My First Million - One Chart Businesses Guaranteed To Make +$1M From Day 1

Episode Date: April 17, 2024

Episode 574: Sam Parr ( https://twitter.com/theSamParr ) and Shaan Puri ( https://twitter.com/ShaanVP ) talk to Jeremy Giffon about what businesses he would buy if he was starting Tiny TODAY and a bunch of opportunities that he sees people sleeping on.  Want to see Sam and Shaan’s smiling faces? Head to the MFM YouTube Channel and subscribe - http://tinyurl.com/5n7ftsy5 — Show Notes: (0:00) Intro (1:23) Idea: Build businesses for people with audiences (5:48) Idea: Wirecutter for products that won't kill you (10:30) One chart business category: Regulation (14:55) Opportunity: Become a protege (19:19) Philosophy students > Business students (22:00) The myth the holdco (26:14) The pre- and post- fall (28:17) Idea: “Special situations" I.e. Distressed Venture (32:15) Working hard vs working winning while lazy (40:19) Hanging around the hoop (42:30) The most successful people respond immediately (43:55) Be Dennis the Menace (45:15) MrBeast shouldn’t be selling chocolate (47:53) Billionaire is a state of mind (51:05) Silicon Valley guys envy hedge fund guys — Links: • Jeremy Giffon’s Twitter - https://twitter.com/jeremygiffon • Live Oasis - https://www.live-oasis.com/ • Afina - http://afina.com/ — Check Out Sam's Stuff: • Hampton - https://www.joinhampton.com/ • Ideation Bootcamp - https://www.ideationbootcamp.co/ • Copy That - https://copythat.com • Hampton Wealth Survey - https://joinhampton.com/wealth — Check Out Shaan's Stuff: Need to hire? You should use the same service Shaan uses to hire developers, designers, & Virtual Assistants → it’s called Shepherd (tell ‘em Shaan sent you): https://bit.ly/SupportShepherd My First Million is a HubSpot Original Podcast // Brought to you by The HubSpot Podcast Network // Production by Arie Desormeaux // Editing by Ezra Bakker Trupiano Past guests on My First Million include Rob Dyrdek, Hasan Minhaj, Balaji Srinivasan, Jake Paul, Dr. Andrew Huberman, Gary Vee, Lance Armstrong, Sophia Amoruso, Ariel Helwani, Ramit Sethi, Stanley Druckenmiller, Peter Diamandis, Dharmesh Shah, Brian Halligan, Marc Lore, Jason Calacanis, Andrew Wilkinson, Julian Shapiro, Kat Cole, Codie Sanchez, Nader Al-Naji, Steph Smith, Trung Phan, Nick Huber, Anthony Pompliano, Ben Askren, Ramon Van Meer, Brianne Kimmel, Andrew Gazdecki, Scott Belsky, Moiz Ali, Dan Held, Elaine Zelby, Michael Saylor, Ryan Begelman, Jack Butcher, Reed Duchscher, Tai Lopez, Harley Finkelstein, Alexa von Tobel, Noah Kagan, Nick Bare, Greg Isenberg, James Altucher, Randy Hetrick and more. — Other episodes you might enjoy: • #224 Rob Dyrdek - How Tracking Every Second of His Life Took Rob Drydek from 0 to $405M in Exits • #209 Gary Vaynerchuk - Why NFTS Are the Future • #178 Balaji Srinivasan - Balaji on How to Fix the Media, Cloud Cities & Crypto • #169 - How One Man Started 5, Billion Dollar Companies, Dan Gilbert's Empire, & Talking With Warren Buffett • ​​​​#218 - Why You Should Take a Think Week Like Bill Gates • Dave Portnoy vs The World, Extreme Body Monitoring, The Future of Apparel Retail, "How Much is Anthony Pompliano Worth?", and More • How Mr Beast Got 100M Views in Less Than 4 Days, The $25M Chrome Extension, and More

All right, this is part two of the episode with Jeremy Giffon. He is the first employee at Tiny. He was there from the beginning when they turned $5 million of equity into roughly $500 million of Business Valley and took the company public just by buying businesses. So last time we asked him, you know, about those early days, about the first businesses they bought, the mistakes they made, the lessons they learned. This episode is different. Now we're asking him, if I was doing Tiny Today, how would I do it?

How can I do the same thing that they did? What businesses would I buy? What trends? What opportunities does he see? And he tells us the sixth. single best investment opportunity he sees today and why he's putting his money behind that. So this is a fascinating episode, Part 2 with Jeremy Giff. Joy.

Yeah. I feel like I can rule the world. I know I could be what I want to. I put my all in it like no days off on a road. Let's travel. Never looking back. I want to ask you about opportunities. So what business opportunities, trends, or ideas do you have that people who are listening

can kind of expand their scope? I remember when I was trying to be an entrepreneur, one of the big big problems I had was I only thought the world was this big, tiny little circle. And I was only looking for opportunities inside my tiny circle. And it was only when I listened to a podcast. And I kind of wish, MFM is the podcast. I wish existed at the time. But it's like only when I would listen to certain people talk or hang out at a dinner, I would hear some idea that was not something I'd ever consider. So my circle got bigger and bigger and bigger.

And then the more that circle got bigger, the more opportunities I saw. So if I told you, what are the juiciest opportunities that you see right now? now that somebody could do or that, you know, you think a smart person could go for? The like second most interesting opportunity, what I'd be doing if I wasn't raising a fund to do these, these buyouts, it would be finding people with audiences and either buying businesses for them or building businesses for them. So I think that, I think it's like an anomaly, like the business is in its toddler stage that the way most people with audiences monetize is through ad reads or sponsorships. I think it's kind of like Hollywood when you, you know, you're a big star, you'd get paid to

hold up a glass of Coca-Cola or something. And I think every person with an audience will eventually, the money that they make from equity in a business that they own will massively dwarf the money that they make from ad rates or sponsorship reads. But the big problem here is like generally, if you're a great podcaster or a content creator, the last thing you want to do is buy a business, for one, like that's risking capital, that's hard, or even start and run a business. business. And so I think there's a big opportunity to basically build a business around someone with an audience and come to them and say, look, I will be the CEO of this thing. I think like, you know, this is the perfect product for you guys to like really organically use and like

and talk about for a long time. And I will run it and, you know, we'll split the equity or something like that. You know, Joe Rogan did this on it and sold that company for for a lot of money. And there's other examples, Doug Demiro with his cars and bids. And people are starting to do this, but it's still very early. And I think that if I was just going to start a business de novo, I would say, okay, who are content creators that I really like and what is the perfect product for them? And then just like make it easy. You know, it's a pretty low risk proposition for you guys, for example.

But if you do it right, like even with an audience of your size, you can have nine figure exits, you know, over four or five years. And that'll obviously dwarf all the money you make from advertising. If anyone wants to do this, Sean atshonbury.com, feel free. to hit me up. By the way, this is how Tiny's doing this. Matina, which is the, the drink they're doing with Huberman. They bought a Yerba Mata company. And then they, he's, he loves Mate and he's been drinking it for a long time. It's a perfect type of product. So they did that for him. Where if Huberman was like, and now I'm going to take a break from my science stuff to go

become a searcher and go find a business, a P.E. deal to do like that'd be crazy for him. But, but Tiny doing it makes sense. They also did it with James Clear. They built the Habits app, right? So, you know, another app versus ad read type of thing. So I think they're executing on it well. This is also how Congo brands built Prime. So they did Alani Nuo and then they were like, okay, cool, we're going to do Prime. They went and pitched Logan Paul and KSI and they were like, hey, you guys are going to be the promotion engine of this. You get equity, you know, significant equity in this.

And we're going to be the operational backend for this. And we know, we know how to do this. We can build a, in their case, what's probably going to be a $10 billion plus company off of that brand. Yeah, it's definitely starting, but I think, and like the Churnin Group has been very good at it with, you know, they did Doug Numero and Stephen Ronella with the hunting stuff. And it's definitely starting to happen. But I think like a more, you know, this is a little bit exaggerated, but I think most people in a YC batch could find a podcaster and just say, okay, you're going to be the audience co-founder for this thing and we're going to give you 30% or something. And we're going to work with you. And it's

going to be a product that you can sell very organically. And because the broad thesis is that these audiences are still super underpriced, basically, that the equity you're giving up is you'll be more than compensated for. And I think that'll last for quite a long time. And the long tail is really good too, right? Like, you could do it with a very niche YouTuber and still sell a more expensive product or do it multiple times or whatever. And I basically just think everyone with an audience will eventually have some really

tightly integrated organic product to sell. Love it. All right. So that's a great opportunity, which is go find a content creator who's got a great audience, high trust, and basically buy or build the perfect business for them and have them be your audience co-founder. I think that's a, it's basically a really unfair distribution advantage you could generate for yourself by doing that. All right, love that. What's another one? One other trend that I'm just really bullish on is basically the idea that everything in the modern world is like poison and toxic. I live in New York like the air is making me dumber. The water is like ruining my hormones. All the food that I eat at any restaurant is like full of seed oils and,

you know, everything that I eat is like some combination of soy, corn and wheat and the wheat is all sprayed and glycophate like everything is really bad for you. But it's like this huge and I'm kind of a freak about it. Like I have water filters and air filters and buy all this specific food and stuff, but it's a really mentally taxing. And I really wish, I think you could even just take the form of like the wire cutter, but for, you know, these are products that are not going to kill you. And the thing is, it's such a nefarious problem that like it runs the gamut. It's like clothes that isn't made out of polyester, betting that isn't bad for you,

cleaning products. Like you could do every single thing in the house. I would love to have a wire cutter kind of thing, which is a great business, for just like this is the version of this thing that is not going to kill you. Dude, check this out. So go to live dash oasis.com. I found this website the other day. My co-workers sent it to me.

And they say, do you know what's in your water? 90% of the water sources contain toxins, microplastics, and other contaminants. And then they rank which water as in the cities, but also which water bottles have the water brand. I see one that I used to have. It's very bad. says out of 100 it's in the very bad anywhere. Well, that's the thing, right? Even you try,

you think you've done it and then it turns out the thing you bought doesn't even work. Like, it's very complicated. Well, and I go to this and like, I'm scared because I also see the thing that I have and it says bad. And then you click it and it make you pay $5. And this is definitely a thing that I purchased recently. I'm like, fuck, I got to see which water bottle. Like you click one, it's like sad. Horrible. I just want like, okay, like I need a shamboy poo. What is the one that like Huberman and Atia and Rhonda Patrick all agree on and I'll just buy that one, you know? Yeah. And I can, I think that it can exist for almost every single thing in your house. Ask Sean why he's drinking that water. I know why. Yeah. We hosted this event, this camp MFF event

and it's, we do it at Mr. B's house. We're in like remote North Carolina somewhere and we all show up and this billionaire shows up. He's got like, you know, his security guard with him or whatever. And I'll just fast it up like, oh, how does this guy travel? It flew in private. He's got a security guard But then the thing that really stood out is he said security guard carries this case of waters. So we had Fiji bottles of water, which was like, it's in a plastic. And you probably got that because he thought you were being fancy. You wanted to make a good impression. He'd be so impressed with my choice here of Fiji.

Like I went, I went for it. And instead, he's got his own like Aquapana glass bottles. And he was just, he'd always be drinking. He didn't say anything. But I was like, hey, what are you doing? Except he made the noise whenever you, when he saw you drink it out of that, I switched to Aquapana for my drinking water for my family. I bought an Afina showerhead filter because the other thing is like,

oh, you're drinking one thing, but then you'll go shower, bathe your naked body and tap and like the dirtiest tap water with like a 30-year-old, you know, showerhead in my house. And so A-F-I-N-A dot com, I bought the showerhead from there. It's like filters that water. And so I'm just like one by one replacing different parts of my house to try to try to get rid of some of the bad stuff. Yeah, the traveling with a crate of mineral water,

that's a good, that's a good way to spend money. I like that. All right. So two good ones. I like the wire cutter for Protestant, don't kill you, by the way.

It's like, wire cutter is kind of like value based. Yeah. And in this case, it's health based. And I think that's just like a, such a simple model that somebody could do. It's probably like 10 years of awesome execution and real like love and care.

Like only the right person should start this business. It's not like anybody can do it. but I do wish somebody did it. I mean, examine did it really well for supplements. Like, it certainly can be done. It's just,

I would know, I would use it every day. Let's do a couple more trends and opportunities. You had talked, I asked you a question when we were hanging out yesterday, which was what are, what's a business type that you really love? Maybe you guys didn't even make an acquisition in the space,

but like what are categories that you really loved? And you mentioned, I don't know, like a regulation compliance type of category. Can you explain that one? Yeah, for sure. So like, any time a government anywhere introduces some kind of arcane rule, you have to fall.

If you don't fall, you go to jail. So it's like the ultimate kind of motivation to buy, right? And sometimes it can be really difficult. So, you know, we looked at a bunch of examples. One was, there was this great company, a software company in Italy that just did banking regulation for all, make sure all the banks are compliant with all these things. And that's like an amazing business because, first of all, you're going along Italian regulation, which is probably a great trade in and of itself. But in the future, Italy is going to have more rules than it does today. And then aside from that, it's like a bank is not going to rip that out ever. And it's, you know, it hits that golden criteria, which is, it's relatively cheap but mission critical. That's like a really

great one. And there's a bunch of these. There's all these, you know, for buying a house, for vetting tenants for KYC and AML. If you start looking for it day to day, you see it a lot. Like I just rented a car and there's like a process there where they check my license against some database and I'm sure that's a piece of software. Like those are great because I love it because it's like a low lift and the downside is super high and you don't really want to mess with it once you've got it working. And the other interesting thing about them is that exists for every kind of

at least every Western country. And so you can go find the software that does that for Europe or one specific country or whatever. And there's going to be multiple versions of those. Even Canada, like Canada has different rules than America. And so either it's two different software products or two different companies. So I love those businesses as well. And they're also like fairly AI resilient, I think, because it's really, again, it's like medical stuff. It's really high downside.

So you don't want to like trust it with AI. And then it turns out you weren't in compliance. and you're going to get a huge fine or go to prison or something. Yeah, I made a bet recently in the regulatory compliance type of space. And I was like, you know, we have this thing on the pod that we talk about, one chart businesses, which is like a business that you don't need a full business plan for, you can just put one chart up on the screen and you say, that's why I'm doing this. And the one in this case was basically that regulation only goes in one direction.

It only goes up into the right. Nobody ever rolls back any of these needs. It's only going to increase. And so if you can become, you know, maybe the go-to provider or like a key piece of software in a space, like that is, it is just such a bet you want to make because you know that regulation only goes up. You know that like this compliance compliance requirements. They don't just say, yeah, you know what, forget them. We don't need all that compliance stuff anymore. Like this is never going to happen.

It's only going to go in one direction. And like you said, you do it or you don't get customers or you get go to jail. It's like, well, that's a pretty strong motivator. So like, you know, I think people are going to want to either get customers or avoid jail. And it's just like the right type of space to be. And it's the type of space that 24 year old me would not have known or appreciated that that's a better business to go into than what I was doing at that time, which was like dating app, social network, like cool new, sexy, you know, thing.

And now I'm like, it's kind of like what's sexy now is like a knee length skirt. It's like, you know, show me a compliance business and I'll show you my interest. The other big opportunity for someone who is wanting to start a business is like you can front run these things, right? You can see what's going to pass. You can see what's just passed. And you can be the first provider for that and have a huge leg up, especially if it's a fairly niche thing. You could very well be the only option for a couple of years, which is a huge advantage, right? Why don't you start these things instead of just investing in them? I don't like operating businesses. I don't think I'm very good at it and it's not what I enjoy doing. And so I think everyone should try and do like really stay in their zone of genius as much as they can. I think that it's like personally very good and also good for the world if that happens. And so I'd rather like be allocate capital to the, because I think I'm good at allocating capital to the person who maybe needs capital and is really excited about building something. All right. Two more things on here.

The first. I actually don't have context on this, but I'm very interested just because of the title, the boy versus the guy. Yeah. So the boy versus the guy. It could go a bunch of ways. It could go a bunch of ways. And there are a lot of different readings, especially depending on what coast you're on.

Yeah, basically it's like it's the idea of being a lieutenant or being like a protege effectively would be the classier way to say it, I guess. And so, you know, in generally there's like there's the trusted lieutenant who is, you know, just the solid number two. really important, but their whole identity is being like a lieutenant to the number one person.

And then there's this other genre, which is like, on the West Coast it takes shape as a chief of staff a lot, where it's just, you're kind of this, like you're this young, rising superstar.

There's this sense of like, you're really gunning for number one. And the idea, like, what made me notice this originally was, especially in the valley, every like billionaire has one or two really young, smart boys generally who just kind of like flowed around them and there's this kind of task agreement of like you come work for me for two, three years, you shadow me,

you're my apprentice and then I will back you and like open doors for you. And it was kind of funny. Like at some point I was in like social situations where it's like, oh, like it's kind of like flying under the flag of a lord or something. Like everyone is, you know, everyone is like, you know, going on the private jets of these principles or whatever. And they themselves are probably broke, but like they very much lived this lifestyle because they're like under the protection of a lord. And so I think it's like, there's another, a new kind of piece of information that I've figured out about this is it's also an age gap thing. So if you're within 20 years of the founder or the number one person in the organization, you're almost always going to

be a guy. And if you think of like all the great first. or even, you know, companies where someone has become the new number one, there's almost always at least a 20-year gap between the person just because otherwise you're too close. And so I think that dictates it a lot as well. But it's these two different things. The other way to put it would be that like the principal really sees something in this young person and wants to, you know, can tell they're like on a rocket ship, they're not going to be an employee forever or whatever, but it's like, you give me two or three years and I can really accelerate things for you. And I think like that pairs very nicely with the cold email thing, which is, you know, I generally think, like, if you want to start

a company, you should just start a company. Don't go, like, work somewhere to get experience or whatever. But I think this might be the sole exception, which it can really open doors of either investment or vouching or connections or whatever. And, you know, there's lots of examples of this. Like, I know, like, Ben Casanocha, like, wrote very publicly about being Reed Hoffman's chief of staff. Blake Masters with Peter Thiel. Sam Altman was this to Paul Graham. There's kind of all these examples of it that I think are really instructive.

I just recorded an episode with Joe Lonsdale, who was this for Peter Thiel? Yeah. He was basically Peter Thiel's protege and now has started, I don't know, more billion-dollar companies than anyone else in the country. And I think he's a fascinating guy because when he was 18, 19, 20, he was an intern at PayPal. Then he was at Peter's family office. Then he started Palantir with him. And then eventually went on to do his own thing.

And Joe's done this for a bunch of people. One of my close friends was one of his chief staffs. And it's an amazing launching pad. If anyone out there, I'm looking for a boy. Never thought I'd say that. But under this context, I'm sure enough looking for a young boy. We need to start a community. We'll call it weed and boys.

I don't know this, but I've had four people who are kind of in this bucket. I hired them when they're, let's say, between the ages of 16 to 20 and that have gone on to either become, you know, that have gone on to become millionaires and in some cases, millionaires and like successful content creator, podcaster type of folks as well. And it's happened four times already. So I'm looking for my fan. Yeah, I think apprenticing is really underrated. You know, you think about it in the context of being like a blacksmith or a carpenter or something. But I think for a lot of these things, it's the single best way to learn. Hey, I've got a question. I noticed that you study, do you study philosophy at Columbia? Yeah. So I remember as a kid, I saw this crazy stat

that I think it was the majority of people who scored really high on, not the bar, but the test to get into law school. They actually, most of them, the LSAT, most of them were, they studied philosophy. That was their undergraduate degree. And then I saw you studied philosophy. And that's kind of an interesting way to go because now you're raising this massive 100 million plus fund. Did that, what did you learn in philosophy that you think is going to help you make a good business person? Yeah, I don't know. It's a big club, you know, leave it to a philosophy major to know every philosophy major, but there's tons of names, you know, Reed Hoffman, Peter Thiel, Peter Fenton, Stuart Butterfield. It's like this weirdly overrepresented thing. My favorite

that about philosophy majors is that it's something like in the top 10% of earners, they're the highest earning of all people. So if you take the top 10% of every major, they're the highest earning. In general, they're not the highest earning. But there's that kind of like group at the far end. I don't know exactly what it is. I mean, I can speak to my own experience. I think it's just like if you're going to spend four years thinking about a set of questions, thinking about the most fundamental questions is just really appealing. That's certainly what it was to me. I don't think I really learned anything that's super...

It's funny, like, you know, I'm Canadian. I had to get a visa to be in America. And a big thing with visas is, like, is what you studied relevant to what you're working on? And, you know, the answer for philosophy, as far as the U.S. government is concerned, is no, it's not relevant to anything. But I'm always like, well, no, it's relevant to everything.

It's like, how should I live? What should I hope for? what can I know? These are relevant to every field. And I think maybe the other way, maybe the other cut at it is it's just like being interested in the most fundamental and the most abstract versus like learning, you know, something more applied. It's something about that just kind of draws these very kind of curious, I guess like intellectual, and I don't really mean that in a complementary way, just like people who like to think a lot. But there's also a big difference between people who study philosophy

an undergrad and then move on and people who study philosophy for their whole lives. Like those people are really people who just like, they thought, they think like, you know what? I actually want to think about like what is a good way to live for the rest of my life. And I think that's a little crazy, right? Like at some point you want to go, okay, I've like explored this. Now it's time to go, go move on. I wanted to ask you about hold codes, which seemed to be the new trend or people buying

businesses. I think a lot of them take inspiration from Tiny and what you guys did. what's your take on the hold code trend or influencers out there who are like, I own 500 businesses, you know, like, what's your take on all that? Bragging about how many businesses you own is really weird and probably like a contra signaled how good you are. And by the way, like anyone who owns a lot of businesses will and should tell you that. Like I know Andrew would certainly, if, you know, if he could have tiny one business,

that would be much better. And so it's always a weird thing to say, like, oh, I've acquired 100 businesses or whatever. I guess unless you're like constellation or shore capital or something where the whole point of it is that you like buy a million businesses because yeah it's always better if you could have the results from one company that would be way better than having to own a bunch of them

and that leads to the point about holding companies which is the thing that people don't understand about holding companies is there's two real reasons why you would start a holding company versus a fund or some other structure one is because you want to hold everything forever and I think that's a fairly faulty premise So usually when people think Because so people look at

Generally they're looking at two places When they think about the merits of holding everything forever They look at Buffett Or they look at venture capitalists You know You don't want to be the person who sold Google at the IPO or whatever And Buffett famously owns everything Although that's not actually true

Buffett sells stuff all the time To your point Sam about him Being a little bit different than his public persona But like Okay so both of those groups Buffett is talking about railroads and insurance companies and energy companies. These are companies that ostensibly will exist for 50 or 100 years. And venture capitalists, even more than that, they are looking specifically to find the one in a thousand company that will be a 50 year company.

But most companies are not 50 year companies, especially not $5 million software companies. You know, like it's kind of crazy to buy a Chrome plugin and say like, yeah, I need to own this thing for 40 years. It's like, no, it's first of all, like software is, really difficult. My kids will inherit this Chrome plugin. Yeah, you're not buying one of two railroads in Canada. You know, like you're buying the Chrome plugin. And so, first of all, just thinking, like, oh, I need to hold this forever, I think is a bit flawed. And then second of all, if you get the chance to sell it for a great price, like that is probably the way that you maximize returns if you're actually interested in just making the most money. And so that's one thing

with holding companies. The other is that I think when the more investors, type start them. They really don't appreciate. A holding company is, part of it is your holdings. The other half is a company. You just run a big operating business. You know, Tiny has, I can't remember, it's like north of 1,200 employees across the portfolio. That's a big business that you're running. And for most investors, that is a completely contra-skill. Like, if you're a good investor, the last thing you should be doing, when you meet a great investor, you're not thinking, oh, you'd be great as the CEO of a 1,200-person company. You know, like generally those are very apart. And so what it can end up happening is you spend a ton of your time actually just

operating a business and you're not able to invest, which is the thing that you're probably the best at. And so, yeah, in general, I think they're quite, they're quite overrated. And you also actually said you're like, most Harvard guys who are trying to buy a plumbing business. They shouldn't buy a plumbing business. They just go and start a plumbing business. Yeah, this one always cracks me up. It's like your resume is, you know, Harvard, Goldman Sachs, Harvard Business School, Bridgewater. And then it's like Ohio plumbing company. And you're always, I always think like, I get it. You know, the math works.

It can be lucrative, whatever. But I always think like, imagine if you had, you know, you're this brilliant young person. If you had just moved to Ohio when you were 18 and started a plumbing company, you probably control all the plumbing in the state. You know what I mean? Like, you just wipe the floor with them. And it's always weird that people want to go through all these loops. I think a lot of it is just to make themselves feel very fancy.

Like, oh, you know, I set up this deal, it's acquisition, these investors and stuff. But a lot of these businesses, I think if you just started them, you could really wipe the floor with the existing competition. You have one more thing that you're known for, which is something like the pre and post fall. I don't know what this is. Can you explain this? Somebody texted me this. They go, oh, you got to ask about pre and post fall. So I define fall.

It's like a pseudo-biblical idea. But I really define it as like a period in your life where you've really been brought to your knees by whatever. It could be a death or a breakup or, you know, a health scare or bankruptcy. or all these kinds of things that like really just kind of humble you truly not like how most people say humbled which is like oh I just got on the cover of Forbes I'm so humble it's like no yeah it's actually the exact opposite but like truly truly humbled and I really think that that changes someone for the rest of their life and I think it happens to everyone I think it happens totally at random times it could be early in life it could be late in life but you can just kind of see

of, you know, the extreme example of this would be like a veteran who's been in a lot of combat. Like, nothing is really going to shake someone who's been in a bunch of firefights, you know? And I think that applies too, is if you've been through really hard, really dark experiences, I think a lot of entrepreneurs, they have their fall while they're building their business.

You know, it can get really difficult and hard and lonely. And, yeah, the best way to describe it is like after someone, someone's post fall, you can just kind of see it in their eyes. that they've been through worse. And so they're not going to, it's just not going to shake them that much versus somebody's pre-fall.

And by the way, you can become very successful. You can be late in life. But nothing bad has ever really happened to you. And I view that as kind of a liability in some sense of if you're going to partner or work with them, of like, boy, like when something goes off the rails here, this might be a really big blow up. Because of course, like, you know,

if you're a broke kid, it's one thing. But if you're like a high-flying person, the way in which you can blow up is far more spectacular. And yeah, it's really just like, have you really been humbled by life in like a true way? And I think when you look at it that way, it's quite evident that, you know, people either have or haven't. And I think it makes a big difference. Do you want to talk about the special situations, distressed venture stuff? Or do you want to save that?

Yeah, we can talk about that. Okay, tell us. What is the opportunity here? Yeah. So the opportunity is this is like really combines a lot of the factors that I love, which is effectively there's this whole class of venture back companies where they raise too much money, especially in 20 and 21. And so you get this like strange phenomenon where you can have a business that's doing $10 million a revenue and growing 30% a year, but maybe it raised

$40 or $50 million. And such that like the founder is probably not going to make any money because the pref stack is so high. And then the other part is the investor is really not going to make any money, not in the sense that they want to. So a venture investor, they want a good investment to return the fund generally. And so it's like this weird thing where you have this great asset. You know, if you guys owned a business that was doing $10 million of revenue growing 30% a year, you'd be very happy with that.

But if it's owned by a venture investor and run by a founder who's got this pref stack, the founder's not going to make any money. the venture investor doesn't really care about it. So it's kind of this, like in some sense, it's actually a worth-this asset. And so, you know, we've done these deals at Tiny before, and what I'm really interested in is doing a lot more of them personally. And so I've been talking to a lot of founders

and talking to a lot of GPs about this. And there's just this huge opportunity. And the opportunity is really to take a business that's, because of its cap table, it's just broken. It's not working for anyone and turn it into a business that works. So, like, say the founder owns 10% and, the prep stack is 50 million, turning into a business where they own 30%

and they can run it profitably and it can be like a great business. A question that I always ask founders is, what would you do if you just bootstrap this thing or if you own the whole thing? And generally, that's a different answer than if they were in their current situation. And it's a service for the venture investors as well because they have to be responsible for these things.

They've got to go on the board. They got to audit them. They got to think about them. A lot of these companies take up a lot of their time and they're not the ones that are going to drive returns. And so it's just this weird kind of vestige of the fact that venture returns have been so high that there's all this waste. Like there's these 10, 20, 30 million dollar year companies that are not really making money for anyone.

And it's this weird situation, right? Because there's nothing wrong with the business, but you can get them for cheaper than you would otherwise because there's this like weird second and third order incentive set. Normally a distressed business, the business is broken. Yeah, exactly. It's that the cap table is broken. but the goals of the investors don't line up with the realities of the business. Is that right?

Exactly. Exactly. Is that what you're going to do? Yeah. That's, I love special situations. I like all different types. You know, I think when tiny started bootstrap businesses were kind of a special situation. And now it's way more popular.

And I view this. A special situation is a really nice way to. I love a good special situation. I mean, that's a better way. It's totally, totally. special situations has a lot nicer the distress asset. Yeah, yeah, yeah, yeah, for sure. But it's like, it's like this idea of, oh, there's all these people that want different

things. And if you can just like arrange the bricks, so to speak, that everyone gets what they want, you can like unlock this puzzle. And like with what I'm doing, everyone is better off. The VCs are happy. The founder is happy. Like everyone's better off. And I love those.

I love those situations when you can do them. And then it also, to go back to our initial thing, it's a very specific thing. So you're going to come to me because you know that's what I do. And I'm going to get stuff that other people don't get because I'm doing this very specific thing. And I, for my particular form of laziness, I love it when people just know what I offer and then they just come to me. It makes things so much easier than having to go to them and convince them to do something,

you know? Which I love because I like people with me, but it's also rare. You remind me of myself. I think that's why I love you. Yeah, you're great. because I see part of me and you. But it's the opposite of what most people come on the podcast and say. Most people come on the podcast and say you got to work super hard.

Hard work is everything. And both me and you were like, we asked a different question. We're like, how can I be lazy and win the most? And we're like, yeah, I take pride in a certain form of laziness. I'm going to be super active in one area, but I absolutely reject a certain type of sweat. That's how I think about it. Do you think about it the same way? yeah totally i i another like archetype i have of this is like you can divide the world into the

um into the you know the Arnold Schwarzenegger kind of type and then maybe the the Sam altman type and it's not to say that Sam altman doesn't work hard and Arnold Schwarzenegger isn't smart they are both examples of doing both of course but like you know Schwarzenegger it's all literally like in the biography it's about like laying more bricks like lifting more days more hours, it's just grinding. And when he becomes an actor, it's like more auditions, more movies, more practice versus maybe someone who like Altman who like found this big opportunity and like was really early on. It was really clever about how he set it up and everything. And it's more about making these like moves. And probably like you, Sean, like I find there's a certain elegance in

in doing things with like the least amount of moves. And other people aren't like that. Like Sam, I bet you're probably more like people. work really hard, grind it out, like put in the hours. I know you love Shackleton. I think Shackleton's a lot like this. Like just like outwork everyone else. You're acting like you don't lie. You looked around like, I don't know, but you are like that. You're like hard equals good because hard means I'm hard. Whereas I'm like easy equals good because it means that I'm clever, right? It's like you admire a different attribute. No, yeah. I mean, there's value I think of just sweating sometimes. Like, you know, I think that sometimes because a thing is hard, therefore it is good for you.

I definitely believe that. But, I mean, I only work like 40 hours a week. I work a normal work week. But yeah, I mean, I fall a little bit in the middle. I do think that like just doing a hard thing for the sake of it being hard, there is like some type of like divine goodness within that. Yeah. And you've got to do both.

Like there's, you know, for the lazy person, there's periods of really hard work and vice versa. but I think when people say they don't work hard and they still like achieve greatness, I think they're full of shit. Like, Sean, you say that you are lazy. Dude, you'll text, he'll text me a paragraph like a book at like 10 p.m. Like, you're still doing shit. You're just laying on the couch while your wife is watching TV and you're on your phone. You know, you're not at a desk.

I view laziness as not that you don't do anything. It's that you don't do things you don't want to do. I just do all the things I want to do at full force because that's how I, because I like them. I want to do them. I just don't do a lot of things that I don't want to do. I'm very selective or cheap about how much effort I'm willing to put into things that I don't actually want to do.

And I'm willing to be lazy on those, right? It's kind of like the definition of work versus play. Work is, you know, work is, how do you define work? One way of defining work is it's the stuff that you don't want to do voluntarily. And play is the stuff that you do want to do voluntarily. And I just opt into a lot more of play than I think most people do. And I have a lower tolerance for work that I don't want to do than I would say the average successful person. And the reason I like Jeremy coming on is because it's cool to see examples of a different play style.

Because we've seen a bunch of the other play style because it gets a lot of it sounds amazing. The David Goggins, the work harder, grind more, show up early, leave late. You know, like that. I get that. That's a cool play style. it's just not what everybody wants to do. So I like hearing other play styles. Yeah, I mean, Sam, you're definitely right.

Like, I'm sure I do a bunch of stuff that I'm not even conscious that I'm working a lot harder than other people because it just feels innate. But I think, like, another way to look at is there's certainly a type of person who, the way you soothe yourself. So, like, some people will just sue themselves by putting in way more hours. Like, you know, working on that, like, diminishing marginal return piece of like, oh, I just put in a few more hours on this. And other people, I think it's like, I just got to figure out the,

exact right thing to do here. Like, what is the exact right move? And you spend all your time thinking about that. You guys want to do a 50 mile race at me in August? Dude, I've been training for this thing, and I had to run 10 miles on Sunday, and I haven't ran that far and forever. And I'm just, like, depleted. So you want to come work hard? Come join this race at me. Yeah, that's probably a good one. Everyone who loves, like, the super endurance stuff is probably a grinder at heart, because it's just like about if I do so much of this, it'll just be better than everyone else. It sucks. I just, Dude, when we were in Austin last week, we were hanging out with, do you know Isaiah Photo? Do you know who that is Sam? No, no, I don't.

He is a YouTuber who lives in Austin and he's got probably like 10 million YouTube subscribers. And if you go look at like what are his popular videos or like what kind of was his break, he would do stuff like these challenge videos. These are kind of like grind videos. Like counting to 100,000. Like that. He's like, I will lick this jawbreaker as many times it takes until the jawbreaker disappears. How many licks does it take? he'll hold a lighter on and he'll be like, how long till this lighter just goes out?

Like how much lighter food is in this? How long does that last? It's like, 100 million views or whatever. People love this shit. And it's like, you know, to his credit,

he found what people wanted and he gives it to him. At the same time, I'm like, oh man, I'd shoot myself if I had to do that because that's not, that's not a path that's very appealing to me. But that same personality, I'm like,

oh, what do you do for fun outside of YouTubeing? And he was like, oh, I love running. Same thing. I'm like, oh, God, what's the deal with you runners?

He's like, I want to start a run club. I love running. And I'm like, if somebody told me, you got to run today, they just said, Sean,

you got a bad day today. And I'm not trying to be a runner, but there's so many successful people that love running. And there's like a really high correlation there. On the other hand, I went and did a podcast with Monish Pabry. Jeremy,

I assume you know him. Yes. Yeah. Andrew told me he's like, he was my first value investing man crush. And, um, he did the Ceps.

It's great. Monish. Is that the first time you've done that? When's the last time you did that? Years ago. When I met my wife. It sounds like you've got practice. Yeah, exactly.

And he was like, yeah, I take a nap every day. He's like, a good year is I make one or two investments, which is like literally clicking a button. It's not even like he runs a company. He's like buying a public stock. And he's not even buying, he's not day trading. He's not analyzing everything. he's like one or two good investments in a year would be a fantastic year.

And he reads and he chills. And I was like, man, both guys I would say are winning. They're winning at their craft. Like to have 10 million YouTube subscribers is phenomenal. He's built a wonderful life for himself. And the other guy, you know, is a phenomenal value investor. But the lifestyle and the things that they value are so different. You know, one guy maybe has to stomach losing $75 million of net worth in a day.

And he's got to be cool with that. And the other guy's got a stomach waking up tomorrow and being like, how do I come up with the next crazy video? And it was really remarkable to see that. So, you know, I think, Jeremy, you were talking about like, you know, you sort of pick your prison in a way. Yeah. I'm assuming you've sort of seen these different games that people play and decided which one is appealing to you. It's funny. Guys like Monish are like, I call them the nap room guys. Like there's a whole set of value investors that have a like a room. He showed me. He's like, this is my nap room. And he opened it up. I was like, this is amazing. Is that a thing? Nap room guys?

Yeah, I've met at least like three or four different value investors like that who, like they have a place to nap. I want to ask you about that same idea, but in a different way. So I'm going to give you my observation and I want you to know if you have any specific stories that line up with this. So my observation, we talked about does Andrew grind, right? He comes on here. He acts super zen, super calm, super philosophical.

He wants to be like Warren Buffett. He's playing bridge half the day. He's reading. And then once or twice a year, he just blesses us with a beautiful investment, right? But, you know, one thing I have seen Andrew do is he may not work super, super hard, but he works very fast. He is incredible at sniffing out opportunities. He is incredible at fast follow-ups. He moves really quickly when he's excited about something. That's the first thing I noticed. The second thing I noticed about Andrew is not only does he move really fast when he's excited about an opportunity.

He'll just keep texting you about it or he'll keep prodding until he finds out more information. He'll fly to meet you right away. But he also will be persistent. So like I think with some of the businesses, it's like, yeah, I used to, I love that business. So I emailed him every month for like five years. And then finally one month, they were like, yeah, I am willing to sell the business.

And I think that was the case for maybe letterbox or dribble where he was just emailing the founder continuously, airpress. Same thing. He was just emailing the guy like, hey, have you thought about selling this month? Hey, have he thought about selling this month? some version of that question hanging around the hoop. In fact, when we sold the Milk Road, same thing happened. We tried to sell the business.

We walked away from these guys at the last minute. And if I'm them, I'm like, oh, hate the, you know, I hate those guys. Screw them. Well, let's kill those guys. And instead, they were super professional about it. They were like, okay, no problem. Like sounds like you have, you want to go different direction. And they hung around the hoop.

A month later, he says, hey, I didn't see any announcement. Like, no deal went through. And we were like, no, you know, we decided not to do it for this and this reason. He's like, well, we're still interested. And I was like, wow, that was so different than how I would, I would have done that. So we made it a practice for us whenever we're buying businesses. It's like, a, don't get personally offended when it happens. And we schedule the automated reminder.

A month or three months later, let's just follow back up and just make sure that we check in and say, hey, is there still an opportunity here? We still like the business. We like to then. We like it more now. You know, like if there's still an opportunity to let us know, that idea of hanging around the hoop. Are there any other stories either on Andrews moving fast and or.

being persistent and just following up over and over again that you remember? Yeah, I mean, on the fast thing, it's annoying, but it's true. The most successful people in the world respond instantly. I cannot believe, it's kind of infuriating how true it is, but when you email the billionaire CEO, it's like a 30-second response. When you email his vice president, it can be a week or something. That is just so true. And I really try and force myself to respond fast.

I wrote this little script for Gmail that it archives my, email every 24 hours. So I like have to respond or it just disappears. And I feel like it's a really good nudge of like just send send the simpler text messages like response. And Andrew is like super, super high-paced, really energetic. The thing that comes to mind is when you're at, you know, lunch or whatever with him, if he thinks of someone you should meet, he will pull out his phone and like send the intro email before you've even like finished the sentence. And, um, It's good and bad. Like, sometimes you're like, wait, like, I don't want to meet that person or whatever.

But it's also just this like, if you think about it in terms of iterations, it's so many more iterations of just making them happen. And also, like, movement, especially when you're an operator, movement creates information. Like, you learn more by doing more things. And so it's a really powerful combo. And then, yeah, in terms of following up, I think just being a little, Andrew used to call it, like, being Dennis the Menace, like, just after just being a little bit more willing to just, just kind of like poke your head in even when it might be a little like um you know goche or or whatever can be really can be really powerful it's kind of that just like hey like you're still interested in selling you still interested in selling you still interested in selling that Dennis the menace bit

that's a good one that's a good yeah and and he's willing to be the menace more than most people like he's he is willing to he does menace like people do say you're medicine me stop it but it also like really pays off because just like oh you know it's and if you think about it it's like, okay, fine. Like, who's that guy who emails me every three months? Like, maybe you had a bad day or you're done with the business or whatever. And you're like, all right, I guess I'll like see what that guy has to say, you know? And yeah, it's incredibly powerful and more people should do it.

And just generally be less afraid of, like, I learned this doing a lot of cold email for sales. You know, if you send out a thousand cold emails, you're going to get one or two responses that are just someone's going ballistic. like if you email me again, I'll sue you or whatever, you know. But the other 998, it's like either positive or no response or neutral. And it's just like all upside, basically. All right. So I want to shift gears to what I call the spicy hot take section, the semi-controversial opinion section. If this was, if we were in a club right now, this is that part where the DJ starts like, the beats about to drop.

And we all know things are about to get a little crazy, a little fun. That's what's about to happen in this podcast. Okay. So here's the first prompt you. I'm just going to prompt you and then I want you to kind of give us your rant on it. First prompt is about Mr. Beast, which is that Mr. Beast shouldn't be selling chocolate bars. What should Mr. Beast be doing instead of selling chocolate bars? Yeah, I mean, I think it's a testament to how valuable audiences are that all the most valuable businesses that have been created are like the worst businesses. chocolate bars, supplements, merch, that kind of stuff.

These are really bad businesses. And so I always think, okay, what happens if Feastewald is the most successful, like, creator brand, what happens when that is, you know, a really good business, a bank or like a great software tool or something like that? And explain, why is chocolate bars or Prime from Logan Paul? Why are those bad businesses? Because somebody might say, oh, they're doing hundreds of millions of revenue or they're they're going to sell for a billion dollars. But you're saying bad business as a characteristic,

like the underlying fundamentals of that category. So explain that. Yeah, the reason, like, you can still be, to be clear, you can still be very successful selling chocolate bars. Like Hugh Kitchen is one of my favorite companies and Jason Carp has, like, chocolate. And I know he's very successful with that. But it's, it's kind of that thing of like, you know, is it a restaurant or is it a, you know, a SaaS company? Like, there's levels of difficulty, basically. And so, you know, there's just businesses like if you can contrast extremes so a chocolate bar low margin not a repeat customer uh not a like super um necessary product or anything like that versus say you know something really low on the stack like uh home insurance or property insurance or something or or visa

or master card or something that you need every day like there's just better qualities of businesses and then the other way you can think about it is what would be the like enduring enterprise value of the business without the person so feastable it's is going to have a way harder time without Mr. Beast than, you know, if he built a bank, right? If the bank had hundreds of thousands of customers or whatever, ostensibly he could go away from that. It might make the business grow slow or whatever, but it's still like a really great, great business. And so I actually view it as very, like, it's very bullish for the creators. It's very bullish for the space. It's kind of like you're making it work on hard mode. And I wonder

what it looks like when it's kind of uneasy mode. All right. Next one. Networth is a silly metric. So why is net worth silly and what's a better metric instead? You've told me something about like kind of personal cash flow or something like that is a better metric. Yeah. Yeah. I mean, so my other line on this is billionaires, a state of mind because the amount of billionaires, first of all, it's like, it's so bullshit because it's always, unless it's

either like you have this in cash or it's your shares in a public company, it's always a complete matter of taste. It's like, well, my company would be worth a billion if it were to sell. And even in public companies, it's not even real. Because most of the time, if you own a ton of the public company, if you were to dump it all, it would massively, you know, drop the price. And so I really think, like, it's kind of this thing. It's more like this memetic label. Once you get labeled a billionaire, it kind of just sticks. And people just refer to it. Like, I see this a lot. Also, people use it as a way to describe someone who just kind of is in a a certain class. I actually think it's more of a class market than anything. Like, you know,

he lives a certain lifestyle. He hangs out with a certain people. He's like a billionaire. It really has nothing to do with whether or not you actually have a billion dollars or you own something worth a billion dollars. And the other, the other is, yeah, like cash, like liquidity is so crazy. The amount of people, billionaires that when you're like, okay, could you wire me a hundred grand tomorrow? The answer is no. Like, it's like, I've been shocked by this. over and over and over. Explain that more. What do you mean?

So people who you have read about... Maybe they're saying no, because they don't want to wire you $100,000. Yeah. It's definitely... Is that the test? Can you wire me 100? No?

Broke. No, can't do it. Bro? But no, like, people don't keep a lot of cash. And it really is... Like, one way to look at this is in like a party seat. round or whatever. I'm always shocked by like who doesn't wire the money or you have to chase them down or whatever and or they have to wire it in tranches or anything like that. And I think it's just

that cash flow is so far from net worth. And then and so like and you had like, you had, oh, sorry, go ahead, Sean. We have a funny experience of this. We were at a lunch with somebody and you were asking them. You're like, what level of money made a difference? Like what's the next level of unlock? And yeah, he said 25. for this much. You said a number that was like a net worth number. And he's like, yeah, that was a good number. You know, when I was doing that every year, then, blah, blah.

He were like, wait, annual link? You were like, annual cash flow was that? Because I was kind of saying the whole net worth. And he was like, yeah, that's what I was doing in annual cash flow. And it was very clear that if you had that much an annual cash flow, you essentially had infinite money. Well, it was like, we were like, I think 25 is like a good number. And he goes, yeah, I agree.

having that come in every year is awesome. And I was like, oh, yeah. I literally, like, in the booth of the restaurant, just walked down to the bottom. I was under the table and I was just like, oh, what's down here? I mean, it's cool. You, and did I read that you tried to create some kind of like equivalent, like a chart of cash flow to net worth? Yeah, yeah, I thought a lot about this. So part of that is talking about one, like, weird thing about Tiny is I've probably talked to three or four thousand bootstrap

entrepreneurs. And the vibes that they give off, like, I don't know, I've met a handful of billion dollar net worth founders. And the vibes between them and someone who makes, you know, $10 million a year from their Chrome plugin or whatever, very different. And there's something about like just how free they feel when they have that cash flow coming in. Because there's two things. One is like maybe the net worth never actually translates into cash. A very funny thing is like all the all the silicon valley guys are really when like behind closed doors are really um envious of the new york hedge fund guys because they're so liquid like they might not actually be as rich per se but they're so they make so much cash that it's like it may as well be a whole

different thing um how much do the hedge fund guys make in new york yeah this is another hot take which is i always when i started getting interested in making money it was like the most common thing you hear is you cannot get rich on a salary like you got to own equity you got I own a business. In New York, there are lots of guys, lots of guys making 5, 10 million. There's people making 100 million. I've met one guy at a big hedge fund. As what? As like a portfolio manager? Like a bonus? Yeah. There's there's at least one guy out there who like makes a billion dollars in annual compensation. But what's normal? Like let's say you're you're hanging out with your New York finance friends. It varies. It varies a lot. But in a good year, like an analyst at a big

hedge fund will make three to five million dollars. And in a really good year, it can be a lot more than that because usually it's a percentage. And, you know, like being a senior person at a big fund or whatever, you make a lot of money. And you kind of take no risk in some very real sense. And so I think like that was certainly, certainly surprising to me. And yeah, just to like come back to the cash flow thing, certainly like Andrew was always such a cash flow person. And really, like, in Canada at the time, like, there was just no funding. So you just

had to live or die off cash flow. And it's, I think it's more instructive to think about money in terms of, in terms of cash flow. Because the other thing is when you have a net worth, like, say, you sell your business and you just have a bunch of cash, even if, like, psychologically, Sam, I know you're big on the, like, money psychology stuff, the idea that you're living off a fixed or finite amount just really changes how you view things, even if it's a ton of money versus this of like, I make, you know, whatever, $100,000 a month or whatever, just the idea that it just comes in. Well, dude, our, me and Sean have this good friend who sold a business and he walked away with

$60 million. And I go, that feels awesome. He goes, it feels horrible, man. I go, why? He goes, I'm a brown immigrant. I need cash flow. If I don't have cash flow, I feel broke. I need money coming in every month.

I can't spend this. And I was like, shocked by that. I think we should wrap it up. Jeremy, where should people find you if they want to get more of you? follow you, become big fans of you. Where should they go? Twitter, Jeremy Giffon. My DMs are open. Yeah, that's the best place. Awesome. Thanks for doing it, man. Really cool.

All right. Thank you. Thanks for having you guys. That's the pod. I feel like I could rule the world. I know I could be what I want to. I put my all in it like no days on. On a road, let's travel, never looking back.