Trading Secrets - 61: Just shy of $100k? Summer House’s Kyle Cooke reveals the number$ behind his startups, Lover Boy, and the entrepreneurial mindset

Episode Date: July 18, 2022

Check out The Restart Roadmap: Rewire and Reset Your Career now!   This week, Jason is joined by entrepreneur turned reality star Kyle Cooke as they dive into all things Summer House, entrepreneurship, and his hard tea Lover Boy. From being the broke entrepreneur of the friend group to a successful one, Kyle gives insight to his hands-on approach to negotiating for reality television and the distribution of Lover Boy, how to handle the intersection of love and money, his take on the world of influencing, and all elements of the entrepreneurial mindset. How involved was Kyle in the shaping of Summer House? What makes Lover Boy different from all the other canned, ready to drink alcohol? What other startups has Kyle been involved with? Kyle Cooke answers all of that and so much more in another episode you can’t afford to miss!   Be sure to follow the Trading Secrets Podcast on Instagram & join the Facebook group.   Sponsors: Mintmobile.com/secrets for a new $15 wireless plan Netsuite.com/secrets for a one of a kind financing offer   Host: Jason Tartick Voice of Viewer: David Arduin Executive Producer: Evan Sahr   Produced by Dear Media.  

The following podcast is a Dear Media production. Welcome back to another episode of Trading Secrets. Today I'm joined by entrepreneur turned reality TV star. Sounds familiar. Kyle Cook, many of you may know Kyle from his leading role in Bravo's summer house over the last six years. What you may not know is that Kyle has a history of lucrative business ventures, most notably as startup, Sparkling Hard Tea Company Lover Boy, which has been booming. Kyle has seen his rise to fame come in some unexpected ways, but it wasn't the easiest path.

We're going to dive into behind the scenes of Summer House. Life is a social media influencer. The recent successes of his businesses like Loverboy, and what is next for him is he continues to grow his brand and other brands. We're going to touch it all, Kyle. Thank you so much for being on this episode of Trane Secrets. Thank you, Jay. That's quite the intro.

Man, I got to live up to my own bar here. Pumping your tires. You got big business ventures, summer house. With the word lucrative. Lucrative, you know, that's big bold words for a big bold guy. Let's kick it off Summerhouse, right? So take me back like six, seven years ago. What track were you on and how the hell did Summer House come in your life?

Yeah, so I'm a big believer. you just kind of have to trust the process and, you know, some gut instinct. I have always done startups. And actually, there was a time where I'd literally just, like, run out of cash. I graduated business school, got my MBA, to maxed out my student loans to start my first company, it didn't go anywhere. And a couple fall starts after that, I look at my bank account. And, you know, it's going down to zero.

So I took a job. How much in those did you lose in those? That was probably 75 grand. Okay. And so that's sitting, though, in the balance of your student debt. Yeah, exactly. So it's like my cash flows are dwindling, but I've still got debt. Okay, got it.

And New York City is not a cheap place to live. And so I had that moment where I had to go get a job, earn a salary. I joined a startup. Okay. And next thing you know, I could actually afford a little more comfortable living. I'm renting a house out in the Hamptons with friends. Most of my friends have been going there for years. I'm like the broke entrepreneur of the friend group.

So I'm finally out in the Hantins, live in the good life. And, you know, fast forward a couple years. And someone sent me, like, the original casting email from this, like, one-man band production company. Okay. And, I mean, the rest is history. I could walk you through that. But I actually ended up taking a really hands-on role to actually cast the show. Interesting.

Yeah, because as an entrepreneur, I'm like, wait a minute. I did a little homework on Rob Vaum. Like, it's one of the most, like an affluent, educated, highly sought after audience on television. Sure. Interesting. Okay. So you're at the, you get the job. You do a couple startups. Those don't go well. Down 75K. That's in your student loans. You started a startup. What is, like, what's your role at the startup? What's the salary look like? Tell me what that's all about. It was actually at the time, I think it was the most valuable startup in New York City. It was a unicorn. It was called Zoc Doc. It was basically like the open table for doctors. Interesting. I was selling, I was

helping run their enterprise sales team. Okay. Based salary of probably like 100K. Which like for a guy with NBA, probably a little low. Yeah, sure. But I was pretty desperate. Yeah. So, you know, helping sell their platform into huge health systems and hospitals.

Okay. And what did they say? That gives great context. Did they approve you? Because I want to get into a little bit of the entrepreneurial role you played with Summerhouse. But did they give you approval to go film a reality show or how did you manage that? So this was pre-Summer house. Okay.

This was a means to pay the bills. Got it. And I'm moonlighting. my next startup, which at that time was a nutrition coaching app. Okay, okay. So this is pre-Summer house. You get that job. You're using that cash inflow to get your net.

You are an entrepreneur at heart. A lot of people think they got to quit their job to go full, you know, all in on their startup. And I'm like, if you like don't have a way to pay the bills, you know, and a lot of people like, oh, I've saved that money. I'm like, well, how much? Yeah. It's going to take you a year to get like a product out there.

Right. let alone actually generate some revenue. Sure. So I always encourage people to moonlight, and I had already quit ZocDoc when the summerhouse opportunity came around. Okay. Because I was already kind of working on my next startup. On your next startup.

So you're working at your next startup when the summer house opportunity comes around. How deep into that startup are you financially in length? Not as deep as I would as advice. Okay. So it's still very much an idea. But I had other ways to pay the bills. I was a founding partner in Bird Dogs, which is an apparel company. So I was involved with them.

You know, I had an Airbnb that, like, I was basically renting out as like a loft that I used to live with, two other buddies of mine. They moved on, and then I rented it out. Got it. So I had, like, a couple revenue streams made me feel comfortable to quit Zoc Doc. And then, you know, the summer house opportunity came around. And I was like, well, I don't need to ask my boss because I don't have one anymore. I am the dead boss. All right. Now, tell me a little bit about that casting process. So you said you took a little bit of an entrepreneur role in the casting process and developing it. Tell me a little bit. But what was that like?

Yeah. So by the time it shifted hands from that one-man band to two producers in L.A., you know, they were kind of trying to fine-tune the concept. And I'm like, well, first of all, like you got to understand like Montauks a lot different. And this is, you know, a while ago, seven years ago. Montock's a lot different from the rest of the Hantons. It's not what you think. It's not like, you know, Diddy's white party every weekend. and like money in your face you know it's montauks like laid back you know where your sandals and maybe a shirt to the bar and so i kind of had to coach them on like take all your preconceived you know notions of like what you think the hantons is like sure and then like almost throw it out the window wow so i i was like you you want to film it in montauk and you're already talking the wrong people because i showed up at casting thinking i would know half the people in the room because that's just how it is out there pretty small out there yeah and i i i think I knew one or two people.

Were they all from Montauk or did they poke? No, no, no. It's just like the casting, the initial casting was just like the wrong people. Got it. And I literally went there for shits and gagles. My buddy forwarded me the email because he's got a house out there.

Somehow he came across it. He's like, if anyone's going to be involved in like ruining the Hamptons, it should be you. I was like, thank you. Is that a compliment? Tell me more. Yeah. So, you know, as they started listening to me more,

they started fine-tuning the concept to pitch it to Bravo and it had to be about a group of existing friends because look like real world jersey shore all those shows where you take a bunch of strangers and put them in a house like they've been done they've been done so ours was like what if it's working professionals that still have jobs in the city whether they're startups or they work you know in finance or PR or whatever and they just do what they've already been doing which is like renting house but driving back and forth back and forth back and forth Okay. So all of a sudden, you're appealing to a slightly older demo.

Okay. Like, the original casting, they didn't want anyone below 30. Interesting. And then they latched on to me, and then they latched on to a couple other people because they knew that we were friends, and it kind of ballooned from there. Interesting. But that was, like, a six-month process. We shot the sizzle reel, like a 30-minute sizzle reel in the fall of 2015.

Okay. Bravo picked it up, and then we continued to fine-tune casting into 2016, and then we filmed season one in the summer of 2016. When you start filming season one, are you negotiating your contract right when you get picked up? Or is that pre-negotiated before you even start sizzle if it does get picked up? Once it gets picked up, that's when you get to your contract. But the way like all Bravo shows work, you're practically getting like a template. And they're like, this is the season one template.

There's not much wiggle room. You can go hire a lawyer, get an agent. You're just literally throwing money out the window. So you're saying they just give you no room for negotiating. Right. We collectively, because there was a group of friends, right? So we collectively hired a lawyer. Okay.

I ran point on that just to negotiate, you know, things like royalties for businesses did. Sure. You start and launch off the show. Yeah. Because there's something called the Bethany Frankel Clause. Let's hear it. So Bethany launched Skinny Girl before any of these contracts had these royalty, you know, sections.

And, like, I've been told on, like, Bachelor, Bachelorette, like, it doesn't matter what business, like, they want a piece. I don't know if that's the case. This is just a rumor. Whereas the way it worked with ours is like if you see the brand where, you know, product or whatever it is you're selling more than say three times and it's talked about and it's, it has significant exposure. Then boom, like technically speaking, bravo wants to cut. Interesting. That didn't exist pre-Skinny girl with Bethany Frankel. So now it's called the Bethany Frankel clause. Makes sense. I mean, like what she turned into because of that. Interesting. Okay. So we'll get into this. in a minute but lover boy so do they have a cut of it technically speaking i mean you know hopefully no one in nbc universal legal department's listening it's written it's written for like book deals got okay spasher's the same way yeah like or if you book deals or if you use like literally bachelor like

any type of their IP it's got to be in a grant to them or oh exactly right yeah particularly if you write a book you get their permission but like the way it's worded is is not very conventional like I come from the startup world where, you know, most entrepreneurs, they might seek out, like venture capital, you know, this, this and that. There's a cap table. You have an understanding of ownership, all that good stuff. They're not on my cap table. Yeah.

But technically speaking, they're supposed to be able to participate in a revenue share of what I own. Interesting. Okay. Fascinating. But it works. And this is where I negotiated it because it had never, no one had never negotiated it in the way that we did because it was written very vaguely. And I was like, I need to be able to raise money from investors.

or whatever business is I'm working on, and Bravo can't have an umbrella on that. They'll be all over. Well, you won't get investor group. So we find out in the language, so it just applies to, you know, my share of like the quote-unquote revenue. Got it.

So when Bravo puts that template together, you start the season off, you're making enough money to, like, take off work, or you're making decent money? Yeah, that's 10-K. Season one, you know, on Bravo, particularly in a city like New York,

you're going to need other revenue streams. Okay, gotcha. In fact, and I don't think you can live off what you make on the show in New York City until season three or four. Okay. And so do you then how, okay, let me ask you this. You're in the six, seven seasons. How are you establishing what your market value should be in a group that has different following, different characters, different roles, season to season? What type of information are you using to go negotiate what your value is to the table?

next season next season next season yeah i mean the the the wild thing for us is when we when our show launched it's it's probably been the most successful new franchise in a long time okay prior to that it was probably southern charm okay and then prior to that vanderpum and then then you go back to like below deck and then like the housewives right that's like the bravo universe i mean there's other shows but a million dollar listing being one but um the way people were consuming content really started to change, right? So when we started Netflix, Hulu, Amazon, they weren't making their own content. Now everybody's making their own content, right? And no one watches live TV anymore. So like the Nielsen ratings for cable, like the Bachelor, Bachelor broadcast, right? Cables is a different

ballgame. People either watch it on demand, they DVR it, or they're streaming it on, like, their platform of choice. And what we saw was we had one of the younger demographics on Bravo. And so NBC and pretty much every other network out there had to create from what this is how I understand it, their own in-house proprietary way to understand the real, like, audience. Sure. And they're viewing behavior because if you just look at Nielsen, I didn't have much to go off because if you look at the Nielsen ratings for our show, which is how they used to look at how you should be paid on TV, I mean, it was almost like the show should be canceled.

Right? Right. So the only tactic that I really had my disposal is I started making friends with people from other shows on Bravo. Okay. And just started asking around because to this day, I don't have an agent. I don't have a manager and I don't have a lawyer. I negotiate all my contracts. You negotiate all your contracts with Bravo directly. Exactly. And well, I got to put my MBA to work somehow somewhat. I mean, we're similar in the sense that we're probably one of the few people that, you know, went to graduate school and then decided to just be like, screw it.

Let's go on TV. There aren't many. there aren't many so yeah i you know bravo looks at these things from an ensemble cast standpoint i'm sure once upon a time different housewives on the same season you know we're making different rates because they were negotiating more aggressively or whatever or they felt like they were worth more and what that creates is almost like fourth wall drama in the sense that like oh i'm not making as much as bethany just to use like a you know housewife that was part of the one of the original franchises well then

then I'm just going to stir the pot and, you know, start a fight and throw a glass, flip a table. It's like all of a sudden you have people self-producing themselves for a higher payday. And that's next thing you know you don't have real reality television. This show's gone to shit. I mean, and we've had two housewives on, and they've kind of gone at each other with their negotiation tactics and like totally pointed fingers, which is wild. Do you, so then.

So I negotiate for, since I've been a part of it since day one, that Bravo looks at it as like an ensemble cast type thing. You took the question away from me. So you negotiate on behalf of the group that was on season one. And so every person in that group, Kyle Cook is the guy that will negotiate the salary. Right. Wild. Yeah.

And if you join season three or season six, then you're basically making what we all made in our first season. So you guys have set the precedent of what everyone will make in the wiggle room for negotiations practically nothing. Right. So, like, if I always say to people that join the show, you know, in later seasons, I'm like, think twice before you give your agent or manager a piece because guess what? You're not going to get any more than what I've already negotiated.

Hmm. Interesting. Why don't you become an agent? There's a lot of things I would do. I just, I got to pick and choose. I just don't have enough hours in the day. But if you've already negotiated the contract, you should charge these people like 5%. When we negotiated Winterhouse, I actually was helping people that came from Summerhouse to Winter House make more than they were making on Summer House because I had set the precedent for Winter House at a much higher season one rate. You're saying that no one, though, in this group, though, ever kind of says, Kyle, go fuck yourself. I'm going to do this myself. I am always the one that ends up talking to like our EVP at first the production company and then the network and getting the best. I mean, other people have tried, but there's only three of us.

It's me, Carl, and Lindsay that have been around since day one at this point. Right. And then Amanda was on season one, but not a formal cast member until season two. I feel like you should have a different title than cast member. Like you help bring in the cast. You're doing the negotiating. I imagine to some level you're helping with production. Like, is there ever a role for you greater than just being cast?

To be honest, I probably could have fought for like some type of credit, but I didn't want to take away from the authenticity of the show. Okay. There's a couple shows out there where you know one of the, like Lisa Vanderpump or Whitney on Southern Trium, like they had something to do with the creation of that show. They get a credit. And you're like, wait, are they getting a favorable edit? You know, are they kind of behind the scenes pulling strings? I have no say whatsoever as to who they cast, who they fire, blah, blah, blah.

I can try to influence, right? I've never influenced a firing. Just let the record state because I know you've had some previous guests that think otherwise. I've never influenced a firing that'd be horrible to wish on someone. I often try to get involved with casting just because I can, I'm a good read of, you know, I have a good judgey character for the most part, or at least like, oh, they fit the work hard, play hard, you know, mold that the original concept that shows used to be about. So when you're casting, what are you looking for?

If someone runs into and they're like, I want to be on that show, what do they got a show, Kyle, for you to go to the top and say, that would be a good thing? Not just be thirsty for fame, because none of us were, this is just all actually. accidental. Yeah. Right. So I knew that it could be a platform. Sure.

I never thought, I'm going to get my MBA and start a different couple of companies so I can, you know, end up being on Bravo. Right. I'm sure you feel the same way, right? Sometimes these opportunities come your way and you're like, I'm going to look at it through a different lens and make sure I make it count. And so, you know, I think that our show is pretty unique in the sense that we film straight through the weekend.

You can't hide from it. You can't go in a, you know. know, hold yourself up for a couple of days to figure out what you're going to say next. It's just real time. Yeah. You know, so I think people are finally starting to realize that lends itself to, like, feeling a lot more natural, which I think is key. If you're sitting back and you're watching reality television, the more real it is, the better. 100%.

The more scripted it is, you could do it. It's like, it's transparent as a ghost for a viewer. And that's the beauty of surveillance. Yeah, for sure. Like, the producers aren't there all the time, you know, extracting how you feel and what you, what you want to say. Like all the surveillance capturing everything. Interesting. Something they run into with Bachelor in Paradise is you get people that now know how to game the system a little bit.

They start to see the opportunity. They start to see people creating their own products and making good money off it. Do you start to find that people coming back from the season might be collaborating, gaming, trying to do something to get the good at it, positioning one another with allies, stuff like that where it becomes less of a really unscripted television? You feel like that's not the game-fied, right? Like, if you think about, like, Big Brother, Survivor, and, I mean, shoot, I mean, at the end of the day, the Bachelor franchises are all gamified.

Of course, yeah. Yeah. Any hint of gamification is going to instantly start encouraging people to game the system. Right. So there's none of that on our show. I'm sure some people come in with this preconceived, like, you know, here's how I want to be portrayed this summer. But that's, that's going to be your biggest flaw in your,

biggest downfall if you come in thinking you can actually manipulate your own edit because the producers are smart they can see right through it so you don't think there's any so think about this though reality tv right a lot of people that determine your value production sure and the viewing audience yeah so even if there is no like game in the actual show which is not at summerhouse do you think there's still no ability to game production and game the audience knowing the value that in return there could be, if you do it effectively. Yeah, I mean, look, don't get me wrong. There's certainly been times where I feel like fellow castmates did something for camera.

Yeah. You know, that's not how I roll. Yeah. I wish I did less for camera, quite frankly. But it is what it is. You know, and I think people are smart. People can kind of, like, see through it. And you kind of take that risk if that's how you're going to roll.

And like, I think that the key words in reality television, I'm sure you've heard a thousand times is like being vulnerable, open and honest. And so if you're trying to like kind of, kind of, cheat the system, game it, or at least try to manipulate your edit, I think your opportunity to be authentic instantly kind of goes out the window. I agree with you. There's a podcast out there that's called Game of Roses. And essentially, it's like the Game of Thrones where they take all the analytics behind The Bachelor and they will rank players. They call them players in their performance. And I got into like a little battle with one of the guys just saying, I don't know

that someone could actually come in a game. He thinks they 100% can. And I said, if you game, you're going to get caught. And if you don't get caught, it's not going to be who of you. And if it does be hoove your edit, it's going to be shit. Like, you're going to struggle if you're trying to game because one way or another, you're going to get caught, whether it's during filming, after filming. It's just going to happen.

And so it's an interesting battle. I tend to agree more with you that there's only so much you can do because you have too many people working against you. And just one last little thing. I think shows like The Bachelor, Bachelorette, Paradise, whatever, big brother, surviving. I mean, producers, I think, have a little more leeway with how they want certain people to be portrayed. Sure. They're going to need a villain.

Yep. Right? I've known, I won't say any names, but I've met someone who's like, yeah, she's like, I got the villain edit. Yep. I'm not a villain, but I got the edit. And fortunately, our producers. They've been pretty fair. I mean, what you see is what you get.

In fact, I think almost everybody that's ever come on our show, if you actually showed them at their worst, they would actually have a worse that they had that they got. Fair enough. That's a good summary. All right, let me ask you this. We have had some people come on this show from like America's next top model, and they got stipends of $38 a day. We've had some people on the show, like Rob Deere Deck, who was paid $125K an episode

negotiated brand rights into his deal. and own the production company that now produces every one of the shows. And he went for making 100,000 an episode to making millions and millions per episode. It was wild. Go listen to that episode. You'd love it. Rob Deerdeck, genius. You guys haven't listened to it.

Go check it out. For Summer House. Like, I just don't have a clue. And I'm looking for round numbers because I feel like you can't give too much away, given your contractual obligations. But is there a season that you can be in the show where over the course of a season, based on years, that have happened so far, you can make over six figures per season? Or is it not at that point? Okay.

Yeah, six figures. Yeah, I mean, six, you can kind of cross the six-figure threshold. It all depends on the number of episodes per season. Okay. Because we get episodic fees. Got it. Okay. Yeah.

So not revealing too, too much. You can kind of cross into that six-figure threshold maybe by season three, season four. Okay. So that was your threshold where you said you could maybe start living in the city by yourself. Gotcha. All right, cool. Now, let's talk about the company you started a little bit and how you've monetized. So obviously, you've monetized from the show. After doing the show, when you're not filming, what have you done with this platform from a business perspective to accelerate monetization? I know you've already built equity in a brand. What is some of your strategies been, especially given your business background? Sure. So, I mean, I've done a lot of different startups. So I never see the light of day. You know, when I was going through the casting process and helping the casting process, I was working on a nutrition coaching app. Okay. And one of the reasons I did the show is I was just like, I mean, what better audience than Bravo, right? People want to look good. They want to feel good. Nutrition is so underrated. Yet people know abs aren't made in the gym. They're made in the kitchen, blah, blah, blah, all the cliche sayings, right? So I'm like, this is going to be perfect. So I had an app that would connect people to their nutrition, a nutritionist. Okay.

And, you know, what I found those first two seasons, because I was working on that season one and season two, is something like that is almost impossible to bring the life on camera in an entertaining way. Go figure. It's an app and it's nutrition. Meanwhile, you look at the show, I'm like the guy with the, I'm like drunk with the late night munchies. I'm doing the opposite of what I don't want a nutrition app from that, dude. So, you know, it was really hard to get these work scenes to make the edit. So I'd have to make them visual. So we would do a workout and then talk about how nutrition plays a part of that.

Most of those scenes end up getting cut. The few scenes that didn't, people are like, oh, Kyle's got a fitness app. And I'm like, no, it's nutrition. God damn it. Like, we don't need more fitness options. We need better nutrition, like coaching. So that would have been an uphill battle. Yep.

I knew there was an amazing audience, a loyal audience on Bravo, right? You know, Bravo has Bravo Khan now. I mean, that's a testament to just the loyalty and the incredible community. And I was just, you know, no one cared about my app. Everybody wanted to know what we're drinking. So in 2016, 2017, I mean, dude, the original truly was in bottles in 2016. But it was in bottles? Yeah.

Wow, that was a fun fact. know that okay so 16 was the year that white claw and truly launched we were drinking mostly truly because we could get it on fresh direct which is like a grocery storage we we pay for all our groceries you pay for your groceries on the show that's a fun fact so i would i would get us like all these like high sugar like margarita mixes and we'd be drinking twisted teas and then we would kind of balance out our like calorie intake by drinking these no-name trullies okay and next thing you know season two boss and beers like hey we saw you drinking all you know twisted tea and truly we'd love to send you some product don't make sure yeah we'll take it we're paying for it yeah we're paying for

it now we'll take it for free yeah so we consumed an insane amount of truly and twisted season two and the the bulb started going off the light bulb just started going off i'm just like everyone wants to know about the rosé the margarita mixes but in particular like what's going on with these like canned beverages that all of a sudden for the first time ever have a nutrition label sure right like that was the game changer for seltzer for a lot of people now i know what's in it yeah 99% of alcohol products don't have to have a label by law. Sure. It's whack.

So, yeah, I knew I had a platform. It didn't work with the nutrition app. And I was just, I had to listen, pick my head up and listen to what people did want to know about. Okay. And it was like, what are you drinking? And here we are in a position of influence. And I can say, yeah, we're drinking twisted, which has 30 grams of sugar a bottle. Yeah.

And it's basically diabetes if you drink a six-pack. And you're going to wake up with a gnarly hangar. I almost felt guilty telling people what we were drinking. A disservice by promoting this. So that's what I was like, why isn't there a better for you hard tea? And then I start doing some research. T's the most widely consumed beverage in the world. Nine out of ten millennials drink tea.

And meanwhile, in the alcohol world, there's basically one brand that does 90 plus percent of the hard tea sales. And it's absolutely horrible for you. I can't think of any. You named like a seltzer. I could list five thousand thousand of them. Yeah. Exactly. So, and T is, you know, these products, whether it's a hard sell, it's a hard T, whatever,

they're distributed by beer wholesalers, even though they're not beer. Sure. And twisted. That's because it's what, malt? Twisted is malt, truly is not, but it's taxed and distributed the same way. Understood. Okay, so what year was it that you started Loverboy? So I basically, like this crash course that, you know, I went on with Amanda from a branding perspective,

and then I worked with a guy that was like, we were, like, formulating in his Brooklyn kitchen. No shit. Like, it was just like, I've got two months before the show starts, I'm putting the nutrition coaching app on hold, and I'm going to spend upwards of 100K to, like, launch this damn thing. Because I know, having started many businesses, the only way I could get friends and family to invest is if I already had a product. Yeah, yeah, yeah, yeah. Right?

No one's investing in PowerPoint. No, no, no, no, no. So I just bit the bullet, and it was a mad dash in the spring and summer of 2018. Got it. And we were able to capture some of that on camera. And so when that aired the following year, I mean, Leverboy wasn't ready, but the awareness had already started. Interesting. All right.

For people that might not know, when you start that deal, you obviously had a partner there. You're in his Brooklyn kitchen. Tell us a little bit about like the structure and the thought process of how you negotiated, like, equity and what you're thinking about value at for someone that has no idea. So I'm, here's the thing about alcohol. Most people in my shoes are going to go slap their name on existing product, a shard. a tequila, you know, whatever, like Kendall Jenner's tequila came from a distillery that makes 60 other brands, tequila. It's about as unoriginal as you can possibly imagine. Sure. What I wanted to do, because this is just how I am as an entrepreneur, I want to build

this thing from scratch. So from an equity standpoint, I mean, up until I raised money from friends and family, I owned 100%. I funded it to kind of get it to that point. And most of the people that I brought on early on were just paid consultants that I, you know, write personal checks too. Sure. So the guy that was helping me put together the original formulas based on what me and Amanda and a couple other people were like, you know, providing feedback and guidance. He was just something that I paid. Interesting. Yeah. And that's how you retain. I mean, like, look, there's plenty of shortcuts. I keep your equity. 99% of like celebrities with a brand, quote unquote, you know, they've got a brand. It's not their brand. Like when Travis Scott launched

cacti, yeah, yeah, yeah. People are like, oh, how's Travis Scott got a seltzer and it's everywhere on they want. You know who actually owns it? The biggest alcohol supplier in the world. Right. A little company called A.B. In bed, Anheiser Bush. So what I, I was just like, look, people are going to wonder why it's growing so slowly state by state by state is because I'm one of the very few brands just building the damn thing myself. Yeah. And the compliance and regulation and alcohol distribution is a nightmare. Yeah. So how much did you put into it? So that was, I think, just shy about a hundred grand too. So I was like doubled down between Phoenix, my nutrition app and lover boy. I mean, I

I basically had taken all of my savings and I was basically going down to zero again, you know, for the second time in what, like five, six years. Yeah, the roller coaster. You got to love it. That's a true entrepreneur. Where does the nutrition company stand? Our nutrition app, where does it stand? I actually just got a receipt still, like, stored somewhere in the cloud, like the actual, like,

code. It didn't really go anywhere. I mean, I had paying customers, but it was a grind and I realized it was one of those businesses that even though it's tech enabled, it's still only scaled by, humans and it's a service-based industry and I was just like shit this is not going to be as easy to control people's experiences and ensure they have a great experience as I would have thought gotcha and so when you get yeah you get to the point you're not going to scale it it's not going to get what you want you cut it most people have issues cutting it and letting it go you go on lover boy

talk to us about lover boy's success so far so we I mean at the time right 2018 there probably weren't even 10 hard celtzers and in you know the summer of white claw had not happened. Yeah, that's an early time to get in the game. Yeah, I just was like, look, alcohol is 20 years behind the rest of like food and beverage. The fact that alcohol had had like a hard soda moment in like 2013, 2014 in a time where soda sales and the non-alcohol were declining was just like in my mind proof in the pudding on like the big brands, the big suppliers have no idea what consumers want. And the reason why consumers don't get what they always want in alcohol is because of the three-tier system, which is the supplier of the wholesaler

and the retailer. It's very unique to alcohol. It's all about the laws and regulations that you mentioned. Almost like a little, especially in New York, it's almost like a monopoly. Yeah. It's crazy. It's, you know, it's insane. We can go on a tangent on that, but we'll keep it going. Yeah. So I just thought very early on, I'm like, look, if you have a canned beverage, the best distributor is going to be a beer distributor. There are thousands needed, or there are thousands in the country. It hasn't been consolidated like wine and spirits. If you have a, If you go put a label on a tequila and go sign with Southern Glazers, you can literally be in 46 states overnight if you have the capital. Not so much in beer.

It's way more challenging. But I wanted to create a high margin premium product that would be at the top of like a beer wholesalers portfolio as opposed to a low margin product in like a wine and spirits distributor. Got it. And with beer, you can be in three and a half times more retail locations in the country than selling wine and spirits due to. regulations. So I'm like, what if I create a premium product that caters towards like that wine and spirit consumer, which is what those are like the best consumers in alcohol, sure. It's made more readily available and the margins are great. And so, look, a lot of like thought went into building this thing. And that's why it's been, we're in about 39 states now,

we'll be nationwide by the end of this year. We'll have 200 different distributors that we work with. I had to negotiate 200 different distribution agreements. It's been a massive undertaking. We did in two years what Sierra Nevada, Boston Beer, New Belgium, Dogfish, all these legendary craft beer brands. It took them 20 years to build a distribution network. We didn't, too. So it's been, I mean, that's why I, like, I'm not very on top of my, like, socials because I'm just, I don't have time. That is wild.

Absolutely wild. So what is the, how many employees do you guys have at this point? We just had, we had number 17 and 18 start. on Monday. And where are your offices? We have an office downtown, but I mean, everyone's pretty much remote, not necessarily because of the pandemic because most, back in the day, you'd think, well, I want to hire people in New York.

Sure. And that reduces your talent pool dramatically. I think the pandemic has kind of opened our eyes. You can actually work remotely pretty efficiently, and a lot of the people that we're hiring are like market managers that oversee sales in various parts of the country that they need to be in. Interesting. I could ask you a thousand questions.

What's been the last year one? What's been the toughest thing about scaling? Honestly, we, I mean, in 2020, it was, it was classic, like, supply chain stuff. I mean, we first, there wasn't enough manufacturing line time in the canned businesses. And then, then we ran out of cans. So in 2020, the U.S. beverage industry was 10 billion cans short of the demand. Holy shit. So a huge, huge, like, can crisis, if you will. 2021 that started to get a little better but I ended up having to import about 20 million cans from Asia from Shanghai and Kuala Impore Wow Like we've we've had to figure out

All of this on our You're importing the can It's not your show right That's like distribution Like dozens upon dozens of containers That are like and then they're sitting on a boat Outside the like the port of L.A Because of all that's going on with the global

Like shipping shit show So I mean I've seen every possible scenario, I feel like. That is crazy. What's the end goal here? You're trying to exit the company? So we, in the markets that we had product in 2020 and 2021, we were outpacing a lot of the big suppliers, you know, big bets in hard seltzer, hard tea, and they call them

RTDs, ready to drinks. And so we kind of caught the attention of these big suppliers. They started having conversations about strategic investments. In alcohol, once you take on a strategic investor, you're almost kind of handcuffed. them sure because you next thing you know you're aligning with their distributors and it's very hard to move the brand to other distributors right and so it's called franchise law it's just like it's a whole that's all the topic yeah you want to talk about monopolies yeah holy hell but but yeah the end goal is is honestly just to build lover boy into a household name we want to be i don't know if you ever

heard of mark anthony brands but a lot of people like where do white claw come well white claw is owned by the same company that owns mike's hard lemonade right came in jack a couple other brands that's a privately owned company. It's actually a Canadian, like, multi-billionaire now. And I'd love to be, like, the next Mark Anthony Brands that understands, like, the millennial Gen Z consumer, what they want. And we find ways to, you know, get them a better quality, better tasting version of what is currently out there on the shelf. Have you yet been approached to be acquired or no? Yeah, yeah. And you said no. We said no. We're like, we're just, we're just getting going. we'd be doing 10 times the sales if we didn't have the can and the manufacturing shortage.

Because the, what's the multiple on this industry? It's like 15, 10 times? I mean, it's... Well, Spirits has a way better multiple, right? So Aviation gin, which is Ryan Reynolds and Cosamigos, which everyone knows is Clooney. Those were like, those around just call it like 25X. Okay. 25X?

That's what they were? Yeah. I knew they were big, but 25x. Yeah, Cosamigos was doing, I want to say, either 20 or 40 million. when they got acquired for a billion? That's crazy. If you're confused in this conversation, guys, we will totally recap it and break it down in a 101 fashion.

So beer historically has traded a much, much lower multiple because the margins are way, way smaller. We've got one of the highest margin, quote-unquote beer products out there. Got it. So we'd want to play in, I don't know, like that 10, 12 or more. Damn, there you have it. I mean, you guys are killing.

One day we'll be reading about Kyle Cook and Forbes exiting this company for $1 billion. One thing we hear a lot about is the intersection of love and money, and we need guidance on it. We've got guidance from a lot of people, but I know in the show you guys talked about a pre-num. So what is just like your overall take advice for anyone out there? You're thinking about getting married. Caitlin and I are engaged. What's your take on pre-nubs and why?

I think that pre-nups had a stigma, and they still do. Just like once upon a time, reality television had a stigma. Yeah, sure. People come around. It no longer has to be your guilty pleasure. It's just your pleasure. Yeah. Get over it.

I think pre-ups are, it's a good conversation. It's like in business, you force yourself to have like the toughest conversations ahead of time when things are good. Right. Right. Like if you have a co-founder, like what happens if, you know, shit hits the fan? Sure. I think as uncomfortable and awkward as it might feel, like force yourself to have those

uncomfortable conversations. I was so trying to avoid the topic for so, so long that I started it too late in the game last summer. So by the time I started thinking about and talking about it and calling up lawyers, it was like really run up against a clock. And then we got COVID. And then like our whole world like kind of flipped upside down the first like three weeks from our wedding. And it was just like if we don't have a florist right now, which we didn't, our florist backed out, I'm like, there's no way I'm sitting here talking, dedicating time to pre-en-up conversation. Like, we don't have flowers for a wedding.

So, you know, I'd encourage people to have it way further in advance. Okay. And you'd be surprised when you poll people, like, our age, the vast majority of people are now in support of them. Yeah. So, but then when it comes down to, like, having the conversation, I'm sure of a lot of people avoid the topic. Stepping into that conflict is.

So, yeah, I think it's, we'll probably look to do something after the fact. Gotcha. I don't know if it's called a postnup or what. But a lot of people like, I don't know, Kyle, a postnup's a divorce. I'm like, well, there's a word for it. But, like, I think it's really smart, you know, not just if you're an entrepreneur, it's a much easier conversation to broach, I think. Yep.

But I think everyone should have the conversation. Yeah. I mean, to your point, you do get in business with a partner of some sort, and you put together an operating agreement talking about what happens when you die. Right. Like literally, like, if you die tomorrow, what are we doing? So why not have those conversations and relationships? What about the business?

Does Amanda have any part of ownership in this business? You guys worked together on it. Yeah, so she had a full-time job, which was actually very unique for anyone on a TV show. For that matter, she held down an actual corporate gig for the first four years of Summerhouse, which is my mind. I was back to season four when I would hassle her because she'd come home from work and want to sit down on the couch and I'd call her lazy. That's one of the biggest regrets I have on this show, because people do think she's lazy now. You know, Kyle said it. She must be lazy.

meanwhile it's like we're filming a show which is time consuming and you know she she wants to unplug after a long day work just like everybody else sure I'm wired differently yeah yeah yeah so anyway she she had her full-time gig back then I didn't know if you're going to be you know get married how things were going to pan out if she'd say yes if I propose so I owned 100% of the company and I was all set to give her equity but then I found out that once you're married you can actually gift equity with basically zero tax liabilities, yeah. So that's like the new plan. Gotcha.

Gift her percentage of equity. Yeah. Got it. Any recommendations or advice for couples that work together, like professionally? Like literally for the same company or their own company. You guys will own equity together. Any thoughts or advice for people? I think initially Amanda's like, well, we got to draw a fine line.

Like at night, at dinner or in bed, no talking business. She quickly realized once we moved in that that's, impossible for me. This is probably one of my biggest issues in our relationship. She's like turn it the fuck off. Yeah. I'm like I can't stop. That switch does not exist. I can't find the switch for me and do it yourself because I can't. So I think that there's all sorts of like case studies in history of, you know, it's not easy to like live with date and marry like an entrepreneur. Sure. Particularly if you're trying to build something not just like a small business, but something that actually scales and you're dealing with investors and you're dealing with employees and

employee, you know, like all the high stakes. You know, I think that it's really kind of like how you guys work together, right? If you don't have that switch to turn it off, I think you have to just somehow, some way they get hurt to realize like, this is me. If this is going to be an issue, then, you know, maybe we have bigger issues because this is who I am. I can't change, right? This is how I'm wired. So you were, but you're wired to work 24-7. How are you, there's no way you can work 24-7. How are you balancing it?

What's your, right now, I, straight up, I have zero balance in my life. Yeah. It's pretty, like, but I'm putting in the work now. Like, I'm, even though I'm about to turn 40, I still feel like I'm young. I have this huge opportunity to build lover boy into a much bigger brand than it is now. And it's kind of like one of those, I'll like pay it forward. Like, Amanda, please bear with me. because I don't know how long

I'm going to be on TV I don't know how long we're going to have this opportunity and how long we're having a product that checks all the boxes for wholesalers and retailers and consumers and sometimes, yeah, you're going to be in a situation in life where you do not have the balance

because they're just not enough hours in the day. So what's a normal day look like for you? Right now I'm stressing because I fly to Italy in like 48 hours for a wedding with Amanda and so like I've got that looming over my head and then next thing you know we come back and in four days we start filming season seven that's a lot so I'm just trying to continue to be respectful and patient you know in my personal life

knowing that like I'm I'm really kind of like running on empty so you're but your typical workday would work you're I'm trying to try to get up and go to the gym before you know meeting started at like 930 10 but I might be working straight up until like 12 1 or 2 in the morning And that's just, and then I just click repeat. And then, and then, and then like my, you know, I, I joked, but our little mini three, three night, four day mini moon was the first vacation I've taken on in, since 2018. Did you know how to vacation? Like, could you just enjoy it? Yeah, for sure.

Could you turn it off, put the phone down? Yeah. When we film Winterhouse, that actually forced me to actually put the phone down because there was just, you'd either be. tired partying or hungover. Yeah. Or skiing. So it's tough. I'm not going to lie.

But like, I mean, filming two different TV shows throughout the year and running a company and just trying to like still maintain friendships and be, you know, good all around dude. That's not easy. Like my brother's like, hey, remember me? Feel free to call me like, I don't know, this year. Once in a while. But I feel bad.

But like, that's, that's, you know, I hope the people around. me understand, can't take things for granted. So yeah, that's my biggest flaw right now is the balance. I got to find ways to be better at it. Balance is tough. All right, we'll end with the trading secret. So it's an advice on money, entrepreneurship, career navigation that someone can get from you that they can't get from anyone else. It's your trading secret. So that we definitely have to go with. But the last thing before that is your take on influencing. We talked to Kyle a little bit about getting in some deals, you know, get you $25K for this, $20K for this. Kyle said, no, I'm good.

I don't need that. Well, he didn't say 25K. I might have to, like, give that some thought. 10.15. Okay, maybe 10.15. So tell me, 10K deal. Explain to people why you're saying no to that. So, look, you've seen it firsthand, right?

A lot of people go on The Bachelor or, you know, a lot of these different shows because they want to be famous. Yep. Back in the day, fame was just, that was like the B-L-E-L-E-L. Now it's like, well, with it becomes influence and the ability to monetize your influence. and it's one you know i think it's very short-sighted to just focus on peddling different products and services on your instagram feed doing the paid ad game because a over time you're you know you're you're your engagement might go way down people might unfollow you sure you know and when

you have something you actually care about like you've now diluted your brand equity by pushing other people's brands when you actually have a post you care about the question is will people engage on it, right? So what I've realized very early on building lover boy is one of the reasons it's successful is because people know that we're the ones building it. Like that authenticity on the TV show translates to the business. We're not just sticking our name and our label on something and white labeling it or private labeling it.

And so, you know, what I encourage people that wind up in a position of influence is think about how are you going to make a longstanding impact? Like, what are you going to create? And it's not just paid ad content. At least it shouldn't be. So that's, you know, my whole M-O is like, once in a blue moon, I'll do some type of partnership or a paid post. But it's got to be 100% on brand. And I mean, I can't even tell you the last one I did, to be honest, because I'm just, like, if I run a sale or if I launch a new product, I don't want the fact that I did five or 10 paid posts leading up to that for people not to give a shit.

Yeah, right, right. So again, I think for a lot of these people that, I mean, back in the day, people wanted to be like lawyers and doctors, and then they wanted to wind up on Wall Street. Now you ask the average college, like, senior, what do you want to be? I want to be an influencer. It's like, no, no, no, what do you want to be? That should be like a byproduct of something else. Influencing is a byproduct of whatever it is that your main thing is. So I just think that at the end of the day, like, what are you going to put out there in the world?

What are you going to offer? You know, is it a good? Is it a service? And so if all of a sudden you just, you know, your feed is just paid ads, does anyone actually care about the product or service that you eventually hopefully come out with? Right. My only retort to that would be, I think, a lot of the people that have the influencing

will utilize the paid ads as cash inflow to support potential outflows. So would you say your cash inflow to support what you're doing? Well, obviously now the business is sustainable. You're probably taking a salary of some sort. But would you say that's summerhouse market? money? Yeah, I mean, in a way, yeah. I mean, like the various things that I did, those various revenue streams over the years is what basically allowed me to start my nutrition app and then lover boy. Got it. Right. So like, look, I'm not saying, I'm not like shitting on everybody out there

that's doing paid posts. Sure. But I will shit on the people that post something that's ridiculously out of their like personal brand. Totally. I'm like, in what world? I'm in like, God, you're desperate if you're pushing this shit out there. Like, right, right, right. Like, don't be that. guy. But if you can get behind a brand or a product that you're a believer in or ideally an existing customer, that to me is much more acceptable. And I think people are smart enough to recognize that. Like, yeah, you know, I've been using this product for years. The brand reached out. Got you guys a code. I'm like, all right, that's a little more, you know, in the wheelhouse. Than me trying to push dildos or anything like that. Yeah. Well, I mean, I don't know. Maybe you're a

long-time customer. I mean, you see these like sex ads everywhere now. I'm like, where the hell are these evening coming from. It should be like hashtag no shame. Yeah, exactly, no shame. I mean, like, I get it. Like, people use sex toys, but like, you know, I don't need to see it in my feed. I love it. Good for them.

If they're doing it and they're pulling it off. All right, Kyle, trading secret. We got to end with your trading secret. What's it going to be? So I don't know if this is going to qualify. But, I mean, for people that are listening that have these entrepreneurial ambitions, I think, and I've said this a couple times, but I can't stress it enough. Not necessarily here, but just like when I do.

do have an opportunity to kind of like share my story. I've talked about these revenue streams, right? And I've talked about quitting my job. And, you know, I think a lot of people will hear someone from some venture capitalists be like, if you're not all in, if you haven't already quit your job to start your company, then I'm not even, you're not even on my radar. I'm not even giving you any type of credibility or legitimacy. The thing is, as a founder, one of the biggest points of stress that you're going to face

is how are you paying, how are you covering your burn? Not just the company's monthly burn, you know, your expenses, but your personal burn. So personal burn is a real thing. And when you raise money, when you go raise venture capital, you talk about, well, how much runway, you know, are you going to give me? So if your burn is 10 grand a month and you want to raise 18 months of runway, it's 10 times 18. Question is like, what do you need on a personal level? And so I really endorse the whole like moonlight, you know, your, your business to a place where it's finally generating revenue or it's capable of generating revenue and capable of actually supporting you drawing a salary. Sure, sure.

Before you quit. Now, if you're not willing to burn the midnight oil, then you're not cut out to be an entrepreneur in the first place. You're not going to get there. Or you're just not doing something that you're passionate enough about. So, like, my trading secret has always just been, you know, you don't want to let the stress of your personal burn cloud your vision as an entrepreneur. So make sure you can cover your expenses. And you should be frugal.

Like, like I said, I didn't start going on the hands instead. I was like 30 something because I was frugal. But I really do believe that a lot of people quit their job too early because they think they're going to go raise money and then pay themselves a salary. Keep in mind, whenever you raise money, you're giving away a part of your company. Totally. Like, raising money should not be glorious. And you've got someone watching every single thing you're doing every single second, every dollar you're spending.

When I was in business school, the entrepreneurs in the mix, the only thing that they were focused on was like, can I raise venture capital? Right. It's like the number one goal is to just give away some of your company. Like, that's ridiculous. The number one goal should be, how do I get my company to a place where we're profitable and I can support? myself. So that, I mean, it sounds obvious, but I see it every time I meet someone who's like thinking about quitting their job.

And I'm like, well, where's your idea? At what stage? Right. How close are you to generating revenue? And then nine out of ten times, they're like, oh, it's just an idea. I'm like, well, then keep your job, bro. Keep your job. It's tough.

Like you said, it's tough to fundraise off a PowerPoint. Kyle, this has been great, very informative, awesome to hear your story beyond what we just see on television. So thank you for coming on. Where can people find you? Where can people go check out lover boy? Yeah, so drink lover boy on Instagram and the web. And it's Kyle Cook.

Well, I'm Kyle Cook, is my technical handle. Okay. Hopefully if you type in Kyle Cook with an E, you'll find me. And yeah, I probably should be a little more active, but like I said, I'm busy. You guys know why. Kyle, thank you so much for being on this episode, Traying Secrets. We appreciate having you on. Thank you.

It been fun. Ding, ding, ding. We are closing in the episode. to the Kyle Cook episode. And of course, we're closing the bell with the one the only, the curious Canadian summer house superstar, clearly a brilliant individual and businessman.

David Ardoin, what do you got for me, my man? Just another, again, I feel like I'm repeating myself sometimes. We get these reality TV stars on. We don't really talk about their reality TV show. We talk about their passion, their drive, they're just business acumen, unbelievable, because he,

I don't know if you've seen Summer House. Have you ever seen Summer House before? Oh, God. So, all right. I'm an honest guy. I should lie and say I have. I've never watched an episode. I'm very familiar.

I know it's on Bravo. I did my research, but though I've never actually watched an episode. So he on the show is like the funniest, but he drinks like nonstop. He talked about like the drunk munchies. He's like he's the funniest person on the show by far. So to hear like all of his,

you know, how smarty is, how driven he is, how successful in entrepreneur is, was crazy. For me, listening into it, knowing you, Jay, and watching the video and seeing you guys being able to do it in person, you know that Spider-Man mean? We're like, you're in the

costume and you're pointing at it, and you're like, I'm Spider-Man, you're Spider-Man, I'm Spider-Man, you're Spider-Man. It was like you were looking at like, you were looking at like your, what I felt like your twin with the way that you guys think. So I want to ask you before we get into it, what was the one moment or topic in the interview where you're like, oh my God,

holy shit, we're the same person. Oh, my God. That is actually hilarious. So one of the things is that I think what, oh, I think I expected what you told me because I asked a lot of people about the show, right? I do my due diligence. People are like, oh, he's hilarious. He's like, the guy can party his ass off, right? He came in. It was like, we're getting in the weeds.

We're getting technical analysis in business. We're going, you know, all this stuff. I'm like, whoa, this guy is not what I thought. And it reminded me, I'm like, yeah, work hard, play hard. Like, that's kind of how I live my life a little bit too. So I just noticed that his whole drive, his strategy, what he wants to do, how he's able to like take one thing and move it to the next and intertwine the two. I was like, that's literally the same strategy that I use.

And that's not often what you find for people that come reality television shows. And him and I actually spent another 30, 45 minutes after the show talking about maybe ways we could work together because we're in a unique position where we both overlap this reality, TV, media, entertainment world, but are very focused on the business and entrepreneurial side. Yeah, no, that's awesome. MBA guys turned reality TV, turn entrepreneurs is the way that you guys have done it here. I was expecting complete frat bro from them, like the show he gives you frat bro vibes, but we're going to move on to some definitions for some 101 stuff, and who would have thought that the frat bro has given me more definitions that I don't even know what they are.

So the first one I want for the people at home, hopefully they don't, they're wondering what these definitions really mean too. So I got five of them. So, if you could rip these off. The first one's a moonlighting. So what's the definition of moonlighting in an entrepreneurial business sense? I'll say this, David, I don't think at any episode I've interrupted more to say, Curious Canadian, make sure you get this because we're clearly only have to cover this. All right, let's rifle through these. So moonlighting. Think about, let's go to the Laura James episode, right? Reminds me of moonlighting. When Laura James was doing everything she could be to be an actress, she also had to work at restaurants and find other ways

to make money. Moonlighting is just the practice of essentially, taking on another side gig or another job in order to make money that is not usually related to the main source of what you're trying to do. That's a wild word for that term because it's completely, I would never have guessed that. Cap table. What's the definition for cap table? Okay, so cap table is just going to be your ownership table, right? So if someone tells me that they have a cap table, I'll be able to see all the details of who actually owns the company. A cap table is really big if you're considering investing in a company, you want to see who as ownership,

are there people of influence, are there celebrities, are the people with great credibility? How much does the owner have? Does the owner have family or friends that have put skin in the game? So it just gives you a whole idea of the company's percentages

of ownership and equity. Okay. Now these next two, he kind of talked about in his trading secret, and I have a pretty good idea of what they mean. He kind of explained them a little bit,

but looking for a little hard definition or maybe another example from you, he talked about his, burn and the runway to cover that burn. I think obviously burn was related to expenses and runways maybe covering those expenses, but I just wanted to make sure that that was concrete and maybe get your twist or your take on that. It's so funny how much jargon there is in the startup world. It's unbelievable, right? But burn rate essentially is like if you think about how much monthly cash that a startup company like his would have to spend before it starts generating

its own company. So that's like, that's like a really big one, right? The amount of time the company has essentially before, there's no money. So think about that. Like, think about this. If I quit my job now and I look at the cash I have, my burn rate would be how long can I live off this cash until I have to go get a job and make money? Does that make sense? Yeah. Now, so runway is how much cash I have until I run out of the money. Then the reason he used burn in runway in one sentence. So runway, will actually tell you the amount of time that you have, right? So it'll refer to the amount of months that I have that I can operate my business before literally I have no cash.

So that's big in the startup world because they have to raise money and instantly deploy the money to get the business up. So they can look at their cash position and say, I have runway of nine months. Like in nine months, if what I'm doing is not bringing dollars in, this business is a deficit. It has no money left.

I just loved him on the podcast because he, I think, was really relatable for a lot of people giving them real world advice. Like when he said, like all those people who say, oh, if you're not all in, if you haven't quit your job for this, he's like, no people, no. Like, understand your burn, understand your runway, moonlight, get a side hustle, get a sidegick so you can keep pursuing that was really awesome. One thing that you guys talked about that if you could just give me, you know, a quick example of maybe some other industries because you talked to. about the multiple in this industry. So the multiple for the wine and spirits and the beer, maybe use another industry as well to give some examples, but just kind of go over what the multiple meant in terms of what he was talking about. Yeah. So, okay, what the multiple means is it's a term for valuing a company, okay? So if you, essentially what will happen is a company

will look at a P&L and they'll figure out what the EBAA is. Let's not even get into that. What EBDA means is earnings before interest, tax depreciation, and amortization. But essentially what they'll do is look at the income of the company. And what those things are, guys, it's non-cash expenses. So essentially, it's an expense that cash actually isn't going out. It's more of a tax strategy expenses. So you add back some things to your income to really give a clear picture of how much money the company's making. And then when people and other institutions buy companies, the way that they'll value that is they will take a multiplier of that income. So what does that mean, Jason? Well, if my net income is a million dollars, if someone wants to buy it based on

the industry, they'll do a four times multiple of the million, and then they'll pay me four million. So it's a measure of how much investors are willing to pay for a company's earnings, if that makes sense. Does that clear it up, David? It absolutely does. Now, real quick, what's really important is that many industries have crazy different multipliers, right? I don't know off the top of my head industries and multipliers. I obviously know wine and spirits because of Caitlin's wine and spirits. I've done the research. But there are some industries that have a multiplier of two.

So you got a million dollar, you got a million bucks in net income plus your non-cash expenses. People will pay two million. And then there are other multipliers like wine and spirits and stuff that are 1020. So you make a million bucks, and companies are willing to pay 10 to 20 times that million bucks to buy it out. Does that make sense? Yeah, it makes perfect sense. Curious, because you and Kyle are so similar, what do you think his extra strategy is? Like, what do you think the dollar amount would have to be? Like, he's put his heart and soul in building something and he's talked about his successes and more so his failures, especially at the start. So a guy like that who's

wired like that, what do you think his extra strategy is? What do you think he's looking for. Is it harder to separate the more time that you've invested? I just want to get your opinion on that. I mean, dude, this is like the million dollar question you just asked. When do you exit if people are interested? And the thing is, is a lot of owners will take too much pride in what they're doing and they'll miss the peak of when they could exit because they're like, no, we're doing more and we could do more. And I know we could do more, right? But there's so many owners that look back at their business and say, like, if I would have sold then, you know how much money I would have left? I think about often the Netflix talking to Mark Randolph, the co-founder.

They almost sold the Blockbuster. I think the number was like 50 million. They have a market cap of billions and billions of dollars. If they would have sold that, think about that. Now, here's one for you. Instagram. Do you remember this? 2012, Instagram was bought by Facebook.

How much do you think Instagram was bought for? I would assume a billion. So you're right. It was bought for $1 billion on the T, 2012. The interesting thing. now. They only had like 10, 15 employees at the time. What's crazy now is Instagram has over a billion users. And I know that from a P&L perspective, they contribute more, more than $20 billion in revenue to Facebook. So if they're contributing $20 billion in revenue and more than that

to Facebook, and that was like a couple years ago, think about what their valuation is. It is so much more than $1 billion. So the exit game is a big game when it comes to business. This last comment I want to make. A lot of people start up businesses. You might start a business if you're listening to this. And they think, well, how much money am I making? Like, how much money do I take in my pocket? That is not what you need to think about. Because the strategy with the business is the exit. Because when you're putting the work in and you're building something, you're earning equity that people will pay much more for because then they don't have to do the three, four, five, six year grind. So it's not just about the dollars the business is spitting off in your bank account. It's

about the equity that you're building in a company that someone else doesn't want to take the time, effort and sweat to build. And that's when you're going to get paid the retirement money when you sell the business. It's such an interesting psychological conversation. Like if I, let's say I could sell something for $100 million and know that like I would be like, be able to not work for the next 10 years. But in 10 years, that company is going to be worth $250 million? You know, is it worth the 10 years of freedom or would it be worth 10 years at the grind for the extra $150 million? I'll never know, I don't think I'm going to make something like that. You might one day, though. Hey, you never know, David. Don't call yourself short. Look at you now. You're a curious Canadian.

All right. So you said, you said you've never seen the summer house. Shame. It's a hilarious, hilarious show. And it takes place in the Hamptons. And I'm sure you knew that from your research. And you've never been to the Hamptons, but you are going to the Hamptons. Well, when this episode comes out, I will have been. So this weekend, Jill Zeran, you guys know, has come on the pod. She invited us to her charity event. She has a luncheon for her husband who passed away and the charity they created under his name. And so I'll be in the Hamptons this weekend or last weekend when you're listening to this for the first time ever. So I have a request from you. Let's hear it. I want you to come back on next week's

episode. I'm going to ask you the curious Jason's top three takeaways from the Hamptons because it is an outrageous place. And if you've never been, I know the way that. I know the way that that your brain works. You've told me about when you're walking the streets of LA, what you're thinking, what you're seeing, how it's making you feel. You're going to be at Jill Zarin's party in the Hamptons. It's going to be outrageous. It's going to be absurd. I want you to put your curious Canadian hat on, and I'm going to ask you your three biggest curious Jason takeaways from your Hampton's experience. Okay, done. We're going to make it happen. I just have one quick follow-up. When you say, like, absurd, like give me just like a 20-second synopsis. I just want you,

I just want you to do some, like, look around, ask, you know, how much is that cost? Who? lives there. What's this area? Where are we? What is this? Like, just get a feel for like real estate. Like how much a hotel is there? Meals, all that stuff. So I just, you know, put your curious Canadian cap on and just look around. Okay. Got it. I'm going to do that. I think in a time like this, too, like I know we're going to wrap here, but I'm just thinking like when we're talking about the personal finance side, while it's such a challenging time to make money in the market, there's so many moving parts. You've got inflation at 9%. You don't want to sit on cash, but you put it in the market. It's the craziest roller coaster ride of your life. I think also a lot of focus should be on

how am I using the time I have deployed to make more money? And if I'm working when I would otherwise be just lounging or leisuring, I'm also spending less. So even if I do something that makes me $100, let's say, in two hours. If that two hours, I was spending, I don't know, $200 at a dinner, that's a $300 net gain. I do think that's a principal people should think about in a time like now. Absolutely. I love it. Enjoy the Hamptons. I'm so excited to hear your three takeaways. And Kyle Cook, great dude, great episode. Well, done. Good stuff. Well, the Curious Canadian. Thank you so much for joining me. Guys, I just gave a little personal finance tip. One thing we're thinking about is adding an episode once a month, all on personal finance.

So personal tips, strategies, things that you can do given what's happening in the market, bringing on a couple experts that could also help with us. Let us know in the reviews if that's something you would want. When you do, make sure you put your Instagram handle. We are reading every review. And we're also reaching out to you guys. So thank you so much for tuning into another episode of Trading Secrets. One, hopefully you couldn't afford to miss.

Just wait till next week. We have Amanda Hirsch coming in hot. The queen, the queen of the Kardashians. She's interviewed almost all of them. She's going to talk all about the Kardashians, how she positioned herself to be the voice of the Kardashians, and much more. That is next week on another episode of Trading Secrets. See you next Monday.

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