We Study Billionaires - The Investor’s Podcast Network - TIP198: Daymond John & The Power of Broke (Business Podcast)

Starting point is 00:00:00 You're listening to TIP. On today's show, we read a book written by a very popular entrepreneur, Damon John. John rose to business stardom after creating the global clothing line, Fubu. Later, he became a celebrity figure on ABC's Shark Tank. After looking through various book recommendations from our audience, we kept getting a similar recommendation with John's book, The Power of Broke. The book provides some great insights into Damon's life before Fubu and how he created the business, but the part of the book that we liked the best was his guidance and recommendations for people that are starting their own business.

Starting point is 00:00:35 So without further delay, here are thoughts on Damon John's exceptional book, The Power of Broke. You are listening to The Investors Podcast, where we study the financial markets and read the books that influence self-made billionaires the most. We keep you informed and prepared for the unexpected. All right. So welcome to The Investors' Podcast. podcast. Like we said in the introduction, we're going to be covering Damon John's book, The Power of Broke. I personally really, really like this book. I'm not saying I didn't have high expectations for it, but a lot of the times when you get a guy like Damon who's a very

Starting point is 00:01:22 big public figure at this point, he's on TV all the time, they get ghost writers or whatever to kind of bang out a book. And so I guess maybe that's why I didn't have very high expectations. I wasn't expecting him to have such input into this book. And you can tell when you read it that he had a lot of input into the book. And it is such good advice. That's the thing that I think I liked about this book so much. It was really good. I'm curious, Stig, did you like it as much as I liked it?

Starting point is 00:01:51 Yeah, I really liked it. Even though it might not be better to have no money than to have money, you can't use it to your advantage, all the disadvantages that you do have. So what we'll do here to start off, we're just going to tell the story of Damon John, how he got his background, how he created his brand and created his money. And just so people know, he's not a billionaire. His net worth is around $250 million. But we like him. We like him a lot. So we think that this is going to be a good discussion, a measly $250 million. Oh, poor guy. Tops. The poor guy. Okay. So Damon got his start. He was actually, born in Brooklyn back in 1969, but he grew up in Queens, and as a young kid, he was always fairly enterprising. And what's interesting about Damon is he's dyslexic. And he talks a lot about this in the book and how, you know, growing up as a dyslexic child, he always felt like he wasn't smart when he was around his friends and had trouble reading and all the stuff that

Starting point is 00:02:57 goes along with it. And so he found kind of his outlet to prove himself through being an entrepreneur. And he always had this drive to make his way and basically create wealth for himself. And what else I found really interesting in this book, and I didn't know this, is that a lot of people with dyslexia are entrepreneurs. And maybe you have dyslexia and you're listening to this and maybe you're an entrepreneur, and maybe you didn't know that. But in this book, he talks a lot about this idea, and I found that quite fascinating. In fact, what did he say? Was it three out of the five sharks on Shark Tank have dyslexia? Yeah, it was very interesting. Probably three out of five, yeah. And I don't remember which one it was, but he also talked about how immigrants were also,

Starting point is 00:03:46 I think it was twice as likely to start up their own company. Because if you have dyslexia, you might have no other choice that to create your own path instead of following others path. Yeah. And he definitely used it to his advantage. And I like the fact that he's so open about it. Some people might try to hide that. But he's very open about it. And I think that it's a very good inspiration for people that might have the same thing.

Starting point is 00:04:09 Anyway, so he's growing up in Queens. And he talks about how drugs were such a driving force in the community and how so many people fell victim to become. a drug dealer in Queens and just that difficulty and that struggle. And he does a great job just kind of telling these stories at the beginning of the book. So anyway, with all this going on, he wanted to be different. And he found an enormous amount of inspiration from his mother. He only lived with his mother. His father really wasn't part of his childhood or upbringing. And his mother did everything she could to make sure Damon would succeed. And so she had him involved in anything and everything that she could possibly have him involved in, to keep

Starting point is 00:04:56 him away from the drugs on the street and just to really kind of nurture him and turn him into a great person, which he obviously became. And what I also liked about the story is his mother took out a loan against the house. What was it? $70,000 or something like that, Stig. Yeah. Yeah, basically to live off, basically as an investment in him. She basically needed the money so she could be around him a lot more and ensure that he was doing what he needed to do is the way he kind of describes it in the book, which, I mean, that's just amazing. And I think it goes to, and he touches on this a little bit, and it really plays on the title of the book, The Power of Broke, is I guess his mother looked at their situation and she said, what do I have to lose? What do I have to lose? There's nothing that's more important than me than seeing my son grow up and be successful.

Starting point is 00:05:47 And so I'm going to take out this money. I'm going to be around him more because I'm going to have money to basically spend and not have to be at work. And so she dedicated to her life and not even her savings, but was taking out loans to nurture him. And so long story short, he starts looking at ways to start creating businesses and to start making money. And so he starts hustling man. And he starts sewing hats. His mother teaches him how to. to sew. He has an interest in fashion, and so he starts sewing these hats and starts sewing his Fubu brand onto these hats. He also tells an awesome story about how, you know, when everyone in Queens turned 16 years old, they all want to try to go out and get a decent

Starting point is 00:06:36 car. And so Damon was working, and he also worked at Red Lobster during this time, which he talks a little bit about his Red Lobster stories, which is really funny. And anyway, so he saved enough money for a car and instead of going out and getting something that would impress everybody on the street, what he ended up doing is he ended up going out and getting like a 12 passenger van or something just ridiculous. And everyone is like, what in the world is this van? What are you doing riding around in this van? And what he was doing is he was basically acting as a shuttle service for people that didn't want to catch the bus. And shuttle them around so it was more convenient and he came up with his own route and he was making money

Starting point is 00:07:22 off this van. And so instead of just spending the money, he kept reinvesting the money. And this is a theme that we see with every billionaire we study is that they're not quick to spend the money and show off, hey, I made $10,000 or whatever. They're quick to reinvest the money so they can keep compounding and compounding. And so Damon John was no different in what he was doing. So long story short with the 12 passenger van, he's doing this and eventually the city finds out and starts, you know, fining him. And eventually the fines started exceeding the revenues. And so he had to look somewhere else. And so he was already doing this fashion thing on the side as well. Well, as his fashion order started picking up, his 12 passenger van really served him well as he was

Starting point is 00:08:14 going to all these different trade shows with the clothes. was in the back because he had room to put all of his inventory. And so, long story short, he continues to grow this business. He continues to plow money back into it. He talks about all these creative ways that he was marketing. And let me just give you a little hint at what he was doing with respect to marketing. He knew that if he got his clothes on rappers and music artists, and if those get on a music video, it could be huge for him. And so just like Nike did with athletes with like Michael Jordan and stuff, Damon John did the same thing with musical talent.

Starting point is 00:08:57 And he started putting his Fubu logos all over these artists. And one thing led to another. And it just created this massive brand for him. And I think in the end, they ended up doing global sales over $6 billion, which is just to grow. Throw that from the ground up and the timeline that he did this is just unbelievable. Anybody who's in retail, especially kind of creating your own clothing brand, can definitely appreciate for how miraculous this is.

Starting point is 00:09:27 So that's his story. And I'm really glad that he tells the story at the beginning of the book because, I mean, I think everyone kind of has an idea of how he made his money. But to kind of hear it from the ground level, clear up to maturity was really, really neat. And I'd say that's probably the first 50 to 75 pages in the book. And I really enjoyed the story. It was well told and a lot of fun. I love these stories. And it's easy to be looped into this personal story of this is how the best people in the world are doing it. And well, perhaps I can't do the same. I mean, that's also what you think as a reader or what you can sometimes be attempted to think because, wow, how can Dimma John do this? And, you know, to some people, I think it's inspiring and to other people might be discouraging because they don't feel that they have the skill set. So I really like what John did next after talking about his own story.

Starting point is 00:10:20 And that was to tell the stories of so many other people and how they became successful in business. And really had a very diverse selection of people and skill sets that led to that. But one of the stories that I really liked from his book, that was the story of Cress and how Chris utilized the power of Broke. I think a lot of you probably know Damon John from the Sharks Tank and perhaps you watched a few of the shows. And just in short, it's basically entrepreneurs who come in and then they pitch the company, they pitch their idea, and then they look for funding in return for typically equity. And John talked about how he was often asked if they always made a deal on the asking price for the participants there on the show. Because it might seem so on the show, but he also says that after they do some due diligence, after the show, the Sharks are allowed to change. the terms, and often they commit less money for the same equity. Also, sometimes because some

Starting point is 00:11:17 of the numbers that entrepreneurs give them, that they can't really bag it up with all the paperwork, and there might be something there. But that was not the case for Chris. I mean, he was backing up all his facts, and he was invested in at face value. And the story is really that Chris, while in school, he saw that more than $100 million annually in scholarship money would go unclaimed, simply because there's no good match between the college and the student. And that's not because there are not enough students to meet the requirements, but it's because the process is tedious and it's not transparent. Preston is nodding.

Starting point is 00:11:55 It's almost like he just had a daughter who just went through that process. So what he actually did in high school was he spent almost a year to apply for all the grants and scholarships he was eligible for. And since he came from a poor family with a single mother and two young siblings, really there was no other wrath for him. And he ran into all kinds of issues. Like the fees you need just to apply to the school. So it's not tuition. It's the fees to apply to the school.

Starting point is 00:12:24 That was hard for him. And it could easily be $50 or $100. And these fees can be waived by the school counselor, which is state rule in Alabama. But you can have a state counselor who can apply. your behalf. You can have some of that way. But that was also something he needed to struggle with. So he was really in a CATS 22 situation where, you know, if he did this one thing,

Starting point is 00:12:48 then there was another thing. The state councilant could only waver it for some schools, but not for the ones you really wanted to go to. He ran into even more challenges that the family didn't have enough money for a computer. So they didn't have internet. So he went to the local library where he could get 30 minutes. That was all you could get for free. and he applied over a year on that golden 30 minutes in the library to all these scholarships and grants.

Starting point is 00:13:16 And Taylor made as much as he could based on his templated answers to utilize his internet times that were so valuable to him. And as the results ticked in, he realized that the hard work really paid off. He accumulated $1.3 million in scholarships. And I know it sounds like an incredible number. It is. And as you can probably imagine, Chris became very popular on campus. And a lot of people wanted to talk to him about doing one-on-one sessions in terms of how he could help them in the vacation process.

Starting point is 00:13:52 And he realized that, you know, as great as it was, as rewarding as it was, it was also very time-consuming to do that for so many students. But in itself, it was a proof of concept why a new service was needed really to do this for people. So he went to a few guys and asked them to develop an app for him. And this is an app where you can type in, you know, sex, gender, race, education level, parents' income and whatnot. And then you'll get a curated list of all the scholarships that you're eligible for.

Starting point is 00:14:26 And it's unbelievable hearing this story like Scully, which is the name of the app, it's firing on all cylinders here. More than 500,000 downloads. And he's talking to state official about brooky. out to all students in the state. And it's unbelievable, really. And this was all why he was a student. At the same time, he's been doing all this.

Starting point is 00:14:47 So Chris comes on to Shaq's Tank, and he asks for $40,000 for a 15% equity stake. And Demi, John was so stoked. And Chris wanted to talk about long-term visions and all that. You're the old corporate stuff that they teach you in business school. But John said, yeah, we can always feel. that out later, which was actually something that really upset Chris initially. But that was

Starting point is 00:15:13 not John's point about investing, because he was not investing in the company. More than anything, he was investing in Chris and the proof of concept. Here you have this full-time student who still managed to set up this company, and he still did his 500 hours of community service, and had a part-time job to help out his family. And since the family didn't have a family, he didn't have internet, he still found 30 minutes at a local library, went there and applied for all these grants and scholarships and still got more out of it than anyone on the planet. So I really like this story because this is really the story of how you can invest in the power of broke and how it's the person so much more than the product of the idea that needs the proof of concept.

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Starting point is 00:20:10 Back to the show. And just so folks know, in the book, when he tells this story, the subtitle is look under every rock for every last dime. And Christopher Gray's story here is, is, in my opinion,

Starting point is 00:20:25 just mind-blowing that you could not just apply, but win enough scholarships to go over a million dollars. Just, I mean, that is the epitome of hustle. For anybody out there that says, oh, I don't have any money or my parents aren't rich, I can't go to school. Like, read this dude's story and you might have a different opinion. Stig, we need to have a link to his app in the show notes because I guarantee you there's

Starting point is 00:20:53 people that are in college right now listening to this or parents that have kids in college right now that are listening to this. And I'm sure that that would be a valuable source for anybody listening to this. And you know, guys, the thing that I liked about this book is he tells his story up front, but that's just what, 20% of the book, Stig, 15, 20% of the book. Everything else is someone else's story. And what he's doing is he's showing you, hey, look at this person. They had no money. But look what they created because they were relentless and because they were doing something that they were passionate about. Like, Chris really wanted to go to college. He wasn't going to let anything stop him from going to college. And so his story expresses

Starting point is 00:21:36 that. And then not only did he achieve what he wanted, but then it turned into a business. And that's how so many businesses start is somebody's passion about whatever leads them into a business. Like, you know, I hate to talk about ourselves during this, but like, Stig, look at what we're doing. And we were just passionate about talking about investing. Like, we could be paid $0 and we would still do this every single night because we just love doing it. Like, it's just fun for us. It's just fun. We might not record all of it because it requires a lot of editing whenever we talk about stocks present.

Starting point is 00:22:10 But yeah, we did that before. I mean, before we started the recorder, we just talk about stocks because it's just fun. And I guess that's often what you hear like from these successful entrepreneurs. Definitely not a category I would put myself. in. They created the product that they wanted or it just could not help not doing it because it was just so much fun. Lots and lots of editing. All right, Stig, you had another story you wanted to tell. This was the tie guy or the bow tie guy, right? The bow tie guy, yeah, the story of Mo. And this is a hilarious story in itself. And I think we will include a video in the show notes of whenever he

Starting point is 00:22:50 pitched his company to the sharks. I mean, and you see this 11-year-old. kid. And, you know, this snappy dresser. And he comes in and he says, I'm in BT, the next big thing. And he's cute. I mean, he's cute. He's not obnoxious. Well, I guess he's more cute than he is obnoxious. You know, a very, very charming, charming fellow. And he started this company with his mom, a single mom. And she talks about how whenever he learned how to ride his bike, in age four. He did that, you know, in that tie in a three-piece suit. I mean, a kind of kid would do that.

Starting point is 00:23:31 And he was so frustrated because, well, I want to say even as a kid, but he's still a kid. He couldn't find any bow tie that you really liked because we're not in fashion. So that was actually one of the reasons why he started his own company creating just that. And whenever he came onto the Sharks Tank, he already sold. more than $50,000 worth of ties. And he was asking for 15% for his $50,000, money that was needed for manufacturing because they had orders coming in

Starting point is 00:24:06 or they expected orders to come in. And he talks about a marginal cost for a bow tie, that is $6 to $10, but we sell them between $45 and $50, which is an extreme mug-up in itself. And the quality is supposedly good. I know he's supposed to say that. But it also seems, at least to me as a business person,

Starting point is 00:24:30 that the reason why they can charge that premium is also because he's the product, more than anything, he's authentic. Whenever you buy into the product, you support a little kid, and you also support his mom. But then there was this interesting dynamic going on between the shock. So Kevin O'Leary and people who follow the show would know who he is. he wanted not an equity stake, but he wanted $3 in royalty for every bow tie that he sold. And then just for that $50,000.

Starting point is 00:25:01 It's a very interesting scene. The first thing that happens is that MacCuban just says, horrible deal. No. That's the first thing you see. Don't do it. And you can just see this little kid. I mean, he is tempted. He is like $50,000.

Starting point is 00:25:18 I mean, that's a lot. it was quite evident that he didn't want to give up equity because that doesn't sound good. And here was this guy who just wanted to give him money for future money that's not in yet. And he was kind of enticed by that. And then you have Damon John who swoops in. And he talks about how he in 1981 was offered 10 grand for 10% of his company, which he was tempted to take, but he declined. And he also said that 10 years later, that 10% stake was 400.

Starting point is 00:25:49 million dollars. So John continues and he says that he won't offer any money because what Mo needs is not money, but he offer to mentor him for free because that is really what he need. But there is one catch here. If he enters a deal with Kevin O'Leary, DeM and John won't mentor him at all because that means he's not listening and that's what he needs to be doing right now. I think there was kind of a spat going on there between O'Leary and John, which was actually quite interesting in itself. And what's happening is Mo's mom, I'm saying as he says, we will take John's deal, not O'Leary's deal, because Mo is the CEO of his company, but I'm the CEO of Mo. And Mo says, it will go with the mentor-ment-to-relationship. It's a very, very cute scene, a very cute story.

Starting point is 00:26:41 And one of the takeaways that John has about this relationship here now is that, yes, he did that to help Mo. He could see a lot of himself in it. It was a very similar situation for him. But he also did it for selfish reasons. Mo could teach John about the newest trends in the fashion industry. And there was also a lot of publicity about it, which I appreciate John saying, because that's also what you're thinking whenever you're doing that deal. One stat that I really like to talk about in the book was he said that entrepreneurs who enroll in mentor-mantee programs, they have a comparable return of 106% compared to people not enrolling in these programs. And I honestly don't think it's because of the mentors.

Starting point is 00:27:31 I think it's because people who enroll in those programs, they are ready to listen and ready to learn. and they have this mindset that if you think you can grow your business without growing personally, you will never be successful in the first place. So I think it was a very smart for John to say to Mo, yes, I will mentor you. But if you're not listening now, you won't listen in the future. And I won't invest my time in you if you're not willing to listen and learn. It was just a great story. I would recommend everyone to watch that clip.

Starting point is 00:28:06 If you're a business person or not, it's a very cute club. Let's take a quick break and hear from today's sponsors. No, it's not your imagination. Risk and regulation are ramping up, and customers now expect proof of security just to do business. That's why VANTA is a game changer. Vanta automates your compliance process and brings compliance, risk, and customer trust together

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Starting point is 00:31:54 A lot of the time, the intangible aspects of things. And this was a great example of why he has become the success that he's become is because he wanted to help this young boy, because I think naturally he saw a lot of himself in this boy. But more importantly, he knew that there was a win-win relationship here. And that's when you're doing business right, you're always looking for the win-win in the negotiation. And so he knew he could help this kid out a ton. And he knew that in the end, the kid was going to help him out a ton because this was going to give him a lot of publicity.

Starting point is 00:32:31 It was going to help him in the long run. I mean, if this kid's doing this at whatever age, what was he 14 or something, Stig, I can't remember his age. Yeah, I think it was 11 when he pitched this. It was probably a few years ago, though. Yeah. So, I mean, he was young. This kid's really young. Can you imagine where this kid's going to be when he's 25? And so think of it from Damon's standpoint. I mean, if he nurtures this kid for 10 years and he's a total go-getter and he helps him succeed at epic levels, I mean, that's going to come back to him in a major way. And I just think it's so important to understand the intangible aspects of things. And this was a great story. And it really kind of shows what kind of person he is. I just got so much respect for this guy.

Starting point is 00:33:13 And I think he's doing so much good. So I really like that story. So for people listening, these are just two stories that he tells in the book. Every story that he tells in the book about somebody else's power of broke moment are equally good. You were thoroughly going to enjoy reading this book because there's just really interesting stories that he tells. And they all relayed back to this theme of the power of broke. So this is, I'm going to start off with one of the major things that I got out of this book that I think is worth just the price of the book itself for people. And that's this idea that. that when you don't have a bunch of capital, a bunch of startup capital,

Starting point is 00:33:54 Damon's arguing that that can be a very good thing for you. And this is the reason why. So often when a new company starts, the first thing they want to do is go out and get investors and raise money. Because if we had $100,000, we could then run a marketing campaign and really start to sell our product. But what Damon says in the book is those are not real sales. Those are not reality sales.

Starting point is 00:34:26 Those are sales like you're hawked up on a drug or something. Okay? Because once that money runs out and that money will run out that marketing money, what's left is the product itself. And if the product can't sell itself without the marketing money, feeding it and enticing people to drive eyeballs to it, you're dead on arrival. And so by being broke or being in a poor financial position to grow the business, you are forced to be creative, period. You have to get out and you have to do things like nobody else. You've got to learn SEO.

Starting point is 00:35:07 You've got to learn whatever. And you've got to start pushing things in different directions that are free. Here's a perfect example that he talked about in the book. He was trying to put his ads for Fubu up on billboards. Well, all these billboards in New York City were really expensive to do. So he's driving down the street and he's looking at all these stores and if you've ever been to New York City, you know, whenever things closed down, they put these like metal gates down in front of the storefront. Well, Damon gets this idea, hey, maybe if I went to these storefronts, I could convince these guys that we will do like a spray painted mural or logo on their gate. I'll pay them just a really small amount of money and then I'm going to put my Fubu on the gate. Everything

Starting point is 00:35:55 kind of says the street vibe, exactly what he was going for. And for most of the hours of the day, because they're open from, call it nine to five or whatever it might be, in the evening, he's got his ad right there on the gate that's close. So that's an example that he tells in the book of the power of broke. He was forced to be creative. If he had an outside investor that gave him $100,000, do you think he would have been doing something like that at next to nothing cost? Of course not. And so for me, this is so important for young people that are starting their business, especially if they come on a windfall. You've got to continue to optimize your business. You need to continue to optimize the product

Starting point is 00:36:40 in the service that you're creating so that your greatest marketing is word of mouth, because that's what will continue to sell over the long term and not some short-term burnout. And what I find so fascinating about his advice in this book is it goes completely against everything that they pretty much do on Shark Tank, right? Like, I mean, the whole point of Shark Tank is they're raising money and then they're giving away equity. I mean, most of these people that go on Shark Tank, they just need to go out and take out a loan from a bank, right? If they have real sales, go get a bank loan and keep your equity. But that's what I found so ironic about what he's writing here is he's basically saying,

Starting point is 00:37:20 like, you don't need to do this. In fact, you'll be better off if you don't take the money and you optimize things because you're broke and you're coming up with creative solutions. You know, I found this stat. It's not from the book, but it might as well have been. And it said that companies who started during a recession are more successful. for all that if they started during a boom. And you might think that that's counterintuitive, right?

Starting point is 00:37:45 I mean, why wouldn't you be successful when people have more money to spend and you can find investors who can back you? And the reason is really that it's not the top line growth through the boom that will make you successful. It's the expenses that will make or break you. And that's why it's so important not to have money in many ways whenever you start. It forces you to be creative. It forces you to prioritize the scarce capital.

Starting point is 00:38:09 that you do have. And I think it also has to do with how you are building the culture within the company from the ground up is you have this bootstrap mentality. We don't have any money. So now we need to be creative and now we have to prioritize. And I think that the one key takeaway here, more than anything, is really to get that proof of concept. You hear all these guys coming on this show and they're sitting at home making all this

Starting point is 00:38:35 revenue projections and this is the price based on my Excel sheet. that I would sell 15% equity in my company for. All we need is Damon John's distribution network so it can be rolled out and all retail stores across America. And then you might get a $50,000 investment for 10% or whatever they're trying to sell it for. That's just not a way to spend investors money. It's probably even worse spending your own time and money doing that.

Starting point is 00:39:04 The way that John explains this is that if someone comes to him and says, this is my product and I want to sell this for $50. He'll get laughed off the set. But if someone comes and says, yeah, I'll sell it for $50, but it costs $10 to produce and already sold $10 from the back of a truck close to a mall in less than five minutes, that's different because that is your proof of concept. And he says if he talked to entrepreneurs, if they haven't been going out and gotten feedback, you know, doing sales first, then getting feedback, tweak their products, go out again,

Starting point is 00:39:37 try to sell to strangers tweak it again. If they haven't been doing that 10 times, then he will not back them. Why would you do that? Because you need that proof of concept first before there's any reason to scale. Because otherwise, your business is just built on a very unstable foundation. I think there's a lot of people that get confused on whether they need to move fast or they're just moving fast because they want to move fast. And so, like, if you're building something that's tech-specific, that's going to be a game-changed.

Starting point is 00:40:07 and you know that there's five other companies all trying to create the same thing. You've got to take the money and you've got to build this thing out as fast as you possibly can because if you don't, you're not going to get the network effect, right? But if you're growing something like Moes, bows, okay, his bow ties, is that something that he needs to move fast on? Absolutely not. It's his own specific brand that has a story to it. that's not something that needs to move really fast.

Starting point is 00:40:40 And so those are the situations where entrepreneurs need to ask themselves, why do I have to move so darn fast? And if you can't really come up with a good reason, you probably need to slow down a bit and try to build good fundamental protocols that optimize your expenses so that they're as low as possible and that you build a customer base that's based on true loyalty to your product or service. And when you do that, what you're going to find is that you're building a business with a solid foundation that's going to last any type of storm. But when you're moving super fast, man, you're building your business out of balsa wood.

Starting point is 00:41:24 And the pain train's going to come and it's not going to be fun. And sometimes you do have to move fast. I'm not going to say that you don't. But I would argue, I think that for most people, they can move a little slower than what they think and do things a little bit more methodical. But, you know, it's really situational dependent. You know, you hear these stories about Mo, you know, age 11 and Scully and high school. And like you feel like you're already behind, you know, if you're in grad school, perhaps, which you're not. And I think it's very important also when reading through this book that one of the key takeaways is to get a job.

Starting point is 00:42:01 And you might not think that based on the stories that you just heard now, but most successful entrepreneurs, you know, they didn't quit school and started their own business or just started their own business right after school, at least not full time. You know, they got a job and made money to pay the bills while they learned about business and life. You can always start searching for that proof of concept working from home while you have a job while you're in school. more than 50% of the businesses in the U.S., they're from home.

Starting point is 00:42:34 And you don't need a fancy office to get started. More than anything, you need proof of concept to yourself and not to investors. This is a viable product. If you can't make any sales off your product while you're still in school and why you have a job, it's probably not worth doing full-time either. I mean, look at Damon. He was working at Red Lobster. He was driving a 12-pack van, and he was sewing hats together.

Starting point is 00:42:58 when he first started. I mean, it's amazing. It's absolutely amazing the grind and the hustle and the persistence for what he pulled off. You know, and he thought creatively. I mean, he was doing things that no one had gone out and done from a marketing standpoint, putting these jerseys and things on rappers and like, you know, painting the storefronts. I mean, it's just amazing. The dude made moves. And I think he's a real inspiration for people, especially people that aren't going out and getting the funding. I got a question for you, Stake, why do you think so many people go out and want to do a funding round

Starting point is 00:43:35 or want to do venture capital or want to, you know, sell some of the equity of their business so fast? What do you think causes that? Because I have an opinion. I want to hear yours. Male ego. Yes. It's fun.

Starting point is 00:43:48 It sounds cool. It's sexy. It's sexy. Like, why do you want a fancy car? The same reason. It's not because you will. the sell lead get from A to B faster or, you know, financially smarter. That's not why you're doing it. I'm not saying it's good or bad for you to do that, but that's male ego. Why is it that

Starting point is 00:44:07 CEOs always wanted to do mergers and acquisitions? It's fun. I mean, you can look up on the table. It's not a good strategy in terms of growing. It's just more fun. Sounds cool. Isn't it something like 40% of all mergers fail? It's a really high number. It might even be higher than that. Yeah. Honestly, I don't think there's any. like if you look at it like across the board, more or less no value creation. All those synergies that we think of, you know, then something, you know, different cultures or whatever the reason is why that merger or the acquisition won't work. It sounds good.

Starting point is 00:44:44 We acquired 300 companies this year. I mean, how amazing is it to say that? I mean, compared to, yeah, we had 8% organic growth in my company. That's not fun to say, right? That was your point too, I'd take. Yeah, absolutely. All right, guys, well, that's all we have for Damon John's book, The Power of Broke.

Starting point is 00:45:06 I highly recommend this book. If anything, you'll just love the stories in it. They're very entertaining. I think it'll give you some ideas. And it's not a real long read. How many pages is it? It's like 250 pages or something like that. So it's not huge.

Starting point is 00:45:20 But great, great book. Highly recommend it. And for all the different stories we were talking about, the apps and things like that, check out our show notes. We'll have links to all that stuff in the show notes for you. All right, guys. This was all the press that I had for you for this week's episode of The Investors Podcast. We see each other again next week.

Starting point is 00:45:38 Thanks for listening to TIP. To access the show notes, courses, or forums, go to theinvestorspodcast.com. To get your questions played on the show, go to AskTheInvesters.com and win a free subscription to any of our courses on TIP Academy. This show is for entertainment purposes only. Before making investment decisions, consult a professional. This show is copyrighted by the TIP network. Written permission must be granted before syndication or rebroadcasting.

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