So I can borrow 900 million dollars at like point one percent interest and put it into Bitcoin which averages 100 percent annual appreciation for the last 10 years. Okay. What's yeah, why not? Yes, but there's another detail to it. I feel like I can rule the world. I know I could be what I want to me like a punk dude. Welcome last time you were here. I just went and looked it up.
Up, four months ago. The Bitcoin price was 37,000 today bitcoin price is sitting at 69,000 ice in four months. That's kind of amazing and my question to you start it off. Why is the Bitcoin price going up
oil prices go up because more people want to buy then sell. So that's like the simplest example or explanation. But if you think about what's happened in those four months probably the biggest thing is the Bitcoin spot.
Got approved and in those ETFs it basically just gives a ton of people access to the acid that previously didn't have it. And so historically we've seen these ETFs for certain asset classes get approved. Lots of money comes in the price goes up over a long period of time I think people are surprised at how quickly assets have come in. There's over ten billion dollars that are floated to these assets. And then also how quickly the price of Bitcoin has gone up and set a new all-time high, you know within two months of the ETF
same if you follow this or even watching this like the ETF
stuff. I know that
When I tracked my like net worth which I look at like every six months it changed ours. Yeah, it changed and I saw that it went up and I had no idea why
he's honest with the net worth goes up. Do you strut a little differently around the house? Do you look at Sarah a little differently turtle. Look at you little differently. Tell me the truth.
Maybe we dot it. We made it
baby Papa's right?
Red panty night. We made it. We don't have baby. That's what we say.
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You could say
I'm surprised you only check every six months like I check on a weekly basis and track it like pretty religiously and I feel like things you measure move. And so if you wanted to move then you gotta measure like off my track by track income. I don't track Network because there's nothing I could do about that. Right? It's I've I'm not like you guys I've done it set it and forget it. But now that big client Bitcoin and ether is close to an all-time high Bitcoin is I think should I just show you just sell it all and get out.
The number one rule of Bitcoin is you don't want to sell your Bitcoin obviously. No, I mean look it do. I think the long-term kind of like thesis around Bitcoin is no different than it's always been which is you have a scarce Supply asset. There's lots of people who want it that number of people who wanted is increasing now the people who are banging on the door aren't like retail investors on the internet with $10 its large institutions that have billions of dollars. They're obviously allocating to it and probably the most exciting part over called the next 12 months or so. Is that at the same?
I'm time that all this demand is coming in. The Bitcoin having is coming and that's just when the daily incoming Supply the number of Bitcoin that get created each day is going to get cut in half from 900 Bitcoin to 450. So like I always joke if you want to economics 101 class supply and demand if Supply goes down and demand goes up at the same time. Then the price has to go up to accommodate everyone and we've seen this happen before probably happen again as most of your net worth in in crypto stuff now pumps. I mean, oh, I know it was you still you're still holding strong.
Yeah, I haven't sold anything. I fight I bought more crypto stuff. But also we've built another number of other businesses and done a bunch of different things that it's not the same percentages, but it's still definitely over 50% You remember about three years ago Sean made a tweet. It's I forget what the Tweet said but like some Indian newspaper picked it up. What was it said like entrepreneurs Jean paree puts all that worth of the crypto. What
was it? I love how you could tell a story and get all parts of it wrong. But still the story's kind.
Right, not an Indian newspaper. Not all my net worth. Basically when I when we got bought by twitch. I had a bunch of cash come in and I was like, you know what I'm moving I put twice I was like, I'm gonna I tweeted out I'm I'm putting 25 percent of my net worth into Bitcoin. I just that was it that was the tweet and then a bunch of blogs like Bitcoin.com and stuff like that not necessarily introduce your but they all were like twitch executive says he are they
Someone's like Amazon executive cause Amazon announced which like Amazon executive twitch executive says, he's moving 25% of his net worth into Bitcoin in a stunning move and it's like, you know, my net worth is like go. It's like we're talking about like, oh, I I put quarters in the vending machine here. Like these are not huge sums of money that is moving like like they should not make news when I do something. But yeah, that was that was the story and honestly one of the better moves I ever did that was in 2019.
I'm so so that was a good bet.
I've always thought that the media if they wanted really to get the click bait set of like Amazon executive or whatever. They should just label everyone future billionaire. Right? Like he kept
firing billionaire. Yeah, like you can't disprove that
right? I just everyone will click on every
article. So
we had a Michael sailor on like a year to maybe two years ago. Now he got we got in a little at the end a little tizzy. He got it. He got angry at me. I remember that's
Not the only thing that I truly remember from that podcast it over it. Why because he goes I go Michael. What's the downside of this of this bet you're taking and he's like there is no downside and I was like, well, that's that's dishonest because with every decision there's upside and downside and even if the downside is minimal, there is also a downside and he's like no there is no downside and I remember I think I said, well, I don't trust you then because if you're not admitting that there's downside to this decision, you're just being dishonest. What else are you lying about? And it kind of got weird and I still feel that way.
I still feel that way but on here, we're on what you want to talk about your talk about Sean. I think asked if this is the craziest bed of all time, it appears as though it's working right?
I want you to do two things. I want you to explain the like just explain like I'm 5 years old. What did Michael sailor do and then after you've explained kind of like just the mechanics of like what is the bet that this guy has been placing the kind of like from the start of it tool to now because he's kind of evolved it and then I want you to tell me if you think this is sort of on the on this.
Trim of idiotic to genius. Where does this fall for you in terms of a bet because it is a colossal colossal bet. So explain explain what he's done.
Yeah. He is definitely bet the company and burn the boats for sure and the way to think about, you know, kind of how it started was had a bunch of cash. I think it's like five hundred million dollars in cash give or take because he owned a he owned a publicly-traded software company Mike.
Yeah core strategy, which is like a 20 year old company at that point and they did something completely unrelated to crypto like
they do.
Business analytics, right? So they do business analytics. The 500 million dollars was sitting on the company's balance sheet. He personally started to get interested in Bitcoin. He bought some person I think about like 250 million dollars a Bitcoin. He disclosed that and the company said hey, well, maybe we should buy Bitcoin as well. And I think that there's like two different types of people who buy Bitcoin especially for a company. Some are like, I'm gonna go day trade the balance sheet, which is a horrible idea and will end in sorrow and then there's another idea which is like I want to have
An asset on my balance sheet that I have confidence in over the long run and what he basically came to the conclusion along with the board of directors and some of the shareholders was wait a second. The dollars are being devalued inflation is really high and so we're like losing purchasing power. The number of dollars are staying the same but the inflation is eating away at our purchasing power. And so he said let's go try to buy something else and they supposedly did this entire analysis. They looked at like real estate stocks Bitcoin gold in all these different assets. They came to the conclusion Bitcoin was the thing that they should buy.
And so he was the first public company that wasn't like a crypto minor or something like that to go and say I'm going to put like 85% of my balance sheet into Bitcoin now, he had like 10 million dollars no one will care. But this was a company that was a billion-dollar company 500 million dollars in cash. She made this big bet and if the story just ended there, I think a lot of people will be like, wow, that's kind of crazy. But then he like doubled tripled quadrupled down on it and he began to raise a bunch of money via debt offerings. So he would like sell bonds and
Really good terms get that cash by more Bitcoin then it was like selling Equity at one point whenever the value of the company like was higher than what he thought. It was actually worth. You would sell Equity use that cash to buy more Bitcoin and he went from owning 0 Bitcoin in July of 2022 today. He has more than 210,000 Bitcoin, which is more than one percent of the Bitcoin Network and it's worth. You know, I don't know something more than like 10 billion dollars. And so yeah, it's an insane bet but if it works then we'll call.
The genius bet and so like history is written by The Victors. Let's see what
happens. So he currently has fourteen point nine six billion dollars of Bitcoin in microstrategy. It's up 97% all time. So he's put in seven point three billion and now it's sitting on 15 billion of Assets Now, I think there's one other piece to be honest about which is it wasn't just that he was like hmm. We have 500 million on the balance sheet.
What can we invest in I think the truth was and this is what we were trying to in our original interview with him. This is what kind of started to come out and I was like this makes more sense to me and I kind of wish he was a little bit more upfront about it, which was his stock was flat or going down for a long time. Like I think if you look at the microstrategy chart it will pull it up here. If you go look at the all-time chart for like since I don't know 2002 to you know, 2020 the stock the stock was basically
Lee basically flat let me see exactly. So it's flat from 2007 to 2010 T2 or sorry 2020 before he started making his bet and that's a long time right? That's 2007 to 2020. That's a 13-year period And so what ended up what do you realize what he's like, why are they not giving us any credit? Like we're basically we're basically valued at the amount of cash. We have they're not valuing the business really at anything and the business going to produce more cash, but they don't believe that we can invest this. Well or that
In reinvest our cash well to grow the Enterprise Value the company so we have two choices. We either dividend out all the cash or we got to do something with it that's going to get our stock price to go up and I think the reality was you stuck between a little bit of a rock and a hard place where he had this business that was too successful to not continue but its share price would not move because investors are simply did not believe any of the stories about what they could do with the cash. And so he kind of had to do something that I think that's the part. That's a little bit left out. It's
like, oh I completely agree and he was very loud about it on purpose.
Purpose which I don't blame him for being I also think that like I may be an extension of this is whenever you have a company that has cash on their balance sheet and it's like accumulating cash. It's usually because they don't know what to do with it. Like there's not a clear. How do I reinvest in my business and like drive more cash in the future? And so historically what those companies have done is they've either dividend it out or they fought back their shares. But if your Shares are flat and there's not a lot of volatility to it. There's a lot of opportunity to buy back the shares for less than what the company's worth. And so this is definitely that's why I say, it's like a bet the company
They burn the boats situation where he went all in on this strategy. Now what I think is very interesting about it is he essentially has pioneered this like I have a business that does software analytics and kind of business analytics and that's supposed to throw off cash. And then I have like a treasury strategy, but if you really think about, you know, maybe companies in other countries like this is not foreign to them. Right? If you're in a country where like the currency is very volatile or could lose value very quickly a lot of times you're managing.
Foreign currency risk and you're trying to get into dollars or something. That's more stable. It's just that no one in the US ever thinks about this raised about it. And so now he's doing it with Bitcoin. Now, I actually like one of the most interesting parts of this story is that no one's followed him, but there hasn't been a second microstrategy. I've talked to a lot of people and I'm like, you know one company is a data point to would begin the trend and so I actually don't have a good answer. I still like if this guy has made basically seven billion dollars off of this bed. Why has no one followed
Usually in public markets like somebody does something, you know back like 2017 2018 like companies were start changing their names to blockchain Long Island Iced Tea changes like Long Island blockchain, right? They just started doing anything. They possibly can right now A, I like everyone goes to puts dot AI at the end of their name try to you know, get some sort of boost in their stock price, but no one's following sailor which like the omission of everyone else may actually be a data point that we should pay attention to as well. It's a it's a very scary bet. I mean in order to do this, I don't know if you have to be
A public company, but you know, you have to be large enough to be in that ballpark and I don't know how much he must own the majority of the company because there's been my boner. There's been so many times where like it could have been justifiable to fire him overall this I think is voting control but not a majority ownership, but he's not floating control
he has about I think he has about 50% ownership of the stock. This is if the until you have a unique combination of cash cow business been around forever founder/ceo publicly listed already, so he's able to do these bonds because it
It wasn't him talk. He's like so I can borrow 900 million dollars at like point one percent interest and put it into Bitcoin which averages 100% edible appreciation for the last 10 years. Okay. What's yeah, why not? Yes, but there's another detail to it
and I'm definitely an expert on like convertible Bond offerings in the public market, but these are convertible bonds and they convert at a premium to the current price. So without getting into all the intricacies is basically like people can get paid back.
Or they could convert to equity and maybe let's say 50% higher. So if the company's worth, you know ten billion dollars today, it'll convert it 15 billion. So the company goes up a lot like you obviously convert rather than get paid back. And so it's not exactly the cheapest Capital if you know, you're basically selling Equity, but you are selling it at 50% premium. So it's still attractive to do
and so do when you look at this are you like wow, this is genius. This is terrible. This is it this is riskier than it appears. What's the pump taken because you've talked to this guy multiple times, right? We
About them years ago and haven't really paid too much attention, since you live in this space, you know day-to-day and you know, this guy a lot better than us. What's your honest takeaway of this? I
think it is riskier for a company to sit with 500 million dollars in US Dollar Cash on their balance sheet than 500 million dollars for the Bitcoin and the reason being that or maybe the one clarifier is if you have a long-term oriented posture and you don't need that cash for day-to-day operations right now Bitcoin will definitely do better from protecting your purchasing power over the next.
10 15 20 years then the dollars will and so it's a unique aspect to be able to not only have the cash but also not need it to run your business. And so yeah, I think that he's actually taking less risk than most of the public companies and my expectation is actually that shareholders at some point will start turning on some of these public companies that have tons of cash and saying like hey if we're sitting there with you know, Warren Buffett sitting with 100 billion dollars of cash like how much money is he losing for?
Business by leaving it in cash and it's unclear. What else he could do, dude, you know what's crazy is like, you know, there's have you guys read the book The Outsiders. It's about nine different CEOs. And the whole thing is like they've gone from CEO to Capital allocator and that phrase is thrown around a lot. But that's actually a really hard. So for a person who starts and builds a company from scratch. Typically their skill set is like their little bit of a wild card. They're probably good at product. They're probably decent at hiring and often.
Times that means that they're not the best at managing and I have found amongst my friend group oftentimes that doesn't necessarily mean they're going to be a good investor. And so it's pretty interesting to watch someone go from being like whatever you are. When you start something to Tinker to a proper Capital allocator that transition is pretty rare. I think I think typically the people who are good at being investors, they kind of start as an investor and they either by a company just so they can get the cash flow to invest
But those skill sets to see someone like transfer those skill sets or evolve as an operator. That's actually really fascinating to see that the way I call it is you go
from product manager to people manager to money manager. That's the transition right? That is the the levels of the game in business. That's rare. Don't those three. Yeah. It's very very rare. Very hard Warren. Buffett has a great quote. He says he goes I'm a better investor because I was a businessman. I'm a better businessman because I'm an investor and for those who have the disposition to do both they can become
Very good at one because they were very good at the other but you're right. Most people aren't able to do have both gears
like Sean you and II think are quite good and I'm sure you are too Pompa. I know Sean more intimately like we're pretty good at think I going 021. Do you think that and you also invested do you think that you are better at starting versus investing and how is that evolution been so far
definitely not better at investing that I am at building because I spent 15 years building and then probably four years seriously.
Right. So just in the learning curve a more of white belt, right, but I can see what Warren Buffett says, which is that when you have built and run companies you are better at analyzing companies versus somebody who's only ever analyzed a company from a sort of spreadsheet arm's length away. They take everything it sort of face value, right? There's a skepticism that the it's built up a healthy skepticism when you've actually seen how hard it is to do some things or you know, for example,
A lot of times in the stock market people react to the news. It's like Google puts out a you know overly woke a i thing and people are like Oh Google's dad goes out. It's like do you know how hard it is to compete with these companies? Do you know how durable you know, how how strong these businesses are, you know how hard it is to create one of these and so the mr. Market goes up and down and it's mood right because euphoric and it gets depressed but a business Builder has trained themselves to not have that same swing of
G to go from Peak Euphoria, everything is amazing and going to go up and oh my God, it'll never recover again a builder kind of has been through that themselves and therefore when they're in investor, they don't get caught up in that kind of herd psychology that the worst investors do what do you
think pump? I think that's dead on you see this not only in the public market. She also starting to see it in the private markets. Like how many of the Great Angel Investors today are really just running companies or building things themselves and then they kind of Angel invest on the side or vice versa and so like found
respond, maybe is like the best example where they're really, you know, putting a flag in the ground and they're like look we want to be operators and we want to invest by operating day-to-day we learn which makes us a better investor and vice versa. I just think of like to win in the dynamic World. We're headed into you have to be a ballplayer and I was go back to the like, you know, you're 12 years old you play Little League baseball and there's like, okay a kid today or the picture tomorrow like you're gonna play shortstop tomorrow. You're going to be like the catcher. Oh now you're like the designated hitter like you just have to be
To do all the different positions and there's not really like the specialization that you get maybe when you get into high school college or definitely Major League Baseball and so like that in entrepreneurship is like the most coveted position to be able to stand in is like if you're a ball player, you can build things you can invest you can hire you can manage you can fire. You can do all these different things but it takes practice and and it's difficult to do just like anything and so like being the ball player is really what Warren Buffett figured out what Jeff Bezos figured out. What do you on must figure it out and that
Vols not only building things but also Capital markets and it looks like Michael Sailors figured out a way to tap the capital markets and unique
way. It's a good transition because you went from pop Bitcoin crypto guy as like main brand and then you know, it's like, oh pops doing this real estate conference pops buying these you know, these sweaty businesses. You've showed some range, I guess in the last few years. I don't know if as a hedge or just where your curiosity went or whatever but talk to us about what are some of the non crypto.
Weird stuff that you've been looking at I know you were looking at some what was the line painting business talk about that talk about some of the weird stuff you're doing and why you do it.
So I've always been doing this stuff. I just never talked about it publicly. You know, if you go all the way back to when I was a kid, like we always had some business we were trying to do I built two companies right out of college and in between those companies have remembered that like, I taught myself how to do like WordPress websites and I would go around a small businesses and behave me five grand like build you a website right and like that was going to be like some big thing, but it was just like oh,
A way to figure out like could you gain a skill? Could you solve a problem because you make money I do it over and over again and so over the last couple of years. We've been doing quite a bit of work and building companies or trying to buy these businesses, but crypto definitely was the thing that I think most people weren't talking about online that we felt like we had a unique kind of narrative or perspective. The line business is a perfect example, so I was reading the biography on Elon Musk and in it every Sunday, he would have the Tesla team bring him a car and they would take him for
A test drive of the self-driving Tesla. And so there was this one area on the highway where it was kind of like a really hard turn and the car kept messing up the human had to intervene and grab the steering wheel because the car wouldn't recognize that this turn was there as with the engineers figured out was that the road the painting on the road was actually degraded down and so they were like, well, we're tired of Elon yelling at us every Sunday. So they called the Department of Transportation and were like hey get out here and like repaint this road. So if the car stops messing up
so they fixed the road not to call her then the car can drive correctly Ilana. Stop shelling. It's like they just solved kind of they're like local problem, but it made me think I was like, wait a second. He's like line striping or line painting businesses are going to be exponentially more valuable in the future because as self-driving becomes prevalent on the road governments are going to mandate that the roads are painted more often so that the cars from a safety perspective can actually drive correctly. And so you probably can go buy these line striping businesses right now for like three times.
bitter and you start to scale them and then as the government mandates them paint the road more often, like Revenue will go up there be multiple expansion and there's kind of this thesis of like you have smart cars on dumb roads, but like everyone wants to go compete with like the smart cars, but maybe actually the best way to make money is like go figure out how to take the dumb rows and just make them smart and interact with the tech if we really want to dig into like the nitty-gritty details like one of the hardest parts for people coming from the tech industry in doing deals with people who are not that
tech industry is there is a drastic asymmetric information Advantage the tech people have and what I mean by that is like let's say that you guys start a company tomorrow. I'm like, hey, I'm going to raise a million dollars on a safe note. We pretty much like you can pitch me we can have a conversation back and forth. We can come up with the terms. The safe document is already pre drafted and we can have that done in like two or three days like Tech has basically figured out these long-term oriented people reputations really important. There's some baseline shared knowledge and so deals get done very quickly, and there's not a lot of friction.
And then because the power law game investors are incentivized to invest in tons of companies and Founders understand that like there's tons of capital available. When you go into these like blue-collar kind of industrial manufacturing businesses, like sometimes these people in building the company like the line shopping business demand building for 20 years. This is like their life and when we were having the negotiations with them like we were starting out with like what's the point of the board of directors, right? Like there's an education that goes into it and so it makes getting deals done very very hard because of that friction.
And that exists and so it's almost easier to do deals with people who have done lots of deals than it is to do steals with somebody who's done their first deal. Like this is the big one. And so we're still trying to figure out how to solve that problem. But it's just something that we've noticed that doesn't get talked a lot about online. What were the numbers but of this company? I don't want to say because they were there are super great guys, but these businesses they're bigger than you think. I've looked at a bunch of these business. So there's like line striping another one is by traffic cones and barricades.
Is it so if you think of that business like every construction site you have to have these things. They're from a safety standpoint. It's legally mandated and it's like the greatest real estate business in the world. They can buy like a hip height, you know, like four foot wide barricade, they buy those for like 400 bucks and then they rent them out for like five to eight dollars a day. And once you're on site, you're not allowed to leave the site with like the equipment can't leave until the job's done. So like LaGuardia that was under construction for like 10 years, right? So like somebody was just renting them.
Bones paying getting paid five six seven dollars a day for 10 years. It's like those businesses are really interesting. What ends up happening is my buddy. Brian be shorts got this quote. He says small businesses. Don't stay small on purpose. So a lot of times what happens is they'll dominate like a local area, but they have very hard time kind of scaling and so you can expect kind of Revenue is like mid seven figures. Usually they can get to like about a million a million and a half dollars in ibadah. And then the owners are taking quite a bit of compensation for themselves like you if you're taking five hundred
Hours and you live in kind of like a rule area or not a major Metro like you're rich, right and so it's pretty good job to have especially with the freedom that comes with and do that for a decade. Like, you know, you got paid five million bucks and probably living pretty good. All right everyone a quick break because I want to fill you in on a little experiment that I'm doing. I've got a new project. It's called money-wise. It's a personal finance podcast for high net worth people or young people who are on their way to becoming high-net-worth when I made a little bit of money. I didn't even know how much
Money, I should be spending each month should be 10,000 30,000 50,000 and I didn't really have a lot of people to ask so I create a podcast called money-wise because I wanted to figure out what are some of the things that people who have a lot of cash and who have a high net worth. What do they do with it? The first episode is with the friend of mine. He sold his company for 200 million dollars when he was 31 years old. He gets super transparent about his monthly expenses his portfolio how it impacts is happiness everything. So I want you guys to check it out. It's called money-wise. That's one word. You can find it on my Twitter bio. I'm the sampar or you can
Type in money-wise on Apple Spotify and YouTube. All right back to the
Pod. Hey, let's take a quick break to tell you about the HubSpot podcast network. If you like podcast like this. You should check out some other cool podcast one is called business Made Simple toast by Donald Miller and is brought to you by the HubSpot podcast Network and what he does is he makes it easy to take the mystery out of growing your business. There's an episode that you should check out called what you should put in a job description to get the perfect higher and in this episode. Donald Miller looks at the whole hiring process and how
Important it is to emphasize both the the positive attributes and the drawbacks to Future candidates and you'll learn why being self-aware as leader will help you avoid hiring disasters. So check it out goal is such a business Made Simple, wherever you get Podcast.
There's also a like a generational thing. So my father is a small business owner. My father-in-law is a small business owner. My father owns a produce brokerage meaning buys fruit from a farmer and sells it to Walmart. My father-in-law owns a moving company and I've like ass
Questions like like do you do you have managers? Like how does that work? And they're like, what do you what do you mean? I only have 18 employees like we don't like there aren't really meetings. Like I don't do one-on-ones and or a little be like, well, how do you do just like do everything like yeah. Everything goes up through me or it's like well, how do you hire? It's like, well, usually just one of the people who work there might have a buddy who hopefully like it could do. Okay, you know what? I mean? Like there's not a mindset is when you come from I think a different generation.
And also you come from poverty and it's blue collar. You're like dude. I make a hundred grand a year. I'm rich. Like what do you mean? Why would I do anything else do you want? I mean, I also think that there's this element of like ambition can kill companies if you're in the wrong business and so like we all get excited because like he lost like we're going to Mars Riley. I'm gonna put a chip in someone's brain, right? That's awesome. But I have one friend. He's got a retail store. He's got three locations in the United States. One of them is New York and I was talking to recently and he's like, yeah, all of our Prophet comes with the New York store, but actually I might
Be better off if I shut down the other two stores, right? And so it's like when you're in business everyone wants you to expand get bigger. Like do all these things and he started down that path. But here I was like wait a second like maybe actually the value of this business. Is that like I know one market really? Well, I picked a great location like it's a great business and if I become ambitious, I will suck all the profits out of this business and try to reinvest it and up just like blowing up. And so again, if you're running a tech company like you have to be ambitious the whole point is the power law, but
if you're running some of these other businesses like yeah, maybe you don't want to make more than 800,000 dollars because in order to do that, you've got to double the team size your profit margin goes down your stress level explodes and like the odds of success don't actually wind up with how much money you could make and so I do think a lot about like, there's like an ambition product and Market
fit where it only
pays to be ambitious in the right market with the right product. Dude, my father when he travels my parents now once they got older they go to Florida for six weeks every winter he
Bubbles, I swear to God with a file cabinet a phone that you can plug into the wall and a fax machine and he's like, well, I have to have my work equipment like I can't work without the stuff and like I'll get i'll get texts from him and I'm like dude. Are you trying to post on Facebook right now? Like II this is a Facebook post, isn't it? He's like and that what I just did like and so like the idea of like evolving to some of these tools. It's like dude. I'm like, I don't give a shit about growing this. I'm just gonna like bail.
It's gonna die like it there is no there is no exit. What are you talking about the exits when I die. I also think that small businesses. Like if people don't understand what goes into running these small businesses like you just were like, oh, of course the business just runs it somewhere like a tech company but small businesses make up 50 percent of jobs in America and the country is literally built off the backs of these small businesses right in terms of GDP growth and all this stuff and we all probably know stories similar to this where like they're going around with their equipment. I know somebody who's an extended family member he has a business
I swear it's like a chemical business any like mixes things
in order to create the
product and he won't fly anywhere. He will only drive because when he can drive he can put all of the materials in his car and then he'll like show up. So like when I was living in Florida, he showed up and he's like, I just like take over the garage that walked in there and I was like, this looks like a like a science lab like he's like, yeah and they like makes the product and he goes to the post office every day and like drops the product off so they can ship it like all the stuff and you're just
like man, this is incredible what goes into building these companies compared to like the tech world were just like, oh like somebody like wrote some code and just like operates 24/7 365 money keeps coming into my account because Stripes awesome. It's a whole different way to kind of like play the game of business
dude. There's a great quote in venture capital of like you can't put rocket fuel into a car like Rocket Fuel is great. But if you put into a car the car explodes and that's it. Your ambition thing is like that ambition placed into the wrong vehicle. Well,
Just result in pain not growth and I had heard another interesting thing. I was talking to a guy who's one of the probably the one of the most successful VC's in the last I don't know 20 years and he he was talking about Ai and he went and he met with a guy who is like a mega billionaire private Equity type of dude, and he goes to this guy. This guy's like 80 years old or something and he goes to him. He says hey, you know, I'm here. I want to get your advice your wisdom on what I should be investing in. You know, I feel like the whole world is
Changing a I super exciting. I want to be in the game. I want to be investing in the right AI projects but I'm not sure like opening I could kill any project at any given moment. If they just released a new feature the valuations are a little bit crazy. What should I do? And the eight-year-old be guy goes think you should buy railroads and it goes knives shit and he goes well when you know Buffett has this great quote, which is that change is the enemy of the investor in their style of compounding right because you want something that's
Ball that's going to compound over 20 years. You don't want to be in the industry of Rapid change where the leader one year could be gone and your three that's not it's great on the way up, but it's terrible on the way down. Right? And so
he was like, it sounds like everything
is changing so much. She's like my Approach is go find things that are not going to change the probably have less people interested in them right now. They're probably undervalued and what I like about your line striping business pop is that it's a mix of both. So it's like a AI proof type of business because
it's painted lines on roads, but it's also going to benefit from all the advances in AI like one of the big advances is self-driving cars. And so you would be the beneficiary without the competition versus if you said I'm going to go create a better lidar system where you know simulation system for self-driving cars. Okay, cool, but you're competing against the smartest people on Earth in the most competitive field ever where technology is going to make everything obsolete every three years and that's just a very hard way to win. Somebody's gotta win for sure. But but it's
Hard way to win versus what you're talking about the line striping business
if somebody's listening to this and they have a line striping business. I know how to grow this nationally like please get in touch with me. I will help ha ha ha like 100% another's no no don't
come to that suit dude. Help me expand relatable your relatable guys, you know, I got cool baseball hat. They have guys like denim collection over there. You don't want pompous. Ooh, this guy's on TV. He's too busy for you
Sean. Have you ever been inside a Home Depot your entire life?
Yeah, dude, I go in there all the time for advice. I'm like, I'm looking for some men could some boys come fix something to my house.
Maybe an extension of this is not only like what's going to change was not going to change but like can you bring fresh ideas to Old Industries? So there's this new podcast. I've been listening to that fantastic is called rainmakers it is this guy out in LA and basically he's like trying to find investors that no one's ever heard of before and so he went and found them like and I think it's not like
once heard of but just like the new generation hasn't heard of as one of the guys that he profiled was Philip Auschwitz who he owns real estate had a bunch of like oil and gas but railroads and there's like a tie through of this guy's career where he basically tried to find like value no one understood so he would buy up railroad companies not for the railroads, but he'd buy because there was oil underneath the ground right or he bought up like a bunch of local sports teams because he figured out a Playbook of how he could get the stadiums for free, right and he had a bunch of real estate, but the one I loved was
He bought Regal Cinema the movie theater chain, when all of the movie theaters were crashing and everyone was like, oh this is a horrible business like you can't make money on tickets and food and what he realized and his like aha moment was for 20 minutes before the movie starts. You haven't captured audience. They're just sitting there looking at the screen and so he started to sell ads and he made the movie theater and add business and then all of a sudden he completely changed the unit economics and was able to like save Regal Cinema became this huge thing sold it cetera and so like
One, okay, like that's awesome. But also like part of being a ballplayer and like understand this I listened at podcast episode and we had a conference coming up and I was like, oh my God, I have the same thing as movie theater all these people going to be sitting there. And so they want to advertise your like does anyone have a TV commercial that they've already made pay us and we were just like play the commercial in the middle of the conference and can we did it and so you like start to realize that not only are you taking new ideas to these old Industries,
but then once you like see it, you can
bring this across
Across all sorts of different applications and I really think like that is the beauty of what you guys do on my first million, but also like these podcast and Twitter Etc is it's just like find the ideas and then like capture them and apply them into your situation and this has been going on for a long time. But now all these ideas are just much more readily available through this guy Philip on Choice. Have you do know who this is Sean? No, I've never heard of him. Yeah, bitch a Savage. He's super low-key. But yeah, it started real.
Satan oil but then now he owns a EG. Do you know what that is
entertainment thing
you cast the entertainment thing. It's it's basically I think it's the second largest ticketing service provider behind Live Nation AEG owns music events like Coachella. So this old guy he owns Coachella. He also, you know AG you buy tickets through there. He owns all types of sports magazines. He owns a couple sports teams. He owns entertainment parks that
He's like prolific This Guy's super prolific and you guys want to know something else about him. Papi probably didn't realize this. I was reading I read a lot of history. I bought this book about the American West this fucking guys the author he wrote that she wrote the book on like America expanding into the West This Guy's super prolific this guy fail. How do you say his name Phillip are limits on she was a EG is literally on truitt's Entertainment Group, right is the AEG. He's super legit hes.
This guy's amazing. I been fascinated by him, but he's pretty low-key like there's not I don't think you could find a biography on him. He's very under the radar This Guy's super fascinating.
That's cool. Okay. I like it. I'm sold the the he wrote. The book was a great Twist. By the way, that is not what I thought you were gonna say at all
very fascinating guy. Can we talk about pumps list? So we have this segment Sean we have to do like a redo on this segment. So it started out right with like you
Years ago when my wife wanted to work somewhere. I was like, where's a company where you can own the stock and it could like 10x potentially, but it's like a really safe place to work where it's got 500 employees. You can get good maternity leave at
school. I think it's worth saying well, how old were you guys at this time? Roughly.
This was I was 27. So she must have been 24
so she's 24 years old. Most people when they think about a job just like I want a job. What kind of job good job I like
What do you want? You don't know what you don't really know what you're looking for. Whereas Sam you you went all capital allocator on our you're like look, this is not a job. This is an investment. But you're trading your time for restricted stock units. We're going to pick the best RSU package that's out there and you're going to think about this as one concentrated bet where you're going to basically get. I don't know. Let's say a lot of these companies would give you maybe 40 50 k a year of stock in addition to let's just use round numbers. I got to know 150k a year of Silence.
Salary and so you're going to get over a four-year period you're going to get two hundred thousand dollars of stock and what you were saying was like, how do you become a millionaire right here? You take that 200,000 of stock over that for years. How do you become a millionaire without having a great idea without becoming an entrepreneur without becoming a great investor without without doing anything. Right? No Capital. No expertise. You're going to join as a as employee number. I don't know not even in the top hundred, right 1,500 1,500 right at a company that we all know about we can touch and feel the product so
Betting on thin air here and that fascinated me you told me about this and then we created a whole thing around. It called Sarah's list around her name which was what are the ten companies are so that we think fit this criteria today and we did this and then we did like a round of it and they all turned out to be a hit like 7 out of 10 that would have hit the criteria that we had that we touched on pump. We asked you to do your version of this pumps list. Do you have any idea we didn't we just told you about the prompt we didn't hear anything you had to say, what are the companies today that you think fits?
It this criteria we could you could go beyond I don't know employee 500 or employee 1000 get 200k of stock and might become a millionaire just off of the company continuing to grow and chug along these sort of later stage private company or public or private companies. So I broke it up into
three different buckets. The first two are like 10x reputation. So I don't think there's 10 x left in the stock necessarily, but I do think that if you go and join now, they're still like kind of seen as cool and new and fast growing and so your reputation and of your resume with 10x those
Like pretty simple open a I'm Andrew. I think our bolts at this point where if you go and you join like you may be able to make a couple hundred thousand dollars a year and like there's probably some upside but open a.i. At like 85 billion dollars basically have to go chili dollar company to get you 10 to 12 x and so I think that is like you can make a really nice salary. You can probably get some upside maybe you know, 225 x is like kind of base case but really why you would join one of those companies is because the reputation and kind of resume.
10x is kind of the the value that you're getting there and roll was on our original list my friend. We've went up to you on that one. I don't even think open. I really existed but not every
time you're probably existed. It's like a research lab at the time we did that episode and it was not on our radar we missed on that one.
Yeah. Well, I think that you know these companies that's how they should mature right? They should be like 10x economic opportunities and then 10x reputation. It never works the other way like there's no
Need that. There's a 10x reputation opportunity first and then there's a 10x Economic Opportunity. Like the economics have to be captured to some degree and people be like, oh that company is successful and then that's where the reputation kind of follows. So
let me ask you you worked at Facebook and snap to blue-chip logo type of things. But also at what, you know different times have been incredible, you know Financial things to when you join those. Did you think about them from a logo collector first mentality or a stock collector for?
His mentality what in your Calculus I'm sure both were beneficial. But which one was more beneficial in your
case? Yeah, I mean Facebook by the best example, I built and sold this company was kind of like in social media analytics. We used to watch the apis. I had gotten to know some people at Facebook. We sold the company. I like made enough money to like make more money than my friends who had jobs but not enough to like retire or anything like that and the guy said Facebook. What are you gonna do now and like for whatever reason I never even thought the like Facebook has like, you know a building with like hundreds of employees so I can do this. Like I was just kind of like this thing.
Use I talked to a guy over email. And so I wanted to come out here and like interview for a job. I was like cool what jobs are product manager had no clue at a product manager was so on the way there on my Kindle. I bought the art of product management approaches the book about product management. I read it. I went into the interview and I just regurgitated everything. I remembered from the book
bullshit. But I was just like, I mean like that's kind of what a product manager does right? It's like they kind of just like get enough
information.
And then just like say some you need a buzz words right might get the product out the door. It's so like definitely huge imposter syndrome when I started working there and I remember the last interview actually was with Sam lesson who now is like, you know, very well known etcetera and Sam got on and I didn't know what to expect because they were kind of like, hey like this is like the boss guy, right? So like, you know be on your A game and he got on and he was like, let's talk about beacons. I was like what and like the beat and Facebook beacons and just
Not like I'm like RFID stuff. He just wanted to brainstorm and I was like, oh this place is different. Right? Like that's not like a normal interview. And so the reason I took the job was not the money like it was a good salary but it wasn't anything crazy. This was at the beginning of 2014. The stock was probably like 50 bucks. Oh, you got a 10x or them. Well, I sold it and bought Bitcoin wait,
but were you about to say the reason you joined was the kind of the people and the culture was different
because the first two companies I built I couldn't get them to grow past a certain point. And so I pretty much came to his eyes.
Fork in the road is like I can go to business school and like pay to try to get this education where I can just go join the people who seem to be like the best in the world at growing things which was the Facebook growth folks and they'll pay me and like that literally was the evaluation and so I went to Facebook and they blew away my expectations like sure you get some, you know, resume benefit and all that kind of stuff. But what I found in my career is kind of like college like no one actually cares where you went to college after like maybe the first like three to five years of your
business career
working at a place like Facebook unless you're one of the first baby like 22
100 employees. It kind of just is like all right, you're like kind of legit, you know, you worked at a place that has some sort of high bar. But now there's 80,000 people that worked at Facebook as of like the end of last year. So it's kind of like 80,000 people got in right? You know, it does it have the same kind of cash a as it did a decade ago on clue
dude Sam did I ever tell you when I interview at Facebook,
you know, I did not know that
so what we were going to the acquisition process Facebook it was gonna go we were going to sell the Facebook. Not not not twitch.
They had the higher offer the better offer and they flew us out to Seattle. I guess is where we went and they're like, oh, you know as a formality like your whole team has to go through this like kind of like leveling things. So you interview your role in but like you have to get leveled and you got to do it too and I was like, okay great. I'm excited. I've always wanted to know what this process is
like but then a part of me was
like shit, I better not blow this one, right? Like the emperor has no clothes. Let me make sure I don't blow this whole deal here by by going in wrong.
I do the interview process during the interview. I was kind of like you pumped. I was just making up like a literally just making things up every single question. They asked I had not had no I had no idea what the answer should be. And you know, this is completely out in the in the blue because I done the interview process with the other people who are looking at buying us, right and there's it was like tell me about a time where you showed resilience and it's like oh, yeah, whatever. Yeah, this girl rejected me in seventh grade, but I didn't give up eighth grade. I got it right like whatever is like some
Stupid like character type of tell me a story tell me about a time you disagreed with somebody but you've found resolution. Facebook was different they go. Okay, let's pretend that you just released a feature
and you know, you come
in the next day and the chart of the usage looks like this and he showed this curve which like, you know, it was like normal and then it drops off a cliff and he's like, but it's not around the feature You released but this is this adjacent feature the here's what the usage looks like walk me through like, all right, how would you approach that? What would you do next?
And I was like, I know I'm so dumb, but I was like wide go I'm I'd go ask the guy who works on that a bit like hey, do you know what's going on with this feature? They're like, okay, I like that and then what would you do? Well, then I'd see what he says and then based on what he says that leads to my next question. If he doesn't know then I would do this what a stupid interview know it was it was honestly was a great interview. It was the best interview I've ever done all of the questions were like this where there were real real scenarios where they
got you to basically it wasn't a riddle like some abstract riddle about like how many toilet seats are there in Bay Area and it wasn't canned, you know pre-prepped like character questions where you just cherry pick one example that makes you look good versus the you know reality. I was like, oh there's this is a problem-solving job and they're trying to see how I problem solve and there were all different variations of try to solve this problem. But it took a real problem not like you're very arbitrary problem that like doesn't even it's not even relevant to what's going on.
What level did you
Now, what was it last last last pod? I don't mean to toot my own horn, but beep beep the guy told me that it was the highest. It was the it was of all MMA that they had done. It was the highest like feedback rating. They never got now what he said that I knew I had been pretty much bullshitting the whole time during the interview. So I was like, I have respected them even more. I'm like these guys just want to win the deal like that's clearly what they want. They don't actually care about my interview. They know that they didn't just flatter me and that this is going to totally work as it is.
Is working right now I could feel myself blushing. I was like, wow, these guys are really smart. They there throughout the actual interview results and they just told me what I wanted to hear to get me to take them because they already had decided before the interview that they wanted to buy our company it was the last thing is this a problem though. There were so many people that were at Facebook that you've never heard of because there's people you know of at Facebook there's up there Cheryl then there's like the Timnath level then there's even like Sam lesson the guys I had taught the interviewed with us.
I guarantee you guys have never heard
him. Do you know this guy Vijay Raji? Do you know this guy Vivek? You probably never heard of these guys, right?
They were so impressive these guys were so impressive and not just impressive like in the interview then their track record was in person was like so what are you working on here at Facebook? I've never you know her do you guys do like, well, we built the games like the HTML games inside of messaging and I was like, okay how that kind of like just some people use that like, well, honestly it kind of failed in this way, but there was just one part of it that was actually pretty successful and it brings in like whatever like it brings it 500 million a year now and they're like, you know, that was like kind of like, okay hit but our big hit was working on this and he's like, yeah this kind of event
He's like, you know, how office went from like Microsoft Office went from something you'd out by a disk and you download and you like type in the key you pay $30 once to like this thing in the cloud Office 365 that you pay every month for he was yeah. He created that like he was at Microsoft who like created at his desk. Nobody would kind of believe that that's the direction. They should go. He did it anyways on his own nights and weekends and then I had like powered that through and got that approved now that's like the way that Microsoft Works
And I was like you guys are the no names at Facebook. Holy shit. The level of talent at this place is insane
dude. It is insane. I remember taking tours there my wife worked at Facebook and I would just walk around the campus and I would just see some of the conversations in here some of the conversations and I was just starting to hustle which is just a daily newsletter and I was pumped that I had a hundred thousand people a day reading it and I just remember walking around and I'm all like I'm I'm a piece of shit. I'm nothing like, I'm nobody give me one of these Facebook
I want one of these I'm
in did you see the vending machine where they have like MacBook chargers that you could just like push a 3 and it just a giant tree-like brick charger will
drop out for me. I'm like dude. I just bought for computers on Craigslist for 800 dollars a piece and that was a big deal for me and like I'm out here and you guys have a vending machine with mouse and dr. Dre headphones in it. Like what the fuck did I sign me up? I'm in the thing that Shawn was talked about with the interview. So there's three different tracks in the interviews when I was there and I would I didn't believe I was a good interviewer like I
I know how to pick Talent basically and so one of the things that you can do is you can like volunteer to do the interviews more often as a product manager like they don't have like, oh, that's the person who does all the hiring but the current product managers hire the perspective new product managers and so like the current team kind of like does the interviews right? And so of these three tracks the one that Sean talked about was the favorite one that I like to do because it was like the most practical and so the example I used to give is like you launch something 50% Your traffic is down you come in Monday morning. What do you do?
I probably did over 100 interviews and like an 18 month period as you hear all these answers, there's only one time ever. Somebody said something to me and I immediately was like higher like strong higher. He goes, I would immediately alert the entire team. We have a problem like everyone else would jump to solve the problem, but it was so obvious like this guys worked on teams before he understands like what happens in these scenarios, like communication is key like everything that was wrapped in this like one single sentence and I remember just being like man, you can tell the greats from like the pretty good
Ed's in you know, a 30-minute conversation just walking through a practical example because all of the Lessons Learned show up and so I do think that's one of the strongest things that Facebook does in terms of like Talent filtering what what are the other companies that you like? All right. So there's a bunch of companies. I'm going to put in like the middle bucket which are like the 10x potentials eight sleep. I think it's a huge business. Really? I think they're huge. You think it's 10x. So
huge, but not a business.
I think eight sleep so like, you know, look, I'm very good friends with a lot of folks there. I think that they are probably one of the best operators like team of operators. They do a lot of Revenue they have only like 80 or 85 employees. I believe that they publicly said that the company's been profitable and they're selling a hardware product plus all of the software and some of the things that they're building now are just like really cool and I think a lot about like 10x Economic Opportunity.
Is not just like hey, can we make more money but you also have to really really strong Mission. And so their whole idea of like 48 hours a day. No one tends to a human can they compress that can they make it healthier? Can they, you know, do things like body scans Etc. Like all these kind of cool things. I think that's a huge opportunity for someone. The second is varda the whole idea of like, let's go to space is not new, but let's go to space to help us back here on Earth is huge and so varta does is they've created a space Manufacturing.
These they launched them up into space there right now manufacturing drugs in zero gravity and then they're bringing it back to Earth. And so I think that's a pretty big one
explain that I forgot. What's the reason to do the manufacturing in space? It's a little
unclear as like what all of the reasons are going to be so far, but two quick ones are like there are some drugs that it's either very difficult or not possible to currently manufacture, you know with gravity. So like zero gravity is a huge component of it and then the second thing is if they're able to
To do this correctly. It actually may be cheaper to do some of this in space than it is on Earth. And so it's like they're big macro bed is just like you space for the benefit of Earth rather than everyone else who wants to go to space to like conquer Mars or the moon or whatever
else dude. How does that make sense? How could it be cheaper to do in something in space? You have to get to space in a rocket and you have Labor in space. Look, how can you tell us you don't be cheap traditional labor.
So that's the thing is they built this like automated manufacturing like box base.
Clay, and so you don't need any labor and then now like the other thing to remember is like rocket launches are super cheap compared to what they historically were and then it's not like SpaceX is like getting a rocket just for varda right though. I bring tons of things up there all at once and so now you have like shared cost of an already 10x or more cheaper rocket and so the math ends up working in a really interesting way.
We got we got to get that guy was I'm Delian we got to get him on the pot to explain this. I'm be like and I'm not gonna let him do know hand way.
If you share I'm gonna be like do not do the Box manufacturers in space and it's cheaper than renting a place in Lexington. Like all right, walk me through that line by line. There's no way right like, this is crazy you guys bring him on it. We'll see what he says. He's obviously right like he's not wrong. I just don't get it and I want somebody to explain it to me cuz there's got to be other people out there that are like, how does this work? Exactly?
Alright everyone quick break because I've got a thrill of the shill. I've got something to show. So here's the
About eight weeks ago. I released this new podcast called money-wise when we break down different peoples financials. Meaning we look at what their income is. We look at how much money they spend and they break down their portfolio and then we'll dive deep on a certain topic. That's a little psychological like what do you spend on the makes you happy things like that? Well I said I was only going to make more episodes if you people beg me to make more because they're really hard to make and you did so I made more so we have a season of seven episodes. The first ones released today right now. It's live in this first episode is but the guy who
Ends roughly 250,000 dollars a month and we broke down exactly what he spends his money on his net worth his portfolio everything. It's pretty surprising that people give out this information. And so I'm really proud of this podcast so you can check it out. The first episode is Live Now look up money-wise. You can find it on YouTube, but right now it's not video. It's only audio but the audio is on YouTube and then Spotify iTunes, wherever your podcast check it out and then tweet at me the sampar. Let me know what you guys think because I'll make more after these next seven.
Again, only if you love them and I need to know if you actually do so it's called money-wise. It's podcast by Hampton my company joined Hampton.com and let me know you guys think that's a my Twitter. All right back to the Pod. So that's the third one. I'm shy to share this one because Sam's head's going to explode but figure a I definitely I think as one. So for those that don't understand what they're doing, you know, human labor is becoming a huge problem where there's just not enough people to do all the jobs people get sick. They're tired. They only
work so many hours all that kind of stuff. And so this rise of like robotics, but not just like Boston Dynamic like dog robots actual what they call a humanoid robots. So these are like human looking things that walk around a warehouse. They can pick things up. They can pack things. They can kind of do all the things a human could do and one of the best things I texted Sean this like one of the best ways to evaluate a company is like what enemies they pick and so here the guy Brett who runs figure AI he basically picked Elon Musk as
His competitor and so like you got to be a little crazy. You gotta be a little ambitious. You got to raise a lot of money. This guy's race, you know, I think over a billion dollars now to go after this opportunity, but the other thing that's really interesting is like as an
investor is store eclis
people paid attention to demographics how old a population was, you know how fast it was growing all that. Now you're gonna have to actually pay attention to Robotics and Balaji srinivasan has talked a lot about this where if you don't have enough people in society, you have to replace them with
it's and so measuring on how many robots are coming off the production line, maybe a better sense of like where you should be investing versus the human demographics, but I think that's a big one. Once they raise their first round at 300 million dollars. I went and toured their like Factory or whatever and I went back I go Sarah. Let's move there. You're gonna get the job there. We gotta it seems like I don't know anything about robotics of Mike already bought the books. You got some breathe tonight. We're gonna get you to work out. He's gonna be okay, we're gonna get you caught up. It's like
I'm the tiger mom. Yeah,
don't worry. We're enrolled you and kumaon you'll be ready in three weeks. Yeah, the coffee's Brewing. It could be a late
night. So come on chop-chop. Let's get to work. The I've got three more for you is trauma and ours you guys have heard of this company is one of the fastest company growing companies in Founders funds portfolio. What they figured out is similar to like uber where you press a button to car shows up all
of these light industrial manufacturing facilities. They need tons of Labor. So kind of the other side of the problem that figures going after so that what they do is they go to these like temp work providers, but the problem is that the temp work provider should be like, hey, I need all I need 50 people tomorrow and they'll buy cool will send you 30 that's all they have and then of the 32 they're supposed to send you like 20 of them show up and five of them are like hung over from the night before right? So it's just like it's a horrible experience. It's super expensive all the stuff and this is the company where like the investors brag about the
On their about page should like we're a 996 company ravages. I met the founders and they were like, we have an Olympians work ethic and I was like, I'm in like we're now work
everyone, you know the truth about this company, so I should have invest in this company. I had a chance to invest in see I was like and then before I even heard the pitch I said I'm in because I heard something very similar to what you just said pop. Not the Olympians work ethic the spelling bee Champions work ethic the guy who started the company went to Duke and I
know his brother and they both the brothers were like ESP on the ESPN spelling bee like, you know, one of them won it and then the guy who started to trial but he's the guy who fainted mid word. You remember that clip of the guy who starts spelling the word he passes out stands up and finishes the word. It's the most incredible clip. I did not know that ESPN history. Forget LeBron forgive Michael Jordan. This kid starting to spell the word passes out gets up says nothing about passing out and just finish his spelling the word flawlessly.
It was absolutely incredible. He's the founder of trauma when I heard that I'm like, I'm in just send me tell me where to wire the detail why the money and then unfortunately got to smartass my partner who knows a lot about Staffing. He's like, well, it could be hard for all these reasons and I was like, I guess, you know more than I do. I'm just basing this off the spelling bee performance lovely turns out I should have just trusted my
gut he's done. All
right. I met him I met his brother at a party and he had won the Scripps spelling bee right? I seen him on ESPN. I see him at a party. I
sighs this kid from ESPN. I'm like you I've seen you before I was a year the spelling kid. He's like, yeah had had you know, it's that was years ago and I go dude. This is annoying drunk dude, dude, everybody. Wait, dude my name I don't know your name and he goes, I don't know shawnte519 00 beat him and I beat him as if I smelled something as if you him spelling my name sha and meant anything and that
The only time I ever interact with this guy the next day, I was mortified like dude what absolute douche I was last night and I've been hoping to meet this guy again so I could apologize for this 15 years ago, like bro. Sorry. I made you now. I'm at them
now. We know why he didn't send you the wire details. No,
that's his brother. Yeah, this is Brother two different guys. He became there was brother became like a very successful poker player. And then it did a bunch of testing things that way both. Yeah, I think spelling bee is like one of those hotbeds of of like if you can get obsessed and about this like,
Intellectual Pursuit, you know means two things your parents are incredibly overbearing and you're incredibly smart. And so, you know that usually will lead to to success 100% Next one is a
Placer dot AI so I and I've invested in most of these companies the only one open a.i. Enduro and figure a I wish that I had but Placer they basically it's this really guy and he was like Hey, I'm going to use like cell phones to create better mobile analytics not like what you're doing on the phone, but like where you are, so
Certainly, his like pitch was like Hey, I'm gonna like be able to tell people when you drive into the parking lot and I'm like what I always you walk through in the store and we're going to sell all this analytics like really really granular kind of location data. They just publicly announced that they're doing a hundred million dollars in annual revenue. And so when you look at that again,
like it's for real estate, right?
That's where they've seen a lot of people by but like I think also like some hedge funds and a couple of other folks by the data as well, you know, a hundred million dollars is pretty much dearest it and this is like if you want to have a career in like B2B
Be you know software analytics, like obviously you're not going to go to like an hand drill right this kind of like off-brand. I'll often disagree but I think placers are like still got probably a 10 x potential upside. What's their valuation in their latest round? I think the latest public one is like a billion dollars. So kind of like 10 times Revenue, so it's not hard to see a business that you know already doing a hundred million dollars in annual revenue growing pretty quickly. So it's got some upside to
it is probably my favorite one of your so far do you got any other ones you had one more
maybe?
Got two more that are kind of related. So everyone's all excited about like the Deep Tech stuff. I invest in this company called rain maker. And so Rainmaker makes it rain. There are flying Precision drones into clouds and they're dropping chemicals in the clouds to make it rain. And so like that's kind of crazy. That is probably the riskiest one. Wow, pretty cool URL and then kind of simultaneous to that if you look at like what's like the cyber security version?
Ian of all these deep tech companies there's this guy Joshua Steinman who left I think he's on the National Security Council in the Trump Administration and he like realized wait a minute. Like there's no companies that protect all of our public infrastructure like the example he gave me was imagine what happens if someone can hack like the water treatment plants and change the pH levels of the water and have like massive, you know Carnage or like, you know, really really screw with a like a local area by simply hacking this like one facility that's public infrastructure.
And doing something nefarious and so he's creating a company called galvanic again. It's super small probably on the higher end of the risk Spectrum, but just like a really cool mission of if you're able to protect public infrastructure. There's like unlimited demand for this type of service. You can see how these businesses could get quite big given, you know, all the concerns with our adversaries and people kind of getting better at cyber warfare cetera,
dude. I love that idea. That's a great
idea. That's great. And what was that called?
galvanic GA L VA n IC k
Wow, that one and this make rain thing are pretty wild. Yeah, The Rainmaker one, like people have been doing it's called cloud seeding people have been doing that for a while and they're specifically doing in like China and the Middle East and stuff but there's a world where like not only can they make it rain. But also if you can change the weather pattern like you may be able to like prevent hurricanes from hitting land and doing stuff like that. Now, of course you get into this weird world that like the second someone's like hey,
hey, I can like change the weather. People are like right know like yeah, you're trying to play God whatever but I think that where they're starting in terms of like going to Farmers and being like hey, you know get what it's basically precipitation in this in the clouds just a fall. Yeah. It's a worthwhile Mission and the founders awesome. It's got a mullet. He works out Scott. He's a squat rack in the office and he's just like we are going to be successful. So, you know, we'll see what happens
did maybe I should do that for all my portfolio companies just gift them a squat rack.
But just increase returns in my portfolio 20% I mean
there is definitely got to be some sort of study that like one people are just are in better shape. Like you have more energy you think clear, you know, all that kind of
stuff dude. We got to ask you about two things this Solana bet you did explain this. This was a this was baller it same to you know about
this know what happened. So I had a bunch of eith etherium back from when I was mining it and it was kind of like sitting
then they're gone up a lot and at towards the end of last year. I was sitting there and I was just like why am I holding this like deciding to hold an asset is an active decision every day. So I'm basically like saying I should go long etherium every day that I don't sell this and I'd been scared about triggering taxes and like all like the normal lies you tell yourself as to like why not to make a decision and I just said to myself like okay if I am gonna sell this and not buy more Bitcoin what else would I buy? And so I like went through a bunch of the crypt
Currencies and I was just like I think Solana is going to go up a lot. It's gonna go up a lot more than Bitcoin. I think it's gonna go up a lot more than a theory mm in this specific bull market because a smaller market cap. There's a lot of energy and excitement around it and and all that and so over the years. I've learned how to come like positions on which I think is also like a very under discussed thing. I didn't like sell everything and just buy this asset instead. What I did is I bought a little bit of cilantro at $48 it started to go up a little bit more.
And usually when that happens people are like oh cool. I was right instead. I doubled the bet at 55 like the position is going in your favor. And so I double down because it's telling me that the Marcus tell me. I'm right it kept going up. I then sold 100% of the etherium and I bought Solana at $73. I think it was and so gave me like a blended price around like 65 bucks. And so Salon, I just went on a tear which $120 and I was like, oh wow, that was awesome. Like hopefully keeps going
And that was it. I was like done but then the price started to fall and as it fell it fell from like 122 1 10 to 100 and I woke up one day toes at $80 it over the years. I've just learned like nothing's changed with the thesis. I got no more a theory of the cell to like, you know convert over saw like I'm going to the bank account and I just want got more cash and bought it at 80 which happened to be about a 30% drawdown which historically and cryptos been like a pretty good spot and then it's ripped all the way up to like 190 is
Shhhh, it's been a great trade. But also it is I'm only able to do it because I've been doing this long enough and like learn how to put the positions on how to think about like when the position goes in your favor to add not like cell and take profits. But you also have to know what you own and like I don't think I'll own Solana like five or ten years from now. It's very much like for the next year. I'm very bullish on this and then like we'll see what happens whereas Bitcoin like, I'll hold forever and don't think that I'll ever sell it
first of all.
Been kind of very good trade. So first of all the very very well done not not easy to do what you just described the psychology around what you just described is I think more important than the why but I do want to ask you said the word thesis on Salada.
So I have a buddy who
has a insane amount of Solana. He owns like 40 or 50 million dollars of Solana and I think this guy's nuts for doing he's a very smart guy in general, but I'm like I asked him like why why do you own this?
Absurd amount of Solana. This is like, what do you know that? I don't know. Please tell me so I can go buy it if you have some like incredible thesis and he's like, I just I'd like to think it's going to go up the number go up. It's desus and he's like, well, I think it's going to be a bull market in a bull market. It's usually these kind of like second third fourth fifth coins that like get the highest run up. I see a lot of energy in the ecos in the people like these like all of a sudden it starts to sound a lot. Like I don't know like, you know, we're talking
Horoscope type language for me and so I'm like and I've been telling him I'm like dude, please just sell this thing and he's like, it's feel like the energy. I feel like I see it a lot on Twitter. It's like, oh my god, dude. You sure that this is the reason I have 40 or 50 million dollars of Solana. That is an absurd amount of this thing. Yeah on
one hand. It sounds crazy. You're like, oh it's like the energy whatever on the other hand like in this person's defense. What I would say is when I first started investing somebody told me like follow the developers like that's like a great investing strategy. And so there is like a lot of
Element activity that shifting the other thing is there is a pretty like well-thought-out investment strategy of like I want to buy the things that everyone's going to buy tomorrow today rather like I like if everyone else is going to build a thesis around something then I want to buy it before they do but be contrarian that becomes consensus and I love the George Soros quote. He's like when I see a bubble I rush in right like the whole point. Is that bubbles and I'm like go bigger and further than you think that they can and so let's just say that like Solana
Is a bubble selling an asset at the beginning of a bull market is usually in crypto like a pretty bad strategy. But also as I said is get bigger the returns go down and so I don't think it's crazy to say like, oh there's a lot of activity around this. There's a really strong narrative or meme there's tons of coins and and things that are being launched on this and Bitcoin aetherium and Slaughter probably all go up. But if you had to pick one of the three that goes up the most well, it's probably those smaller Market Gap ass at likely will
well outperform and so I don't think it's like the craziest Theory the question is what is your thesis on when to sell and that's what people in crypto including myself over the years like we have messed that up over and over and over again because timing markets is nearly impossible and what an asset goes up hundreds of percent. You're like, well, of course it's going to double from here and then next thing you know is down 50% You're like
shit. What are you thinking with the Solano? And what are you do
my theory in crypto now is selling is less?
With price levels like in the public markets people will hold a stock and they're like, okay if this ever gets overvalued I'm selling. I'm trimming the position in crypto. It's much more cyclical. And so I actually think that selling is more about what where are we in the cycle at time then it is like value right? Because they're it's hard to like, what is the value versus price and this is overpriced or underpriced like it's very difficult to do for these assets. So I think about a lot more as like, is it the end of this coming year is it you know, the
inning of next year is the summer of 2025 like there's some time frame that I'll come up with and I'm like, I don't care what the valuations are. Like, I'm just selling because it seems like the right time in the cycle more so than I have a price target for any one of these assets. What was the second thing you're going to ask them about Sean
and Route 8 pomp interview to undertake before he was take you you were on tape before Tate. What's a guy like you met him in person? Right.
I did meet him in person. He didn't interview together.
Other in Miami, why did you
interview them at that time was he kind of big is that it was like kind of interesting person or what was the context? I don't really think that he had maybe
it's a couple of crazy things on my crazy in the sense that you know, if people were like, oh whatever rig reacting to it. But you know, he's a four-time world champion kickboxer. We had like damned a couple of times actually thought that he was just like an interesting person from the perspective of like it a lot of commentary about things that people either weren't willing to say
or like made me think and didn't mean I agree with everything you just like when you when you find those people you kind of like, hey tell me all your World Views and then I'll sift through the bullshit and figure out like what I agree with and what I don't and so I interviewed them and he definitely said some like things that I was like, oh, I can't release this interview like, you know, this is kind of like a little little spicy. And so what was interesting is I will was like, hey, I don't know if we're going to like actually ever release this thing like that's just kind of put it on ice and we'll go from there and then a year later.
Like Society had changed culture had changed and he was started like become much bigger. He went like all podcast. He said that a lot of the exact same things and people didn't have a problem with it. So like it's interesting like he was saying the same thing for like a year or two years, but actually culture became a little bit more acceptable of some of the commentary and including things around like, you know, the vaccine and like that type of stuff and like I think people just had more information to kind of evaluate these situations and so I was like, all right. It's a little spicy.
I see but like let's release it and one of the like final points to deciding whether we were going to release it or not was I didn't really care so much about the like really hardcore perspectives as much just like who are you as a person? Like how do you make money like kind of like the business and the person behind these thoughts what was his business at the time Hustler University like his course, he had a bunch of them there like online businesses. He you know, he described them. Actually. It was the first time that ever a podcast episode I had done was like
excited and articles where people were like writing pieces or like, you know, critiquing him and then they were like referencing things on the podcast. So I get like a Google alert notification like, oh like you've been mentioned in like the New Yorker or whatever and I'm like, uh must be awesome. Like obviously I'm a cool guy and then you go to like, oh, I'm in an article where they're like, you know talk about misogyny and like all these things like okay, um, and so at the end of that interview, he asked me he said, what's the one thing you disagree with me today?
And what I say to him in the interview is I said to him I said every single thing that you're saying has like this like kernel of truth, but then you like extracted and have this like bombastic rapper that basically is gonna go viral online and it kind of like cracks a little bit and breaks character and he's just like I you're smart man. He like shakes my hand and I think like that was the biggest takeaway was people don't become viral and successful without being highly intelligent and he very well understood the human.
In Psychology, and the way the internet worked and so he had a message you want to get that message out to people he was able to communicate in a very effective way. And so people might not agree with everything he said but if you look at his tactics, they have pretty much become standard in a lot of people's like marketing today. And so people kind of like saw this guy be successful on the internet get a message out and now you have a bunch of companies and individuals that are trying to replicate it and maybe it's not the same message but like
that structure
was pioneering and so you've got to be able to like evaluate people and say hey, I understand you for who you are. I agree with some things you say I disagree with other things you say and then like can I learn something from and to me the learning was he really really understood marketing communicating on the internet and the way that I don't think a lot of people did before they kind of saw what he did. Yeah, and I kind of had the pay the fucking price for it too. Well in high side like that's the second You Know lesson is like don't become the main character.
Right or if you are you better be ready to pay that price. Yeah, and it's just you know, I ask myself a lot. Look I have a number of very successful friends who nobody's ever heard of before right and I'm sometimes like mad that's an amazing life. Like like you figured it out you figured out how to be super successful and also no one knows who you are. There's a lot of other people who like they enjoy talking to folks, right, you know, Patrick, but David I saw a clip of him recently. He was talked about the fact when he sold his insurance company. He was like I wanted to
to do something for the rest of my life that I enjoyed and talking to people and learning from them was like the thing and so he went and he did all his Media stuff and whatever and so I think you just have like know who you are as a person like, what are you trying to accomplish professionally? What do you what is your comfort level with like privacy and like personal, you know kind of notoriety and it's different for everybody. And so yeah, if you want to become the main character, then definitely you got to be ready for everything that comes with that good or
bad. Well, dude, you're dressed as the main character today. Yeah came on here.
You're looking good.
Good best dressed award
for 2024 is in your hand. Somebody has to come take that belt out of your hands for my first million. Thanks for coming on dudes always want to talk to you.
Thanks for having me. All right, that's the Pod.
I feel like I could rule the world. I know I could be what I want to
travel never looking back.
