#207 - How to Make Millions by Unbundling Etsy

That's exactly how it works, is people think oh, if I practice stoicism, I'll become that person who is Calm mind. and able to just operate and doesn't have these sort of like Massive swings. And it's like no, it's the other way around. When once you learn to tame the mind, once you learn to master the mind

you'll naturally become a stoic person. I feel like I can rule the world, I know I can be what I want to I put my law in it like a day's song. On the roadless travel, never looking back. Alright, what's going on? Um I'm in Nashville. I wait, it's uh Is it eight or seven where you are?

Seven. Oh, it's seven? Wow, that's really so I woke up A little bit late and I texted you and I go, You just wanna record something right now? And you said yeah, I'm thankful you said yes. Yeah, let's give it a shot. You're at a podcasting conference, which sounds like not a ton of fun. Is it a ton of fun, though?

So It's educational. And I'm happy and I'm learning. But It's just like nerdy stuff. And uh you know, there's not like I don't wanna I can't absorb it for that long, but I'm happy that I I I would love yeah, it's worth it. It's cool.

People uh people like know us and that's crazy. Like it's crazy just to walk around. It's uh it's at a hotel and like so everyone's staying, and it's kinda funny to be walking around and just people come up to you and say that they like listen. So that's kinda neat,'cause it's all podcast nerds. Yeah. Okay. I like that. Uh you learn anything cool? Any hacks? Any any growth hacks for us or what? I think YouTube is just the way to go. So and that's what we'll be doing with this show. Podcasting is for nerds, we're going to YouTube. No, I mean we'll um That's the way to go. I uh some of these people spend so

For the listeners, Sean and I sp well it's not our money anymore, but when we were doing this, like we were like so cheap. And I actually think too cheap. about starting this podcast. I mean, I think it was right how we did it with like Really uh

bad at first and then it got a little bit better and a little bit better. But people spend so much money on recording their stuff. And I actually don't think that's important, but when you have something like we have, which is like you kind of hit this lick, it's important to invest. And I think we've underinvested, which is crazy. Yeah, maybe I don't know. I was renting a studio the first tw ten at ten, twenty episodes, a hundred dollars an hour. So that was a that was like professional setup. I went I I thought I was going I thought I was overvesting at that time because I had zero listeners at the when I recorded those. Yeah, no, but that's my point is that uh my perspective has changed when I'm seeing like some of the budgets that people have. Um but for this episode I Like I called you because I saw like three amazing things that I wanted to bring up to you and you have one, two, three, four, five uh um interesting things, and I just wanted to talk to you about'em.

All right, let's do'em. What do uh where do you want to start? Give me give me your first one. Okay, the first one that I we didn't get to last time, but I wanted to fill you in about it. Uh And it's Uh about the oh, I'm just writing notes. It's about the elevator business.

So I told you a little bit about this. So I like There's this was one of these moments and I've had'em with you a ton where you explain something and you're like, I didn't even know that this was a problem. I didn't even know this was an industry, but now I'm totally bought in and I think it's amazing. And this particular comp And well, in this particular company, I'm not sure I don't uh it's not because I think that they're bad. I just don't know them well enough to actually believe that they're gonna win. But like

It it was pretty amazing. So let me set the stage. So I believe there's something like I'm I might be off by uh a little bit, but I believe there's something like two million elevators in America. And Only four companies basically control the whole elevator business. Uh have have you ever been on an elevator and looked at your feet where the doors open and seen the names?

Yeah, you had there's this little like plaque there, but I don't remember any of their names. I don't I don't uh I I can't recall. I once threw my key in the crack and had to call one of the companies to be like, Hey, how do how do I get under your elevator? Wow. So it's Otis You probably recognize. That's the big one. Yeah. Otis, Schindler, Cohn, and uh Mishibie. Is that Uh. Yeah, mistubishi um are the big ones. I know of Otis because I've already uh I've looked into them a m a bunch. They're not technically these four aren't technically a monopoly because there's more than one, but basically they control just about everything. And what that means is

Um when you buy an elevator, I'm not actually sure how how much an elevator costs, but something like like Target might have six or seven thousand elevators. And when you buy an elevator from them, it's a like 10 year or 20 year contract. It's a really long contract. And it's almost like buying a car. So when you buy a car, you get a fifty thousand mile warranty. And Except imagine buying Five thousand

And it's incredibly challenging to know when each car needs to be serviced, what type of service the the car company is actually gonna pay for. and what they're not gonna pay for, what falls under it. It i it it's kind of a pain in the butt. And so what happens is oftentimes a company like Target, they employ a whole team to manage their elevators and escalators, and they don't know like you know, what they have to do and instead of fighting with Otis and deciding they just go, ah, fuck it. We're just gonna call service people and we're gonna we're gonna get figure out on our own. And there's two new companies. One is called Audit Mate. That's who I talk to, but there's one in Britain called We Maintain that's raised 40 million dollars. And basically what they do is they manage your elevator and

Escalator, um Like It's like fleet management. You know what I mean? And I thought that this was so fascinating and very interesting. And when I heard about this company, Uh I was like, Well, I don't necessarily want I'm not sure if I ever want to like invest in anything like this, but I would love to own it. And so the way it works is they charge fifty to sixty dollars a month.

Per elevator. And the name of the game is you just go out and find all the elevators and you say, Look We're gonna be your your agent, which means we sign on to speak on your behalf, and we're gonna negotiate with Otis and we're gonna make sure that your shit's maintained. It doesn't break down, and we're gonna handle all of it. And I thought that that was amazing. And it's one of these business models where it's kinda like The way that they charge right now, or a lot of these companies charge is a a subscription fee, which is fine. But this is one of those business models that we've talked about, like uh TurboTax, where they take a percentage of all savings. So it was like the easiest shit ever to sell. Right. And so they're basically saying, Hey, you have no no risk, no loss, because we're gonna save you money.

Yeah, y you sign up to pay with you sign up with us, you're g we're gonna save you money and we'll take We'll take out of it in the same way that l um you know, like Main Street does this with tax savings basically for it for you. They'll be like all right, uh We'll take a percentage of whatever we save you. It's like oh okay, sounds like I have no downside. And even if that percentage is large, it's like found money, so they feel good about it.

I thought and I thought this was cool. I've never have you ever even heard of anything like this? No, dude. So you so I'm just looking at some of your notes. Otis Twelve and a half billion in revenue, Schindler, eleven point six billion cone. Basically the same, ten billion in revenue. Uh huge. Those are huge revenues for for these companies. Now, I don't know how profitable the elevator business is, but family owned

Oh, Otis is like a family owned business. I'm almost positive Otis has been around for since the eighteen hundreds. I mean, these are like huge, huge family owned businesses. So they definitely are I believe they they have to be Profitable. Um Here, Otis Oh Otis does twelve but the Otis is publicly traded. So what do you think their uh market cap is uh for twelve billion in revenue? Okay, I'm gonna guess they are a

twenty two billion dollar company. Might be less. I think it could be less. You think less? I think less. Is it more? Oh it's about forty.

Forty. Okay, so twenty two hours off. Uh Uh pretty crazy, right? Like who would have thought? And so this is just software that lets you help you negotiate. Twitter Twitter is like fifty. Fifty five or something like that. So Otis Otis the Elevator Company. Yeah, Twitter had been hovering below that and then now it's at fifty five, sixty or something like that, because the stock went up recently. But um Basically Otis the elevator company is worth almost as much as Twitter. Which is insane. And not only that, I believe let's see, it's been around since eighteen fifty three.

Yeah. Amazing. And the funny thing is this is named after like a guy's first name, it sounds like it's not even a it was it was the the company was uh invented in Yonkers, New York in eighteen fifty three. And they've been around since then. Fucking elevators. And so this fascinates me when I like learned about this because you know I like old shit. When I think about You and I and and a bunch of friends were talking. What is Yonkers? Is Yonkers a place? Is somebody born in Yonkers?'Cause that's amazing. I wanna say I'm from Yonkers now.

Yeah, it's in uh it's in the I believe it's in the Bronx in New York. It's like a it's like I don't know, it's in New York. In the Bronx. All right. Well uh so so this company, but you're what you're saying is that this company is a SaaS company on top of those, right? Yeah, it's a SaaS company that lays on top of it. And here's why this fascinates me. I love old shit. Things that last a long time. And we were talking about like the creator economy sub stack. I don't remember what we were talking about. Something like involving like uh w one of these newsletter like one off craters and it's like, yeah, I think you can make a lot of money, but can you do that for twenty or thirty years? It's really, really challenging, I think. Right basically Sam's type on companies, did you start in the eighteen hundreds in some way?

Did you um did you have a physical product that you could f that you could touch and feel? Were did were you started in the Midwest or some part some part of America? You know, are you named after a family like Rockefeller or Shidler or Otis or or something like that? Um Let's see what else what else is it? You know, are you absurdly profitable? Uh those are your those are your type essentially. Yeah, look, I think it's cool that something that to build something that can last a really long time. Yeah, that interests me. Because that that that like you you optimize for excitement, I think. Or uh interest. I optimize for what's the least amount of work I can do in order to like

Have freedom. And yours is more like durability. And I and I I I feel like durability is like number one. It's like yeah, you just if you have this, you win. And I'm like, if you have this, you might win for an hour. And then you might lose the next hour. Like I I'm cool with that. So both work, but they're both work. They're just different. What um what what do you what do you have? I'll give you one. All right. So uh what do I wanna do? Let's do let's do this. Um

Okay, let's do this unbundling Etsy one. So I'm really interested in the second tier or like what I'll call B class. uh marketplaces. I don't mean that as an insult. I mean it more like if you're in real estate, you're like, oh do I buy an A, you know, A A class property, which is like It's a modern building fully leased up, blah, blah, blah. Or do you go for like an older thing that has upside, right? Do you go for something that has some hair on the deal that you might be able to do? And so you you go, you know. This is not New York, right? That like that marketplace might be Amazon. Um, Etsy or Poshmark are these like second tier

marketplaces, but I see a lot of opportunity in them. We talked about I think we talked about this. About building SaaS tools for sellers. Uh on those marketplaces. So You you you you brought that up and I and I thought that was a pretty revolutionary thing. That that was a big idea.

And so these exist, but they're not great and there's not a lot of competition. And so like I think we had talked about Jungle Scout, which sold for some large amount of money that you knew. Um, Jungle Scout is a tool for sellers on Amazon. And I was thinking, okay, who's building stuff like this on these second tier marketplaces like Etsy or Poshmark? Uh so that was the first idea. Then I started thinking, okay. Wait, that can are you gonna elaborate on that?'Cause that's pretty amazing. Well, I think I didn't we talk about it. Maybe we talked about it. I thought we talked about it. No, if not then. That's a I don't know if you phrased it that way. I think the your s the storytelling here that you just said is actually wonderful. So I think that's actually brilliant. We had So at HustleCon we had Poshmark.

Thread up. And one more of these companies speak. And I think they were some of the biggest. Mercari Mercari's a big one. Second hand sales. The real real. You know, there's all these like other marketplaces, basically. There's all these other other places. So Ben's wife Uh, Tiffany, she is a Poshmark like super seller or something like that. And so she like she sold so much that like when they IPO they invited her and like whatever the top other thousand sellers to be like, Do you want to buy the IPO you can buy. the reserve price basically. We're reserving some shares for you because you've helped build this thing. For which company?

For Poshmark. And like Airbnb did the same, I think. I think for they they offered Superhost the ability to buy some share, so some some small amount of shares. And so um And Airbnb, by the way, another another marketplace where could you build a jungle scout type of tool on top of Airbnb? There is. Then I'm a subscriber. four two. It's called Air DNA. It's amazing. And what does that do? It tells you like what to price it at or

Yeah, so it's called air DNA and when I was so I rent out my house when I'm not there and I buy property to rent out and I use it as a research tool and I guess it just crawls Airbnb and it determines what the average occupancy rate is, what you should charge, what the earning potential is. It's just it's tons of signals for buying properties to make into an Airbnb. And there might be other things like reporting, you know, i uh Tax you know, ta some tax savings you can get or whatever if you if you're an Airbnb host. It plugs into your Airbnb and it generates your your report. Um So anyways, uh I was thinking, okay, you could build a Jungle Scout type of tool. And for those who don't know what Jungle Scout is, basically you go on

Amazon, if you have Jumble Scout installed, it's a Chrome extension. And basically when you Are looking for products, you can just click Jungle Scout and it'll tell you, hey, here's how much search volume this has, here much monthly revenue this product makes. It's it's an estimate, but it's pretty good. Uh here's how fast it's growing and here's how strong the competition is. And so what you want to find is something that there's a lot of search. uh and low competition. And if you find some if you find a combination like that, you're like, oh, nobody's searching for, you know, wooden spoons that are like wooden oversized spoons. Uh you don't want to build that because nobody's searching for it. But if you have like you know wooden oversized baby spoons is high search, low, low competition, you could go

go to China, get that product made and and become like the top result on Amazon, which is basically free traffic for you. So that's the idea. So I think you could do that for Poshmark. I think you could do that for Etsy. One thing that I was thinking about for Etsy is I think you could spin off a whole new marketplace just unbundling Etsy. Etsy is now big enough. It's a public company, been around for a decade plus, and um has all these different categories, right? So it's like You can go and you can go to home, you can go to um you know custom gifts, you can go to all these different Categories on Etsy. You can ask yourself

Huh. Could I make A a marketplace of or or or a service that just does this. one thing better than Etsy's doing, market it as that, and actually like unbundle a piece of Etsy. In the same way that people have got a lot of success unbundling Reddit, unbundling Craigslist. If you haven't seen this, Google. Google unbundling Craigslist and look at the diagram. It's like it takes every part of Craigslist.

And then it just shows how Oh, look, this housing part of Crisis became Airbnb, and this became Etsy, and this became this other thing. And so the same thing I think can be done here. So here's That's the i that's the core idea, is unbuttle one of the verticals of Etsy. What I would do I was looking at the the categories I would do custom gifts. So custom gifts is one of the top categories on Etsy.

And people go there because they want to send a thoughtful, kind of like what looks like a homemade handmade gift to somebody. Or they're getting it made for like their wedding and they want all their wedding coaster to have their names on them, or their bachelor party and they want everybody to have matching shirts that say the bat the the bachelorette's name on it or whatever. Um And so I think custom gifts could be spun out into a marketplace that's like Fiver. Where he's basically just um here's a bunch of custom gifts. push a button and you get these for you know ten bucks or some some flat rate, basically. So I think you could do a fiver or or even like a cameo style thing for custom gifts. And that's the that's the category I would go after, but I think generally I think you could study their marketplace.

And find a find a we'll find one that works because you can also see the shop sales. You can go into any shop on Etsy and you can see how many sales it's had, which is like You can do that and entrepreneur that show, right? Yeah. This is just part of Etsy. It's like Yeah. six thousand orders. And you could look at the price at price of the store and be like, Oh, you know, the average thing's thirty five dollars. It'd be like six thousand times thirty five. That's how much revenue the shop the shop has made in two years. Those are both two big ideas.

Um, so you're talking about building like the the the software that analyzes the sales and then the um the marketplace that sells the stuff, both actually pretty amazing. I go to Etsy sometimes and I do. So if you scroll all the way to the bottom, you'll see how many sales they have. eBay does it too. Um But it not as good. But that's actually a great idea. I and and by the way, I looked up Air DNA. So the thing about these software companies, uh you're you're you're you're talking about two different things. We'll call one software, one marketplace. The software companies. So if I told you or if you if you told me about Jungle Scout a few years ago, I would say like, Oh, that's a nice little that's a nice little bit.

Yeah. Well it it it's Probably does like eighty or I mean i i if it's worth a billion, I wouldn't be surprised, but it's definitely worth nine figures. I know that for a fact.'Cause it sold part of their company. So I told you just about Air DNA. I thought that was just a small thing. How big do you think Air DNA is? By the way, Jungle Scout raised over one hundred and ten million dollars, which is That gives you a sense of how big it is. If if it was a I think it was pri some of it was private equity, so I don't know how big the valuation was, but it's definitely huge.

Right. Okay, Air DNA, I don't even know what it does. I've never been to a website, so I'm just gonna take I'm just gonna say a random number out uh out of the air. I'm gonna say Thirty five million. What is their D A worth? Well, so the air DNA, so they charge I think I pay a hundred dollars a month for it. In two thousand eighteen they did four

four point nine million in revenue. In twenty nineteen they did eight point four million dollars in revenue. They said they were going a hundred percent. So you could probably assume that I would I would actually bet that in two thousand twenty they probably did sixteen and then twenty one. I I wouldn't be surprised Because uh there there's a lot going on with uh investing in Airbnbs. I wouldn't be surprised if they're in the thirty million recurring revenue or annual recurring revenue range and they raised eight million dollars. In order to uh build all they they bootstrap to nine million in revenue and then raised eight million dollars. So these are like these things that you would think are small, insignificant stuff. That could actually be quite big.

So that's a that's a fifty to a hundred million dollar a year uh value business, uh at the at that roughly th those numbers you just told me. Yeah, it's a huge thing. And who would have thought? I never would've thought that. If you told me you're gonna build this thing that That analyzes Airbnb. I'd be like, no, I'm just going to do it. Side hustles are cool. Yeah. Yeah. You should be able to bring in the four or five K a month, uh, you know, with your little air air Airbnb DNA tracker, whatever the hell you're talking about. And and I would say I I I would have if you had to guess what's bigger, Etsy sellers or Airbnb, I would think there'd be more Etsy sellers than Airbnb hosts. Well the thing with Etsy sellers is that um

Uh so Airbnb is very much it's it's a lot more set it and forget it, and there's less levers to pull and there's less like um There's less like categories and things like that. Whereas like Etsy has like multiple different categories, each one has its own little nuances. Uh and then there's like such a wide variety of sellers where yes, there's many people have houses, but it's all they're all doing the same. They're offering the same service. Etsy's offering like a million different services to people. Um, and so I think that's why it's has probably a little more opportunity. What would you d why would you call it cameo? Well, I was just thinking custom gifts. If custom gifts is this big of a market, I would just

start with that, I'd say custom gifts. I wouldn't maybe the end product wouldn't be a physical gift like Etsy. Maybe it would be something like a cameo where it's a video or it's just making a jingle for somebody, or it could be with celebrities or non-celebrities, but basically some way to send a custom gift to somebody if that's such a big uh such a big uh part of Etsy Maybe you could rank for it in search or run Google ads and hijack some of that traffic of people looking for Custom, you know, handmade, whatever, custom name, blah blah blah. And be like, yeah, we do that. We'll we'll put your name on a shirt. Yeah, it's not as nice as Etsy. It's you know, we we just took the generic Etsy look. And we just mass produce it basically. Um that that that'd be one way of it. I'm on board with that.

Um Oh, you want to move on to another one? Yeah. Yeah. All right. So I'm gonna weave two. Uh one one of mine and one of yours. I I'm a big UFC fan, so are you. So DC, Daniel Cormier, he is a he's retired now, but he's a he's a big fighter. And he uh he posted this thing and I'd seen ads for it, but he posted that he's now gonna endorse this thing called Fit to Warrior. And I went and looked at it. So Fit to Warrior, it's incredibly interesting. And so what they do is you spend twenty two hundred dollars And in six months they take you is it six months, maybe three months. I think six months. They take you from being a complete noob, so you're just a guy up the street.

Oh sorry, I spelled it. Yeah, it's wimp, my bad. That fit to warrior wouldn't make sense. It's called Wimp to Warrior. Uh Wimp to Warrior. They take just you off the street, you give them twenty two hundred dollars, and I think you get like a hundred classes or fifty classes. What did I write? Fi so Uh so it's a twenty week program. How many months is twenty weeks? Five. So five months, yeah. Okay, so you if you have five months and what they do is you sign up.

And you have us fight? You have a fight scheduled. five months from the day you sign up. And it's like and it's like cohort based. You pay like twenty five hundred dollars or something like that. Yeah, it's a cohort based thing and they say and the next Five months we're gonna take a guy off the street. And you're gonna have an MMA fight. Now

It doesn't take a rocket scientist to understand that the goal of this Is not necessarily to get you fit or to like get in a fight. The goal of this is to have like a pivotal change in your life to be more confident to say like, look, I've s I've said I'm gonna lose weight forever. Now I've like I have a fight in five months. If I don't get my act together like I'm really it's not a good it's not gonna be good. So this is like a pivotal life changing thing. And I love this business. They just raised eight million dollars from a bunch of PE people. It was launched in Australia. And basically what they're doing is they came up with this name went to Warrior. They come up with this program and they work with loads of different MA and I guess boxing gyms and they license out their program.

And now they're paying uh Conor McGregor's coach, John Cavanaugh's on board. D C all these coaches to like promote it and they give them a some type of fee. I thought this was amazing. And I think this is amazing for a couple of reasons. One It's a business that I actually think would this would change your life. If if I told you you had to f if I told you you had a fight in five months, would that be the one thing that finally like said like I gotta I gotta take this

Am I wrong that you think Basically this should be mandatory part of the education system. Well, everybody to do this. Here's what here's here's why this has always fascinated me. So Women have this because they have like a biological like you're now officially a woman. But man.

We've lost like a rite of passage. We've never had this like All right, now I'm officially a man. Like I guess if you're Jewish and you have a bar mitzvah, maybe that's like the cr like the crossing of the cast of like all right, you are no longer a boy, now you are a man. And like we had this like I I I love s uh the spart the Spartans'cause they do this thing where they like you'd go they say, All right You're fourteen or whatever, now you gotta go out in the wild for five days and you gotta survive and just come back when you're done. Right. meant American m uh we don't really have this like this this modern day yeah. Yeah. And so I love these type of transformational, like, all right, it is official. You have s it uh there's a start, beginning, and then like an end type of thing. So I love that.

And you up here, you want to talk about mental fitness. I've also done like Yoga or not yoga, um meditation. I love headspace, I love calm. I I I try to buy I do buy into mental fitness stuff, but it's a little bit tough because it's not like intense. And so I love these intense programs, and I think that they can be great businesses and incredibly fun and fulfilling to run. Yeah, so I think there's a couple things. First, I I had seen this, I thought uh McGregor's coach John Cavanaugh, I thought he invented this because he was the first one always talking about, Oh, we're doing Wim to Warrior. It's so good. We have 200 people doing it this season. And he just kept doing it. And it was like they take average Joe's, you come in and you basically say

Cool, I'm gonna turn into a fighter. I'm gonna train like a fighter. for X amount of weeks and then uh it and the kind of the graduation, the culmination, the rite of passage at the end. is you do the likes the the the the amateur exhibition fight or whatever with somebody else from the program, I think. So it's not like you're not in a ton of danger. Um I think it's really cool. I didn't realize that there was like a business underneath this. And so just to do the math, so basically what they're doing is They're

licensing this out to gyms and they're saying, Hey, this is a great Um Customer recruitment like mechanism, right? So you you run a wim to warrior program, we'll give you the branding, we'll give you the business in a box kit. And what what you got to do? And we'll send you the customers. And we'll send you customers because we have star athletes and coaches

promoting this'cause it's a feel good thing for them too. Um And uh and so we'll we'll send you a bunch of interest people, they'll find a Wim to Warrior program near them and you be my operator. So it's asset light, you do all the work. We will just do the marketing and create the brand on top of this. I think this is actually really, really smart. I would invest in this company. Um even though it seems like so crazy fringe. Uh I think that actually there's This is a very nice model.

Um It's better than Tough Mudder, better than Spartan Race, better than all those, because they had they take on a ton of operational overhead. They're a traveling circus. And so I I like this model a lot better. So okay, I think Wimp to Warrior's cool. I think that your right of passage right of passage thing is interesting and especially we talked early on about Boy Scouts and like the downfall of the Boy Scouts program. and what you would do if you were gonna buy it or reinvent it or make a new Boy Scouts.

And um And I think we were on to something with this and we should keep looking for the opportunities that are here. Um, I'm uh I'll I'll tie this into the mental fitness thing. We we did a segment on Simone Biles in a podcast. Two two episodes ago or one episode ago. Yeah. And we ended up cutting it. So it's on the c it's it's in the lost archive, lost files, along with me and Sam sparring footage from when I went to his house in Austin. And the reason we cut it is because I had a strong take. I was pretty like so the but we didn't I didn't have

I didn't have all the details of the story. I didn't realize that there I thought this was When she said I had like a mental breakdown, I was like, Oh, that's like crazy. Like that's nuts. But then Yeah. And then there's like these like the twisties things. I'm like, All right, well that's like That that's like an injury. That's a like a your leg's broken type of thing. So my opinion changed and I was like ah, I didn't actually have all the facts when I was when I was kinda explaining my opinion. Yeah. Uh yeah, that's that's true. And so we we basically were like we sent it to Sam's wife and we were like, Hey What do you think? Too much? He was like, Yeah, a little too much. So we kinda but I I I thought there was one part of it that was interesting, right? Like so yeah, nobody really cares about Sean and Sam's opinion on some biles, even though kind of th that's whatever. It can be interesting. The more the more crazy your reaction, the more interesting it gets.

I thought the more interest I thought the real part in it was There's gonna be a trend. I'm calling it now. Over the next five to seven years. people are gonna start to really give a shit about mental fitness. And it's a very different thing than mental health. Just like for your physical body, you have

Health? Like do you have a disease? Are you ill? Like no, I I'm not I'm not sick. But you can be not sick, but you can be not fit at the same time. And um right, so so you could be healthy, but not fit. And in the same way you could have mental health, meaning you don't Uh you're you're not suffering from you know depression, uh severe anxiety, bipolar, anything like that. But you can also not be mentally fit. And you know, so what's a fit person, right? Sam's a really fit person, uh, you know, really physically fit. If you work out with Sam, you go for a run with Sam, you'll be like, God damn, this guy can run. He's you know, he can go long distances, he's he's fit. And so similarly, there's mental fitness, which is basically

Just like in physical fitness, it's about overcoming some adversity. So a mentally fit person is somebody who can overcome a high degree of and variety of of of adversity and intensity of diverse of adversity. And so um, you know, shit not going your way, uh getting in sticky situations, being out of your comfort zone, these are all areas where mental fitness matters. Relationships, uh different different uh challenges that come your way. is where mental fitness matters. And I think right now this is something that is very poorly understood. It's rarely talked about. It's almost never taught.

But I would say mental fitness is in my opinion. The most important skill one can have, right? The most important thing is the little voice in your head. That's talking all day nonstop, this chatterbox we have in our head. And what is it telling yourself? Is it telling yourself that you suck, that you can't do it? Is it telling yourself that you should give up? This is too hard. Is it telling yourself that uh uh you know, don't do it, things might go wrong? Or is it saying the opposite? Is it saying, uh, you know what, you could figure this out, hey Um, even if it doesn't work out, no problem. You know, you'll still everything will still be okay.

This person just cut you off on the road. Look at the look around, the sky is blue, the the air is crisp, your your family is happy and healthy, you have a lot to be grateful for, right? Like the voice in your head dictates the quality of your life. And the voice in your head is your mental fitness. It is it is the the the manifestation of your mental fitness. And so I think we're gonna be seeing a lot around this. I think we're gonna be seeing

growth in services, content. Um thought leaders Whatever around mental fitness. What do you think? Am I overblowing this or is that uh are you a believer? I'm a believer. I think that what you're doing with this title mental fitness is I think you're just rebranding something that's been around for a long time. You know, this is like a Tony Robbins book. So I I I I totally buy in to what you're saying and I and I one hundred percent agree with it. I think

There's a few opportunities here. The first is so I'm reading this amazing book called Human Nature. I've been reading it for a long time, for like six months, and it's it's uh very dense, but I've I'll read it and read it over and over and over again and I take notes and I'm trying to like master it because to me it's like a handbook on how to like handle My emotions and how to handle other people. Now the what I would do with this Is what I would want to do is almost have like a wimp to warrior type of program where I can spend a fair bit of money and have a very intense program. And I think that a mental fitness type thing, I think that's a lifetime of learning and a li that's like a lifetime journey. But I do think that there is like transformational moments in series of your life that could actually level you up significantly. And I think that there's an opportunity to build something like that in this weird kind of fucked up way.

I've always been a little bit jealous of people who went to the military, or at least people who um went to military school because like there's this like classic like I was undisciplined, I was fat, I was unhealthy, I wouldn't wake up early. Now I make my bed, I know how to like show respect to e each other. To to people, I have self confidence. I know I I have a a a a new level of discipline and I'm like Oh my god. I know what I'm made of. I went through hell week. And I made it. So I I have been to my breaking point, beyond my breaking point.

Where there was just no way. And And I did it. And you know, they don't brag about it. But you could tell there's a certain level of confidence that people have By

Discovering your bottom. Right? What is your actual rock bottom? Not not not in terms of your money. But in terms of like Your mental your mental game. Where you break you break

Physically, yeah, sure. But when you break mentally, it's over. And uh and so they've been there because, you know, that's what the military does to challenge you in that way. And I've always been jealous of that. I'm like, Man, I wish that w like I make a I I like I say it in a joking way, but I'm not actually joking. When I went to my wife, I'm like I I wish I would have went went to military school because like there's some like discipline stuff that I don't have that I wish I would I would have had. And it's almost like I've searched for like what type of programs can I go to where it's like uh it's like basically like the like the the the soft version of that. It's like a like a fat camp version of that where I can just like spend money and they just like insult me for a week. But uh Anyway, I think that's like I think there's something there with that. And I also think that there's something there with mastering some of these books and some of these things, um, and doing this mental fitness type of type of stuff. And so I'm on board with this. I I actually think this is quite amazing. Yeah. And I think th the the word is amazing in this concept. This concept of look, you're healthy, you're not like

ruined. But you're not fit. I think that's amazing. I love um You know who could like crush us if they wanted to, but I don't think they they do. Have you uh bit paid attention to what Ryan Holiday has done with his stoic brand? No. Like I I'm I'm from afar, but I don't I don't know anything specific.

I've seen his books, but tell me what's interesting. So Ryan Halliday is an author, his first book was called How to Get famous or wh what was it called? How to It's like newsjacking or whatever. Yeah, I forget what it was called. They got like the obstacle is the way, ego is the enemy, or something like that. He's got a bunch of Yeah, so he's got obstacles way, ego and this whole idea is uh based on stoicism, which is this uh I I what are they Greek? I don't know, Marcus Aurelius, the these philosophies of basically like you're gonna face hardship in your life, and it's not about avoiding them, but it's about

Bracing them and finding meaning in in them. And it's great. And he's and and it's probably predominantly male, young males who listen to his stuff. I I'm one of'em. And he's built this brand called the Daily Stoic. So I believe it's called dailystoic.com, and he sells twenty five dollar stoicism coins, which I own one. He sells um like a nineteen dollar email course where every fourteen days he teaches you like a new stoicism like thing on how to read more. Like and it's it's pretty amazing. And like if I don't think he would ever want to do this'cause he d he seems like he's got a good life and he doesn't want to work much harder. But I I I would imagine that if Ryan Holiday had like a stoism Stoism boot camp for like a month. And he charged like ten grand and like it was around this mental fitness idea. I think loads and loads of people, including me, would would pay to go.

Yeah, uh by the way, I heard something that I thought was great. They go A lot of people get it backwards. I forgot who said this. Uh they were talking about stoicism. And it was like, Yeah, you know, stoicism, I've uh uh you know, I get it, you're supposed to be stoic, and then that that brings you sort of this calm and this peace and this like sort of like really stable mental mental game. And uh

He goes, No, it's the other way around. When you calm the mind, you become stoic. You don't become stoic to calm the mind. And uh I thought, Oh, that's so true, which is that You um

That's exactly how it works is People think, oh, if I practice stoicism, I'll become that person who is Calm mind. and able to just operate and doesn't have these sort of like Massive swings.

And it's like no, it's the other way around. When once you learn to tame the mind, once you learn to master the mind. You'll naturally become a stoic person. Um you have to get the get the order back, get the order right. And uh so that was like a big breakthrough for me because I've known I know a lot of people that have tried to get into sto they they have this anxiety, they have this like sort of mental like Lack of clarity and calmness.

They get into stoicism thinking it's the answer. And they get sort of disillusioned very quickly. They're like, Oh yeah, uh it wasn't for me. And it's like well That's true because stoicism is is almost a state you get to after you learn how to calm the mind. It's not the method you use. You know, so I've read a lot of stoicism books and and I like it from a just a history perspective and I like it from a practical life philosophy's perspective. I think it's one of the very few like philosophical things that you could apply to your daily life. You know whose book changed my it kind of changed my life on it, and it was shocking. It was Naval.

That Naval Almanac. What's it called? Right. Son of Almanac. It's so good. It's so good. So the f the first half is all about making money and the second half is all about being happy. And the first half is like That's just normal. Whatever. Who cares? The second half I felt was was pretty game changing. And he talked a lot about stoicism and a lot about mental fitness. And I and he was basically like

Uh the the the summary is basically happiness is a choice that I made. And here's some of the strategies that I use and it's very sto uh it is stoicism. And I thought it was very useful. All right, let's uh let's jump to a different topic uh real quick. Wait, let me quick tell you really quick about

one of the greatest hacks that I've seen, so f a financial hack. So starting a company. So the first one that I always tell people, and this is something that's new to me that a lot of people or was new to me, a lot of people don't know about, it's called QSBS. So it's probably the greatest American Uh tax advancing when you sell your company, if you have QSBS, which basically is like The s the it basically means qualified small business tax. So if you sell a business and you've owned the business stock for five years. And it's a C corp.

If you sell your company the first ten million dollars in sales or in uh in in profit that you make to selling a company, you don't you don't pay taxes on. So it's amazing. But I think I found something that's even better. Um Moving to Canada. So I talked to this company the other day and they and they were building this like amazing thing and I was like huh How many people work there? You're like a really new company and they're like, Well, we have about 18 people who work here and we only spend about a million dollars a year uh in total cost. And that's kind of cra So basically when you're starting a company I started my company in San Francisco. If you're starting your company, uh I uh I would imagine that you would when I started it, uh it was ten thousand dollars ahead.

But I w and I was hiring like um young people who hadn't pay much. But I imagine you'd wanna you'd wanna bake in fifteen thousand dollars ahead. Right. Easily, especially if it's eng engineers, yeah. So maybe more. So but let's just say fifteen thousand. So fifteen thousand times twelve

Is let's see, fifteen thousand times twelve. Is um so that's a hundred and eighty grand Ahead. Oh, I think it's even more than that. It's probably. So that number you're talking about is basically seven years ago and non engineers. And now you fast forward seven years, double it, and then engineers basically double it again. And so, you know, what what was maybe let's say ten grand is actually you should be buck you should be Budgeting. Almost thirty grand uh thirty grand per per head is po probably closer to reality now.

Thirty grand, you think? Okay, so thirty grand engineers, yeah. So thirty grand times twelve is three sixty. So three hundred and sixty thousand dollars uh uh an employee. So three sixty times uh fifteen, if you have fifteen employees, that's gonna be around five million dollars a year. And by the way, so that's not um that's not the just their salary. So let's say their salary is two hundred to something K. Then you have to pay all the like, you know, kind of additional overhead on salaries, which is about twenty percent. That's your FICA, that's your social security, all that good stuff. You have your rent, you have your free catered lunches, you have your your snacks in the office, you have all the other bullshit that you gotta do if you're gonna hire in this like extremely competitive hiring environment, signing bonuses, recruiter fees, it all rolls up. Uh so if that number sounds high, uh if that number sounds high, you'd be surprised. If that number sounds low, you're probably right.

And so let's just say like three to five million dollars is a huge range to have a team of fifteen engineer heavy Uh highly competitive startup. Uh uh to to get going. It's a lot of money. I talked to this guy the other day and he had 15 people and I was and he told me he was spending a million dollars a year. And I was like, wait, what? He goes, Yeah, so here's how it works. In Canada, we have these things called the research and development credits. And basically what that means is if you're an engineer is is how they're called they call them shred credits, even though it's it's S R E D, but they I think they just when people talk about it, they call them shred.

Yeah, I I heard people mention it, but I didn't actually look at the mechanics of it and I and I'm not an expert on it, but he was reading it to me and I was amazed. And basically what happens is he pays their full salary. So he pays uh some engineer 150 grand a year and at the end of the year I think he literally gets like deposited money back, fifty percent of the cost that he's allocated or he's paid them. He gets that money back at the end of the year. So a hundred and sixty thousand dollar salary is actually only eighty K to him. And also in order to manage cash flow, there's these loans. There's loans that you can so you he has to pay the hundred and sixty thousand dollars. So a hundred and sixty thousand biweekly. So he pays that out. So you have to have cash up front. But he was able to get a loan against that. And so he gets a loan up front. And then at the end of the year, after paying taxes and things like that, he gets the salary money back. This was amazing. And he was telling me all about it and this guy was based in Toronto and I've never been to Toronto, but it's

It sounds like an amazing place. There's a company that you should check out for this. Uh that's kinda cool. So so most companies aren't gonna make the drastic move to go move to Canada. So there's a company it's it's part of Atomic, uh, if you've ever seen it. And while and while you're talking pulling that up. I think um I think the best arbitrage to do this in, or one of the easiest is service based businesses. Uh okay, so but I think you can't do it unless they're engineering. I th I feel like it's only engineering roles.

It it it's I believe uh it's for anything that's uh research and development. Right. Which usually I think is uh No. No,'cause w uh the h at the hustle we got a uh we got a tax credit for some type of research and development stuff. And I had to go through each employee and like kind of guesstimate what percentage of their time is on like

research and development and and you can do this for agencies. Um you can get a fair bit of money back. Uh so agencies that do a certain type of thing. And I was at my friend's office uh who has a New York agency and their office was like lavish because and and and they spent they I think they sent half a million dollars uh in decorating it. And uh I was I was like Well why do you guys do it? And he's like, Well, this is just what you gotta do to like keep up with everyone and I was like, Well fuck, I don't wanna play this game. I'd rather keep up with other people in other places. And I think that the we have a friend who has an agency and he sells to Silicon Valley and New York companies, but he does this arbitrage thing and he makes a way more profit than most huge agencies. The um the company I was talking about is Terminal, Terminal.io. I think they basic what their their startup is is a smart idea. They basically were like, Hey, we will spin up a a Canadian engineering office for you. So you want these credits, you want these cheaper engineers, but you don't want to relocate yourself and your whole business and figure out shred credits and figure out where to go find engineers and figure out, you know, the best coffee shop in Toronto. Cool. We will do the engineering office for you and you just pay our bill and like basically they're kind of like a

uh a recruiting slash spin up agency for for talent in in this region, which I think is pretty smart, a smart arbitrage. Now they're doing it in kind of a fancy way. I think anybody can really do this. I think it's a smart idea. Yeah, and uh so anyway, this guy like made this It like I had this whole conversation and then you like kinda Like made this offhanded comment and I'm like Wait, wait, wait, wait, wait.

What? And that like it totally was like a there was a big shift there. Um And I was like, I'm sorry, I know we're not supposed to like this isn't like the main point of this conversation, but can you tell me everything about this? Right. And that was pretty that was pretty amazing. Uh you wanna do one more? Yeah, let's do one quick one. Um All right, what's fun. Did you see that Reece Witherspoon sold her production company for nine hundred million dollars?

Yeah, and a lot of people caused a fuss about that. And I don't entirely understand the business, but I don't think I think people caused a fuss because they don't understand what the buyers were getting. But I don't understand what they're getting. Wha why is this worth nine hundred million dollars? They get three T V shows and her her team? Well, so this is like kind of bro science, so I want to preface like I haven't done like entirely a bunch of research on this, but Brees Witherspoon has had this production company, I think, since like the early ish two thousands. So for a long time. What that means is I believe that she owns the rights. You know, do do you realize that Rhith Withersprint is like

Like she's gross like over a billion dollars. I mean, she's like one of those people that she's like the killers. Like the killers is a band that like maybe not everyone says that they're it's their favorite band. But like everyone knows like Mr Bright side if they like uh you know they they they're quietly in the background just always the best uh and the most popular even though they're no one's favorite. That's kind of what Race Witherspoon is. It's like everyone that at least kinda likes her and will will go to her movies. And so With uh with the deal, I believe what they're buying is like a lot of IP from years and years of production work. So uh

Okay, so so I'm looking up I'm looking it up right now. So it says that she started Hello Sunshine, the company that got bought in two thousand sixteen. Before that, she had another one. It's called Pacific Standard in twenty twelve. That's a subsidiary of it. So she kinda rolled that in. So twenty twelve. So that's only a decade. Uh I guess in two thousand she had another production company called Type A Films. And they made I don't know, some Oscar Boot Gone Girl they made. Uh you know, not nothing too big. Big Little Lies was their hit. recently and then they had the morning show, uh, which is on Apple TV.

Might. Uh This is wild. This is like so she has a book club. And the book club has over five hundred thousand followers on Instagram. That's pretty amazing. Um that teaches twenty year old twenty girls that are thirteen to eighteen the art of filmmaking. Like this is great. Dude, be be like, uh She also has a clothing brand, I think it's called Draper James, and they have brick and mortar stores all over the country.

What a power what a powerhouse. Reese's kinda like an Oprah thing where she's just got in kinda got a web of like a variety of different things. She's uh she's a baller. She's also kind of a baller because a few years ago Her husband her and her husband were at a party and they drove home and her husband was got pulled over and I think he got a D U I and she got out of the car and like uh confronted the cop and and she's like, Oh I'm going with him So it she got arrested with her husband. So sh she she she's kind of um she's kind of a boss. No, it it's amazing. I think if I remember correctly, I believe her company was bought by Kevin Mayer.

Who recently was the CEO of U TikTok America, but got fired because of all the stuff. And before that Was he the CEO Was he the CEO of Disney or Disney? He wasn't the CEO of Disney, but he was president and he cr he like was the president, I think, of Disney Plus uh before the like when they launched or whatever. Yeah, so he's a big scene dick and he Yeah, and he basically they bought This company

to build a conglomerate of like some type of mm media company. I I don't entirely understand the structure. Th these deals to me always seem very complicated and they seem very like deal makey. Like I don't understand the the numbers, right? Because like I'm looking at the the so I'm looking at the assets. So they have Gone Girl, which which made 360 million uh gross in the box office. And then the next highest one was fifty million. So they have four films. Uh of which you know N nothing nothing huge. Um, and then they have on TV, they got Big Little Lies, The Morning Show.

Little Fires Everywhere. Those are the three shows you know. And then there's six that have been bought or sold to either Apple T V plus, Amazon, ABC, Netflix, whoever. I just don't get how you get to that number because I feel like to do that you You basically need to uh

Like like the office was getting a hundred million dollars a year of like streaming royalties. That's like you know, the top or friends, you know, those were getting a hundred million a year. I feel like there's a pretty deep drop off after that. So I think this is like This is like a Beats by Dre acquisition is kind of what I see it as, which is basically somebody being like, Cool, we get Reese. We get recent and then some stuff. Great. I think that's basically like when Apple bought beats and they're like great, we get J you know, we get D Doctor Dre and we get whatever his name is Jimmy Ivine or or whatever. Um, plus we get some headphones. All right, three billion. Yeah, we'll we'll pay three billion for the for the for that. But I think

It's like the most expensive apple hire. The company that bought it was Blackstone. They're the funding and th they I I I would imagine they don't they're pretty savvy. I don't know if they overpay for a lot of stuff. Blackstone is funding That guy Kevin Mayer, Kevin Mayer's company is the one who bought this. So I think it's more like Kevin I think it's more like a Quibi thing. Where Kevin Mayer in this case uh Quibi was started by what's the name? Jeffrey Chatsenburg.

Yeah, the DreamWorks the guy who started DreamWorks. So he was able to go raise two billion dollars because he's like, I'm Jeffrey Katzenberg, I started DreamWorks and uh then he used it to go buy a bunch of content. It all evaporated into into zero dollars. Um, I think that's that's you know more like what this is like versus some th some like real asset that you can analyze and say, Yeah, it's worth that. Dude, congratulations congratulations to Reese for getting that bag. We I would I that she is actually amazing. Reese Witherspin's pretty amazing.

Have you seen Have you seen what she y you know she's like I I think she's in her mid fifties, isn't she? I don't know, but she's killing it. And uh I know she's exactly the same Well that's exactly what's going on. shot up all over their face and you know they they they they look the same. Or or or it goes the other way and they just look super weird and they're like, yeah, it's just gone wrong. Um you know we'll add on this one one last thing.

You know the new COVID strain uh it's called like whatever Delta the Delta variant, Delta Plus is the new one. Um I was thinking about this this morning. First Delta how shitty for Delta Airlines just for for the new Covet strain to get named after you? God, that's uh

That's a tough that's a tough loss to just wake up to. It's like scientist Just decided to name this Delta. Like that's not cool. And then I was thinking It's a scary name. It's a scary name. I was thinking, What Would that be worth to them? If you were Delta. Delta's if you were Delta, what would you pay Some lobbyist. Some some bribery to some scientist. How much money would you shove in the briefcase?

For this to not be called The Delta variant. It's like yours the United variant. Call this the uh the the the uh Southwest variant. Don't call this the Delta variant. So I'm staying at this hotel. It's called the I don't know what it's called, Gaylord Opri Land or I don't know what it's called. But I I think it's called Gaylord. I mean Gaylord Opri Land. That wasn't like a joke. That's what it's called. And

I'm in this like wing of the hotel called the Delta Wing. And it I it It has like a bright red sign that says Delta Wing. And I'm just like when I'm seeing this, I'm like, Oh man, this is just like not good. Yeah, I don't did you associate Delta Airlines with the variant? I didn't I didn't I didn't It's gonna happen. I mean corona with like Corona beer with the coronavirus. Like, you know, that can't have been good for them. Um

I didn't associate corona beer too much with that, did you? I mean, people did. It's like that it became the word of the year and it's associated with like the deadliest virus in a hundred years is the coronavirus. Who owns corona their own things that you're You know, nothing good comes from that except for, you know, the like college bro who's like, Bro, I've had I've had the coronavirus for, you know, five years, been loving coronas. You know, ever since. Like that joke. That's the only upside you get. Uh everything else is downside. And so I don't know, I feel like Delta should pay You know, they're worth I think like twenty five, thirty billion dollars, something like that.

Who do you pay? I th you can't. You can't pay anybody, but I'm saying Well would they pay if they could push a button and make this go away? I feel like this is worth a billion dollars to Delta. Like easily this is worth one twenty-fifth of their of their market cap. This is worth a four percent swing in like brand value perception. You know, who's gonna wanna fly on Delta with the Delta variant going on? Uh I I just feel like that's uh there's there's some weird blue here on Delta. That's my arrow. And you're staying in the Delta Wing. And I'm selling on the Delta Wing. You're just helping helping Delta. All right. Uh yeah, anyways, I I I feel like

If I could if I could secretly present the CEO with a button that said pay a billion dollars and this goes away, this doesn't This isn't called Delta, I think he pushes that button. Yeah, I would agree. Um all right. I think that I think we had an action packed episode. We'll see what people think. Um I think we gave like

Eight good things. Good. All right. And uh early morning episode In the books. Enjoy the podcast conference.

Uh All right, I'll see you. See ya. Uh-huh. I feel like I can rule the world, I know I can be what I want to I'm putting my all in it like no day's off On a roadless travel never looking back

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