A Masterclass On Flipping DTC Brands For Millions With Mehtab Bhogal

It will go down as one of the best private equity deals ever. Over the nineteen years, they put two hundred twenty six million in to Weight Watchers and got five point three seven billion out. Four point seven billion of realized profits. What's up? Uh we are back and we got another episode. Uh we got a guest here today. Maytab is here. He's a he's a friend of mine who Most people I think probably Probably haven't heard of unless you're

in the D V C world or you're on Twitter or you know what's going on in that in that area. But Uh I wanna introduce you because you're somebody who A has helped me a bunch with my DC brand. You like know a bunch of tips and tricks and hacks and shit like that. So I'm like I basically have a little scoreboard in my head and Everybody attributes are there. And then yours, it was like business hacks was like filled up. And then the other thing was that you I don't know if you listen to the show regularly, but you would send me

Little nuggets of like ooh you should talk about this, you should talk about this. And so I kinda got confidence. I was like, Oh, I think he's just got his back pocket full of interesting stories that are off the beaten path. And so I kinda like that. Do you listen to the show first? Let's start there. Yeah, all the time. Almost religiously.

So Same as a shower podcast. Oh that's that's perfect. Uh we we are the number one rated shower podcast in the country, actually. Millions of men lather to us. So uh Sam, I sent him a picture of uh the Vancouver show where like the stadium or like the all the theater was filled up. And he goes, Wow, a that's a lot of virgins and I

That's hilarious. So true. That's a good point. My fiance listens to the show religiously too, and she wouldn't use chat GPT when I told her about it, maybe a month or two ago. And you guys mentioned it the other day and she was sending me screenshots, so You guys caught her using that? Dude, the DarmeshPod. I think you're referring to the Darmesh pod. I've been using it all week after talking to him. Uh I implemented a lot of the stuff that he was talking about. Man, he got me hyped up. Also, what a lot of people don't realize this Is Darmesh pods.

Always get tons of views on YouTube. And finally Sean like texted Darmesh in a group chat and was like Hey Dharmesh, what are you uh what are you doing? And he goes Oh nothing really. And I go, really? And he goes, Well, I'm just doing a few things and he like gave this like a very detailed list of like

Internet marketing, not hacks, but he was like, Oh, I'm just like testing like buying ads, like five hundred dollars here just to test this, and then I'm like responding to comments, just like the small stuff that you wouldn't expect someone who runs a twenty billion dollar company to like be doing. And it's very tactical. We don't even do it with our it's our own podcast if we don't do any of this stuff. Like people are like, Oh, the thumbnail, the the title. People don't realize we don't see those. We don't approve those. We don't know about those. We're not involved in it. Uh we don't do a lot of this stuff. That we probably should. But uh

Yeah, can't be bothered to do all that stuff. But he did. He did do it. They say the devil's in the details and I ain't trying to hang out with him. He's the man. Like he was like, Oh, I'm not doing anything and then he had those like Well really long list, actually. Mate have you said a phrase that to me the other day, uh I called you and you said a phrase that I've stole and I've just been saying all around town. I've just been saying it everywhere, even when it's not really appropriate'cause I thought it was so funny. Sam I was talking to him and I was like, Oh, you lived in like are you like you're living in Utah? Why Utah? Like

You're aren't you like Canadian and you're like Indian, like what's going on here? And he was like uh he's like oh yeah, my wife something something And I go, I I asked you something about your wife He goes Yeah, you know me he goes Yeah, you know, uh I I look like I got beat with the ugly stick, but somehow I ended up with an awesome looking wife. And I thought that happens. It happens. It's Beat with the ugly stick was so funny. I've been using that everywhere. I use it to refer to my business partner all the time, so.

Okay. Oh, you take him down with you? Oh always, yeah. He's my toe too. I don't know. I Googled him. He he's pretty handsome. How um how how old are you? Uh I'm twenty nine.

Wow. I'm not going to be able to do it. He does stuff that like you say words that um Most people don't say. So I I I pay attention to vocabulary. So for example In the tech world, and me and Sam used to live in San Francisco.

And uh You couldn't go outside, you couldn't poke your ear out the window, you wouldn't hear the word epita. Nobody says e bita in San Francisco. Nobody knows about it. Nobody talks about it. It's not a thing But then when you get into like the cash flow business kind of world That's all you're gonna hear. A bunch of a bunch of different people talking about

Words that have to do with profits. You say a bunch of other words like Uh dividend recap, distressed buyout, and he talks about all these things that I frankly don't know what they mean, what they do, how it works, but I know that that you come from a little different world. So I'm excited because I want to talk about some ideas. from your w the your neck of the woods, your part of the business world that is less of stuff I'm less familiar with personally. And so I think I'm gonna I'm gonna learn a little bit. Where where do you wanna start? What what what topic should we start on? You sent the doc with some things

I wanna I wanna look at some of these. Let's start with one that we have. Hold on, Sean. I need a little bit of background here. So you you basically Uh I like I read your medium post. So if I understand this correctly, what uh the name of your holding company you guys buy into or you buy entirely outright. uh distressed or d only okay performing D to C brands and you make them great. Is is that the summary? Yeah, that's the gist of it. And we're less of a whole tone, more of a um an independent sponsor.

If that makes sense. And that just means you do everything on a deal by deal basis. So the equity that you're working with might be very different on a deal by deal basis. That doesn't make sense. I don't understand. What's sp what do you mean when you say sponsored? So It just means that we're the ones making the investment. And say on one deal, Sean's a co investor with us. And then on the next deal

Only stands on the cap table with us. And you run it or you hire CEOs or what? Um, it depends on the the portfolio company. Right now I am day to day with one of our portfolio companies. And how many do you have? Like seven, I think. No, there there's three platform companies and then there's another eight to ten kind of minority equity and debt positions that we have. And the whole thing is roughly of what size, so uh me and listeners understand. Um, the core platform companies, which is what I would count as part of the revenue because we own the majority of those companies.

Is one of the figures. Um kind of that that mid eight figure range. And is the biggest one the the Flowers company? No, that one's slightly smaller than the succulent company, but the flower company is the one I'm most bullish on. That one's solowoodflowers.com. And that's just because Um, there's a lot of room for margin expansion yet. So when you

That's the one you talk about the most. So so let's give Let's g let's give you said three platform companies, so you said a succulent company? Of uh solo wood flowers. So it's a Like a wood or fake flower company, correct? Yep. That yeah, exactly. So made in India, people buy them for like weddings and things like that, right? Because flowers are super, super expensive at weddings. And so these

look really good, but they don't cost as much as fresh Flowers or whatever. Exactly. Like Majority owned company.

Um that one's an apparel company. Apparel company. Okay. Yeah. And so um You own these three. Let's talk before we go into the details about each of these. Um I wanna know the origin story, because you've told me you've told me some interesting things like I think you met your co founder on Reddit, like in a subreddit. Yeah and so g take us back. Uh go go all the way to I I see here something about about about getting sick at seventeen. Start there and then tell us the story of how how you got to this this spot now when you're twenty nine years old.

Yeah, so the quick and dirty version is essentially um diagnosed with final stenosis and degenerative disc disease. When I was seventy. Um Yeah, obviously doing anything physical. For work.

was kind of out of out of the picture. Uh So I decided to learn more about e commerce and entrepreneurship. And just kind of stumbled. Um

I I started a a Facebook page called Guitar Porn. And this is back when organic reach was awesome. You know, you post something, people would actually see it. Facebook blessed us to so much free organic reach. It was the greatest time ever. Um almost like TikTok is now, right? And then um I transitioned I started doing basically guitar runs, like semi-custom guitar runs with big brands. And we partner with it.

The retailer, dealer. This is before brands would work with you directly, right? And we would sell out these pre order roads and basically take a cut. Eventually we cut out the retailer and became the retailer ourselves. Uh that got to kinda low seven figures. That was nice because there's no CapEx. So we didn't have to have much cash, right? It's all pre-orders. Um after that I started a mentor product company, which is a really ironic because I'm I'm sick.

Um so I I don't cut my hair. I have a turbine. And uh So d did that with one of my best friends. That also scaled to kind of low seven figures. Along with a guitar pedal company that still had the low seven figures. And then after that I decided, um, you know, these are all fairly small. Like Tem really small for niche guitar pedals.

Um So I decided to start investing. Realized, hey, you know. No one's gonna come to me. Yeah, you weren't even doing guitars, you were doing guitar pedals specifically. Uh

So the first company was guitar. retailer like actual full blown guitars. And then yeah, the one that was really profitable was guitar pedals. just because the margin was insane and I partnered with a um a guy who I'd met flipping guitars, like just trading guitars with And he was a Grammy nominated guitarist, right? He is.

Um he plays a band called Periphery. For any metal nerds. And uh That went well. Like those were both flowing well in terms of cash small opportunities. Were your products any good or were they kinda you're just good at the marketing?'Cause that's my that's my kinda uh rub with a lot of D D C companies is Uh they have pretty shitty products, but slick marketing.

Um what a No, the products are awesome. I mean I have like thirty or forty thousand posts in guitar forums by the time I was eighteen. So I really was into guitar. I used to play six to ten hours a day, so I uh I definitely knew what it took to make a good product. Oh okay, cool. Yeah. I mean like a lot of these companies, like I'll see them like, dude, these are shit. Or like this is some Alibaba crap that's just wrapped up in something a little bit nicer, but it's still pretty crap. Like there's no R and D like made it a A superior product, you know what I'm saying? Especially with like a lot of the

Cosmetic stuff like lotions and stuff. I'm like, I don't know, man. This is kinda crappy. So did you go to college?'Cause it sounds like you were doing these when you were like eighteen, nineteen, twenty, twenty one. Is that right? Yes, I was in school and then I dropped out. Um, it just didn't make sense to stay in school. What did your Indian parents think about that?

Oh, they were not they were not big fans of it. That was Yeah. What was your like dropout point? Was it like I'm making X dollars and the X was just like Too big to t or you just didn't have the time to go to school. Wha why did you drop out?

Um it just didn't seem like the value was there relative to who I was Had the opportunity to interact with on the business end. Yeah. Um it just seemed like there was more opportunity there. If that makes sense, then obviously there's

Doing okay in terms of cash flow. So So how old were you when you made your you know, this podcast called My First Million. How old were you when you ended up making your first million? Um in cash or or equity. Yeah. Um, I don't know. I'd probably put it like

Mid twenties, early twenties. Like twenty four, twenty five. And so you you Did that through these kind of like smaller ecom things. And then how'd you get into this kind of like private equity style thing where you go and you buy these distressed companies and you turn them around? So how did that happen?

Yeah, so Yeah, in the great recession when I was a kid reading about it. I always thought it was interesting reading about private equity firms that made money no matter what, like if the company did well or it failed. And I thought, Hey, that sounds great. Uh I hate being an entrepreneur because Obviously if the company doesn't do well, you fail, right? And that's still the case. It's not like

Yeah. Um it's just not as black and white anymore. So I started um I just have explain that. Why would a why would it make m why would it work whether the company does well or not does well. Explain how that works. Yeah, we can jump into that a little later, but part of our thesis is essentially investing on how much liquidity or cash the company can generate in a short term basis.

Um, so if you could invest today and pull most of your cash out within two or three months. There's a lot less risk, right? Um versus say you bootstrap something new, you're always putting more and more cash Um On the working capital side, you need to fuel growth right.

If if you're doing a traditional consumer brand, that's less of an issue for something as that light likes to ass, right? Um But that's case, then you you don't actually end up pulling cash out of it for so long. So where most people focus on equity appreciation, you guys focus on liquidity. You guys focus on how quickly can we pull cash out. Whereas

Most business people just think How do I make this worth more? Which often results in putting more cash in. Is that correct? Right. And that's just one facet of it. We're okay with holding to the long term or being more long term focused, if if it makes sense. And sometimes we're just more of a short term partner.

And like uh it's not uncommon for a software company to sell on the low end for three times revenue on the high end if it's fast growing, ten times revenue. What you just said was you're gonna buy a company for Basically uh Uh Uh one six.

times because you said you want to get your cash in I can't do that math, but you want to get your your cash back in two or three months. So you're buying it one six times. profit or ca uh cash flow. I mean like Like nothing. So give us uh give us a sample deal economics. So uh a situation where that happened. Yeah.

So we invested in an adult health and wellness retailer. Um, which is a nice way of saying sex twice. Um that's I'm in Utah, so yeah. But why don't you ever say the name of the brands?'Cause you don't wanna you don't wanna talk about it? Um, well, if they're distressed, it's just kind of

Got it. Okay. Um yeah, just culture kind of mean to them, so I I'm not like that, but the and I I can send them over. I think I shot them over to Sean, but Um Yeah, so we we invest Essentially uh

Um I'd say a fairly far below market valuation just because others were unwilling to invest in a in that kind of company. And this was twenty eighteen, back when it was a little bit more Taboo that it is now. Um now there's a few publicly venture funded brands like Dame, et cetera.

in that space. So it's become more socially acceptable. But we we got in far below kind of market valuation. Uh the comp Give us a give us a sense. So Revenue was about X. And then what was the distress well why was it distressed? They had too much inventory, they had a debt problem, what was the problem? I'd say it was more of a case of really bad margins. Uh and there's a clear case to improve those margins.

They were so just originally a drop shipper. They're doing like six million a year. This is one of our first deals, so they're very small. They're only doing six million a year. Um and At Fay Market. for that for valuation, like the growth equity side would have been like Ten, fifteen million.

As far as valuation back then. Um we got in at like one. And then the company paid us a royalty until we were pay back in full that initial cash investment. And then there's a few other kind of structural things going in, but we got involved and we helped boot up their option. Why why would a company like that sell for one million dollars? I think that's I think if I'm listening, that's my question, right? Like he said that six million and normally that's like ten million w of value.

But they bought it for one. And how you're just going to be able to do it. Mr. Charming or what why were you able to to buy it for that that price? That one was a minority equity investment and we got involved like really hands on operationally. So my co-founder, he jumped in and he helped them boot up their The physical operations and transition from a drop shipper.

Holding their own inventory and booting up ops here in Utah. Um he helped them launch that facility, make their first few hires, GMs, et cetera. And then I helped them raise um debt to fuel growth. And that kinda took them from that six to twelve. Yes, Mark. Gotcha. Gotcha. Okay.

I mean we sold our equity um just five secondaries to to a V C firm that invest later. With that value been created. Okay, gotcha. Um So

So continue on. So you you uh You've done some of these So I wanna go back to to sort of m how did you get this idea? So you you read about this, you're like all right. Private equity. has this trait where they can buy stuff.

at a certain price or on certain terms. So that they get their money back quickly, whether they th you know their equity portion is small. Uh, they have a lot of debt and they get the money back quickly. Uh you read about that. But still you've never done. So how'd you decide to actually go do it? How'd you figure out how to do it?

Yeah, so I just started posting on Reddit. Um to try and find initial deal file and then I met Which sub. Um just the entrepreneurship one. So I met my co founder who I still work with now, Alex.

Um through that subreddit. And then I'm at A lady who was one of the first few engineering hires at Uber Eats. Um and she actually ended up retiring like eight months after we started working together when when Uber IPO'd.

Um and then the other one was someone with a very traditional background in private equity. Taught me a lot about private equity. And you're just what, building a relationship through Reddit DMs or like how are you like I don't meet anyone on Reddit. Wha what what is actually happening here? Sounds like you met some pretty high quality people and actually trusted them enough to partner with them.

Yeah, it's the same way you meet people through Twitter, I guess, right? Um just posting. Okay, now people I'd say that The community there is very low quality. Uh on Reddit versus Twitter.

And some other private forums like EO IPO. Uh what Sam has going on, right? Um So it there's a lot of filtering to be done, but we did sort the deal through that. Um

That's how the succulent company was was found. Okay, gotcha. Um Okay, so Sam, what do you wanna do from here? You wanna talk a little bit about this like flower company thing or you wanna talk about other brands that that that he's got on this list? I wanna talk You have you have uh three well shit. You have five categories or four three categories. You have frameworks.

You have interesting ideas and opportunities, and then you have under the radar companies. I would like to start At number one, under the radar company. I read those I read that reverse order. Number one, under the radar companies. Do you have things that I've never heard of And I like

I'm pretty good at finding these unheard of things. Yeah, so let's start with a simple one. So t tell us about Josh's Frogs. And like what one of these types of companies This is one of my favorite companies. There's all the characteristics of a company we'd love to invest in. Uh And I've I've been trying to invest in it since twenty eighteen. But

He always does no. So It's okay though, I still love him. So basically Josh's Frogs does exactly what it sounds like. They I don't know if you call it farming.

Breeding. They breed their own f frogs and their exotics. And they also grow the bugs that they eat and they sell the food. But They do all of that in house in Michigan. And they ship it to customers. So if Sam wants a frog tomorrow, he can order one from Josh's Frogs.

And they've scaled really cleanly, totally bootstrapped. Josh is awesome. I called him on a Sunday and the guy was catching frogs with his kids. I couldn't believe it. Yeah, I think he's been doing this for fifteen, twenty years. And uh His Still loves frogs. And frogs, basically. Do you know the price of a frog? You know what frogs are going for? Dude, I'm looking at it I'm looking at it now. I would have thought like

So you can buy a chicken at tract or uh tractor supply for like five bucks, like a chick. Or Frogs are way more expensive. And they're all delicious. Yeah, I mean they're the frogs here range the most expensive one is four hundred dollars. It looks like the average one is like sixty to a hundred bucks for a frog that's like. They're beautiful, but like I know I don't know These are for pets? Like people want a pet frog so they go buy this uh sixty dollar black poisonous dirt frog, all right.

Fair enough. Later on you you guys should watch the uh tour of his facilities. It's really cool. And so you like this business because what? Um so what I what I really like is the steep ops mode. So no one else, your typical e commerce guy is not gonna go out and boot up a frog operation, right?

Um It it's just too intense for them. They don't really like physical things where we have to show up. A lot of guys just use three PLs. And it requires a lot of specialized knowledge. At the same time you know that someone overseas is not gonna undercut you. And it doesn't become a race to the bottom with voletized products because you you can't really ship a live frog from China. Or directly overseas to the US.

It's just not viable. Thank God. So with that, there's a very strong operating mode. You're only really competing against other companies in the US, right? So your c cost per acquisitions. Yeah, exactly. Yeah, your CPA your C your cost per acquisition of customers stays consistent, doesn't really spike the way you see it spike another

Um It's like space. Josh's frogs, Jack's frogs, Sam's frogs, and you know her Herbert's frogs. Those are the that's the fro the big four in the frog industry. If you're Josh, if you're Josh, if you're Josh from Josh's frogs. What what would you sell this business for? Or like what would be the threshold of, okay, this is interesting. I'll take the offer. Or I'll maybe take the offer.

Yeah, I obviously I can't say what a Z but does, and if I gave you a multiple it would kind of Tell you what his EBIT does. But I would say there's probably What let's say your average T to C business His size might sell and I'll just use a range for eight to ten X. She would get a premium of a few turns on top of that.

Because of that operation. And it's not something anyone can just knock off, right? Yeah. Super super defensible. Um Okay, so and how did you even find this? Do you know this guy personally or you found it? I mean. I

I met him through uh I did a podcast on e commerce fuel and then he reached out and we just got along and I I always stay in touch with them. We like to turn it out. We have similar problems for their businesses. So It's fun to discuss them with him like implementingly and et cetera. So by the way, I just read uh I just Googled Josh's Frog Revenue. So there looks like they're on the Inc. five thousand, so you can find it there. But according to some articles, they're in the range of like fifteen million dollars a year in terms of frogs. I don't know if that's accurate, and I haven't actually researched it, but that's like uh just some Yeah, I think they're

Bigger than that now. Yeah, this guy's uh There's a picture of him on the about page and he just looks so happy. This guy looks like he's in frog heaven right now. I'm so happy for this guy. Just this one picture. Just like I I I hope to be as happy as this man right here. Um this is a good one. I like this. And I I think What's cool when you So invent in in the sort of like tech world.

Right. All the discussion is always just about like The future dream. Like the dream and state. It's like what could this be if everything goes great? And what I've learned as I talk to guys like Andrew Wilkinson or the guys from Endearing Ventures or you people who are buying who want to buy, you know, solid, stable, cash flowing businesses.

That are profitable. Um That's not the you know, it's not the pie in the sky sort of thinking that you get in Silicon Valley and instead It's basically what could go wrong. So instead of what what could go right, it's what could go wrong if I bought this company. And um that's why people love businesses like this that are That have this like you know defensibility, this moat. So it's like no one's gonna compete with me, not internationally, because you literally can't ship the frog.

Locally, mo you know, the average e-commerce bro is not gonna wanna like take this on. Um, so who am I competing against? I'm competing against basically nobody, which will let me that which means my business is extremely defensible. And so it's just a different way of thinking that is less common when it comes to tech, which is just sort of like half asking to grow. Um, you know, can this become huge? Can this become a unicorn? It's a different sort of like mindset altogether. Um, what's another example of an under the radar business that that's worth talking about? Talk about this fast growing trees one. I think that one's a great example. So similar similar similar operations where obviously they're kind of growing the trees. Again, no one wants to be a tree farmer, right? It's just not sexy. No one's gonna go out and raise capital to become a tree farmer. Maybe that sounds kind of neat to me.

Wait, so w so literally what what what what is it? They sell seeds or they sell the actual tree? What's going on? Both? And the company I I first stumbled across the same when the company was being sold. Six or seven years ago. And I think it went for between a hundred million to a hundred and twenty million, and it looks like they've grown quite a bit since then. I wouldn't be surprised if

They're worth it. closer to double that now, just with their website rehaul, et cetera. They're very like really traffic estimate. Shows it went from It's like at almost three million Uniques a month. That's Pretty crazy for a pre website. Their website's selling.

Uh flower so here's their H one. Flowering trees are it. You'd hate to miss out on the hottest trees of the season. Wouldn't you? Shop now over one point five million happy customers. And so what you see is I don't know what type of tree this is, but it's like a grown tree that's purple. It it does look beautiful. It looks it's a beautiful tree.

And uh I just think it's hilarious. You'd uh you'd hate to buy the house. Flowering trees are it. That's like, you know, like the like Gen Z people like She is him. She is her. If you see this like this trend, trees are it. This is awesome. I mean it's it's a really defensible business. It's cool. Um kind of no no one would really expect something like that to be that large, right? And so what do you buy? You buy a tree that's mostly grown already and then they come and plant it? Uh I think you plant it. I think it shows up and then you plant it. Oh my god. In your property. So if you want if you want a tree to like uh for more privacy, say privacy hedges or something similar.

Or just trees in general. This is where you go. How much remnant do you think? Uh I have no clue now. Again, I'd be really surprised if it was less than a hundred million. In revenue?

This is probably close to like one fifty. And what type of pro what type of uh net margins would this be? Or net income or even a Uh, I'd be really surprised if it was below twenty percent. Probably closer to twenty, twenty five. This is crazy. And they probably don't uh they probably aren't buying too many ads. I I they had a couple of Google ads, but like

It seems I bet you this is the type of company that they I mean they called their company fast growing trees for a reason. I I imagine that was a search thing. Yeah. Yeah, it's an older company. It's been around for a while. Um Under a few different owners. I think uh a private equity firm owns it now.

And who would have thought that like, you know, when the internet came out It's like yeah, people are gonna be able to like buy things online. It's like There's some guy out there who's like They'll buy trees online. It's like No, no, no way, no way. Why would I buy a tree online? That sounds like the most far fetched thing. And then here we are, hundred million dollars selling fast growing trees online. You can buy this, by the way. Look at this Italian cypress.

It's like the perfect for the Airbnb, Sam. Yeah, I am looking I'm looking at this and I think this is pretty awesome. Like I like the it it's they have some beautiful hedges. There's like uh fruit trees. I mean, this is pretty amazing. I understand this. I'm getting to the age now to where I appreciate a good tree.

Ha ha ha. Ha ha Yeah, this is this is pretty crazy. Okay. I like this one. Give us another under the radar business. Yeah. Um what seems more appealing to you? The first

Well let's do the Betty's one and then we've talked about this C S C generation thing and we should but you have more info on it than than we do. So let's do Betty's and then do the CSC. Yeah, so Betty's this really interesting business. What I love about it, it has strong IP mode. So if you go to their website, Um Well you can tell what they do. What what do they do? It's like a bed cover thing for kids. I actually don't know how to explain it very well.

Uh But I mean it's so your kids can basically Change the bedding really easily. But They have it it's patented and they have proper IP mode. And when you go to their website, you can tell it's not very optimized, but they've been crushing it, totally bootstrapped, great people.

A very healthy EBITDA margin. And um that I'm a it's a duvet cover. It's a duvet cover that's easy to zip. Which I have a zip duvet cover as well. Duvet covers are are a pain in the butt to to It's meant for little boys, so that makes sense. Um So this uh they bootstrap this to forty million. That's pretty impressive.

Yeah. I I'm pretty sure it's right around there. Um Yeah, that's pretty good. And you can tell it's all P M F killer product market fit, killer product, killer IP mode. And um they've done a really good job with that end of the business. What do you think are some of the a like uh

I I I don't think this is Like a Everything can perfectly do this, but I think that when you like look at like a software company You think all right, so what are the attributes of like a great software company that could scale? You think like, well, they have to have good net retention, meaning most people re come back constantly. Uh ideally you can h it's a expensive enough product that you could afford to hire a sales team.

Uh thing like things like this. Like there's like a handful of checklists and then there's lots of examples of things that don't che check the checklist that still succeed. But what are the handful of of check boxes that you have when looking at uh or building a D to C company? Particularly things that people don't think are true. Like for example Like in the cool kid circle, and when you're twenty two, you want to create like You know, cool shit that Gen Z buys. You're

None of nothing that you've mentioned fits in that category. Right. For us, what we found is the most consistent moat, and some people are are different, right? This is just the moat that's worked for us is that operating mode. So Anything that requires physical manufacturing has good reason for the manufacturing to be in the US or Mexico. It's great.

Uh And we found that like I'm not sure if you guys are familiar with lean manufacturing. Um it's just like a philosophy behind I guess running a manufacturer operation. Toyota thing, right?

Yeah, exactly. It ports over very cleanly. from company to company, but marketing does not, right? What worked with your paid ads for a company with, let's say, low AOV, but really fast consideration period. So you know, something like clothing. I say clothing, I buy it. It's very simple. compared to the marketing side for something that was a long consideration period that's very different, different teams, totally different strategy. Nothing will really carry over cleanly, but on the manufacturing end it c it carries over cleanly company to company to company.

Um so for us that's that's our favorite mode. So it it's summarized, you you want a low consideration period. And you want something that can be made in America because it has some type of manufacturing mode. Anything else? W we don't actually care about the consideration period.

Um I think it's just like A natural challenge than any vertical that you get into, right? Um i if if that's there. But for us, we only really care about the manufacturing end now. And then obviously the way we enter the deal is really important too. Um

And that just you know, if you pay next to nothing for something. The odds of making it work and making money on it are much, much higher than if you overpay on entry. I wanna talk about This agency stuff because You know, the interesting thing about

you know, people like you in the D to C world is they're oftentimes really, really good at acquiring customers because it's kinda like Like the D to C folks oftentimes are pretty good now. Before it was the gaming company. So like if you met someone from a gaming company or from the at tech world. Like that meant that their internet marketing chops are like pretty good. Now that uh D to C or now that Facebook is harder to buy ads on, the people who are succeeding oftentimes are quite good at that.

And Sean and I have a bunch of friends who are starting recruiting companies. And which is really interesting because recruiting companies isn't new Outsourcing isn't new, but people are putting sexy new packaging on it and I guess w from what I'm guessing because you have it on here is they're doing a really good job or historically they've done a poor job of

acquiring customers and you want to apply that to that space. Is that right? Yeah, I just think it's a really interesting face in general, but uh I I think Some of these agencies are really heavily focused on, say, the Philippines or other countries. In South East Asia. Um

We've noticed there's a lot higher quality talent. In places like Mexico and you don't lose The same negatives associated with hiring the Philippines are not there in Mexico. So for example, you could build an office out there and fly out. And be there in person in a few hours if you live in Texas, right? And the wage disparity is not as high as you would think for really, really good talent.

You're only paying Uh large number, but Yeah, it's not actually that bad. Thirty percent more. than you would be for someone who's great in the Philippines, maybe forty percent more in Mexico. But Again, you can visit them in person, which is really big. You can have them fly out. And again, it's big for us because we do a lot of manufacturing. Right.

So they can actually understand the product. Or interrupt with the team in person. So your retention goes up. The quality of work is much higher. And we found The quality of applicants is much, much higher in Mexico, too. Um so if I did start an agency it'd be focused on

Solely talent Mexico. And um Uh, just for for example, when we're hiring a customer service for all like an any manager or director. Um we're getting people who used to head up Uline. Are you guys familiar with U Line? I just use it to buy like boxes.

Yeah, we use it a ton for like the when we had our our warehouse. Yeah, so their customer service is awesome, but we got one of their former directors. And his salary ask was really reasonable. It was like I think five thousand dollars a month, but his talent was the equivalent of someone who's two hundred thousand dollars in the US. I can find this client info. Have you heard of HubSpot? HubSpot is a CRM platform, so it shares its data across every application. Every team can stay aligned. No out-of-sync spreadsheets or dueling databases. HubSpot, grow better.

Yeah, the uh you have one agency idea on here that I think is a is a no brainer, which is site speed. So we've had this problem with our store, but I think everybody ha everybody has this problem. Like uh basically If you're stalling something on the internet. One of the easiest levers or the biggest levers you have is your site speed because if you have a slow loading thing, you're just gonna lose traffic. You're gonna lose customers as you have a slow loading page. You're also gonna g suffer in terms of your Google rank because Google takes into account your your page speed as well. And it's really easy in the ecom space to have slow pages because what happens is

You start with a Shopify store, you install 15 plugins just to get your your Shopify store to do anything,'cause it like you you can't basically run a Shopify store just out of the box. You have to you're gonna end up installing a bunch of apps and each app injects a bunch of code into your page. And even if you delete the app, the code stays. Yeah, there's no like you have to like manually clean that up, which is kind of insane and probably a business of its own. But basically site speed is a problem that we I think we've hired three different folks to try to fix our sight speed. And all of them I'm like they claim to do something. I have no idea really if they're If they're doing a great job or not. Um

I don't think that they are because the next guy comes in and says, Oh man, your site speed sucks, let me fix it. So um So I think this is a this is a a product that I wish existed and I think could clean up because it's a It's clearly accretive to the person, but explain your thinking on it. What did I miss? Yep. Um, so it doesn't really require much in terms of dev skill.

It's not like You don't have to be great. uh at the dev end to actually do most of these changes. And it's almost like a checklist. It's very portable company to company to company. It applies very cleanly. Um, so for example, changing the order in which your pixels fire for Google Analytics, Facebook ads, et cetera.

You can delay some of those very slightly and dramatically increase site speed and it won't really hurt the business that much. Um that's just an example of one quick fix you could do. Or certain apps do not compress images properly. So Judge B the review app. On Shopify for for a lot of sites. Um It does not properly compress images. So if you just apply more compression to those images, your site speed goes up at the product display page level or wherever those reviews are. So How uh would you acquire new customers for this?

Um, honestly I would probably just Just go. Um have you guys used Beltwave before? Yeah. We love it. Yeah, just go to Bellwave's full list of websites, make sure they're they're doing a certain amount of revenue or at least have meaningful revenue coming in. Um just cross. Check that against um sudden that shows traffic, right? Like a Lexa or something.

And um From there I think you just Yeah, just cold email, I think is the way to go with this. If somebody out there wants to do a site speed uh shop, just DM me because This is a no brainer. I'll be your first customer and I'll help you get the next ten'cause this. You could charge purely on contingency too. It's really cool because you can see a black and white effect.

Yeah. Um, if you've done a good job. And again, it's really easy to do a good job. It's just nobody specializes in this for some reason. So Yeah, and it's a moving target. Like uh you'll do it and then like six to twelve months later, they'll need it again because they've installed a few more things. They hired somebody who didn't know how to compress images before putting it up. They started using this new tracking software for hot for heat maps, and then boom, now you need it again because you you've gone from an A rank back to a C. See, right on these like these sight speed graders that are that are out there. I'm surprised the the site speed graders don't have these agency or maybe they do. I haven't actually looked, but like does GT Matrix or one of these companies that have the the site speed score, do they not set offer a button that says

By the way, we could fix this for you. No. They should though, to your point. Oh my God. Really easy, especially If all these e commerce sites are on Shopify, right? It's very Yeah. Checklist. Yeah. So that's the other move. You should buy that site. You should buy the site speed site that checks the speed.

And then just add this button at the end, that's the agency service to uh to fix the problem. If they don't do that already. That's kinda crazy. Um how are you um How are you balancing your time? It seems like you've got a bunch of stuff going on and the I mean You know Mm.

Ideas are worthless, but it seems like a pretty good idea to me. And when I hear when I'm hearing this, I'm like, Oh, that's kind of an interest uh I actually seemed like that has legs, you've got a good network, you could probably spin something up fairly quickly and scale nicely. Uh how are you balancing doing everything that you're doing? Um, about fifteen percent of my time some of the investment and they're managing or minority equity. And credit positions. And then the rest of the time's just spent on the floral business. Um there's a pretty big lever that we're pulling right now. With booting up.

Um another operating base, like a manufacturing base in Mexico. And that'll get our eBay to kind of five or six million. And then from there it's it's a pretty good valuation. So we just want to get that over the hub and then I'll probably slowly phase out. But my co founder is solely involved in that company. And that's the that's called Solo wood f flowers. Yeah, yeah. Sam, when I uh met Metab I and I heard what he was doing, I was like um

I s I I told him two things. I I think I go, How do I invest in this? Because uh if you're willing to go down and move to Mexico and build your manufacturing facility, you're gonna win. Like uh Paul Graham has this uh essay that he wrote called sh like Schlepp. And he basically describes the guys from Stripe. um as being willing to do do the schlep work. And he's like, you know, in a lot of businesses, there's basically some amount of schlep that you have to do. And for Stripe, they had to do all this like banking stuff that was kind of like annoying and bureaucratic, but they didn't really view it that way. They weren't A, they were so young, they didn't really know what all was gonna happen. They they didn't really realize how much they would have to do. And B, they were just willing to do it.

And um And you know, you you are willing to do the schlep, like you're like oh Yeah, you're like, I am looking for operationally intensive things. That's the opposite of what I'm interested in. I'm like, I want the least operationally intensive thing, but I get why you would want it because it's super defensible once you have it. It's very valuable once you do it. It's very simple once it's fully. Set up, if that makes sense. Once you've Once you have like the best practices for lean manufacturing running.

It's very simple to keep the manufacturer running versus like a D to C brand that's really reliant on the marketing end, right? Yeah, exactly. And so I told you I remember being like, Hey, can I invest in your Mexico thing, like your facility there? I think that's a great idea. And then I also told you I was like, man, I feel like you play the game on hard mode. You're super smart and uh you are like I'm gonna go do distressed turnarounds of D to C businesses. That's like multiplying three hard things together. Um and I was like, why do you do this? You could just do like you know there's easier options. And you were like

No, I like this. I like you know playing in the mud. Once you get a really good deal, you can't go back. I'm I'm Indian. I need to get a good deal, I need to get a good price. I think it's genetic that you're like, Oh, you know the best deal possible. A company that's burning to the ground. You can get Exactly You can get it for nothing. You're also um I'm trying to find it, but so your website's really good. Um, but you have this blog post or you have a bunch of blog posts on medium. So Carta Ventures, Carta with a K. K K It should be on Substack now. I killed the medium. Oh well I found it on Medium, but um But yeah, it looks like it's is also on sub stack, but you're really good with language, so like

Your thing starts off with like Your first sentence is just is just good. This is a guide intended to give distress e commerce heavy business uh To give distressed e commerce heavy businesses with ten to fifteen million revenue a high level overview of turnaround management basics and resources to dive into. That's a great first set. You're telling me exactly what I'm getting. And then you do a really good job of explaining

kind of your background with Alex, your co founder. You say you started up these things in your early twenties, you took uh passive roles or you sold them and then you like s helped turn around ice dot com, which is now called Ice Trends. You met on Reddit. Uh, and then you say we welcome complex opportunities that others are unable or unwilling to tackle. As a result, we can invest in non control opportunities, we can grow quickly. Uh, but you just basically say, Oh, here's another good line. My team and I are responsive, discreet, and avoid pointless formalities. We understand how critical speed is both in turnaround and high growth environment, and we could tell you within twenty four hours if we're a fit. And so you like you just do a really good job of

Being very crystal clear about what your offering is. And you are direct, but you're not rude and it's just a r you you have a really good voice and you also like cite a lot of the th books that you read. So you talk about turnaround corporate artistry. And you have like a quote from the book. And so anyway Your language is wonderful. Sean said he pays attention to vocabulary, so do I. You you have really good words. You you your and your rhythm is nice. What did you read to kind of come up with your perspective?

And uh How did you how did you become a good writer? You're you're you're you're quite good at explaining complex things. I think we all grew up during the era of hardcore I don't know what it was, but for some reason copywriting and being into copywriting was really popular from two thousand ten to two thousand Thirteen, maybe earlier. What did you uh what did you learn for that? Or where did you turn to for that? Um, one of my friends was just really into it. So I got dragged into it too, and just reading random books. I think there was a compilation of like a hundred of the all time best sales letters.

That's back when like people used to distribute swipe files and stuff like that. Um so you just be honored. In a random group and someone would just distribute it and you just rip through it. And that's kinda how I picked it up. It's good. You're you're very good. And what what were some of the other books that you read to learn this topic? Because you you learn this at a very young age. Yeah, I'd say corporate turnaround Artistry is one of the greatest books ever. But it's written by my mentor, Jeff Sands. And that guy is an absolute beast. He's turned around.

Um handful of Fairly large nine figure industrials. Um like Manufacturing companies. Everything from bakeries to I think large restaurants, restaurant groups, et cetera.

And That guy is in his fifties. I I think. I hope it doesn't kill me if I got that wrong, but And he just he just shows up. So he's done like lumber mills et cetera. He just shows up and turns the operation around within six to twelve months. Absolute machine. And his book gives you

It's probably the most value in a book that I've read in a really long time. It's just like tip after tip after tip. And you can just take it and apply it, even if your company is not Distressed. Yeah, it'll just juice profitability, if that makes sense. Um Really awesome, guys. It's a complete machine. I'm convinced you could drop them into anything.

And he'll just make it more profitable in six months. And that's because what? What is he uh like world class at doing? What does he do when you drop him in? Um I'd say he's just very fast at making decisions. He doesn't hold back. In a lot of ways, running a turnaround is like running a startup. You you don't really have the benefit of sitting around and make decisions, right? Like you're not gonna hire McKinsey to run a full blown study to see if you should do something. You're just gonna go and do it, right? And maybe you have some light directional data, but you're not gonna wait for a ton of data. You're not gonna run some

Crazy qual trick survey, right? Um He's gonna go out and get it done. And that's that's what he's really good at. It's just taking action. He'll show up. For example, when he turned around that That Canadian um lumber mill.

He's American, so he just he moved and Yeah, keep mine, he has kids, et cetera, but he still just moved, showed up to a lumber mill in the middle of nowhere, Canada. And turn it around, he's got it done. No one else will really do that, right? There's a premium for that. What part of this brings you joy? Why are you doing this other than it that it makes you a lot of money?

Uh I'd just say it's really satisfying and it's fairly repeatable. So Uh And I think the speed at which you learn is really, really good, right?

Um And it doesn't require a lot of equity to keep scaling. If that makes sense. So for example, you can probably buy a relatively distressed Brand doing a hundred million for maybe ten to fifteen million in equity. I uh we had um

We're friends at Moyes and Suli Ali, so they Moyes started um native deodorant and I was like, Moise, we're in San Francisco. Why are you selling deodorant? Why not like do software and and be normal, make more money? And he goes I'm a merch, man. I'm a retailer. Like this is just it's in my DNA. Like I just exactly I make products and I figure out how to make it a merchant. I've been working on these T shirt uh I've I've been working with the t shirt designer to do things and now I'm just on the lookout for these quotables. I'm a merch. That's what he said. He goes he goes, I'm a merchant. What's that say? It says Kardokov. And then uh this is a banana that says IRR like internal rate of return. That's so funny Well and Moy's also said he goes

My second fra he goes, uh my first favorite phrase in the English dictionary. Distressed. Asset. Uh it was funny, but he goes he goes, I'm a merchant, man. Like I it and it does I don't know if it's like a

Like an immigrant thing or what it is, but like his'cause I know their their family also owns homes, like uh lots of single family homes that they rent out and they own gas stations. And a lot of my Indian friends, the Pakistani friends all do that. They have uh gas stations, things like that. And I'm like, I don't know, man, maybe it's just something in the culture where you're just like you're just geared towards small business. But uh Yeah, and like for you, is it the product that you like or is it just like I just like making stuff something that provides value and I just like optimizing it for profit. I mean what what do you think is driving you towards this? Um yeah, it's in Distress side's really interesting because it's like a game of chess. Um

With the existing creditors, the existing cap table, and kind of figuring out how to squish it together to make it work, right? Um so maybe you have like really angry senior lender and just convincing them like hey, you know Give me the position. a decent price. I'll come in, I'll turn it around, and eventually you'll get right side up, or at least you'll make more than you would just liquidating these guys. And then convincing the guys that you're getting the company from,'cause they're often really upset, right? Like say company's doing twenty or thirty million, it's still run by the original founders in most cases, and they'll be really emotional about it, right, rightfully so, right.

Um, so kind of figuring that side out is really, really interesting. Then obviously the operating end. I I don't like it as much as my co founder. He really loves the operating end. But um that can be a lot of fun too, just coming in, um getting rid of the bad apples very quickly. And then Building out a team and kind of reviving the culture. There's a story of um

What's the um What's the famous um The famous hedge fund guy who's probably in his nineties now, but y you guys will know him. Carl Icon? Yeah, Carl Icon. He tells the story on YouTube and he's like I bought this company.

And it was not doing great, but I thought it could do great. And so we ha owned like Twelve floors. uh in this one particular building, and I just went from in one hour from floor to floor to floor and I laid off the entire floor. And he tells the story laughing. He was like, It was the greatest thing ever. And the a the audience was like, Why? You know, you're ruining jobs. And he's like

But I'm making it better. Like we're gonna we're gonna have a better outcome and like I go both ways with that. I'm like, Well, you're kind of just you know, um Like these hedge fund guys, I'm like, you're just like an Excel monkey and you're just like squeezing every juice you can, you're not providing a lot of value. But I do understand the satisfaction of just like getting something that's not fulfilling potential and achieving potential. You know what I'm talking about. You know what story I'm talking about where you're like, Yeah, I know the exact one. Same video. Did I get it wrong? No, you you nail that. You nail that. Yeah, he goes through floor by four and He does exactly what he said. And he's like glowing with like he's like pride. I'm like

Carl, you're just like ruining these people. Yeah, layouts just get a bottom bothered. Yeah, he's like I'm getting a semi just laying these people off. Uh but yeah, I uh I guess you're you're kind of in that position. A a little bit. I guess it really depends on the company, right? In a lot of cases, you have a few really good apples people left who are really passionate about the company. They want to see it succeed. And then the last people left. And then you have all these people who are more or less just leeching off of like the corpse, right? Well um what do you think about how Elon's done this with Twitter?

I think it's great. I think a lot of those people are really self entitled and they have no perspective on anything. Um In a lot of ways they're they're kind of like the modern version of this. companies in the nineteen eighties that were really fat and just overpaying executives, et cetera. I don't really feel bad for someone who's making up a hundred grand losing their job, right?

Um it's more so people working blue collar jobs where they're making Forty, sixty grand that they're working their ass off. Um, I definitely don't feel bad for any software engineer making three hundred grand who's upset they have to work ten hours instead of six. I don't disagree with you. I just wish you'd be less of an asshole when he was doing it. You don't. I think he made fun of someone who was disabled or something. That's obviously horrible. That's not appropriate. And you you mentioned something about uh being in America and how like, you know, you like things that are in America.

When I uh does it ever give you like do you have any sense of pride around like creating American jobs because I know on your website you said we've created or saved two hundred different jobs in America. Let alone overseas. D are you into like that whole made in America thing for like the sense of pride thing, or is it strictly like Uh this just

This the if it makes sense, it makes dollars. Yeah, I think it It's a mix of both. I think it really does make sense. And I'm I'm Canadian, but I'm obviously grateful for the opportunity that exists in the US. You know, Americans just much more gung ho about entrepreneurship. They're more willing to write a check and just get involved, um, than Canadians are. If you go to Vancouver where I'm from, it's a lot of older real estate families. They're not really willing to write a check uh and get into something the way Americans are. They love taking risks.

And I really appreciate that about the US. Yeah, man. There's a thing I've noticed recently about um what I call like the North Star formula for a for a business. And so Um I like

When you can boil down a plan into like A very simple Equation. So let me give you an example. Um

Like Sam with Hampton. Um I think I texted you this, but I just said ten thousand times ten thousand. So you just need ten thousand CEOs who are gonna pay you ten thousand dollars a year. And you have a hundred million dollar business. 10,000 times 10,000. So it's like.

Can I provide enough value where if somebody's willing to pay ten grand a year? Um And then can I get ten thousand people to sign up for that value. Your whole business comes down to that one equation, ten thousand times ten thousand. Um, when I met uh when we were hanging out with Andrew Wilkinson, I was like, How much equity did you put into Tiny originally?

And Um, I think it was something like, you know, don't quote me on this, but I think it was something like six million dollars. He's basically turned six million dollars into like six hundred million dollars, just as round numbers. And Six million into six hundred million. If you wanna be the next tiny, th you can just take that thing. I'm turning six into six hundred. Okay, how how are we gonna do that? Let's work backwards from that simple formula.

Well, I think I would need to Compound At forty-five percent annually. Okay, how am I gonna do that? Well, I need to buy businesses on these terms at these prices, right? So you a formula can be very instructive. We have some friends that just raised eighteen million dollars and where I was like What do you do with that eighteen million?

And they go. We're just trying to figure out how we could turn uh well like the the goal is take this eighteen million of equity and turn it into ten million a year of free cash flow. It's like okay, like that's a a clarifying equation. And um

I'm curious, Metam, for you, like W in a best case scenario, how will this have played out? So like you've you you go to the start. Uh, I don't know, how much how much equity did you and your co-founder put in as like your seed capital? To get your whole business off the ground. Um

Well, it's kinda weird for Carter'cause we both had a few exits beforehand. Like he'd sold a company then he got kinda low eight figures. In his early twenties he put a bit of cash, but we put in What I say a couple hundred grand. Like two three hundred grand to start making investments.

So you and so and maybe you've put in more over time, I'm not sure, but like whatever that's we reinvest everything. More or less. Uh yeah, but like just the out of pocket like initial not not reinvestments from the proceeds of what you've been doing. But just have you had to take something out of the checking account or savings account just to to to re to recapitalize the business in any way or no? It was like Two, three hundred grand and then anything else we put in was reinvestments from

What that two or three hundred grand has made us. It was reinvestments from what that two, three hundred grand that we put in initially was. Okay, amazing. So you're gonna go from let's say three hundred grand And like if this all plays out the way you want, um you know, fast forward, I don't know, the ten years or however long you're you plan to to kinda do this. What would be the big win for you? How much would the portfolio be worth for this to be like a you know a home run outcome for you guys? Yeah, we are really goal driven. Um, we're a little bit weird that way, but we both want to tackle increasingly large distress deals. So that's what we get.

Pleasure from I guess just kinda fun. Doing it. It will just keep doing it until we don't have fun. Um really is Yeah. This floral company thing can easily get to a hundred million in top line. Um

Like our our allowable cuts for acquisition costs will go up. by thirty, forty percent once we finish with a few manufacturing transitions. Hold on. So you don't you don't have you you're not goal driven? What does that mean? I I don't even that's like not English to me. How do you how do you function without without goals? I I just like to do Hodrat stuff just where it's fun, right? Dude, he's like a domin the you're like the dominatrix of PE. You just get You just get pleasure. Oh yeah, you like that? Oh that's my new LinkedIn subheader. You just love the act, man. You just you just like the act of uh You know, someone um Uh you you you whisper whisper IR into your ears and you're gonna get weak at the knees. Well still fine because you get to learn from people like like you too or or hang out with other people that are really interesting.

Um and and that's really exciting too, right? But don't you don't you don't you have um Like a like a you know, ever a lot of people who get in business, they've like one day I wanna make all this money so I can buy, you know a thousand acres, or I want to create a school that does this, or I want to be able to make sure that everyone in my family never has to dream medical. My initial dream and my co founders before we met. It just turned out we had like the same target. Was to make like five thousand dollars a month. That was it. That's how it starts, man. That's how it starts. That's really funny.

Then you realize that you know, y you know uh what I've noticed I I have all the same goals. Dude, uh you didn't start like this, I had the same thing. And the goals always change. But you said when you started you guys have had wins under your belt. So No, I mean before that. Like Oh, okay, okay. Like early on, like when I did my first thing, I was like, I'm gonna be stoked if I make sixty grand a year. Okay, yeah, of course. Of course, of course. But what about now? You know, like what's like the what's like the vision, the long term vision that you you that kinda keeps you excited. Maybe it sometimes it sometimes it's buying shit, giving shit away, helping your family, whatever. Right. I think getting this one portfolio company the next level. Uh, either selling it or re leveraging it, taking out cash and then raising a large fund.

It's probably like our our immediate short term goal the next two, three years. Dude, that's when I was in college. That's so not what I thought it was gonna be. Sorry, go ahead. When I when I was in college, uh one semester, me and my my buddy Trevor and our uh other friend Dan we We had read the card counting book. This was before the movie came out twenty one, but the book Bringing Down the House was out And um

And we were like, oh, not only are we gonna count cards, we decided to create an underground blackjack club on campus. And so we started preparing and we were like And and because we had read this card counting book, instead of just doing the obvious thing of being like cool, let's just invite some some friends over. To play Blackjack at low stakes. Let's see how it goes and we'll go from there. That's how you would do it. If you had any like any ounce of IQ in your brain instead.

We were like, okay, let's go buy this like fancy blackjack table. Okay, cool. We can we now we're in the hole and we've got this like fancy thing. And then let's run all these practice simulations to see how bad we could get beat. And then what if somebody comes and count cards? How what's our security gonna be? We're worried about all the stuff that didn't matter. And we spent no joke, we spent like the entire semester at college, which is like That semester cost each of us probably like 40 grand just to be there. And instead of focusing on the 40 grand that we put into being there, We were doing this thing and I remember one night we were calculating, we were like, Oh my God If we do this.

We can make Breathing. thousand dollars. And then we all started giggling like Like can you imagine that? Like we were like dude, what if we made three thousand? That's a thousand each. And we were so pumped about this.

And it was like It just took over our mind like a mind virus for for for three or four months. It made no sense. But it was like, you know, the it was the humble beginnings of scheming. It was like the f it was the first of many schemes to come with the same group of people. We ended up starting a a company together and and did many more things together, but like That first taste of the scheme and how hilariously bad your plan and your goals are. Like now when I look back, I look back with a lot of fondness on that.

Totally. Yeah. It makes sense. It's always start small. And then you What you're like you're bought you bought the safe to keep the cash before you even had the cash, and the cash never even came. And then we never yeah, we never even ran the ran the club because we like We were too worried about getting kicked out of school'cause we found out how illegal it was. Well, basically we had one simulation where I was the okay, we were big into these simulations and I walked in and I played, I lost a hundred dollars. And then I go

Give me all the money or I'm gonna tell people about this club. And I was like, Oh yeah, what are we gonna do if somebody does that? Like at any point in time somebody could just literally take all the money because there's no recourse. What are we gonna do? Call the cops and tell them about that somebody stole from our illegal gambling club? And we were like, Oh, this won't work. Before I sold my first company, I Was using Some type of like mint dot com style service. And there was like a thing where you could manual you know, you connect all your accounts and it shows you your your net worth and whatever. And they had this option where you could manually add something.

So I manually added this really big number. And I would log into this every day, like six months in advance. And I'm like Sick. This is awesome. And I remember like when the money then actually came in, I was like Damn I I Kind of like

felt most of that joy in that six months leading up just like I I kinda tricked myself into already believing this was real. Th the the simulation kinda gave me like a lot of the joy. Uh it's pretty cool how you can kinda like trick yourself into believing these things are true and you get a significant amount of satisfaction from that fake thing compared to the real thing. Yeah, you you'cause what people want is the feeling. You don't want the thing. If you if you ever say, Oh, I really want X to happen, why do you want X?

If you if you just keep asking why do you want that, the the the obvious answer, why you want anything of a a relationship, uh money, whatever it is to have a six pack, whatever, it's some feeling. It's a sense of accomplishment, it's a feeling of relief of rel of of less anxiety, less stress. Whatever it is. And then you realize Oh, it's not the thing I want, it's the feeling. And then you might be able to get the feeling through literally like faking it. You might be able to get the feeling through something much simpler. That's not gonna take you, you know, seven years and a bunch of heartache to get there. And uh and also if you've never had that feeling before, even when it when that thing happens

It'll be your first time having that feeling and you'll suck at it, which is why a bunch of people feel After they get success, they get like kinda let down. 'Cause the feeling wasn't as as great as they they wanted it to be. The anticipation was better than the result. And the reason isn't because the feeling is actually a letdown. It's because it's the first time they've let themselves try that feeling and the muscles just very, very weak.

And so uh yeah, big big life tip is to realise like what you want is the feeling and then start Practice having that on a daily basis through like much smaller things. Yeah, it works. Um May Tab U I'm looking at you on Twitter. You have five thousand followers.

I think that being popular on social media doesn't really matter in most all of business. I in fact sometimes it's like negatively correlated. To how popular you are. But In your case, I at least I know with Andrew, like when he's buying a lot of companies, having some um Like, you know, it's basically being on Twitter's a billboard for him. So when he reaches out to someone, they're like, Oh, you know, I think I've heard of you. Fine, let's have a conversation.

For how good it seems like you're doing and how smart you are, you're um Your social presence is significantly smaller. Is there a reason uh for that? No, I just don't really like it. Um I I just like to post content about stuff. That I actually care about. Um fairly open and then I guess too on the distress type when you're buying a business.

They're more of a forced seller. Right. Um And when you're talking to a lot of these senior lenders who you're working with. It's a lot of guys that are in their fifties or sixties and they're very conservative traditional

Um Like Banker types, right? They're not. They don't really care about social media or anything like that. So

And I'm sure it does help the deal follow the growth equity side or buying healthy businesses, but Um I've just never really been into it. Yeah, I mean you have s you have you do tweet interesting stuff. It looks like What's a Daniel Roth watch? It looks like a pretty fancy old fancy watch that you just want to do. Neo vintage and vintage watches. And then as well as some newer brands, but mostly smaller ones.

Um it's just kinda it's a lot of it's like angel investing. Yeah. Like if you buy into an early independent brand. Um, which is just like a watchmaker basically going at it. Sometimes they can appreciate and value significantly. And you get a pretty cool watch for the money, plus you support a small business, they'll build you whatever you want. So it's like a win win.

Yeah, your your social media's actually pretty cool. I'm gonna follow you, but you have some interesting stuff, but like compared to Some of the stuff you're doing. I know a whole lot of people in the D to C space that are significantly bigger than you and are much More of a little pip squeak and don't ever walk the walk like you like you are. You know what I'm saying? Yeah. Yeah. I know what you mean. Uh leave us with this example of this Weight Watchers thing. So uh explain explain what happened with Weight Weight Watchers then we'll we'll wrap it up. Super high level Weight Watchers was not doing so well and this guy at this tiny

Firm. N not super small, but relatively small. He convinced Oprah to join them. And they absolutely crush it. That's the very thing. high level overview of what he did.

So this guy uh what what like what were the number? So they what did they buy up and then what have to pull it up. Okay. Um So how did this guy know Oprah, by the way? That sounds like you know Oh simp simple. He got Oprah on board. That that's not doesn't sound that easy. Yeah, twenty fifteen Oprah is uh was a big deal. That's like twenty twelve twenty twelve Obama, like you know. That's peak Oprah. So In tw twenty fifteen, he did a deal with Winfrey to acquire a ten percent stake in Weight Waters. Since then, the company stock has soared by almost six hundred percent.

They sold one billion dollars of White Watcher stock and Oprah. gained at least four hundred million so far. Okay, that's pretty impressive. Um It will go down as one of the best private equity deals ever. Over the 19 years, they put 226 million in to Weight Watchers and got 5.37 billion out. Four point seven billion of realized profits.

Yeah, it's pretty good. Uh that's pretty good. Not including the stock that they still. But they only bought of it. Uh I thought they bought more. I think they kept buying more. Over time.

I thought they kept pouring more and more cash into it. Dude, we have to do a pod on Oprah. Like I I love her. I grew up watching her and like I I I for you know, she's seventy now. I just looked her up, or she's sixty eight or something. Uh we forget

Or I forget like how Big of a baller she is. I'm like just googling if like Oprah buys another thousand acres in Hawaii. Like she basically, you know. Okay. Got our network to be something absolutely insane.

Yeah, what what's her what's her story? So uh w wha what what do we know about the beginning of her story? Uh Bor born in a really poor town, abused growing up, et cetera. And then absolutely crushes it. And she should run for president. I would totally

I think she's a little bit more than I've I think she was born in like an abusive family. And like I think I think there was even like pregnant at fourteen or something. Yeah. And I think that there was some like sexual assault or something some some like some horrible uh tr tragic stuff. And then at age twenty four, I think she becomes like a weather woman or like a like a w whatever they call a news person, but you're not actually in the office. You're like out on the streets. Yeah. Um she did that, and then eventually when she's like thirty-two or thirty three, she gets a talk show.

But it's not like a hit right off the bat, but it slowly starts picking up and then eventually she like makes some like groundbreaking deal. She did like one of these groundbreaking deals sort of like Michael Jordan did with Nike. Uh what Lucas Films did with Star Wars where it's like, you know, we'll just take a percentage of the upside. And uh and then that like turned out to be like one of the most you know, one of the best deals of all time and And it's worked out and And she did this all back when people were very, very racist. So like now

Yeah, from like I think it was out of Nashville, Tennessee, uh that she's doing this, so in the South and she kinda killed it. We we need a how to take over the world episode on Oprah. What's what's going on? Where is our where is our definitive Oprah episode? Why why have you not done this already? It's a real question for you, Ben. Uh put it on the list, Sean. You put it on the list. Put it at the top of the list. Let's do this after this after this episode is done. Yeah, you got it. I'm I'm buying my Oprah I'm on Amazon.com buying Oprah. Is there an Oprah? I would totally buy that. Of course there is. There has to be. I mean I she's she's the best. I I'm a big fan of her. And she like did this all out of Chicago. So I think she still owns like the Penthouse and the Sears Tower, which is like You know, one of the largest buildings in the in in the world. Uh but no, she's the best. You know, I always forget about this.

It's like I'm in Austin and there's all these nerds talking about crystals. You know, you go to a therapist and they like recommend a crystal. Uh like there's like pretty woo woo shit out here. Um sh she was pretty woo woo, but for some reason She made it very very likable. Like do you guys remember that book, The Secret?

Where it's just like it's like if you think about it enough and like put it in place in your brain. The universe will grant you this. She liked would she was talking about that stuff before any of that stuff was even popular. And for some reason, when she does it, it's very tasteful. Other times my friends do it. It looks like you know they're one of those women wearing like a Coachella brown hat. Uh like you know, and it's not cool at all. You know I'm talking about those wide brim hats, but I ever see one of those with turquoise jewelry, I I run away. I'm out. If you're wearing cowboy boots, turquoise jewelry. Yeah. No Wyvern hats hats for me. I'm out. If you if you wear one of those things, I I'm not part of this. But for some reason

When she does it. Amen. Well, that's what I want to know. Like I think the the story I've heard is like grew up in these terrible conditions overcame and became super successful. But I literally want to know like

What was the successful part? Like uh Meaning how did she get her break and then like what led her what was she doing? Was it literally just Better content. Like was she just that damn good and dynamic as a talk show host? Was it like the Microsoft IBM deal where they like, you know, how did Microsoft take over the world? It's like, well, they cut this really great deal for the operating system where they could be, you know, with multiple providers at once and

And they use IBM to bootstrap and that's how they got bigger. Like It's like was there like a growth hack? Was there a um A smart you know deal that she struck, was it Uh the timing'cause like, you know Those show you know, cable started spreading into every home in the country and like

She was one of the top three shows and just like I she got to surf the cable wave or whatever, like Yeah. I wanna know what actually Mm-hmm. led her to the mega, mega fame. Uh what were the actual those those things. So it's not like a simple answer, but um that's what I'm actually curious about because

You could like in the air in the Topics that I know about Um, those stories are always the most interesting. And I feel like when you when I go into other topics, like I was like, Oh, May Tab, like what happened? He was like, Oh, started off bad, now the best. It's like yeah, but Act two, the middle part. Uh that's the part uh anybody who actually wants to make shit happen in their life, you wanna focus on act two. Like Hollywood focuses on act one and three, right? Like the the the bad origin and then the the happy ending.

But it's the montage, the training montage when like You go from like scrawny to strong. The training montage that they speed up through is the part where all the interesting shit happens. I already told you Gino, I go. Billy of the week on Wednesday. Oh bruh.

I'm on it. Yeah. There's this really cool book. Um Called Messy Middle. Have you guys m Messy Middle? It's by uh what's the uh Scott Belly. Yeah. The most dreamy guy of all dreamy guys. Scott Belsky's the man. Scott Belsky basically started um So this guy named Scott Belski, he started Bahance, which is uh where developer uh designers could host their portfolio. He started it, bootstrapped it, had a hundred and seventy five million dollar exit.

Before it became very successful, he said he had like fifty thousand dollars and he invested like fifteen thousand into Pinterest at a three million valuation, fifteen thousand into Uber at a three million dollar valuation, each of those, you know, fifty to a hundred million dollar outcome. Plus he owned seventy five percent of his company when it sold for A hundred seventy five million dollars. So very, very, very successful. Now he's it l it's looking like he's gonna become the next CEO of Adobe. So huge deal. He's got this awesome book called The Messy Middle, and it talks about how like You know, starting things can be somewhat easy, but once you start that Then there's uh once you you start it and then there's the middle and you have the end and the end's the kind of the easy part. You know, things are just kinda working, but the messy middle is that ten year period where it's like is this working? Is this not working? It's a really cool book on how to like navigate that period. And it's and and I love that title, the messy middle.

Yeah, great title. Great guy. He came on the pod once a long time ago. We should bring him back. Um But yeah, he's on your like Mount Rushmore of Dreamy Dudes. I feel like uh you got Huberman up there. You got Belski, who else? It's basically like Yeah, you gotta have Jawlines. Yeah, you need a you need a good jawline. And a clear cut jaw. Dude, have you seen Scott Belski's jaw man?

He's got a strong change. Talk talk about talk about not a distressed asset. Chisel. Yeah. Uh he also just dresses well. And I feel like dressing well is this like really Easy thing to do that nobody does. And uh he does an amazing job of it. Especially in tech.

He's the man. 'Cause he lives in New York, dude. All those guys are stylish. He lives in New York. So he's got that leg up. Um dude, I've never been to his house. But I've been to his house. I know exactly what a guy like that's house looks like. It's basically I can picture it so clearly in my mind of w how immaculate like the design is of that guy's house. He invested in the hustle. He wrote us a very small check and I've got the paperwork for where to send the docs to.

Immediately I looked up and I like saw the house and I could tell you I could tell you off air. It's exactly. What you're describing. You didn't even dis You didn't even describe it other than using some big words. And it's exactly all you're describing. I tried to uh in twenty eighteen would wear hot tech for deal floor. I've stumbled across the hustle, like this is awesome. I should try to invest to this. So I messaged you on Facebook.

But no reply. So Oh, I'm sorry. This is your revenge. It's kinda funny. If I would have got that would have been a good investment. But It w it would've, I'm sorry. I could have helped you connect with my with my boyfriend Scott. Maybe you too could have zillowed. Scott's

Yeah, we're not we're we're friendly. We're not friends. But we've goo I've googled his house. He's not Googled mine. I can tell you what type of couch he has, though. But dude, thanks for coming on, man. You're awesome. I'm gonna go and find that I'm I just pulled up Facebook. I'm gonna find that message. It's just kinda funny. It's from twenty eighteen. It's like Hey, I'm an angel investor. Please let me invest. I look what you're doing. What's your Does your last name start with a B? Bogle. If you just type in B H O G L.

Oh yeah, I see it. Sorry. Would have been there. Should have asked you. Dude, I saw a um a post on Reddit yesterday. It was a map. I don't know if this is this might be fake news, but it's the top it was like one of the most popular popular posts on Reddit yesterday. It's a heat map.

That shows the average life dec life expectancy by Town? And there's literally a twenty year age difference. between like New York, uh, California versus like They're not.

Um, it's like you know, people in the south are dying at like sixty something, and people on the coasts who are living like, you know, sort of the yoga and salads lifestyle. Or living till they're eighty on average. And and then you can see these small pockets like In Florida. It's like the retirement community where people like migrate into they're also living for a long time. Yeah, the Jewish New Yorkers who move down there, they're living for a long time. Everything around it is surrounded by

The walking dead of people who are gonna die at sixty something. And uh it's like Boca Batone kills it. And then like George Lauderdale. It's like a thirty year uh shorter life expectancy. I I asked my data guy, I said, please overlay the a map of Chick-fil-a's and it was a perfect sequence to like to the dying early crowd, which is unfortunate for me'cause I love Chick fil A.

Chick fil A's not healthy. Well we're screwed. Um Dude, thanks for doing this. We appreciate you. Yeah, noise, thank you.

What you see above is a preview of the first minutes. One unlock costs 3 credits and covers this episode forever: full segment and word-level timestamps on this page, plus .txt, .srt, .vtt and word-level JSON downloads, as many times as you like.