From Blogger To $100 Million Business With Neil Patel

To say in your blog post that it you go, fifteen thousand dollars a month is all I need. I'm happy. That was like ten years ago, I think. But uh that's but you used to say fifteen thousand. Seeing a no kids is easy. Right now, if I had a guess on my burn rate one twenty to one eighty a month. What? That's insane. So what is how does that break down? So

What's the like What's the bulk of it? Whether the so house probably is the biggest one. No, I have no mortgage. Okay, yeah, so you're spending 120 to 180 K without spending anything on your home. So

Neil, I I was telling you a little bit about what you're getting into. We record everything, by the way, so like we just hop into it. But Uh Sean kinda knows who you are. I've been a fan of yours for like 10 years. Can I tell Sean and the audience who I think you are and you can tell me if I'm wrong. And like what I'm missing.

Sure. Go for it. Alright, so you're Neil Patel, so I know you because you used to have this blog Called Quick Sprout. I read it. Maybe ten years ago. It's probably a fifteen year old blog, if I remember correctly.

At first, it was mostly about like SEO, but eventually it kind of like warped into being about SEO, about content, but just about business in general. And you would do like crazy stuff like You would build a business that made a hundred thousand dollars a month in revenue by like you just pick like a random niche and I think it ended up being supplements and you like blog every month about how that was going. And you used to blog about all types of crazy stuff. But then eventually you also started a company called Crazy Egg, which I heard was doing many millions of dollars a year in revenue and it was a bootstrap and you own the whole thing.

Then you and uh Heaton started Kiss Metrics and raised a bunch of money. It didn't end up working out wonderfully, but it was like It could have been actually quite huge. Keaton wrote a great blog post about Like where uh you know, where a couple of errors were made. But now you've got like a seven or eight hundred person agency. That is also bootstrap, like the rest of your stuff. And you've just kind of been balling out like

for like fifteen years in the world of business, just killing it with agencies. Is that right? Did I did I get everything mostly right? Mostly closed. So crazy came first. Uh Heathens the co founder on that. He has it all or uh you know, he owns

Uh crazy egg. Um as well, so it's not just me anymore. And then uh there's another guy named John Butler, who was also part of Crazy Egg at the beginning. And then Quick Sprout came later. I started blogging on it about business and stuff like that. Uh Kiss metrics then came. Kiss metrics didn't work out.

Quick Sprout started to have a big audience related to marketing. We tried to create a SEO software on there. I did that with my co founder Heathen at the time. He's like, All right, how about we create a company out of this, I'll do the software and That didn't work out. I don't wanna be part of it anymore. He took it over. And um he ended up making it uh You know, business site, directory, you know, informational site, whatever you want to call it, has affiliate offers, which you already know about.

And then the last one was the ad agency, which is correct. And then there's been a lot of stuff in between here and there. A lot didn't work out. But generally speaking, I tend to do one thing at once, focus. And currently I spend all my time on my ad agency. And that you're you're at six, seven hundred, uh how how big is that at the moment? And it's only like five or six years old, right?

Yeah, so we're on our fifth year. End of this year will be end of year five. Uh we're at roughly seven hundred people. I think maybe a little bit more, maybe by end of year nine hundred ish. I had a guess. Who who are these people? Like Seven hundred anonymous Indians in India? What's going on? Who are these people? Uh we do have some people in India. Uh

But what's funny is how many people do you employ in New York? That's what I want to know. That's my agency test. You're in Brazil too, though, right? Yeah, we're in Brazil. Majority of our people are in the United States. If I look at a region wise the United States has the biggest headcount. We also have offices in Australia, Canada. UK, Brazil, India. I think we're opening up Germany soon. We're looking at Italy. We're looking at France and a few other regions as well.

But Our model is is like Our ad agency in India markets companies in India. It's not really used to outsource.

American work into India. And what work are people doing? Like what's the service that you're providing? All digital. So like SEO, paper click, email marketing, conversion rate, optimization, organic social, paid social. The list goes on and on. And do all the customers come from Neilpatel.com?

It used to be that way. Then we started getting a lot through word of mouth. I would have never really guessed that word of mouth drives business. Yeah. How how many can you say how many

Uh so most people I would say like our audience they'd be like, Oh yeah, it's cool to have like a personal brand but Me and Sam have figured out, Oh wow. This shit really does open up more doors than you would have expected. Uh you've been doing this for a long time. So Neil Patel, which is kinda like a personal blog where you're talking about like, you know, hacks and experiments and strategies that you've You know,

Figure out. How many can you say how many millions that brought in in client bookings, what for the agency? Like what Uh, how big did just the referrals from Neil Patel get you? before other stuff kicked in, like word of mouth and being recognized in the industry and other things like that. I think the Neil Patal brand got us to around like thirty, forty million in revenue, and then word of mouth started kicking in and then other things started kicking in and employees started bringing in their own deals'cause they worked in the space for so long and then We saw more and more growth, got awards, that bought us deals.

Um being a minority. Own business that helps. Believe it or not, there's if you're Indian and you live in the United States, you're considered a minority. And uh I was about to say, are we a minority? I never get minority. I feel like you're m you're the majority of CEOs out there, so I mean It's funny because we go through RFPs and some of them ask if you're um what is it, like MBE certification or something like that. I forgot what it's called.

Or minority business enterprise. And I was like, Well I'm not a minority, there's like one plus billion of me in this world, right? And they're like, Oh, you're a minority. I'm like, What are you talking about? There's like a billion plus Indians in this world. How are we a minority? And they're like oh in America you're a minority and in some of these RFPs They're looking it says in there we're looking for um

LGBT Q I don't know about the Yeah. All four of the letters are. Um you have the tattoo on your arm. Yeah, the Q's there.

Uh and then uh women owned businesses, veteran owned businesses, and the other one was minority. And I was just like, Wait, there's actually a quota that these big Fortune five hundred companies have to hit and they're like, Yeah. And I was like, Well I'm a minority they're like, Well, you need the certification. And I was like, I gotta have a certification to tell you that I'm a minority? And at first I didn't realize I was a minority. They were telling me, Oh, you're a minority, we reached out to you, we're hoping that you'd be a good bit.

And I'm like, I'm a minority and they're like, Yeah, you're a minority in the United States, you can help us meet our quota You had the certification, I'm like, what are you talking about? And then we went through the process and got the certification. You gotta get your papers, bro. You gotta get your papers right. I I would have been offended and then as soon as I realized wait this is to my advantage? Oh hold on um

I also got solar panels on my house. Does that help? You know, like my I'm a dog owner. Yeah, exactly. I have I have a vision impairment, uh called far sightedness. You know, so what else works in my favor here? You know, like Was the certificate just turn the webcam on and it looked at you and it was like, Yep. That's not enough. And what's funny is

Our COO or VP operations, one of the titles, I forgot what Tracy's title is. She asked me for this like six months before we did it. She's like, hey, I need your birth certificate. I'm like, Yeah, why do you need my birth certificate? She's like, Oh, we need it for this certification. I'm like, whatever. And the moment someone ended up telling me how uh Maddie Johnson generates a lot of his revenue because he's a minority and gets a lot of contracts, partners with other businesses, white labels it. and uses his name, becomes a quote unquote owner of that business and then outsources Oh wait Tell me about that. Give me an example. What's what's what's an example of the Magic Johnson formula. Sure. So I don't know if this is true. This is just what someone in the minority space ended up telling me. So

That's the caveat. I don't know if this is true or real. And they're saying let's say if someone has a food company and they have the contracts with all the hospitals that are run by the government, like the VA. They're looking for minorities to provide it, but there's already a lot of big corporations that provide the food. So Magic Johnson may go create a business. That's in that space. partner with the big supplier who already provides the food to these hospitals, he'll go get the contract.

And then work with them to actually put those. Yeah, wait, Sean. You never heard you you never heard of this? My my my in laws my in laws own a a moving company and they're minorities. They're uh Black. They're Haitian immigrants. And the they win deals. Partially because of that. Reason.'Cause like Morgan Stanley or something like that, if they wanna move, they wanna they have some type of policy in their company that says we we wanna

get R FPs for or we want to get bids from these types of companies. I had no idea how I didn't obviously I knew this exists. I just didn't realize how significant it was. I definitely didn't know the Magic Johnson formula, which It's frankly genius on his part, if that's if that's actually what he does. But think of it this way, right? It's a quota. So if I go and I get a RFP, let's say from Bowie, which funny enough, we lost the Rf

Um and let's say prices very similar to the competition. I have awards showing that we were the agency of the year. So like all right, these guys are good at what they do. We have the case studies. And if we're similar pricing like oh this minority helps us hit our quota. Let's get the business here. Right. Yeah, yeah, of course. You you have some merit uh to go with it. For the first thirty million dollars of business, you got that and you must have gotten that by year two or so, if you're growing this fast.

Um What was the main Year three, sorry. Three. What was the main service like when I think of like

'Cause I went to your website and I actually submitted a lead to figure it out. There was the maximum y you ask what your website is. And what your budget is. And it's like Zero to ten thousand, ten thousand to twenty thousand, and then just fifty thousand plus. So were you serving like mostly small businesses and what like what were you were you doing as simple stuff as like making their Yelp page good? Like what were you doing?

Yeah, so it's not that small. We do have some S Bs like that, but we actually first started off in uh Mid market. Our clients would pay us like a minimum of ten grand a month. And what would you do for 10,000 a month? So nothing was cookie cutter. It was all custom. So like maybe they need SEO, maybe they need a help on paid management, maybe they needed some CRO or email marketing or a little bit of

Everything, right? But the plans would start at a hundred and twenty a year, right, ten a month. And scale up from there to twenty a month, thirty a month, whatever it may be. What was most in vogue as the service when you started, like the the trend everybody wanted? And then what's the in vogue thing today? When we first started, it was mainly SEO. And what does that mean though? What does that mean? You use HA reps or something and your employees like look which terms they should rank for and then you write an article for them? So it was optimizing their on page code, helping build links, creating content, promoting the content.

And making sure that traffic converted into leads or sales, assuming if they weren't services. Um and it was a positive ROI. Or the cause. That sounds like a ton of work for ten thousand dollars a month. It would start at ten. It depended on the keywords, how hard they were to ring for, and it would go up from there. And what about now?

People's businesses'cause you're just like uh So what does that mean? You just Google their name and then it doesn't show up and then you go write an article with their name and it's like What's the hustle, dude? You just read the New York Times and then you just cut out half the words and then you hit send in an email? Like is that what is that what the hustle is? Yeah. Nailed it. I mean it can be. Like the like you know, uh

There's there's always more nuance and complication in reality. But like if you you c you can explain things in a in a fairly simple way where it's like what's HubSpot? Oh, they just make software so when you people sign up for your website, you can email them and call them. You know what I mean? Like you could s I'm just trying to dumb it down a little bit. But when you look at the business when they first started massive churn, how to add tons of features, how to figure out onboarding, how to figure out training.

There's a lot of stuff that went to make HubSpot. billion dollar company, right? A lot of people look at it as email, but they do more than email. They do more than a CRM. They've added actually if anyone in this space has a ton of traction They have a history of adding a lot of those features for free, which is a smart model, and then Goblop Market Share, get them into the ecosystem, and hopefully they stick around. And so what's what's the popular You should do the ad reads uh for us. Yeah. Oh that was amazing. By the way, Sam, I think you should make suburban dictionary, which is just you explaining businesses without like Any

Uh any of the complicated stuff like Yeah, what is it? Well if you get customer. The the the the three syllable dictionary. Like I I explain complicated things, but no word is above three syllables. Exactly. I was just gonna say Ben brought up one point on that minority thing. Ben, you wanna say that? I that sounds pretty interesting. You slacked us something

But Neil kinda mentioned this too, but like This is really, really uh popular in government work. Because the government is like very hardcore. About hitting their quotas um for racial minorities.

And so around here, like I actually know a couple guys. And basically what they do. Is Uh Th the people I know are all African American.

They get the contract, they put their name on the contract. They then outsource the entire thing to like Uh Deloitte or KPM G or whatever. And uh they take like, you know, fifteen percent of the revenue or whatever. They create a consulting firm. That's like the minority minority inc.

And then minority ink goes against the contracts and farms it out to to like Deloitte or whoever. That's great. 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. I I lived in uh in Indonesia for a while and they had such a bad traffic problem. Jakarta has like I think the worst traffic in the world.

Like you just Going two miles, you might be there for two hours. And uh so they were like, okay, we need to create like a carpool incentive. So how do we create an incentive where if you have three or more people in your car Then you can go in the fast lane.

And so this so it worked for like you know a month. It was like oh wow, this is great. If we carpool We get to go faster. And then this like little industry sprouted up where people would just stand at the edge of the carpool lane like a hitchhiker. And they'd be like, I'll get in your car. If you want a third rider, I'll I'll just hop in and we can ride in the fast lane. And then they would get off on the other side and ride back with somebody else. And so they would be a professional

Like you know, H O V lane participants. So they would just s spend all day riding with you in your car. So you'd be sitting there. And someone would just get in the back seat with you? It's just like a random Indonesian person. And you would pay them ten ten like rupees or whatever, and then ten bot, and then they would, you know, get out on the other side a mile later. It was amazing. You uh Neil was Was Quick Sprout uh then go. Uh was Quick Sprout

I mean so that was your main business quick sprout and crazy egg were your main business for a while. Because this is a blog and then my co founder Heathen ended up taking it over and now it's his blog. So but what was your main source of of revenue and income? Because it I like I said, I've listened to you forever. Like you've been crushing it, it seems like for financially for like ten plus years. I don't know if I'm crushing it, but uh the main source of income was crazy egg for most of my life.

And then it ended up becoming that agency. And Sam, you said something at the very beginning that if I was listening to this, I'd be like, wait. Hold on, I wanna hear that story. You said something like Just for kicks, he would like spin up a business that like did a hundred K a month in revenue. What's an example of that? Tell that story, because that sounds awesome. Yeah. So everyone thinks like it's really hard to make money online. And then you got these shysters who are like buy this for a thousand dollars and you become rich, which never really happens. Maybe every once in a while, but for most people it doesn't.

So I was like, I create a business on anything, and people are like, go create a nutrition business. My audience, I give them like a lot of different options. They picked a nutrition business. And I was like, All right, let's create a blog, get it ranking, get some traffic and then funnel people in through quizzes, through uh email. And let's funnel them into uh supplements, rank higher on Amazon, get traction and see what happens. And it did well. And that took you like

Uh months? Years? How long did it take you to get it? It wasn't months, it was much more than that. I think it was like a year, right? A a little bit less than a year. I think it was like nine or ten months. So it wasn't like one or two months, sadly, but Uh a little bit less than a year, so it's pretty good. It was an awesome it was an awesome blog post series, Sean. You gotta Google it. Google like Quick Sprout or Neil Patel then like hundred thousand dollars a month and it was like a a monthly update. It was pretty amazing.

I I I don't think they may have deleted it now. I don't know if it's still online, but And then so I took the money I made from Crazy Egg and I'll park it into other things. So it's like stock market for a long time the stock markets had a really crazy run, right? Then you also have things like investments, a lot of venture funds, uh Angel investments. And then sometimes you just get lucky, sometimes you don't know that's the numbers game.

We uh had talked about doing a content series like this to grow the podcast. I was like, you know, I think one of the best ways to grow the podcast could be if we do a challenge like what you described and what one of the ideas is like What if Sam created his own uh Sam sticky icky, his own uh condiment brand. And we basically show how we build a D to C brand, like from from the idea to like Branding to marketing to

And we just do it all transparently to like Like get people hooked on, okay, let me see how you guys actually build this thing. Now it's a lot of work, which is why I think ultimately we didn't do it. But how well did that work for you? Was that like just kind of like a good content thing or was it like no, that was like

drove a lot of growth for the brand and the blog. Uh I'm curious how well that worked for you. It didn't drive as much growth for the brand, um, but it did help out every little bit. Like I did crazy experiments where I spent like a hundred and something or two hundred and something thousand on clothes. And Wanted to see what that did in business meetings. Uh spent money blind first class everywhere. See wanted to see what that would do.

But yeah, I tried a lot of different experiments and it was just for Shits and giggles. Um And there's also a reason to justify some of my expenses. And then I want to fly first class because I remember my first time flying first class, someone else paid for it. I'm like, wow, this is I've been missing out. This is a lot better than being crammed up and flying all the way to Europe from Los Angeles, you know, in economy.

And then I was like, Man Let's do some experiments and let's see if I can justify this expense. But yeah. That's amazing. And you just you did you t say early on that you just gave Heaton so d did you invest in Heaton Shah's other company, Sean, Nera? Yeah.

Yeah, so we're both Neil, we're both investors in Nira, which is he Heaton's your cousin, right? No, or brother in law. Yeah, sorry. And uh Heaton's amazing. He's a another he's a great blogger as well, and Sean and I both invested in his company called Nera, which It's either gonna Be a dud or it's gonna be like the biggest company ever. I know. The uh the it like it's like a company that's cloth like they're gonna close like multi million dollar contracts, I would guess. That's it's like a big ol business.

Potentially a big old business. But did you say that you gave him crazy egg? Uh so with Crazy Egg what ended up happening is is What I wanted to do is we were doing business forever together and then eventually I just said, Hey, you can have the monthly distributions and I'm gonna go create another business.

Why would you give that wh why? Uh he didn't ask for it, nor did he care for it, nor did he want it. You know, he's never been about money, neither him or I have. And we're not rich. I can't actually speak for him. I'm not rich. I've just done well enough and I don't spend as much, so it's like don't really need the money.

Does that make sense? Like if you just Don't spend money, you don't really need Much cash up. Dude, you just said you dropped two hundred thousand dollars on clothes. What do you mean you don't need money? Well that was an experiment, right? But that's not my daily life. Like I'm wearing a white t shirt with stains that my kids put up on.

Um And probably like ten, twenty bucks. I don't know what the white t shirts cost, but they're not really white anymore. So I try not to Do video recordings in front of white walls anymore. Uh because you can just tell the discoloration from it. So y d does Sam say you live in Brazil? Is that what I've done? I have a uh division in Brazil. Like we do marketing in Brazil for Brazilian companies.

And you live in Texas, where do you where do you live? Vegas. Vegas. Okay. Amazing. And uh So Have you um is it easy for you to keep your burn rate down because like

Uh, I I was telling Sam this I spend like I don't know, twenty five thousand dollars a month now just like And I I'm not I don't even feel like I'm Dude, I think Sean, you might sp I think you might spend more than that now. If you I bet if you add it up'cause I know what how you spend. I bet you it's more than twenty five. It might be. It might be a little more. Uh but it's not more than thirty, I would say. I don't think it's more than thirty. So I uh but like it's Yeah, I got two little kids. But I got two little kids, but they're like Babies like you know, like

They don't they don't need food. Yeah. So so you know, there's diapers, sure, but like it's not them, it's me. So I would take thirty. You said it's a steep burn rate or it's a uh Good burn rate. I would take it. I would trade with you. Okay, gotcha. So when you say you don't spend much, what what do you say is your monthly burn rate? Because I think for most people listening, right? They like Most people don't talk about

How much they make or how much they spend. All right. How much you make, sometimes that's sensitive. How much you spend that if I see how much I burn out. Well, but but Neil, you actually wrote this in a blog post. You said uh you said I spend this is I don't know if you're I actually I have no idea if you're single or if you have a family and you can I'm My my burning. Right now.

But you used to say in your blog post that it you go, fifteen thousand dollars a month is all I need, I'm happy. That was like ten years ago, I think. But uh that's but you used to say fifteen thousand. Single and no kids is easy. Right now, if I had a guess on my burn rate one twenty to one eighty a month. What?

That's insane. So what is how does that break down? So what What's the like What's the bulk of it? Whether so house probably is the biggest one. No, I have no mortgage. Okay, so you're spending hundred twenty to hundred and eighty K without spending anything on your home.

A property tax. Property tax. Uh, for both my home's and HOA does it's probably close to two hundred a year. Okay. Right. So we've got twelve thousand of the way there.

Okay. Life insurance is twenty five grand a month. My whole life policy, yeah, that's twenty five to three hundred a year. Uh what what the hell is a twenty five thousand dollar a month life insurance policy? What can you explain that? Is it just um Benefit like if I die my wife and kids get money.

Like a life insurance policy. Yeah, well I get that, but is that normal? I've never heard uh like either I'm dumb or you're dumb. One of who's dumb here. Uh am I dumb because I've never heard of anybody spending that much on their life insurance. It's like an investment account. It builds over time. So it's not like it goes away, right? Most life insurance policies are for Call it ten years and then you buy another one. Mine just keep going and you can borrow against the just think of it as like a investment vehicle. That's twenty five a month. Okay, I see. I see. I see now I understand.

Staff. Uh cleaners, nannies, driver, we have a full time driver. I think that ends up being around fifty seven a month. Um fifty seven hundred, fifty seven thousand. Thousand. Yeah.

You know. A driver? Uber? Mm-hmm. Why why portable in I optimize for convenience in Vegas I go to this company, they charge a hefty premium.

I go through this company and I have decals on my car. So if I do a meeting in front of a casino The car can just stay in front of the casino and doesn't have to move. If I'm going to the airport, you can straight up pull up into the plane or whatever you want to do and you don't have to go through terminals or anything like that. So that makes like So part of your strategy as I'm picking this up is that You Live the best lifestyle you want.

And it's all expensive the way you do it. Uh, I don't know if it's all expensive. Is that what you meant with a decal? Like it's a company, it's like marketing, it's like a like a marketing vehicle for you. So there there's a limbo company. If I have their digital R my windows and pay'em. I can end up Parking wherever I want in theory.

Not literally wherever I want, but in most cases I can park wherever I want and the car can just sit there and wait for me. He's like I f I buy a daily Disneyland fast pass just in case I decide to go that day. Ha ha Yeah. Yeah. I'm like it for convenience of time. Um What's been the what's been the number one uh like kind of like Where you feel like most people don't most people think this is too expensive and not worth it, but for me, I get

Way more value. I'll give you an example in my life, right? So I I thought I had burn right until we started talking, so this is great. I'm feeling so much better about myself. But the one thing I did was I I hired a private chef. So I was like, All right. That I think I I always thought that's the lifestyle of the rich and famous. And I I thought, wow, that's cool because you eat healthy and it tastes great. You don't have to fuss with time and you know, cooking and dishes and groceries and all that stuff.

And so to me it's like a no brain like, dude, anybody with any kind of money, you should be like that should be one of the fur like fancy car. Later. Private chef now. Cause I'm like to me the value, the reward way outweighed the cost. I think most people don't typically make that trade. Sounds like you've experimented with many ways of spending money. What has been a good reward for

That you're like This one is is great that most people don't do. I I don't know. I'm in I'm in a bubble'cause I have a lot of friends who are like me, sadly. Um, in which we spend a lot and we don't know what's reality. I know that sounds bad to say, but it's true, right? Uh

Cook is not bad. Uh Housekeepers and best so you don't have to do your own dishes and stuff. Although funny enough, I enjoyed doing that and ironing because it's uh it's kinda like meditative for me. It's relaxing. I don't know why watching TV and ironing. Um Nannies help so you get the freedom and you can watch your kids when you want to, but you can also do meetings and stuff like that.

Um Probably the the best expense I ever spend on is private planes. Not because I like it. It's uh I don't mind playing commercial. Not really any difference for me.

But it helps me optimize for time so that way I can see my kids more. Does that to sometimes do a lot of meetings for work? And just going and then coming back the same day, just really in and out really quickly. Like sometimes I'll be home. Quick enough, like go from Vegas to Utah for a conference, speak, come back. And I'll be home quick enough to pick up my kid from school.

Like to meet Well valuable. That's worth the money. Are you saving any money then? Or are you I mean are you just taking a fat draw from the agency in order to f of uh provi uh pay for this or are you able to expense a lot of it to the agency? How's that work? I don't expense any of it to my company.

I just personally cave. So you're just the agency's just that profitable of a business. It's doing that well. Or investments, or savings. I've done well enough in life where I'm okay. Why did you do an agency? So me and Sam always talk about like uh We have many motto on this podcast.

Um For example, we don't do public math. For example, you don't say you're rich, you say you're post economic. Uh these are things we've picked up from from guests along the way. And one of the one of the model one of the motto that we say Is uh uh you know

Agency suck. And uh it's like and and and the reason we say is not because They uh like they do well. There's not that they suck. It's like they suck as a business choice. Like If I could I I've always thought if I could choose between software or an agency, I'd choose software because it's like oh it's Not a services business. It's gonna work while I sleep and it can scale up and all

I don't have to open up offices and Poland and Brazil and all these other places. Well you chose that. You did software and you chose agency now. Um Why'd you make that choice and what's great about agencies that I'm

kind of like not giving enough credit for. So you you're looking at business as in software is more scalable, it's more desirable by public markets, EX HubSpot versus Uh Accenture. Excentra has Way worse multiples.

then help five center is a bigger company from a revenue even us standpoint. But now Take a different approach. Okay, HubSpot's publicly traded companies, you guys are both HubSpot employees, I'm assuming still. Is that correct? Kinda.

Sure. Well whatever your guys' deal is, right? But you guys are pretty much at Hub Talk. Now imagine creating a business and you don't plan on going public. You don't care for the limelight. You don't care for any of that. In business

What's a successful business? Good remnant, bro. And good revenue and profitability, right? All that really matters at the end of the day, whether you grow or not grow, is how profitable are you. Would you guys agree with that statement? Assuming you're doing something that's ethical and you're not selling drugs. I wouldn't agree with that. I would say there's a third thing, which is like is this enjoyable and like do I like my day to day?

And With the more people you have S most people would say that's just a little bit more a headache. Uh then But that's not software or consulting. Anytime you build a big company, you tend to have lar a large amount of people.

Whether it's HubSpot or whether it's Accenture, everyone has Yeah, but you can have you can probably have a much higher revenue per employee with software. versus let's say you own a massive landscaping business, you're gonna have to have tens of thousands of people. But but what's the difference from dealing with how many people does HubSpot have? Like six thousand? I don't know, five thousand, six thousand? There's probably a lot, I'm guessing on the number. But what's the difference of dealing with Five thousand or six thousand people and twenty thousand people. There's a point where it doesn't matter and it's a lot of people either way.

Like it's not like you're at fifty people. You still have thousands of employees to deal with and you need managers and layers and all that kinda stuff. Yeah, but you're hiring a some uh good or bad, you're hiring a different type of person. So for example If you're Vayner Media, they're based in New York. They can probably only afford to pay some of their lower level employees seventy or eighty thousand dollars a year, and so you just have to Get a ton of people like that and have to have higher churn.

versus, say, a bigger company where you're able to pay a significantly higher salary because the revenue per employee is is much higher. So Perhaps there's a s a slightly different day to day with Because of that. Not necessarily. Let's say you're a Bainer Media, he could be doing it to optimize for profit. Wams if I told you his LTV was six, seven, eight years. Right, and you have to.

Then at that point you can still hire high quality people and pay them arm and a leg. You get what I mean, right? Like you look at extent, right? They're charging accounts so much money and their contracts are long, and I don't know what Vader Media's LTV is, but there's a lot of consulting companies that have LTVs of Six, seven years for clients. And their clients are spending, you know, a hub spot, yes, just more revenue per

You can say potentially in software you can get to more revenue per employee. But I know consulting companies that only take on contracts that are like five, six million dollars and upwards. So you have high margins and you can have a high revenue per employee, but Either way, no matter what. As you build a big business, you're going to need more people and it's a headache to manage, whether you pay them seventy thousand or whether you pay them a hundred and fifty thousand. It's still more of a headache. And the notion that if you hire someone for a hundred and fifty thousand, I'm not saying you're saying this, it doesn't necessarily mean they're a better employee, right? And it just means different types of headaches.

Correct, exactly. Engineers, for example, are very expensive in this economy, right? So The point I'm getting at is a consulting company, I had the demand for it. A lot of people wanted to pay me for marketing. And there was just so much demand it would have been silly not to do. But if I'm not trying to go public or I'm not trying to sell

Money's money, green is green, as long as you're happy doing what you're doing. Take the cash. Will you ever sell the company? I want to say I would never sell the company, but I don't care to ever sell the company'cause I love what I'm doing. We also have good growth too, right? Like I don't know what we'll grow this year.

sixty something percent, which is a bad You know, with the market going up and down and fluctuating sixty something percent is my guess. At our size is Decent. Yeah, the part I was actually talking about was a little bit more like uh uh I think you're you're totally right that like If you're gonna win big, you're gonna end up with a bunch of employees and like

You know, it might look like a hundred fifty, it might look like a thousand, it might look like ten thousand, but like, you know, in either case, you're gonna have managerial work and headaches and it's just different types. The part I was really talking about was like You know, I've now built, let's say, a media company content. And then it's like um Done educational stuff. So courses, which are like, you know, a different thing. And then there's like

I built software company and so you know, we ended up selling that one and then it's like And then there's um uh services, which is like client services like with like consulting or agency model. And What I hate what I what I love about content media is it's actually pretty fun to create and it's cool because a lot of people consume it so they kinda

You know, you get that like hit. Um But you gotta like you gotta bake the cake every day, right? So like you know, the the hustle or like my w the milk road or this podcast, it's like We have to come on and create the content again. Uh, you know, for the most part. We we're not doing like super long evergreen stuff. Uh, so you know like with the hustles of daily newsletter, Milk Road's a daily newsletter, it's th we gotta bake that cake every day. Whereas software, it was like we built one product and yes, we might

We will improve it over the course of a year, you know, uh every year we're gonna improve it. But like fundamentally, um We didn't have to like recreate the product, come up with a new viral story or a new great content segment uh that would like require like a new genius. Uh with software it's like you come up with one genius moment And then you sort of refine it, make it work better over time and get rid of bugs and things like that. So I preferred that part of software, which was like

Making a product rather than making kind of like a disposable Uh, you know, consumable. piece of content. Or like I have an e commerce company. And like it's a pain in the ass to have supply physical products that are supply chain. constrained and like we have a warehouse. We got warehouse problems with our e commerce business.

And so I'm like, man, digital is sweet compared to e commerce, but e commerce is quite profitable. It kicks off a bunch of profits. That's nice. So every business has these pros and cons, and I always thought agency was like Um The part I w always thought was a pain in the ass was like the client services. You are reinventing the next campaign and the next winning marketing s you know formula for them.

And you have to keep clients happy all the time and clients are sort of like never satisfied. In a way that like Name if software it's like you can have nameless, faceless customers that like, yeah, some percentage of them will will write into your help desk that's in the Philippines or whatever. Like you're not having to like

you know, send account reports to your you know, your your big clients and keep them happy. Yeah, but you e everyone has their own problems. In software a lot of people have turned this issue and they can't figure it out. Or they have competitors who come into the marketplace and just undercut'em on pricing for the same features'cause it's cheaper and cheaper to build software these days, right? So they all have their own problem. To me, I look at it as If you can find the right people, so every time I start a company, I find people to put in place that have already done it multiple times before, because your risk of failure are lower.

And they already know everything to do. So I don't have to deal with client relationships. I don't have to deal with customer service or anything like that. I get to do what I enjoy doing. Which is go and create content, be the face, et cetera. And uh my wife enjoys what she gets to do, right? She gets to donate the money, although we don't really consider it as donations. We look at it as investing. We're investing in people, although we really don't ever collect any money back. It's more so you're investing into making the world a better place or people's lives a better place, or whatever it may be. What's a who Who were your first three clients?

At this at this agent. They were small companies. And right now who's an example client? Like A Fortune One Hundred software company. Like that is a typical company. A think of any big large corporation in B2B, that's a great example of one of our customers, or even B2C. Actually think of any Fortune five hundred company, that's a prime example of a customer.

What's uh and who's the CEO of your agency? Are you? No. I'm never the CO. I'm a terrible manager. I'm one of the worst managers ever. Uh his name is Mike Gullikson. He was the CEO no, he was the president of iProspect. Which is a ad agency owned by

Uh Denzu. I believe in I prospect maybe they had four or five thousand people is my guess. And what when you How early into the business did you have a a hired CEO or hired leader?

Day one. I won't start a business without a CEO from day one. And what did you pay them in the first year? Burskier is my co founder. So like a hundred grand. And that's because you basically went and drummed up a hundred grand worth of business and you're like, Hey Mike, uh I got a I got this client said to give up a hundred grand.

You wanna run this thing for me and and h help it get deployed? No, uh our business didn't start off that way. I probably put in total of five million bucks into the business of my own money. So it was bootstrap, but not really bootstrapped, if that makes sense. It's kinda cheating. Um

And it gets easier and easier as your entrepreneur, right? The more The more successes you have, and I'm not saying I'm successful by any means. The more capital you have to deploy into the next thing so reduces chan Uh failure. And when it's your own money

This is just my thesis and I could be wrong on this, I have no data points, when it's your own money, you're much more careful than when if you raise like 15, 20, 30 million dollars of venture capital, right? You really look at every single dollar. Uh, but Mike was the CEO from day one. He's a great operator, has no agency experience. Eventually we got in a president. And then eventually from there we got in a CEO. And

Have you guys crossed a hundred million in revenue yet? Yeah, we do nine figures. That's crazy, man. So w I mean, that's just pretty wild that you're able to like parlay This blog that was our all always kind of a juggernaut, but this blog into a Nine figure a year business. I mean, that's amazing.

Yeah, it it's been a good run. I hope it I'm knocking on wood, although you probably can't hear because of Chris, but uh I I hope it keeps going and more so we're just having fun. Like for me, what I enjoy doing is building a business. Um I know I have an expensive lifestyle. I generally don't do stuff for the money. Like I overpay like house staff, like nannies and stuff like that. When I say overpay, I drastically overpay, not by like 10, 20, 30, 40 percent. Like I really mean drastically overpay. Cause I look at people and like, if you're cleaning a house,

How are you gonna live on this? Like I'll give someone six figures to do that. I know that sounds kinda crazy or stupid, but like I'm not giving my kids money. So might as well take care of other people in this world who need it more than um Uh we do. Did you just say you're not you're not giving kids money? Yeah, I'm not gonna give my kids money. Nothing leave not leave nothing? We have a trust set up. What they'll get maximum is like if they're on the street and they can't provide and they're gonna be suffering.

Like I will help pay their bills. Um or put'em in a normal home. Or like if my kids like I wanna be a doctor and I wanna go spend all my time in Africa helping other people out and I won't get paid for this and I need You know.

X five thousand dollars a month to live or ten thousand, so I can just go volunteer all my time. I'd be like, sounds good, I'll pay for that. But like I won't give'em money for the sake of it. Like if they're like, I wanna go travel to see Italy or I wanna A Honda Accord and like go buy your own Honda Accord. Go travel on your own with your own dime, like You know, I don't believe in just giving people money'cause I think there's other people who need it more than We do.

Sean, are you gonna give your kids money? I haven't really thought about it. Like my oldest is two, so I think I got some time to figure that out, but I I lean more toward so I've kinda heard both arguments like um I know somebody who they

If some people are like, you know, uh you know, I do th there's some people I I I'm definitely not in the camp of I do this for my kids. I wanna leave my kids with a whole bunch. I'm like I that may be the worst thing you could do for them. Um not because it means that they'll be ruined, but like drug addicts. Yeah, you take away, you know, agency in a way, right? Like you you want people to Um

Like it's it's not that it's good or bad. It's actually just it's just way lower on the total bull of priorities. It's like I just don't even focus on that. It's like If I'm gonna leave them something, it's gonna be a certain set of character character traits and skills. And like uh mentality. That's what I'm trying to leave. Money is like, I don't know, fifteenth on the list of like, I don't know, we haven't even gotten to think about that yet.

But I've thought a lot about what are the character traits and mentality and like mindset and skills that I think I can Help build and like That's the focus. That's the one that matters. That's the

That's the gift. If uh whatever else comes from beyond that, I don't know, we can figure out it's like the foot it's like the footnotes. So like we're very similar. Mike my I have a two year old and a less than one year old, right? And I look at it as you want them to be Um productive units of society.

Right. You want them to be ambitious, hungry, uh, caring, thoughtful, happy, like whatever it is. There's a lot of characteristics that you may want children to be. But I look at it as like They don't need money. Even like with my wife and I, we go over our expenses. And we look at what we spend on travel. And we do some of this because it's easier, but like my wife and I are actually considering cutting out all private and just going commercial now. The main reason our expenses are high is due to COVID.

So if it wasn't for Covid, I would just be going in a normal airport. I didn't know how Covid was gonna impact. With young kids. Could afford it. I was like, yeah, just start applying private. And we haven't gone back to commercial yet, but we're thinking about going back. 'Cause like my wife and I look at the money is like, Yeah, we spend all this money on travel and

Airfare and hotels, if we donated the money, people would have a better life. Do we really need it that much? What do you do when you donate that like What's a good way to donate in your opinion? So There's like Uh you know, ranging from not donating to donating to one thing, to donate to a bunch of things, to like getting involved or seeing the impact or like You know, I know people who

If they donate to Africa, they'll actually their family will go take a trip every year so that they're more connected to the people and They actually see the impact and they take their kids with them so that they see the impact like What have you found that's a good way to give? So we we have a balance. It's my wife and I team up. Um, this is gonna sound bad, but I don't like volunteering my time. My wife loves volunteering her time. I think it's very inefficient for me to volunteer my time. I should make the money.

Uh, versus volunteering my time because the money or the hours spent if we donated the money would have a much bigger impact to the cause than if I actually spent my time. I don't think it's a wife more Yeah, and my wife loves spending the time. And like from going to soup kitchens or whatever it may be. So she picks the causes. We have a few thesis. So like one thesis is is We are

Not really thesis, but rules. One rule is we don't like money going to organizations that have tons of high overhead. We actually want our money going to the causes. So if it doesn't go to the cause, then we tend to not pick that. Um organization. The second thing that we look for is

Mm-hmm. organizations who are um Uh Like uh self sufficient. Right. It's just like how can this continue going?

Even uh Someone wasn't managing it. So like a great program, for example. Is My wife likes donating to women's education. We used to donate also to men's education as well. So you find these people in these villages, you say, Hey, you can't afford to go to school, get a degree, we'll pay for you to go to college.

go get a degree, come back. Teach kids in your village for a few years, whether it's under a tree or anything, people can learn anywhere, right? And then, you know, go move on with your life and do whatever you want, but at least you're giving back. to your own community. And what we found is when we started giving because we've been doing this for so long now.

Uh Well actually not that long. But when I mean long, I'm talking about like ten, eleven years where we've been donating. And it it's picked up quite a bit over the last like five, six years. When we started giving the money to men, a lot of the men we saw very low conversion rate from them actually coming back and teaching people in the village. Well, when we gave the money to women for their education, a lot of them came back. and fulfilled on the promise. Cause it's not like you get a sign contract, right? It's just like

Hey, we're gonna pay for everything, come back. Help people out within your village. Uh we've done this in both India and Africa. So different parts of Africa. And uh in India.

And then another program that we've done is like Growing Gardens. Where a lot of people who have AIDS don't take the right uh don't take their medication and aren't doing well. They're getting they're given the medication for free, but if your body doesn't have the right nutrients It rejects it. So what we'll do is we'll do programs like growing gardens, we'll give'em money

They grow food. And then not only do they uh eat nutritiously or Well they'll more likely take their medication. And you're also growing enough food so that way other people in the village can also uh eat.

I was like, but my wife picks all the causes. She vets him, she loves it. Like she'll go this is Wednesday in two days she'll end up going to a function Uh scouting out more non profits and organizations. I won't go.

Like, I think it's a waste of time. I'm like if I go make more money, she can donate it. It's a better ROI than if I go spend three, four hours mingling When she could just do that and I can go make more so that way we can donate more. Other than your own private businesses. What have been your best financial investments that allowed you to to donate and and

make a lot to to give away. Stock market has done really well. Companies like Apple, Amazon, Google, Facebook. I know Facebook's down, but they still have been a tear if you just bought the stocks early enough. Um,'cause some of these companies have grown thirty, forty percent a year and the public market's compounding, right? And it really adds up. Uh Angel Investments have done really well for me. And I would say Probably those are the two

Biggest. Um Stock market still has done well, although in the last six months I've taken a beating. Cause I'm in a hundred percent tech companies. Like I don't diversify. Like everyone's like, Oh, you need some oil and you need this and I'm like, Yeah, I'm just gonna go all tech. And people are like, Oh, you're silly, look how much you lost. But if you look at the whole Time when I first got in, I've done well and I invest in what I understand and I'm thirty seven, so who cares? You know, another ten years.

Everything should rebound, assuming you pick the right companies. What's your portfolio look like? In terms of percentages. Not including private businesses. My public portfolio I If I had a guess, it probably don't even have more than twenty stocks.

Amazon. I I I I won't be able to name them all, but Amazon, Google, Facebook, Apple, Microsoft. Uh hub spot, Salesforce, Adobe. Uh Atlassian, Shopify Um, I'm missing some as well.

And of your liquid of your own. Of your liquid net worth, how much is in public equities versus other Versus real estate else, yeah. Just non agency. If if if I think your agency is your agency the only company that you own a significant stake in? If yes, exclude that, then what's your portfolio look like? Uh no, I have quite a bit of other companies'cause it started using a lot of the cash to buy other companies for like three, four, five X EBITDA, and then you just fix them and grow'em and then just cash flow.

Um I would so if I look just at cash. Invest it in. Other companies that aren't mine. Like not companies I'm buying at or anything like that.

I would probably say eighty to ninety percent is in stocks. What companies were you buying? Uh any that we can find that we like. Like we bought Uber CS, it was a software company, bought it for a hundred and twenty, put three million into it. Um

It took I think less than Seven or eight months to get to a million a month in revenue? What? What's it called? Uber suggests? Hrust competitor. That one did well.

Uh we just bought another. A lady named Lisa. Crazy. And then we b we just bought another one. We haven't announced it. We bought it for eight point six I think a month ago, a month and a half ago.

Uh, so we'll see that it does uh a hundred thousand a month. Uh we think we can grow it within twelve months to probably like Four or five hundred grand a month in profit. So forget revenue, we just will look at it as a cash flow. So do you uh have rules around that like okay, I have to be able to grow it using Neilpatell.com or

Has to be in the marketing niche, so the agency benefits. No, it's like Would you buy like brick you know, like a fucking Laundromat or If I can grow it, I won't do too much brick and mortar, but I've invest in other people's brick and mortar. Like

I have a friend who does a lot of brick and mortar businesses. Um Like one of my buddies has A roofing company? And I was like oh cool, you can buy it for three X, it's good size.

And I can show you a few things and we can probably increase the profit by like sixty percent within twelve months. It's like it's just good cash flow, right? Like if you're getting like thirty, forty, fifty percent returns on your money. Right. And then you also have to keep in mind because of My My history and I've been doing this long enough.

I also can get that at really cheap terms and large amounts of debt. Like I can get deb at like three point six percent plus silver. So if I'm buying a business for five acts. In many cases because of the economics of my whole portfolio. You know, some businesses I put down, like on the one that was um

Eight point six. Two point six was uh paid over twelve or eighteen months or something like that. But we put six mil up front. I could have got a loan for it, but I was like, Yeah, it's just easier to put the six mil and not deal with the paperwork. But sometimes we'll just do loans on the hundred percent of it, but zero down. Right.

And what do you like, okay, so you do what you do now. So you have your time and it's pretty much probably fully allocated, let's say, to the agency and then some of these other things. Um If somebody was smart But didn't have your you have a bunch of visibility. You kinda know where the your industry's going. You see adjacent opportunities, but hey, I'm not gonna go do them. I don't have the time. Uh what are opportunities that you see that you think

Somebody listening to this. Who's just like Smart, hustler. Like So I got more time than I have ideas.

Um, I got more time than I have money. Where would you go if you were that person? What would you what would you suggest for them to look at as like, you know, opportunities that you see today? I would look for opportunities in anything that they're good at. And I know that's not the answer that you're looking for, but what I found that the issue is when people go look for opportunities that make some money. When you're not passionate, you don't put in the time and energy required to actually make it successful.

That's a big issue we see. Maybe some people have it in them where they can make something successful because they'll just tough it out, but most people we see will just quit. 'Cause they just hate what they're doing. And so but I think a lot of people don't know what they love to do. They don't have like they don't if they already had what they love to do, they wouldn't be, you know, looking for opportunities. So, you know Uh sort of like a by definition. problem there, right?

Who's thinking about okay, I don't love what I'm currently doing. I'd like to I wanna get to where this guy's at, but which is basically like seems happy and successful. Right. Um he he seems like he lo he said he loves what he's doing. I'd love to do that, but What if I don't know, right? It's like when my sister was going to college, my dad asked her, you know, she's like, What should I major in? He's like, I don't know, what's her favorite subject? And she was like lunch. Like you know, I don't I don't have a favorite subject. I don't love any of these subjects.

Um, so what am I supposed to do? Like am I just out? Uh you know, I'm just not one of those until you find what you're passionate about. Because if you try a lot of different things You'll typically find something that you're naturally good at. Usually what you're naturally good at, you'll also tend to favor in what you like. And then just double down on that.

Um, but if you're looking for industries with opportunities, I see a huge slowdown in e commerce. Not only see the e commerce market shrinking, I'm not saying that, but the growth in the e-commerce market isn't as what it was once used to be, right when COVID first kicked off. So you're gonna see the multiples go down to buy e commerce shops, D to C brands, right? So Great opportunity for buying.

And go fix'em up and grow'em and scale'em. Another great opportunity right now is Uh free. So I look at the whole software market as really Backwards.

Okay. In which Right now, it doesn't matter if you're a HubSpot or Canva, eventually someone can just create a Me Too company and just undercut you on pricing. And what I've learned is If you can create a software company that already has a brand that has a free product and you just make it really good for free and you just keep adding more and more to it. Um a great example of this is Photo P.

There's this company called Photope. It's uh Uh we love it. Oh shot. And it's like they make very little to no money. So I had up one of my buddies Who uh is great at outreaching and I told him I want photopee.

Offer him ten million, he said no, offered him twenty million, he said no. I can take Photo P make it a really good Canva competitor. Undercut'em on pricing, would ever be worth Ten, twenty, forty billion, whatever they are. No. But I probably can cash flow that thing to like

Four five million a month in Ebada. Right. It's like who cares what it sells for, what it's worth, but then I think you're saying make it free and you're saying it cash flows like a motherfucker. So what how do you take a free product and cash flow like a motherfucker? How would you explain that? Well he said he said a Canva uh a a Canva knock on. So you make You make almost ninety nine percent of it for free. You charge for one percent, but that one percent is enough where you can drive in the revenue. So you don't ever make as much as like a Canva or like um a MailChimp or a hub spot.

But hey, if you can make millions a month in profit, it's still good. What's your math there? So when what's the calculus when you were thinking so like Let's say Photo P according to similar web has ten million uniques a month or something.

What was your math? Is that right? Yeah, it is right. Yeah. We researched it. But yeah. But like what was your calculus to get to uh four million in Ebada a month? Like what would how many people would you need to run it and what was the what's the calculus there?

Sure, so I can probably get the thing from ten million visitors. I can so let's say I bought it for twenty. Right. He wouldn't sell it to me for twenty. Um, I've never outreached him, but I had a buddy outreach him for me who just Does all my outreach.

So let's say I bought it for twenty, I would put another ten into it, so now I'm out thirty million dollars. I'm really good at growing traffic and I know I can grow the team to roughly forty million unique a month. I just have a I don't know how, but for some weird reason I know traffic really well and how to calculate what I can get it to and all this kind of stuff, right? And I've done enough research of competitors of what features drive X amount of traffic. Just looking at so many competitors in the space.

So let's say if I get it to forty Um What is it called? Forty million. And what what one are the one or two things that you'd get at the forty million? Like SEO, basically. So uh more SEO, more virality, uh increasing the quality of the templates.

Increasing features. Uh adding AI in there like click a button we can automatically detect backgrounds remove it. Filters for social media,'cause a lot of people use them for social media. Logo generator website as a uh lead gen, shit like that. Right. So then so let's say you got it to forty million, right? At forty million.

I can easily monetize. Let's call it like One percent of the traffic. But let's be even more conservative, like a half a percent. Two hundred thousand people.

If I have two hundred thousand people hypothetically paying Three dollars a month. Okay. That's six hundred thousand. The reason I give you on average three dollars in certain countries you may want to charge different pricing, like India and stuff like that, so it's more affordable. So three dollars a month.

And at three dollars a month, if a customer stays for ten months, that's six million dollars. Can probably run the thing with less than a million, million and a half in burn each month. So then you think oh so then for a million and a half. Burn you would need to. Right? When you don't have tons of revenue, your burn is much lower on a monthly basis.

You're looking at thirty people you would need to run that operation. I I don't even think thirty, but let's say thirty total. So I think I can actually run the thing for under a million dollars. I'm on. Right. So I'm just trying to do the math in my head, but I mean under under a million two there.

It was like six hundred thousand or something. Right. Six hundred thousand a month, but if a customer stays for ten months, you're looking at six million dollars. Because you charge up front. No no no dollars a month If you have four

Forty million, not four million, but forty million, you're converting a half a percent. That's two hundred thousand paying customers a month. If they pay you three dollars a month, that's six hundred thousand. They last for ten months that's six million dollars a month in MR. Over a year you're making seventy two million dollars in revenue. That's crazy. You're a very interesting person.

You uh I just I think I dig you because you've got your hands so many different things. I honestly don't at this point. I don't want anything. I come up with ideas. I have really good operators who are great at execution. I'm like, go do this, it'll make money. Here's a playbook. Go and just do it. So how many businesses do you own? I don't know. I don't

Really count. Over or under ten. Over. Over under twenty. I don't know, Tony's probably getting close. So probably under if I had a guess.

And how many of those twenty how many of those th twenty companies have more than five employees? Full time employees. I don't know. I don't really count employee headcount. I only know my ad agency headcount because they do reports and I get in my board meeting deck. And you own a hundred percent of most of these companies, it seems like. You're not raising extra no capital

You might Do you give your CEO of really anything? Um, I always give equity to uh Profit share. I I usually have a partner who runs things will get equity and then I'll do profit share.

What's the uh ideal setup for profit sharing and equity for your partner? Uh, partner, give them maybe ten percent of the business. They run it plus a really nice salary. When I mean nice salary, industry or more than industry. Um, and then you have a pool for employees. Like another ten percent pole.

So then you lose in total twenty percent. I'm left with 80 myself. I put up all the money. If it does well, great. If it doesn't, I lose the money, no one else is on the line. Uh, if it does well, no one has to pay me back the money. Everyone just takes their distributions the moment it turns profitable from a monthly standpoint. Does that make sense? They don't actually have to pay back any of the other stuff. And then do you also do give them ten percent of the distribution, or do you make that even uh heavier? For them.

Uh yeah. Well, if if I'm losing twenty percent in total, which is my ideal structure, then twenty percent of the profits gets distributed on a monthly basis. That's crazy. I love hearing about this. What do you think, Sean? Yeah, I think it's dope. I um

I had just seen you kinda from afar for a while and I I I got I know Heaton, you know, loosely, like we're friends, but uh So you know, I I didn't know a lot of the story. I knew I knew Sam Sam has talked about you before on the pot, I think it's uh or maybe off the pot, I'm not sure. Sam had told me some cool stuff. Um, but I didn't know a lot of this. So for me, this was dope because I got to learn a bunch of new things. Uh sometimes when we have a guest, it's like, dude, I've already listened to

Ten of your things. I've been following you for five years, you know, so it's like I already know a lot of it and I'm Doing sort of like Translation work? For the audience. I'm like, tell them about this. Hey, tell tell them about that thing you did.

Uh versus in this, I I genuinely wanted to know a bunch of the stuff and I thought Yeah, uh That's interesting to me. Yeah, you're you're great. There's two people that I've wanted to talk to, Sean, who are like Neil, so I mean, there's Neil, so I want to Neil I I like finding these people that like are Doing really well and a lot of people know about, but there's also this whole other world of people who have no idea who they are. Neil, you're one of those folks. I've been I'm an OG reader, so I've known you forever.

The other one is Syed. So Syed, we've talked about Syed a bunch on here. Him and Neil I think are very similar, which is Very generous, but also like pretty cutthroat when it comes to business and has their hands in just dozens of different things and they're just quietly crushing it and not even talking about it. He's a very generous person too. I know. He has a school, I think in the same city I have a school in, or a different city. I don't know. He actually went to go see his school.

But uh really generous guy. Uh, him and I have built schools and third rural countries and stuff like that, Freddy. D you guys are I don't know if you're like this, Neil, but I know it seems like he's like this where he like has this uh you know software business that's making who knows tens of many tens of millions uh in revenue and probably that much in profit, but and he like buys a gas station.

Or like he like buy it just it's just like dude are you kidding me? Like you're a you're like a tech tycoon and you also own like thirty gas stations? It's just kind of funny. Here's the thing, some of those businesses sell for like three X Eva Da, you get thirty three percent returns on your money if you have good operators. And you can put technology in place in marketing and you can grow it to maybe fifty times I are.

That's great. It's just the question of can you scale it up and you can you do ones that are large enough. I know, I'm just saying it's cool that you know this stuff. That's what you're eclectic. Yeah, w uh him and I I shouldn't speak for him, but I'm a little off, right? But the The madness of the methodology I think is great for cash flow. It's terrible if you wanna be like, Oh, I'm gonna create the next Airbnb and take this thing public and be like

On the forms list, like It's not what I do. Is that are you motivated to become a billionaire? Wha what what's your motivation factor? Wha wh what are you motivated by? Well I won't ever be a billionaire. I'm not saying I have the opportunity to, but even if I did Uh I would never be there because

We donate our money. And when I mean donate, like not wait till you're dead to donate, like actually donate on an annual basis. How do you figure out how do you figure out how much you want to give uh 'Cause there's always like like when I think about it, I think like well I could also invest this money, it's gonna grow. I'm gonna give more later, but then I'm not helping somebody now. And so what's the right number, what's the right percentage basically for me to to be giving on an annual basis?

How do you figure that out for yourself? Whatever my wife wants to give. What per what percentage does that come out to? Uh we we don't have a percentage. Keep in mind businesses are so large I can get loans for anything on almost any type of business. I can't go buy a business for a million dollars or a billion dollars. But if I wanted to buy a business for a hundred million dollars, I can go get a loan on that.

Like literally for most of it. So I still I don't have to worry anymore about do I need more of it to invest? It's just Do we find the right causes and is it gonna make a big enough impact? That's more that's more about how we look about donations. We don't really look at it from the aspect of am I donating X dollars or too high of a percentage.

We look at it as do we actually think it's gonna make a big impact in the next year or short run or two years. We don't want to wait like Ten, twenty years. To see a impact.

We also don't want to put money towards like things like Cancer research. I think cancer is really important. I know a lot of people who have died from cancer. But I don't have enough money to make it bet into cancer versus Yeah. Solving some of the basic things out there like

I can make an impact on things like education in a region. I can't make an impact on cancer. I just don't have enough cash for that. Uh what is your school? Should I have a school? Sounds tight. I want a school.

Uh I never seen it. We have a squ I think it's in Cambodia and we've done a few others, but I don't really keep track. My wife does and You know? The bigger thing is it's not my school, it's more so the kids' school and are they learning and getting value from it and th

I remember the first school that I bought and forgot about. I was gonna say, um when I buy my school, it's for sure gonna be my school. They might attend. My school in Cambodia. I remember when I was on college campus, I saw like, you know, whoever the Rothschilds or like the Rockefellers uh nameplate or whatever on the like uh The the library at a at Duke Campus. I was like, Who would do this? Why what's the point of this? You know, like so it's already nice. Like little kids. I didn't understand the appeal until you said you basically described a school you have and forgot and have never visited, and I was like, Ah, that sounds like something I want. I don't want my name played on, you know, the the Villanova like 10th library on campus, but like

Just to know that there's, you know. Twelve kids in Vietnam attending my school. They're wondering. Why does this name have so many A's in it? You know, who is this who is this benefactor, silent benefactor who has forgotten where our school where the school is. That sounds like the perfect blend of giving And egomania that I live for. So that's perfect.

Neil, we uh we usually so we don't have guests on often and when we do, we typically never just ask them questions like this. We like it's more of a conversation where we're brainstorming stuff. We asked you tons of questions'cause you're just a very fascinating person. I hope you'll come on soon and you could actually brainstorm uh like the uh another uber suggests or something like that, you know, like actually go through some of this. I I I hope you'll come back again,'cause this is awesome. Yeah, it was so funny, I was doing the interview, I'm like, Oh crap, I should have never told people how much I spend a month, should have never told people I donate money. And I was just like

It it goes against a lot of what my wife and I do. We're more a Don't tell anyone anything, live our lives and Well you only told it because it's not like you're bragging. We like kinda begged you to tell the like we were kind of got under we were like, Yeah, tell us, go, go, tell us. It's not like you're like bra I don't think that's bragging. It's it's not even bragging, it just feels weird to talk about expenses, right? Because there's so many people who struggle for like clean water or shoes, right? Yeah.

Yeah, so this is interesting. Those people, uh, if they ever listen to this podcast, they've already been filtered out by our doucheness in other uh episodes. So don't worry, those uh anybody who's sensitive to that's probably gone by now. But also there's there's actually a lot of good like I I actually pretty passionately believe this, like not only am I curious from like a Ooh, I want to know. I want to learn. Uh but like

I actually pretty strongly believe that the way that people are like treat money is a pretty taboo thing. Um actually is like a net Like a huge net negative on most people. So like Yeah, people don't know what other people make.

Therefore, they don't know what like they don't know when they're underpaid. They don't know how what's possible. They don't ever like sometimes the most valuable conversations I have with somebody. It's just somebody for whom they do something like something's very normal to them. And it would be abnormal to me, but it has now expanded my worldview of what's possible and what could be normal for me. Like Oh, maybe it could be normal to actually like Give more, donate more, have a school. Actually that sounds

Like something I actually gonna go talk to my wife about today is like something we should go do. That like It's not because you you weren't bragging about it. You highlight you Just kind of We're honest about how you live your life, which is no n there's nothing wrong with that. That's that's great, I in my opinion.

And it expands other people's worldview for Something that maybe they want to go do or something that they haven't considered. And like it's really weird to me that we keep the stuff under wraps and if somebody's just honest. About like the way they live their life. It's sort of like There's like all these like negative taboo around it and like fuck that. I don't like that at all. And um

It it's been like When it when Sam first met me, I think this I think I've told the story before, but like the second day I met him and then like the next day he messaged me on Facebook Messenger was like So like how much do you make? And he was like, No, like what do you pay stuff? He's like, So then what do you and then I like I was like wow, that's like super forward And he's like but he told me why. He was like,'Cause I'm trying to figure out how much to pay myself as an entrepreneur. I have no fucking clue.

And like my investors think I should make this much, but I don't know if is that normal? And like I can kinda ask you and dance around it or like I'm just asking like five friends what they make in in the same role as I am. It's like startup CEO and like That'll help me figure out what's normal, what's the range of like possibilities here. And then after that he was like

So what do you do with the money? Like where do you invest? He's like, Well, that's a lot like W uh are you investing that? I was like, Yeah. What are you investing in? I'll start telling and he's like Cool, I'm investing in this. And now I got new ideas about what I could be investing in. I it really became very obvious to me in that moment. I was like

Oh shit, you're at a massive advantage if you have a few people you trust that you can talk openly about this sort of thing with. And the podcast was basically taking that and doing it at scale. It was like all right, well What if me and Sam were pretty honest about like the shit we do? And like what if we could get guests to be honest about the shit they do? Like that's actually a pretty valuable resource for people who don't have five they don't happen to have that lucky

Group of five friends who were all Motivated entrepreneurs who are also open and honest about what they do. It's like, well, not everybody's located in a place Where they have five people geographically around them that they can trust to talk about that stuff. And so the pod kinda like serves as that. So that's my uh justification for why you shouldn't feel bad about about sharing that information.

Do you did it work, Neil? Do you do not feel bad? But if you want, we'll bleep it out or whatever. If if you feel like that, too. Okay, it is what it is. I still feel bad, but it is what it is. I thought it was a great speech, Sean. I I I felt good about that. Thank you, Neil. No, it was a great speech, but I I I I I still feel bad because I look at money as like a tool to help other people, and I'm not saying that's right or wrong. That's how I just do, but I also know I spend more than I should. Um, and I probably should cut back and live a more humble life and spend a lot less. Yeah, dude, I'm inspired by how you spend and how you live, and it uh you know, you've done some good in the world by inspiring me.

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