0:00:06 Today’s episode of YAP is sponsored in part by Rakuten, Factor, Robinhood, Airbnb, Shopify,
0:00:08 Rocket Money, and Indeed.
0:00:13 Get the Rakuten app now and join the 17 million members who are already saving.
0:00:14 Cashback rates change daily.
0:00:17 See Rakuten.com for more details.
0:00:20 Eat smart and fuel your wellness goals with Factor.
0:00:26 Get started at www.factormeals.com/factorpodcast and use Code Factor Podcast to get 50% off
0:00:29 your first box plus free shipping.
0:00:34 With Robinhood Gold, you can now enjoy the VIP treatment, receiving a 3% IRA match on
0:00:36 retirement contributions.
0:00:43 To receive your 3% boost on annual IRA contributions, sign up at robinhood.com/gold.
0:00:48 Hosting on Airbnb has never been easier with Airbnb’s new co-host network.
0:00:52 Find yourself a co-host at Airbnb.com/host.
0:00:56 Shopify is the global commerce platform that helps you grow your business.
0:01:01 Sign up for a $1 per month trial period at www.shopify.com/profiting.
0:01:06 Rocket Money helps you find and cancel your unwanted subscriptions, monitors your spending,
0:01:08 and helps lower your bills.
0:01:12 Sign up for free at www.rocketmoney.com/profiting.
0:01:15 Attract interview and hire all in one place with Indeed.
0:01:19 Get a $75 sponsored job credit at www.indeed.com/profiting.
0:01:21 Terms and conditions apply.
0:01:29 As always, you can find all of our incredible deals in the show notes or at youngandprofiting.com/deals.
0:01:34 If you’re in the driver’s seat and refuse to coast through life, this is Young and Profiting
0:01:40 Podcast where you get actionable advice to level up your life and business.
0:01:45 I’m the podcast princess Halataha, the host of Young and Profiting Podcast, and I invite
0:01:50 you to join the YAP BAM to uncover the secrets of some of the most brilliant entrepreneurs
0:01:53 on the planet, from digital pioneers like Gary Vee.
0:01:58 The reason people burn out is because they choose money, not entrepreneurship.
0:02:01 To creative visionaries like Jenna Kutcher.
0:02:07 I built a million-dollar business because I now have time to be creative again.
0:02:10 Sales experts like Ryan Sirhant don’t sell.
0:02:14 Bad salespeople are people who watch a pot boil water.
0:02:19 And even movie stars like Matthew McConaughey keep confident with who you are.
0:02:24 In Young and Profiting, we focus on the things that will help you win in business and life,
0:02:28 like marketing and sales strategies, rather than trying to cut the price, just increase
0:02:31 the value, psychology and human behavior.
0:02:34 People like those who are like them.
0:02:38 And of course, hot topics and cutting-edge technology like AI.
0:02:44 If you’re not informed of AI today, it is a bit like a hurricane approaching your city
0:02:49 or village and you’re sitting at a cafe saying, “I’m not interested.”
0:02:53 Whether you’re side hustling, starting out, or scaling up, Young and Profiting will help
0:02:58 you uncover the secrets of entrepreneurship, the real stories behind the scenes, and the
0:03:03 insights and strategies you need to build your own success story.
0:03:08 If you’re ready to listen, learn and profit, subscribe to Yap, Young and Profiting podcast
0:03:11 on Apple, Spotify, or wherever you listen to your podcast.
0:03:15 [MUSIC PLAYING]
0:03:17 you

0:00:05 So that was the first Golden Goose, and then you said you started stacking geese like a rapper, you know, at the club.
0:00:06 So what’s the second geese?
0:00:08 I hope that becomes a term that we can use stacking geese.
0:00:09 Yeah, stacking geese.
0:00:10 We got to get some shirts, baby.
0:00:11 Goose over merch, baby.
0:00:12 Hey, merch guy.
0:00:25 So Brent runs Permanent Equity.
0:00:27 You started off as a founder.
0:00:29 You started buying companies.
0:00:32 And you then started raising money to buy companies.
0:00:35 So you raised like something like 50 million bucks for your first fund.
0:00:37 You started buying companies with that.
0:00:41 Then a couple of years later, you raised about $250 million to buy more companies.
0:00:49 And now you own, I don’t know, something like 16 companies that do over $350 million a year of revenue.
0:00:56 And I believe what you said was $50 million of free cash flow out of the portfolio now, which is pretty incredible.
0:00:57 So that’s who you are.
0:00:58 That’s what you’re bringing to the table.
0:01:00 And I think, Sam, what do we want to go with this?
0:01:02 Because we could ask you about buying businesses.
0:01:06 I have some questions around that, but I kind of want to start with something light before we go into like,
0:01:09 “Hey, can you teach me how to be private equity, please?”
0:01:11 Yeah, we can do the light stuff.
0:01:17 You also, you’ve got the, we call it the all shucks, Warren Buffett attitude, where you’ve got a list of one-liners.
0:01:19 You write amazing annual reports.
0:01:20 You’re a great writer.
0:01:23 So we have a bunch of one-liners that we want to ask you about as well.
0:01:24 Sounds good.
0:01:27 What, can you tell me what’s the, what do you buy and what are the biggest companies?
0:01:29 Do you buy like pool companies and HVAC companies?
0:01:34 Yeah, I mean, we typically, we’ve got everything from a children’s clothing brand to a military recruitment firm,
0:01:37 to manufacturing, construction, business services.
0:01:38 I mean, it’s really the 16 companies.
0:01:42 It’s a, you know, it looks like the island of misfit toys.
0:01:46 For us, they’re, they’re companies that we love the people who we get to work with.
0:01:48 They’re in industries that we feel like are not going to be changing.
0:01:51 And we can talk about how some of them maybe look like high change,
0:01:55 especially like the children’s clothing would seem high change on the surface,
0:01:57 but it’s actually not.
0:02:00 And yeah, we try to partner with them for a long time.
0:02:02 What’s the biggest one in terms of revenue and profit?
0:02:04 Let’s see, our, in terms of revenue and profits,
0:02:08 probably our fencing business out of Dallas, Texas is probably the largest.
0:02:12 So we, we have a big market share in the, in the Dallas market.
0:02:16 And yeah, it’s a, it’s a, it’s a pretty sizable business.
0:02:21 Do you guys remember when marketing was fun?
0:02:26 When you had the time to be creative and connect with your customers with HubSpot,
0:02:28 marketing can be fun again.
0:02:31 Turn one piece of content into everything you need.
0:02:35 Know which prospects are ready to buy and see all your campaign results in one place.
0:02:41 Plus it’s easy to use helping HubSpot customers double their leads in just 12 months,
0:02:45 which means you have more time to, you know, enjoy marketing again.
0:02:48 Visit HubSpot.com to get started for free.
0:02:51 I was going to ask you a similar question.
0:02:55 Like, you know, people are always like, you can’t pick a favorite kid.
0:03:00 And as an investor, you can, you have this portfolio and like some are better than others.
0:03:01 And that’s okay.
0:03:05 It would be weird if all of your companies were equally successful investments.
0:03:06 I wouldn’t believe you.
0:03:09 And so what’s like the golden goose for you?
0:03:12 So which one is like, like, I know in my portfolio, right?
0:03:15 I have like, I have like a mini version of what you do where we have like four or five companies
0:03:18 that we kind of have either bought or own a big stake in.
0:03:24 And I could tell you, I’d be like, oh, this is like for us, like the somewhere.com business was like my golden goose.
0:03:29 Partly because I got in on a great price, but also the business tripled since we bought it.
0:03:32 And it’s just this business that just spits out cash flow.
0:03:36 And it’s like the market keeps growing for this people need this.
0:03:38 And so for us, that’s been the golden goose.
0:03:41 It just keeps laying a golden egg every single month for us.
0:03:43 What’s the golden goose in your portfolio?
0:03:48 Oh, we’ve been fortunate to actually like we’ve kind of stacked golden geese on one another.
0:03:49 That is how I would describe it.
0:03:56 So the very first business I bought is called Media Cross is a military recruitment firm bought that in very early 2010.
0:03:57 Explain in layman’s terms.
0:03:59 What does that even mean military recruitment firm?
0:04:00 What’s happening?
0:04:00 Yeah.
0:04:04 So we at the time worked with two branches of the military.
0:04:06 Now we work primarily with one.
0:04:07 We had two contracts.
0:04:15 One was to recruit civilian mariners into a division of the Navy called military seal of command that resupplies the ships that never came into port.
0:04:20 So it’s about 1400 to 1800 civilian mariners a year or recruited into that division.
0:04:21 That’s our responsibility.
0:04:27 So we do all of the marketing and recruitment efforts and then the processing to bring them into that branch of the military.
0:04:30 Does that mean like you’re out you’re out on the street with people?
0:04:33 Or does that mean you’re running ads and you own like a lead gen website?
0:04:34 All of that stuff.
0:04:36 Yeah, but we’re doing we’re doing lead gen.
0:04:38 We have a whole processing center.
0:04:40 We’re actually doing qualifications for these people.
0:04:43 So it’s a complete soup to nuts operation.
0:04:48 And the government just pays you per recruit or how does that work?
0:04:54 Yeah, we’re on a fixed contract that escalates every year based on the staffing and needs of the business.
0:05:01 So we it’s basically a staffed contract and then we have sort of a built-in profit margin that’s on top of that.
0:05:04 What do you get per recruit or per referral for one of these things?
0:05:07 Oh, gosh, I don’t even know because we’re not we’re not based on that, right?
0:05:13 So we’ve done this for the contract is we’ve had it as a business for 30 years now.
0:05:14 It’s been forever.
0:05:18 And I mean, we’re so deeply embedded into what they do.
0:05:19 We know exactly what it takes.
0:05:23 We I mean, we are the outsourced function of that piece of the military.
0:05:25 And why is that business great?
0:05:27 Is it because you got this cash flow, but you have this contract.
0:05:31 You have the certainty and defensibility with that.
0:05:32 Is that what’s great about that?
0:05:33 Yeah, yeah.
0:05:38 I mean, so like for the most part, we know what our profitability is going to be in three years from now, right?
0:05:41 And so once you get that business optimized and you get great people in place
0:05:46 and the leader of that business we’ve had, I mean, she’s been with the business since the very beginning.
0:05:48 So we’re 15 years into the relationship.
0:05:50 She’s doing a great job and it just it clicks.
0:05:55 So that was that was I would call the original Golden Goose that allowed me to pay back the SBA.
0:05:58 I’ve heard you say you accidentally bought your first business.
0:06:00 Is that what you meant when you say you actually what does that even mean?
0:06:01 How do you accidentally buy a business?
0:06:05 Yeah, I got a call from a guy and he was like, hey, I want to introduce you to this guy.
0:06:07 He’s it’s your he’s in your industry.
0:06:14 You know, he said marketing marketing because I’d launched a call it an ad agency for all intents and purposes before then.
0:06:15 And he was like, hey, he’s in your industry.
0:06:17 She gets to know him and I said, OK, great.
0:06:22 And he’s like, oh, by the way, the guys he’s got left at the altar for the second time trying to sell his business recently.
0:06:25 And I was like, oh, OK, I guess I could take a run at it.
0:06:26 I had no idea what I was doing.
0:06:30 I was 24 at the time.
0:06:31 No idea what I was doing.
0:06:36 And I sat in front of this guy and and you know, we talked about it and we negotiated and he said,
0:06:38 I would never sell it to you for the price you asked for.
0:06:39 And I was like, that’s fine. No problem.
0:06:41 And I didn’t talk to him for seven months.
0:06:45 And then seven months later, he called me up out of the blue and said, just renewed our largest account.
0:06:47 Business is in great shape.
0:06:48 I’m exhausted.
0:06:49 I’ll give it to you for the price you asked for.
0:06:52 But you got to close all cash 60 days from now.
0:06:57 And it was one of those where you kind of like you make the sale on the go down the elevator and you say, oh, shit.
0:06:58 It was it was like that, right?
0:07:01 And I remember getting off the phone and I was like, oh, crap.
0:07:03 Like I just obligated myself to go buy like buy a business.
0:07:05 I have no idea what I’m doing.
0:07:07 Did you know anything about digital marketing?
0:07:07 Oh, yeah.
0:07:10 I mean, we had we had we did digital marketing work back then.
0:07:11 You have a marketing agency.
0:07:14 You stumble into this business.
0:07:17 You’re like, maybe somebody tells you there’s a chance to buy it.
0:07:18 You’re like, all right, I could try.
0:07:20 He says no to the first price.
0:07:21 He comes back.
0:07:22 You’re not even following up.
0:07:25 He comes back and says, hey, still interested, but you don’t have a lot of money.
0:07:26 You’re 24 years old.
0:07:29 So you go to the SBA and you get an SBA loan for this thing.
0:07:30 Yeah, correct.
0:07:33 Yeah, I asked my newly married wife to sign a personal guarantee and she was like, what’s that?
0:07:34 And I was like, God, don’t worry about it.
0:07:35 A big deal.
0:07:36 You’re like, good news and bad news.
0:07:39 Good news, no prenup, but you do have to sign this other thing.
0:07:40 Yeah, exactly.
0:07:42 She was like, what happens if this doesn’t go well?
0:07:43 I was like, it’s probably not going to be great.
0:07:45 Um, so yeah.
0:07:47 So somebody’s never done an SBA loan.
0:07:48 What can you explain?
0:07:50 Just like you put down X, you get Y.
0:07:52 What’s how it all works.
0:07:52 Yeah.
0:07:55 Back then, um, so the requirements have changed a little bit.
0:07:57 I think it’s like five or 10 percent you have to put down now.
0:08:00 And I think you can actually qualify with seller financing.
0:08:01 I’m not an expert anymore on the SBA.
0:08:06 I’ve only done the SBA one time and that was literally 15 years ago back then.
0:08:09 What I did was I count, uh, leveraged the accounts receivable from the existing
0:08:13 business as the down payment and then got the rest of the debt through the SBA.
0:08:16 And so, I mean, I put very little cash into the deal.
0:08:18 So you put basically zero down.
0:08:24 I mean, it was a, it was a lot of my, my money, but it was just tied up in other assets.
0:08:28 But yes, I mean, in terms of actual cash that was coming out of my pocket was not a lot.
0:08:29 I didn’t have a lot of cash.
0:08:34 Um, and so, um, yeah, I ended up asking my buddy at the SBA.
0:08:35 It was, it was part of an SBA lender.
0:08:38 I said, Hey, do you guys do like expedited SBA loans?
0:08:40 And he was like, not really, uh, we don’t do that.
0:08:42 And I was like, well, I need it in 60 days.
0:08:43 And he was like, that’s really not possible.
0:08:45 And I was like, can we make it possible?
0:08:46 Like let’s try.
0:08:49 How much, how much are you talking that you had to borrow?
0:08:50 It was a million bucks.
0:08:51 Yeah.
0:08:51 It was a million dollars.
0:08:57 And was this like your C’s candy, like Buffett bought C’s candy and it’s returned like
0:09:01 a billion dollars in free cash flow or more than that to the, to the headquarters over
0:09:03 the last whatever 50 years or whatever it’s been.
0:09:05 It’s, it’s, it’s like a 20 Xer.
0:09:06 Yeah.
0:09:07 So that’s amazing.
0:09:09 So that was the first golden goose.
0:09:13 And then you said you started stacking geese like a rapper, you know, at the club.
0:09:14 So what’s the second geese?
0:09:16 I hope that becomes a term that we can use.
0:09:16 Yeah.
0:09:17 Stack and geese.
0:09:19 We got to get some shirts.
0:09:24 Hey, merch guy, you know, like Rogan has like Jamie.
0:09:27 I kind of have this like fictional studio in the room.
0:09:28 I’m like, pull that up.
0:09:30 Hey, much guy, get on that.
0:09:30 Like there’s nobody here.
0:09:31 Merge guy, yeah, yeah.
0:09:32 Merge guy.
0:09:35 Um, yeah, I mean, I knew, I knew so little back then.
0:09:38 I remember my lawyer said, okay, we got to start due diligence.
0:09:40 And I literally typed into Google D O diligence.
0:09:42 Like due to like, I had no idea what it was.
0:09:45 Um, and I was, I was like reading about it as he was talking to me.
0:09:46 I was like, Oh yeah, we just asked questions.
0:09:47 Like how hard can that be?
0:09:51 Um, so anyway, uh, it was quite the adventure.
0:09:53 That’s amazing.
0:09:57 Yeah, another, another anecdote on that deal was a week before closing.
0:10:02 I said, okay, so I take all of my money and I give it to you.
0:10:03 You take all the money out of the business.
0:10:04 Like how do I make payroll?
0:10:08 And the guy was like, well, you obviously got a line of credit on the
0:10:08 business, right?
0:10:11 And I was like, no, I didn’t, I didn’t do that.
0:10:14 And he was like, well, the business is going to go under immediately.
0:10:16 And I was like, yeah, that’s not good.
0:10:17 What do we do?
0:10:20 And he was like, well, you got to figure this out because you’re getting
0:10:21 ready to close on the business.
0:10:23 And I was like, can I get a loan from you?
0:10:28 So he actually lent me money to, as a line of credit to keep the business operating.
0:10:30 Cause I didn’t even, I didn’t even think about it.
0:10:32 I didn’t think about like, Oh, well, he’s going to take all the money and
0:10:34 there’s not going to be any cash to operate the business.
0:10:38 I was, um, I was with this guy this weekend and he was like, Hey, should
0:10:39 I start my own business?
0:10:40 You know, I’m 28.
0:10:42 I don’t think I have enough experience though.
0:10:45 And I was like, yeah, I’m pretty sure like a lack of experience isn’t like,
0:10:47 hasn’t stopped a lot of people.
0:10:50 Uh, you can kind of be like a kind of a dummy and get into it.
0:10:53 And you’ll probably learn in like six months and you are a good example of
0:10:53 that.
0:10:55 You don’t really need to know much.
0:10:56 Huge dummy.
0:10:57 Exactly what I think about myself.
0:11:02 And like the lean manufacturing part, uh, like kind of philosophy, they
0:11:04 have this idea of like just in time, right?
0:11:07 You, you, you do things just in time versus doing everything ahead of time.
0:11:10 And so just in time learning is basically what you did.
0:11:12 It’s like, Oh, when I need to close, then I figure out what due diligence is.
0:11:16 Then when I need to take over the business, I learned what working capital is.
0:11:19 And you just, you learned each of the core concepts as you needed them,
0:11:22 which is actually the real way that people learn rather than I’m going to
0:11:23 learn everything up front.
0:11:26 Then I’m, then I’m fully prepared to now to go do this.
0:11:29 And like in reality, that’s not how, how life works.
0:11:29 Yeah.
0:11:31 And sometimes it doesn’t work out.
0:11:34 And I, you know, I joke that I’m a force come private equity for a reason.
0:11:34 So.
0:11:35 What else do you own?
0:11:36 That’s awesome.
0:11:37 Yeah.
0:11:40 So the next business we bought, uh, was a, as a pool business out in Arizona.
0:11:44 Um, and that was, uh, just with, uh, again, started occurring cash and, um,
0:11:46 started building that up and, and bought that business.
0:11:49 And again, that one turned out to be, uh, uh, great investment as well.
0:11:53 You say, you say that nonchalantly like, Oh, a pool business, but it’s also like,
0:11:54 dude, that would be really random.
0:11:55 I don’t think about pool businesses.
0:11:57 Nobody shows me a pool business.
0:11:57 So what were you doing?
0:11:59 You’re talking to brokers.
0:12:00 Where does that deal come from?
0:12:02 Like for you at that time.
0:12:03 Yeah.
0:12:04 So it was about, so let’s see.
0:12:08 So I had no idea I was doing after I bought the business, the meaty cross in 2010.
0:12:09 I was like, Oh, that worked.
0:12:12 Uh, I should do more of what works and less of what doesn’t at the time.
0:12:15 There wasn’t a lot of writing on the internet about this.
0:12:18 Um, so I mean, there was a little bit of, uh, stuff out of the Harvard,
0:12:21 a little bit out of Stanford around search funds, but there was very little
0:12:22 activity online.
0:12:24 And so, uh, I was like, well, I just need to ask ground was like,
0:12:26 are there other people doing this?
0:12:29 I didn’t even literally know that there was a thing called private equity.
0:12:30 That’s how little I knew.
0:12:33 I mean, I started, somebody was like, Oh, you did a private equity deal.
0:12:34 And I literally Googled private equity.
0:12:37 And I was like, turns out there’s a whole industry of people to do this.
0:12:38 Like, why would they not do it?
0:12:40 Like in smaller companies.
0:12:42 And, uh, that was my foray into it.
0:12:46 And so at that point we said, okay, well, if we’re going to go find other
0:12:47 businesses, I mean, how hard can it be?
0:12:48 This one just came to us.
0:12:51 There must be just tons of businesses out there just floating around ready
0:12:53 to be, uh, ready to be bought.
0:12:56 And so we started reaching out to people and developed deal pipeline.
0:12:59 And one of the deals that took us so that, that pool deal we first
0:13:02 saw in 2012, I want to say.
0:13:05 Um, and it took us about three years to get the deal done.
0:13:09 And, um, it was just hanging around the hoop and they actually went
0:13:13 with two other buyers before us and ultimately had a good relationship with
0:13:17 them and so the time between deal one and deal two was three years.
0:13:19 It was, uh, five years.
0:13:22 Sean, isn’t it crazy how long things take?
0:13:24 Like Brent’s like a Brent’s a big shot right now.
0:13:26 Like, you know, people know you and you like, you’re talking
0:13:28 about hundreds of millions in revenue.
0:13:31 But you started this in like 16 years ago.
0:13:35 Like that’s a, I mean, it’s a huge success and everything, but it like
0:13:39 really goes to show you that like you have to grind for, or at least
0:13:41 be consistent for a decade plus.
0:13:42 Oh, absolutely.
0:13:45 No, I mean, I, I say to people all the time, like if I had been given
0:13:49 $50 million to invest in like 2010, I like, I would have lost all the money.
0:13:53 Like it just took so long to build up, like to make a bunch of mistakes,
0:13:56 make a bunch of mistakes that were low stakes, felt like high stakes
0:13:59 at the time that were low stakes, uh, in order to be able to, to, to warrant
0:14:00 having more resources.
0:14:02 And so yeah.
0:14:05 So at some point, somebody did give you $50 million.
0:14:07 How’d you get somebody to give you $50 million to go by companies?
0:14:08 Cause I’d like that.
0:14:09 Yeah.
0:14:11 Uh, well, so, uh, funny story.
0:14:16 I met this guy named Patrick on the internet and, uh, literally he put out a
0:14:17 tweet, Patrick or Shaughnessy put out a tweet.
0:14:20 And this is when he was like an analyst at, at his dad’s firm.
0:14:22 And he put out a tweet about capital allocation.
0:14:23 I responded.
0:14:25 I was like, yeah, I can hop on the phone and talk about capital allocation.
0:14:27 I didn’t really understand when he was even asking.
0:14:30 He was asking about public markets, like capital allocators
0:14:32 and public markets, but I, I didn’t know much.
0:14:34 And so I just reached out and said, yeah, sure.
0:14:34 Let’s talk.
0:14:36 We get on the phone and he’s like, so what do you do?
0:14:38 And I was like, Oh, I buy these, these small businesses.
0:14:39 He’s like, well, how much do you pay?
0:14:42 And I was like, I don’t know, like between three and five times.
0:14:43 And he was like, what?
0:14:46 Like, are these businesses going out of business?
0:14:49 Like, are these, are these going under or these distressed?
0:14:50 I was like, no, these are healthy businesses.
0:14:51 And he’s like, I’ve never heard of this.
0:14:52 What is this?
0:14:54 And so we talked like two or three more times.
0:14:57 And then he said, well, can I come visit you in Columbia?
0:14:58 And I said, sure.
0:15:00 So he flew to Missouri and we spent a day together at the end of it.
0:15:03 He said, like, I want my family to invest in what you’re doing.
0:15:04 Like, I believe in what you’re doing.
0:15:07 And I said, sorry, like, we don’t take outside capital.
0:15:10 Like, I’m not going to do a two and 20, 10 year fun life.
0:15:14 Looked at that, don’t want to do a holdco and value the current assets and,
0:15:17 you know, get saddled with a bunch of partners that don’t know who they are.
0:15:18 Like life’s good.
0:15:22 Like we’re making a bunch of money and compounding and like everything’s fine.
0:15:24 And he asked me the question.
0:15:28 No one else had asked me because we flirted with some family offices to that point.
0:15:32 And and he said, well, what would it take for you to take our capital?
0:15:35 And I said, well, I don’t know.
0:15:37 And he said, well, why don’t you figure that out and get back to me?
0:15:38 And I’ll tell you if we can do it or not.
0:15:42 And so I whiteboarded out our current structure, which is like kind of
0:15:43 the opposite of traditional private equity.
0:15:46 So we take no fees of any kind, no reimbursements of any kind.
0:15:51 There’s no cash that comes from the portfolio companies or from the LPs to the GP.
0:15:55 Outside of we take a percentage of free cash flow above a hurdle as we return cash back.
0:15:58 You got to redo that last 20 seconds.
0:15:59 Can you dumb that down a little bit?
0:16:01 I got you, Sam.
0:16:05 He’s the guy working in Cinnabon that doesn’t touch any of the Cinnabons.
0:16:08 So he’s in an industry where everybody’s like feeing up everywhere.
0:16:11 They’re just getting high on the sugar and he’s like, I’m good.
0:16:12 I don’t need that.
0:16:18 Can we only do Cinnabon references or analogies because that was much easier.
0:16:20 They’re talking about hurdles and sprinting and whatever.
0:16:25 Yeah.
0:16:26 Well, so okay.
0:16:33 So traditional private equity, you raise a fund and you get 2% of the amount every year and 20.
0:16:35 Every year, by the way, you get 2%.
0:16:38 So which is actually like getting 20% of the total.
0:16:39 Correct.
0:16:40 Every year for 10 years.
0:16:41 Which is kind of insane, right?
0:16:42 It’s insane.
0:16:47 I mean, people in private equity get paid well because it’s hard to do and not many people can do it.
0:16:48 And it’s a rare skill set.
0:16:53 And yeah, I mean, it seemed high to me when I first looked at it, but I was like, okay.
0:16:54 Well, that’s the market for it.
0:16:55 So whatever.
0:16:59 And I said, I don’t need the fees because I’m already paying for the team and the overhead and everything.
0:17:01 And so I don’t need the cash flow from the fees.
0:17:03 Just I want it to be entrepreneurial.
0:17:06 If we make money, like we want to share in that making it together.
0:17:11 And so that’s our model and we don’t use debt and we hold it for a very long time.
0:17:13 So we have a 30 year initial term on our capital.
0:17:22 Typically a private equity firm will have 10 years and most private equity firms, you know, use a lot of leverage, put a lot of debt on the businesses at closing.
0:17:23 We typically use no debt.
0:17:27 And so we’re kind of in some ways the opposite of traditional private equity.
0:17:29 And yeah.
0:17:32 So I went back to him and I said, Hey, this is the structure that I think would work that we would take capital.
0:17:35 And he and Jim, his father said, okay.
0:17:36 Wait.
0:17:36 So I think I missed it.
0:17:38 What, what did you do as the carry then?
0:17:43 So you said, okay, no, no, no on the 2% fees, but what did you do for the profit share?
0:17:44 Yeah.
0:17:50 So we get 40% of the, of the free cash flow of businesses as we return it back to the investors.
0:17:53 So you don’t, you don’t have to return all the money upfront first.
0:17:55 You just start participating from day one with 40%.
0:17:56 Correct.
0:17:57 Correct.
0:17:58 But it’s only on what we returned back.
0:17:59 Only on what you returned back.
0:18:00 Okay.
0:18:00 Great.
0:18:02 And then you said you use no debt.
0:18:04 Correct.
0:18:04 Yep.
0:18:05 So these are completely unlevered.
0:18:09 They’re buying all cash, all cash deals using equity from day one.
0:18:10 Why don’t you use like a little bit of debt?
0:18:13 Probably like a little bit of debt.
0:18:13 Yeah.
0:18:16 Just, just, just a little bit of debt.
0:18:16 It’s not a big budge.
0:18:19 Just, just a little icing on top of the Cinnabon.
0:18:19 Yeah, exactly.
0:18:20 Just this one time.
0:18:24 You don’t even do seller notes like nothing.
0:18:26 We will occasionally do some seller notes.
0:18:31 Although we found that having the people that you work with be your creditors is not an
0:18:33 ideal situation often.
0:18:35 So we’ve really shied away from that as well.
0:18:36 Yeah.
0:18:40 No, we typically just close all equity and try to keep things just super simple.
0:18:44 I mean, we think that, that, that transitioning small businesses is a difficult and it’s
0:18:45 pretty stressful on everyone.
0:18:49 We can always lever them up after, you know, after we close, although we haven’t really
0:18:49 done that.
0:18:52 And it’s that strictly like a lifestyle choice.
0:18:55 You’re just saying that just helps you sleep better at night.
0:18:55 Yeah.
0:18:59 Is it a financial decision or a peace of mind decision to not use debt?
0:19:00 I think it’s both.
0:19:05 What I would argue is that the optionality that we have in doing some pretty interesting
0:19:09 things with these businesses to grow them is much better when you don’t have debt,
0:19:12 when you’re not paying all the cash to, to a bank.
0:19:13 I’ll give you an example.
0:19:17 So we bought an aerospace business in 2019 called Pac Air.
0:19:20 And I don’t know if you guys know this, but the aerospace business never goes down.
0:19:23 It always just goes up in the history of the industry.
0:19:24 Never really has a problem.
0:19:29 And I remember when we were closing that deal, one of the advisors to the seller
0:19:30 said, are you guys idiots?
0:19:33 Like this business does never go down.
0:19:34 Why wouldn’t you guys lever the thing up with debt?
0:19:36 And we said, Hey, here’s our philosophy and all the stuff.
0:19:40 Well, it’s not like we actually knew what was coming down the pipe, but 2020 hits and
0:19:44 we were literally the only business out there without debt on it, like literally.
0:19:47 And so we were able to take all the cash flow that we were generating because we were
0:19:51 still generating cash flow, even though the business was down a lot, and we were able
0:19:53 to go out and basically make 10 years of progress in two years.
0:19:58 And that business now is seven-ish times the size is when we bought it.
0:20:02 And everyone else that had debt is, you know, maybe grown a tiny bit out of
0:20:04 from 2019, but not much.
0:20:06 And so it’s really been a transformative experience.
0:20:08 We’ve had that happen over and over again in these businesses.
0:20:11 Like we never know what the future is going to hold, but we know that there’s going
0:20:14 to be options to invest in really interesting things.
0:20:16 If the cash flow is all going to the bank, you don’t have that option.
0:20:18 Right, right.
0:20:20 I’m going to still use a little bit of debt, but I think that’s good.
0:20:22 Can I ask one question?
0:20:22 Never hurt anybody.
0:20:27 We’ve had a bunch of people come on this podcast and I’m always like wowed by
0:20:28 their insights, their personality.
0:20:32 I feel this way about you and so many people that have come on this podcast where
0:20:34 I walk away being like, that guy’s the man.
0:20:36 Like that person’s a master of what they do.
0:20:37 They’re kind of a master of the universe.
0:20:38 This is great.
0:20:40 And it’s so easy.
0:20:44 And it’s so easy, but I and forget the easy part for a second.
0:20:46 I’m just like, wow, that really works.
0:20:47 And it makes sense what they said.
0:20:52 They’re, they’re kick-ass my friends.
0:20:55 If you like MFM, then you’re going to like the following podcast.
0:20:57 It’s called a billion dollar moves.
0:21:01 And of course it’s brought to you by the HubSpot podcast network.
0:21:04 The number one audio destination for business professionals.
0:21:05 Billion dollar moves.
0:21:07 It’s hosted by Sarah Chen Spelling.
0:21:11 Sarah is a venture capitalist and strategist and with billion
0:21:14 dollar moves, she wants to look at unicorn founders and funders.
0:21:17 And she looks for what she calls the unexpected leader.
0:21:21 Many of them were underestimated long before they became huge
0:21:22 and successful and iconic.
0:21:25 She does it with unfiltered conversations about success,
0:21:27 failure, fear, courage and all that great stuff.
0:21:30 So again, if you like my first million, check out billion
0:21:31 dollar moves.
0:21:33 It’s brought to you by the HubSpot podcast network.
0:21:35 Again, billion dollar moves.
0:21:36 All right.
0:21:37 Back to the episode.
0:21:41 And then if you look at people over like a 20 year period or
0:21:43 you know, like a longer period, 10 to 20 years.
0:21:47 There’s this base question which is like, if you just put money
0:21:49 in the S&P, you get some rate of return, right?
0:21:53 So like Sam loves to put money into the index and he’s like,
0:21:54 cool.
0:21:57 I like that because I do no work and I’m going to get, Sam,
0:21:57 what do you want to get?
0:21:58 Eight, nine percent, something like that.
0:22:00 I would be very happy with eight percent per year.
0:22:01 Okay.
0:22:02 So eight percent a year.
0:22:04 And so to be smart and do a bunch of work, you got to beat
0:22:05 that.
0:22:08 And so we’ve had people come on this podcast that when they
0:22:10 talk, they sound absolutely brilliant.
0:22:13 And then later you look at their returns and it’s like,
0:22:16 oh, they kind of don’t beat the index actually.
0:22:19 And I don’t even think that’s really like a knock on them
0:22:21 or I don’t even view that as like, they’re not like a
0:22:22 Charleston.
0:22:24 I just think it’s really hard to beat the index actually.
0:22:27 So what do you try to do in terms of like your rate of
0:22:30 return and what, what’s your score?
0:22:33 So if the S&P is doing nine percent of your compounding,
0:22:35 what are you doing out of, out of permanent equity?
0:22:36 Yeah.
0:22:39 Well, so I’m under all kinds of SEC regulations.
0:22:42 So I can’t actually talk a ton and I would love to talk
0:22:44 about that, but I can tell you what’s been put in the
0:22:45 letters or annual letters.
0:22:47 What are you not, what are you not allowed to say?
0:22:49 I can’t say anything that would be future looking.
0:22:51 I can’t say anything that would be inducing investment.
0:22:53 I can’t say anything that, that would be considered
0:22:57 marketing because we’re like top level registered SEC,
0:22:59 FINRA, all the stuff.
0:23:00 And what if we bleep it out?
0:23:01 What if you tell us and then we bleep it out?
0:23:02 So it’s not, it’s not on air.
0:23:03 Just tell me what to stop.
0:23:05 Yeah, yeah, yeah.
0:23:08 So, so what I can, yeah, here’s what I would say.
0:23:12 So we, we target the minimum underwriting that we have is
0:23:16 we target a minimum of a 30% IRR is, is minimum we
0:23:18 underwrite to, and we’ve historically been pretty
0:23:19 significantly above that.
0:23:20 Okay.
0:23:23 Um, but, um, you know, we really think about term things
0:23:24 in terms of cash, right?
0:23:27 So I think it was last year that we talked about, uh, you
0:23:31 know, our total cash out IRR is in the low twenties and
0:23:32 that’s without any marks.
0:23:33 That’s without anything.
0:23:35 So you, you know, you stack marks in the growing, obviously
0:23:37 cash flows on top of that and the numbers get pretty
0:23:40 ridiculous marks being, uh, the valuation, the valuations
0:23:41 of the business.
0:23:41 Yeah, that’s correct.
0:23:43 And so, I mean, if you, if you underwrite, I mean, if you
0:23:46 think about it, like kind of the bottom line, if you’re
0:23:47 buying a business with no debt, right?
0:23:49 So take the debt side off of it.
0:23:51 You just buying the business for all cash and you know,
0:23:55 let’s say on average, we’re paying between five and seven
0:23:57 times for a business kind of in that range.
0:24:01 And let’s say that the business is organically growing 7,
0:24:05 10% per year and we’re increasing that to, uh, start
0:24:08 to call it mid teens a year, maybe low twenties.
0:24:12 Um, the math gets pretty amazing pretty fast and that’s
0:24:13 without using any debt.
0:24:15 And so I think that’s where it’s obvious from the outside
0:24:16 looking in.
0:24:17 There’s gold in the hills, right?
0:24:20 If you look at small businesses acquisitions, I mean,
0:24:21 this is not a secret anymore.
0:24:24 I think when I first started talking about it in 15, 16,
0:24:25 right?
0:24:27 I remember going on Patrick’s podcast when it was brand
0:24:28 new, I remember Patrick being like, oh, hey, I’m thinking
0:24:29 about starting a podcast.
0:24:30 I was like, yeah, sure.
0:24:31 I’ll help a friend out.
0:24:33 Had no idea was going to turn into what it is, right?
0:24:35 Uh, but I remember going on there and people were like,
0:24:37 shocked, you know, at like what you could buy these
0:24:38 businesses for.
0:24:39 And people say, oh, well, that’s not fair.
0:24:42 It’s an inefficient market is, is inefficient, but it’s
0:24:45 inefficient for different reasons why people think it’s
0:24:47 inefficient, not because people are getting taken advantage
0:24:47 of.
0:24:50 It’s inefficient because it’s absolutely freaking brutally
0:24:52 difficult and it’s so easy to lose a bunch of money.
0:24:56 Like I had a guy reach out last week and say, Hey, I want
0:24:56 to be honest.
0:24:57 I’m looking for a job.
0:24:58 My wife and I went all in.
0:25:01 He was working at a big private equity firm based out of LA
0:25:02 as an operating partner.
0:25:05 He and his wife went all in on a business and it failed.
0:25:07 And now they’re bankrupt.
0:25:11 What attributes make you and others like you successful
0:25:13 versus this other guy, not successful?
0:25:17 Yeah, I mean, I think the, the, in the beginning, if the
0:25:21 first deal I had done gone south, um, and there’s plenty
0:25:22 of opportunities for it to go south.
0:25:25 And so I would say a lot of our success is, is attributable
0:25:26 to luck in the beginning.
0:25:28 And I mean, look, if you listen to any investor, if they
0:25:31 tell you that the early stuff they did wasn’t lucky, they’re
0:25:32 lying to you.
0:25:35 Um, I mean, I remember, uh, getting a chat with a Buffett
0:25:38 about this and I said, Hey, tell me about sand board maps
0:25:39 and Dempster Mill.
0:25:40 And he was like, Oh my gosh.
0:25:43 Like he’s like, if either of those investments go wrong,
0:25:44 there is no Warren Buffett.
0:25:46 No one knows about Berkshire Hathaway.
0:25:47 None of that stuff happens.
0:25:47 Right.
0:25:48 And they were that close.
0:25:51 Like that’s how he met when he met Munger.
0:25:53 He asked Munger, Hey, do you know anybody who could help
0:25:56 help basically turn around Dempster Mill because it’s, it’s
0:25:57 flailing.
0:25:59 And if that goes under, like my future’s done.
0:26:01 Wait, can you, can you, I don’t know the story.
0:26:03 Can you tell the story in more detail?
0:26:06 So Warren Buffett almost failed at the beginning of his
0:26:07 career.
0:26:07 What, what was it?
0:26:08 Can you tell the story?
0:26:08 Oh yeah.
0:26:12 So he had 70% of his assets into these two investments.
0:26:14 One was called sand board maps and the other was called
0:26:15 Dempster Mill.
0:26:17 Um, and this is early days of the Buffett partnership.
0:26:19 So this is pre Berkshire Hathaway.
0:26:20 What do those two companies do?
0:26:23 So sand board maps was a, was a mapping company.
0:26:27 Um, they basically had, uh, at the time, the thing about
0:26:30 this intellectual property for, for maps, right?
0:26:32 If you needed to go build something or if you needed to
0:26:35 navigate something, they had all the best mapping technology.
0:26:40 Um, and so, um, that business was a publicly traded business
0:26:43 and, uh, I think he was a minority shareholder in it,
0:26:44 but he was basically the controlling shareholder.
0:26:48 That one, um, I think turned around independent of him
0:26:51 installing new leadership, but Dempster Mill was a completely
0:26:51 different story.
0:26:53 He, he bought into that to control of it.
0:26:56 Um, and the business was just flailing.
0:26:58 So Dempster Mill, I can’t remember exactly.
0:27:02 I think they were building constructing, um, mills, uh, of
0:27:04 some sort, uh, hence the name Dempster Mill.
0:27:07 And, um, it was basically the biggest headache and he was
0:27:09 staring down the barrel like I did.
0:27:11 And I mean, I can talk about the early days, like we almost
0:27:12 failed like five different times.
0:27:13 So, sorry.
0:27:17 So he, he had 70% of his assets in these two companies, but
0:27:19 those were public companies where he’s just a passive investor
0:27:22 or he was like owned to the majority of those companies where
0:27:23 he could make a change in them.
0:27:24 Yeah.
0:27:26 So I think that he had, he may not have had a controlling
0:27:30 stake in, in, in Sanborn, but I know he had enough shares
0:27:32 where he could basically throw his weight around in that one.
0:27:34 Um, I think Dempster Mill, I think he actually did buy a
0:27:36 majority of it and have control of it.
0:27:38 And so those companies, they’re not doing well.
0:27:40 And you said he goes to Munger and asks him something.
0:27:41 Yes.
0:27:43 We just met this guy, Charlie Munger, uh, who had been back
0:27:46 into town in Omaha and he had kind of gotten a matchmaking
0:27:48 by a mutual friend who said, Hey, you guys are the two
0:27:49 nerdy dudes.
0:27:50 We know you should know each other.
0:27:53 It was like bromance, like love at first sight.
0:27:55 Uh, they get to know one another.
0:27:56 And I think it was actually Charlie who said, Hey, well,
0:27:58 like Warren, what’s your biggest problem you’re facing?
0:28:01 And he said, well, I’ve got these two, you know, problem
0:28:03 children, especially Dempster, you know, Dempster Mill.
0:28:06 And, uh, do you know anybody?
0:28:08 And, uh, Munger said, actually, I do know this guy.
0:28:12 His name’s Harry Bottle and he’s an accountant out here in LA.
0:28:13 We should go talk to him.
0:28:16 And so they took Harry Bottle lunch and pitched him on moving
0:28:20 his family to the middle of nowhere Midwest and, uh, running
0:28:24 Dempster Mill, Harry Bottle, uh, reluctantly agreed, turns it
0:28:27 around, makes Dempster Mill, uh, uh, uh, you know, a fortunate
0:28:29 surprise on the upside.
0:28:32 And, um, you know, again, he starts stacking geese.
0:28:37 As we talked about, so, um, everyone in the beginning.
0:28:41 I mean, look, you, you don’t, you don’t get to be successful
0:28:42 by not taking risks.
0:28:43 Like all investing is taking risk.
0:28:46 And so the question is just how much risk are you willing to
0:28:47 take?
0:28:49 And when you’re younger and you don’t have much, I mean, the
0:28:51 only way to get ahead is by taking more risk.
0:28:54 When you are doing all this research, are you an expert in
0:28:57 the pool business or are you just an expert in looking at
0:28:57 financial statements?
0:29:01 Are you an expert in understanding how leadership thinks and
0:29:02 how to find winners?
0:29:04 What are you great at?
0:29:07 I think I’m pretty good at seeing the big picture.
0:29:09 So taking all those pieces, like I’m not the best financial
0:29:10 analyst.
0:29:12 Uh, the joke is I can barely open up Excel.
0:29:13 Like I’m not an Excel guy.
0:29:15 I’ve never had the skill set and never learned.
0:29:16 I never worked at another, uh, firm.
0:29:19 Like I never took a finance class in my life.
0:29:21 So I don’t have a lot of the, what I would call like hard
0:29:24 skills that you learn as being an associate or an analyst at
0:29:24 a firm.
0:29:28 Um, you know, I think that I’m pretty decent at putting the
0:29:30 puzzle pieces together and then negotiation.
0:29:33 I, you know, I think, you know, and going back to Buffett,
0:29:35 he talks about, I’m a better investor because of an operator.
0:29:36 I’m a better operator because I’m an investor.
0:29:37 That’s true.
0:29:40 And I think operating and investing are two sides of it,
0:29:42 but I think there’s a third leg that’s not talked about a
0:29:44 lot, which is the dealmaking side.
0:29:48 Um, and I think that dealmaking side, especially as you get
0:29:51 into more inefficient markets becomes really the dominant
0:29:51 skill set.
0:29:54 So understanding how to put the puzzle pieces together and
0:29:58 like in that pool business, um, I saw a business that had a
0:29:59 clear track record of growth.
0:30:01 Uh, they were in a durable business.
0:30:03 I mean, you know, we, we kind of joke that, you know, until
0:30:06 people stop dipping their bodies in water for pleasure will
0:30:06 be fine.
0:30:08 It’s been happening for a couple of thousand years.
0:30:09 I think it’ll keep going.
0:30:12 Like we try to have these like very simple feces for everything.
0:30:15 And so if you look at somebody already has a dominant market
0:30:17 share in a market, they’ve had it for a long time.
0:30:17 The business is growing.
0:30:18 The market’s growing.
0:30:21 Um, you know, you look at the business model of it and you
0:30:24 say, okay, look, we’re an asset light business.
0:30:26 Um, they’re not investing in a ton of equipment.
0:30:29 It’s a very simple business model.
0:30:32 It’s fine customers that want pools, uh, do it better than
0:30:35 they could do it themselves and, and, and, and take a rip on
0:30:36 that on the upside.
0:30:39 You know, you start looking at, okay, who is the leadership
0:30:40 and how do you structure a deal and how do you make sure
0:30:42 everyone’s interests are aligned?
0:30:44 Um, how do you continue to find talent to build the business?
0:30:47 I mean, those are all, I, I say this, this is how to make
0:30:47 it sound simple.
0:30:48 It’s not simple.
0:30:49 It’s very difficult.
0:30:51 It’s just not complicated.
0:30:54 You gave one answer to the question.
0:30:57 I think the real answer just was based off of your, how
0:30:58 you’re answering it.
0:31:01 You are a, uh, really good storyteller.
0:31:05 You are very persuasive and you have, um, you’re, I could
0:31:08 just tell you’re a good leader because of how you dumb things
0:31:11 down to be relatively simple and easy to understand.
0:31:11 Right, Sean?
0:31:14 I mean, just him explaining that you’re like, oh, okay,
0:31:15 that’s you’re actually.
0:31:16 Yeah.
0:31:19 Like, uh, you don’t get stuck on the midwit mountain, right?
0:31:22 Like the middle, the middle part where it’s an over, over
0:31:25 analysis, over overthinking, over thesis out.
0:31:28 You know, you’re like, do I think the people are going to
0:31:30 stop dipping their bodies in water for pleasure?
0:31:30 Nope.
0:31:31 Exactly.
0:31:31 All right.
0:31:32 Cool.
0:31:34 Uh, you know, that’s great.
0:31:37 Do I think we’re going to get like, do I think tech, you
0:31:39 know, is AI going to take us out of the pool business?
0:31:39 Nope.
0:31:39 Okay.
0:31:40 Cool.
0:31:41 So this is an enduring business.
0:31:41 Great.
0:31:41 We got that.
0:31:44 Seems like this guy’s been paying himself a lot of money
0:31:46 every single year as the operator.
0:31:46 Great.
0:31:47 We’ll probably be able to do the same.
0:31:50 Also seems like this guy doesn’t do any marketing.
0:31:51 He says that and he doesn’t have any ads anywhere.
0:31:53 If we did a little bit, probably would help.
0:31:53 Right.
0:31:54 All right.
0:31:54 Cool.
0:31:55 Thesis done.
0:31:56 Check, check, check.
0:31:56 Right.
0:32:00 So like not, um, not over complicating things is a skill.
0:32:04 Um, I would also say like, it seems like you have a good
0:32:07 amount of level two luck, which is the action luck.
0:32:10 Like you were talking about that Patrick O’Shaughnessy example.
0:32:12 I thought that was a great luck example because you were like,
0:32:14 you didn’t have any investors.
0:32:15 You’re just doing this with your own money.
0:32:18 This guy tweets out, Hey, I’m looking for somebody, whatever
0:32:21 to talk to me about equities and capital allocation.
0:32:22 So you reach out, right?
0:32:23 And you reach out.
0:32:26 You don’t have some like imposter syndrome or insecurity
0:32:27 that prevents you from reaching out.
0:32:30 You take some action and you’ve probably taken a thousand
0:32:33 actions like that, you know, cheap lottery tickets where
0:32:35 the downside is very low.
0:32:37 The upside, if you made a valuable connection like you did
0:32:39 was pretty high actually.
0:32:41 And so you filled out a thousand of those scratch off tickets
0:32:44 and then he had luck on the other side, which was perception
0:32:46 luck because he’s like, Oh, you’re buying this company for
0:32:48 four times profit.
0:32:50 That means like if you put in a hundred dollars, you’re going
0:32:53 to get 25% yield every year, even without growing the business.
0:32:56 And wait, I’m in the stock market buying things at 25
0:32:59 times earnings and you’re buying them at four.
0:33:00 So like something is good.
0:33:01 That makes a lot of sense.
0:33:04 So he had that’s that third level of luck, which is like
0:33:05 you, you could spot it.
0:33:07 You could spot good luck when it shows up at your door.
0:33:10 And that’s why, you know, that was good on his part.
0:33:13 So I think that’s impressive to me and a good reminder of like
0:33:16 you got to take action to get that action luck.
0:33:18 And then when you know something and you spot something,
0:33:21 what he did a great job was he flew out to Missouri.
0:33:23 He got to know you.
0:33:23 He pitched you.
0:33:24 You said no.
0:33:25 And he’s like, he asked the magic question.
0:33:26 What would it take?
0:33:29 Whereas like, you know, 10 other people could have done most
0:33:31 of that and not gotten the result that he got.
0:33:33 You want to spend more time talking about why you’re successful?
0:33:38 Let me ask you a different question.
0:33:40 So I have, I have this goal.
0:33:42 I want to retire my sister.
0:33:43 So my sister has worked hard.
0:33:45 She’s got her own business, blah, blah, blah.
0:33:47 And she wants to just have an easier life.
0:33:49 So she wants to spend time with her kids.
0:33:51 She wants to travel like her business is brick and mortar.
0:33:54 So she stuck in the certain location where those businesses are.
0:33:56 She can’t really take her eye off the ball in that way.
0:34:00 So I want to buy her a business and I’m like buying businesses
0:34:01 sounds great.
0:34:03 You buy a business that’s already working.
0:34:04 It’s cash flowing.
0:34:07 You hire a CEO or you promote somebody internally in the company
0:34:08 to be the CEO.
0:34:11 But I know there’s obviously a lot of ways that can go wrong.
0:34:14 And so if you’re me and you want to retire my sister,
0:34:15 where do you start?
0:34:19 Like what is your thought process around buying that first business
0:34:24 that’s going to get you to 300 to $500,000 a year free cash flow?
0:34:27 What would you, where would you orient somebody who’s trying to do that?
0:34:29 Yeah.
0:34:30 I mean, I think it’s all about constraints.
0:34:34 Actually, I wrote a piece called how to buy your first smaller company
0:34:37 like literally because this is a question I get a lot from people.
0:34:41 And I can remember I had no idea when I first got going
0:34:45 and I mean, the thing is I, everyone’s got different constraints.
0:34:46 Where do you want to live?
0:34:47 How much do you want to travel?
0:34:49 What do you actually know about?
0:34:51 What are your, what are you good at?
0:34:51 Right.
0:34:53 So somebody with a very different personality type than me should
0:34:55 be buying things that are very different than what I bought.
0:34:59 Somebody who wants to live in LA should be buying things that are
0:35:01 very different than living in Missouri.
0:35:05 People who don’t want to travel a lot or who want to drive to the place.
0:35:07 Like that’s a very different constraint.
0:35:10 Capital constraints, how much cash do you have available to be able to
0:35:11 invest?
0:35:14 I mean, look, like, you know, if you have, uh, you can buy really,
0:35:18 really high quality business assets that are smaller for like seven,
0:35:19 eight, 10 times.
0:35:22 So if you want something that’s going to be more hands off, that’s
0:35:24 an incredibly durable business model, you can get something that’s
0:35:26 either software, software adjacent.
0:35:27 You can get something that has recurring revenue.
0:35:31 Like the, the more you pay up into the value chain, I mean, you’re
0:35:33 going to have decreased, I think total returns.
0:35:37 Um, but ultimately, like there are easier businesses to run.
0:35:40 So like there are like level 10 difficulty businesses.
0:35:43 Like I would not recommend buying into your local restaurant.
0:35:45 Like that would not be something that I would recommend doing, especially
0:35:47 if you want to quote unquote have an easier life.
0:35:51 Like it depends on if you want the role of a hybrid investor operator,
0:35:54 which really is you’re going through a short season of investment.
0:35:56 And then really you, what you’re doing is you’re buying a job.
0:36:00 Like that’s one very specific type of way to leverage your time
0:36:01 against your money.
0:36:05 Um, if you really just want to be in the investor seat, it’s very
0:36:08 difficult to only occupy the investor seat in the, in the world of
0:36:09 small businesses.
0:36:10 It can be done.
0:36:11 It’s very, very difficult.
0:36:15 The first three to $500,000 of cash flow coming from small businesses
0:36:18 are very likely going to require a lot of sweat equity in, in, in
0:36:19 exchange for that money.
0:36:20 Yeah.
0:36:21 You should go to that blog post.
0:36:25 He has a good Q and a, he goes, uh, the question is how hard will I have
0:36:27 to work harder than you’ve ever worked before?
0:36:31 The opportunity in small business, in the small business market is dressed
0:36:34 in overalls and likes to, and likes hard work.
0:36:38 Dude, you’re poetic when you’re right.
0:36:40 Uh, I love that way.
0:36:40 You’re right.
0:36:41 That’s my main skill set.
0:36:43 So yeah, yeah, that’s great.
0:36:45 Uh, you have some one liners that are pretty cool.
0:36:49 Can we just get you, can I read you a one liner that you’ve said and you
0:36:50 just kind of rant on it?
0:36:53 So just basically kind of like make your case for this thing.
0:36:56 Why, why you think this is true or why you believe it, why you think people
0:36:57 should pay attention to this idea.
0:36:58 This is the lightning round, right?
0:36:59 It’s a lightning round.
0:36:59 Yeah.
0:36:59 Here we go.
0:37:02 All businesses are loosely functioning disasters.
0:37:04 Some just happen to make money.
0:37:05 Yeah.
0:37:08 Uh, anybody who’s ever operated a business knows this is true.
0:37:10 The only people who have issues with this are consultants.
0:37:14 So if anytime I’ve said this publicly, the only people who come at me are
0:37:16 people who either got lucky the first time or have never done it.
0:37:20 And, uh, I mean, look, every business I’ve ever been involved in,
0:37:23 it doesn’t matter how profitable the business, how big the business.
0:37:26 Um, I’ve gotten a pretty good view into some very large businesses.
0:37:28 They’re all highly dysfunctional.
0:37:29 Why are they dysfunctional?
0:37:30 Because they’re full of people.
0:37:32 People are messy.
0:37:34 When you get a bunch of people together, that messing is compounds.
0:37:36 Like it is not a complicated concept.
0:37:39 Uh, and so I just think that people should lower their expectations
0:37:42 and, and understand what to expect when they get into a business.
0:37:43 It’s going to be hard.
0:37:45 It’s going to be hard in different ways.
0:37:48 Like, you know, the first time you had to put somebody through rehab,
0:37:50 your, your guide doesn’t show up at the, to me in the warehouse
0:37:53 because there’s been a domestic violence dispute and he’s in jail.
0:37:56 I mean, literally like these are things that we’re having to deal with.
0:37:58 Um, these are things that everyone’s having to deal with.
0:38:01 Now they may come in different flavors, depending on how professional
0:38:04 the business is, but the reality is that these are things that happen.
0:38:06 Sean, have you watched the land man?
0:38:08 I have.
0:38:09 It’s really good.
0:38:14 Um, it’s a, for those listening, it’s a show with Billy Bob Thornton on,
0:38:15 it’s about like the oil industry.
0:38:16 And they, there’s this great quote.
0:38:20 It says, our business is one of constant crisis interrupted by brief
0:38:22 periods of intense success.
0:38:23 Yeah.
0:38:25 How good is that?
0:38:25 Yes.
0:38:26 Yes.
0:38:27 Uh, yeah.
0:38:30 So I have a, I have a quote on my wall and it says, success is
0:38:33 founded on a constant state of discontent interrupted by brief periods
0:38:37 of satisfaction upon the completion of a job, particularly well done.
0:38:38 Um, all right.
0:38:38 How about this one?
0:38:42 The more humility a leader has, the more their business can grow.
0:38:43 What’s an example?
0:38:44 Yeah.
0:38:46 So, uh, look, what is humility?
0:38:49 Humility is acknowledging reality for what it is.
0:38:53 Um, and if you don’t acknowledge reality, you can’t get better.
0:38:58 And so lack of humility is basically a defense mechanism, right?
0:39:02 This usually is one of two forms is either self-protection or self-promotion.
0:39:05 And people are usually doing a combination of both when they’re in, uh,
0:39:07 some form of pride or arrogance.
0:39:09 Uh, they’re usually terrified, fearful.
0:39:12 I mean, I can say this from experience when I get prideful, uh,
0:39:15 is because I feel like I’m not enough and I’m not going to be enough.
0:39:17 And I’m worried that I might not have enough.
0:39:22 And so, uh, what is humility is, is laying that down and saying, Hey,
0:39:26 I, I want to see reality for what it is so I can learn and grow and become better.
0:39:29 And that’s the only way to do that is to get feedback from the world around you.
0:39:36 New York city founders, if you’ve listened to my first million before, you know,
0:39:39 I’ve got this company called Hampton and Hampton is a community for founders
0:39:43 and CEOs, but a lot of the stories and ideas that I get for this podcast.
0:39:46 I actually got it from people who I met in Hampton.
0:39:48 We have this big community of a thousand plus people and it’s amazing.
0:39:52 But the main part is this eight person core group that becomes your board of
0:39:54 advisors for your life and for your business.
0:39:58 And it’s life changing now to the folks in New York city.
0:40:02 I’m building a in real life core group in New York city.
0:40:05 And so if you meet one of the following criteria, your business either
0:40:09 does three million in revenue or you’ve raised three million in funding or
0:40:12 you’ve started and sold the company for at least $10 million, then
0:40:13 you are eligible to apply.
0:40:16 So go to joinhampton.com and apply.
0:40:19 I’m going to be reviewing all of the applications myself.
0:40:21 So put that you heard about this on MFM.
0:40:24 So I know to give you a little extra love now back to the show.
0:40:31 I like that lack of humility, self-protection or self-promotion though strong.
0:40:33 Charlie Munger says this thing.
0:40:35 He says, every time you see the word EBITDA, you should substitute it
0:40:37 with bullshit earnings.
0:40:38 Do you agree or disagree?
0:40:39 Yeah, for sure.
0:40:40 I agree.
0:40:44 I mean, like look, EBITDA can be a useful tool in some very limited
0:40:50 circumstances, but for the most part, it is dressing up something that is
0:40:54 more than often obfuscating reality.
0:40:57 So when you see EBITDA, especially in the small business world, there
0:41:00 usually comes a ton of capex, a lot of reinvestment needs that are on
0:41:01 the back end of that.
0:41:04 And what you have to really do is you have to figure out, okay, just in
0:41:07 a steady state, what is the business actually producing a free cash flow?
0:41:10 Like we look at businesses all the time that are making quote-unquote making
0:41:14 seven, eight, nine million dollars a year that you ask the owner how
0:41:16 much money they’ve taken out of the business and they’re taking out
0:41:18 maybe a million bucks a year, maybe two million bucks a year.
0:41:19 I got news for you.
0:41:22 For the most part, you don’t have a business that’s quote-unquote making
0:41:23 seven million dollars a year.
0:41:25 You have business making one to two million dollars a year.
0:41:26 That’s the reality.
0:41:30 Have you guys, Sean, have you ever learned the history of the idea of EBITDA?
0:41:32 Do you know that’s like a new-ish thing?
0:41:33 No.
0:41:36 So basically, John Malone, I believe, is that right, Brent?
0:41:36 He invented it.
0:41:38 Yeah, John Malone invented it.
0:41:40 So John Malone, his nickname is like the greatest nickname.
0:41:42 He’s one of the Cable Cowboys.
0:41:46 So John Malone, you would know him now as like the guy who owns or founded
0:41:49 Liberty Media, which owns F1 and all this other amazing stuff.
0:41:52 But basically, he owned a cable company.
0:41:53 It was like a small cable company.
0:41:57 I think when he took it over, it was like five or 10 million in revenue,
0:42:01 something like that, like relatively small, and he needed to get loans because
0:42:04 he found that if he could just acquire way more cable companies, cable
0:42:07 companies were incredibly sticky and it was recurring revenue.
0:42:11 I should go out and buy a ton in order to go and get more cable companies.
0:42:13 I need to borrow lots of money.
0:42:16 And for some reason, he came up with this idea that EBITDA was an amazing
0:42:19 metric to convince banks to loan him money.
0:42:23 And so he coined the term EBITDA because for his business, he had
0:42:25 lots of depreciation, lots of things like this.
0:42:28 So he was like, no, no, no, just give me like the earnings before all of this.
0:42:31 And I’m going to convince banks to loan me against that.
0:42:35 And that, I think it was the 80s, the mid 80s became like the term.
0:42:37 And I’ve hated EBITDA.
0:42:39 I think EBITDA is really stupid.
0:42:42 But what I think that like is kind of insane is that we’ve all
0:42:44 collectively agreed that this is like the metric.
0:42:48 And I always thought it was like weird, but I never had the courage to say
0:42:49 like, this is stupid.
0:42:52 And then I would like read about Buffett and all these guys and I was like,
0:42:53 God, I think it’s stupid.
0:42:54 Dude, I take the opposite.
0:42:55 I’m like, this is genius.
0:42:57 I need this in my personal life.
0:42:58 I need this.
0:42:59 I did the husband version of EBITDA.
0:43:05 It’s like, you know, my, my behavior before, you know, before football,
0:43:09 before taking out the trash, if you ignore all those things, I’m great.
0:43:11 I’m amazing actually.
0:43:14 Well, it’s crazy that like you don’t pay your personal taxes on EBITDA.
0:43:17 You pay your personal taxes on a cash flow, or you know, on a cash base.
0:43:20 It’s just there’s so many reasons why this is insane.
0:43:24 But, and also, you know, it’s the most insane thing, adjusted EBITDA.
0:43:25 What the hell does that mean?
0:43:27 It means whatever you want to be.
0:43:28 It’s, that’s insane.
0:43:32 You have another one, another quote you said, you either operate with high
0:43:35 authority, top down or delegated authority.
0:43:37 Hell is in the middle.
0:43:37 Yeah.
0:43:41 So this is hard earned because I would say is I think everyone’s
0:43:45 temptation is to be high authority when you think there’s something wrong and
0:43:47 then low authority when you want to be lazy.
0:43:51 And that, that combination just makes a mess of everything.
0:43:54 And so there’s really two ways to be involved with the company.
0:43:58 You either say, Hey, this is what we’re doing.
0:43:59 This is how we’re doing it.
0:44:00 You need to get in line.
0:44:02 I need people to go and execute this vision.
0:44:05 Or you say, Hey, I want to be supportive and helpful.
0:44:06 It needs to be your vision.
0:44:09 And I’m not going to intervene even when I think that something’s wrong.
0:44:13 I’m just going to go along for the ride and be helpful.
0:44:16 And very, very, very lightly interviewing.
0:44:17 And so you just have to choose.
0:44:19 And I think there’s both can work.
0:44:23 I think both come with certain upsides and downsides, um, but you can’t
0:44:26 do the middle because if you do in the middle, what you end up doing is you
0:44:29 end up saying to the leadership team, Hey, you’re responsible, but I’m
0:44:31 basically telling you what you have to do.
0:44:33 And so it removes all agency from them.
0:44:37 And ultimately everything that goes right is going to be their fault and
0:44:38 everything that goes wrong is going to be your fault.
0:44:43 But to make the lazy, when you say the lazy approach, I’m like, Yeah,
0:44:44 that sounds great.
0:44:44 Sign me up.
0:44:45 Yeah.
0:44:47 But that’s hard.
0:44:49 How do you make that work?
0:44:52 You have to find, uh, the right person and what attributes does that person
0:44:56 have and you know, Buffett and Munger always said that like incentivizing
0:45:01 manager was the number one goal of, uh, of was their number one job.
0:45:02 Is that true for you?
0:45:03 Yeah, absolutely.
0:45:04 A hundred percent.
0:45:07 If you’re going to, uh, try to truly be an investor and not an operator in the
0:45:11 business, uh, it all comes down to somebody has to do the work and somebody
0:45:12 has to exert judgment.
0:45:15 And if you’re not going to be the person to do the work and exert judgment,
0:45:16 somebody else does and you got to be interested.
0:45:18 Got to be aligned with that person.
0:45:22 And so yeah, when I say the quote unquote lazy approach, I mean, ultimately
0:45:24 this is the only way you scale, right?
0:45:26 I mean, if you look, if you look at, again, we keep coming back to Berkshire.
0:45:29 It’s a good thing to think about because when people say, Hey, let’s talk about
0:45:32 how, you know, Berkshire like buys businesses and leaves them alone.
0:45:37 That was not how they operated for a vast majority of the time that they’ve done
0:45:37 it.
0:45:40 Like they had to do that eventually because they got to a such a scale.
0:45:42 They literally couldn’t intervene anymore.
0:45:46 If you go back and look at Buffalo news, like Buffett and Munger were literally
0:45:47 living in Buffalo.
0:45:49 Dude, they’re writing headlines.
0:45:51 They’re, they’re writing like, have you ever read of that Sean?
0:45:57 They bought a newspaper and they would literally, uh, like they, they were news
0:46:00 guys, like they liked the news and they were like, here’s, I want this many ads
0:46:01 on the page.
0:46:03 I think the headline should be like this.
0:46:06 Like they, they, yeah, I did not know this.
0:46:06 This is amazing.
0:46:07 Yeah.
0:46:11 I mean, I was just saying is like Buffalo news is a good example of, of like
0:46:17 basically their, their mode of operation until the call it early 80s, mid 80s, when
0:46:19 they got to have so much money, they literally couldn’t be involved in the
0:46:22 stuff that they were doing was to be highly interventionist.
0:46:25 I mean, they would be involved in the smallest of details.
0:46:26 They would set the tone.
0:46:27 They would help on marketing strategy.
0:46:28 They would replace leadership.
0:46:31 They, I mean, they were doing all the stuff that I’m doing.
0:46:34 They would do all the stuff that anybody has to do because when you’re small,
0:46:35 you can do it.
0:46:39 When you’ve got less capital and more time, you can do stuff like that.
0:46:42 And by the way, the returns are higher when you could leverage your
0:46:43 time against your money.
0:46:44 It’s an advantage, right?
0:46:48 It’s not a disadvantage, it’s an advantage, but eventually you, you have
0:46:51 a limited amount of time and attention and as the money grows and your
0:46:55 attention stays the same, that ratio gets thrown all off and you have no
0:46:59 choice but to say, okay, I’m going to spread a much more thinly layered
0:47:03 amount of judgment over a much wider thing of grouping of things, which
0:47:06 means you have to step out of the day to day operations and then you have to
0:47:07 hire people who can exert great judgment.
0:47:11 And so Buffalo News, I mean, there’s a great quote from Munger saying,
0:47:15 hey, like I’m down to my last like million bucks that I can put into
0:47:15 Buffalo News.
0:47:18 Like after that, I’m calling uncle, like I’m out.
0:47:22 I mean, it was, there’s been various times in Berkshire’s history.
0:47:23 They’ve gotten, it’s gotten very hairy.
0:47:26 It was not a guaranteed success.
0:47:30 And even when they had a lot of success, it still gets hairy in various
0:47:32 points and I think every business has that though.
0:47:33 That’s what should be expected.
0:47:34 Like it should be an adventure.
0:47:38 There’s a great letter that you can read.
0:47:43 It’s from, it’s in 1972 and it’s the Buffett letter to the C’s Candy CEO.
0:47:47 If you Google that Buffett letter to C’s Candy CEO and he says, and because
0:47:50 I went into this, I haven’t like studied Buffett in depth the way that
0:47:53 you would if you’re going to do private equity.
0:47:57 And he, I just thought the, oh, he’s this, aw shucks.
0:47:59 He sits at the table.
0:48:00 He drinks his Diet Coke.
0:48:03 He, he just allocates the capital and he hires great people and they
0:48:03 just do magic.
0:48:07 And this letter, I was like, oh, Buffett had the mind of an operator,
0:48:08 right?
0:48:11 Because he goes, dear Chuck, I was out of Brandy’s a couple of days ago and
0:48:13 I have a few strong impressions to pass along.
0:48:17 Number one, and he basically, he starts talking like details about the
0:48:18 store.
0:48:20 So he goes, people are, people are going to be affected not only by our,
0:48:23 how our candy tastes, obviously, but what they hear about it from others
0:48:26 as well, the retailing environment and which it appears, this class of
0:48:29 the store, the packaging, the condition, like this is like Steve Jobs
0:48:31 talking about the Apple store, right?
0:48:32 Like a product oriented person.
0:48:37 And he just goes through like step by step kind of like things that he
0:48:41 thinks could be improved on, you know, in the store experience.
0:48:45 And I thought, wow, this is different than what I kind of the impression
0:48:48 you get when you hear about Buffett, just sitting in his room reading
0:48:52 all day, you know, making investment decisions off of, you know, financial,
0:48:53 you know, financial sheets.
0:48:54 This is a great letter.
0:48:58 By the way, how awesome is this that this was like a typewriter letter?
0:49:01 Does that make it, doesn’t that make it so much more substantial?
0:49:02 Totally.
0:49:04 He licked, he licked an envelope for this one.
0:49:07 I mean, he licked an envelope.
0:49:10 I kind of want to like start sending letters like this.
0:49:12 It just makes it feel like more authoritative.
0:49:13 Let me ask you something, Brent.
0:49:17 I have, like I said, we kind of, my business is a little bit different
0:49:20 than yours, which is I create content on the front end.
0:49:21 It’s the mullets.
0:49:24 I have content on the front end, which is what I love to do, what I’m
0:49:28 great at, but media and content is not a great business model.
0:49:32 So my back end is basically start or buy businesses that I know I can like
0:49:37 turbocharge and we’ve done this maybe four or five, six times now and it’s
0:49:37 going really well.
0:49:43 But one thing I’ve noticed is like, if I draw a pie chart of what makes it work,
0:49:48 it’s basically like 60% of the battle was just the initial market selection.
0:49:52 When we picked a project that was like the winds were blowing against us.
0:49:56 It didn’t matter how much effort we put in or how great the operator was.
0:49:58 It was always just an uphill battle.
0:50:01 And sometimes we pick these markets that are just like, it’s a pull market.
0:50:02 You’re being pulled in.
0:50:03 It’s just a sweet spot.
0:50:05 The people just need this.
0:50:07 It’s shooting fish in a barrel type of thing.
0:50:09 That creates a big part of it.
0:50:15 The second part of it, the next, I’ll say like 30% is the quality of the CEO
0:50:17 that we picked who’s going to run the business.
0:50:20 And when we pick a sort of limited CEO, we get limited success.
0:50:23 When we pick an unstoppable CEO, we get like massive success.
0:50:24 And the last 10% was just luck.
0:50:28 Like the ball bouncing our way on one or two things that could have easily
0:50:32 not happened, but that they happened or, you know, when the winds that didn’t,
0:50:34 maybe we missed out on something that we didn’t see.
0:50:39 I got a question about that second piece, which is hiring the CEO or evaluating
0:50:41 the CEO, evaluating the operator.
0:50:43 I want to get better at that.
0:50:45 If you sit down with somebody, you’re recruiting an exec.
0:50:49 Maybe it’s a, you’re interviewing somebody who’s maybe in the business
0:50:53 that’s going to become a CEO or you’re taking somebody external to come run this company.
0:50:56 What are you doing to, what are you doing?
0:50:58 That’s like not obvious to get that assessment.
0:51:01 Is there any little tips and tricks, anything that you’ve picked up
0:51:03 that, that helps you find the right operators?
0:51:04 Yeah.
0:51:09 Well, so actually, I think this is a, probably a pretty underappreciated aspect
0:51:14 of being involved in small companies is all about the people, right?
0:51:17 And so the better you can be at the people, the better it’s going to be
0:51:18 for the business.
0:51:24 And, you know, we’ve really deep dived into, I would say all personality
0:51:25 testing is wrong, right?
0:51:29 It just depends on what you’re trying to get out of it.
0:51:33 And so we have actually a huge battery of personality testing that we do
0:51:37 for people to try to get as close to a 360 view of who they are.
0:51:38 What do you use?
0:51:38 Yeah.
0:51:45 So we’re doing a combination of disk, Myers-Briggs and something
0:51:49 called habit story, which kind of has them see like, what are the habits
0:51:51 that they’ve built in their life and how are they kind of supporting
0:51:54 who they are with the structure and apparatus around them?
0:51:59 And I personally also do a lot of study of Enneagram.
0:52:03 And so I think actually, personally for me, when I meet somebody, I’m
0:52:06 instantly categorizing them as what I think their Enneagram number is.
0:52:10 And I’m automatically categorizing them across the four main Myers-Briggs.
0:52:12 Dude, this is crazy to me.
0:52:15 I thought that’s just horoscopes for dudes.
0:52:19 Like, do you really use this as like your core thing?
0:52:19 That’s amazing.
0:52:20 Yeah.
0:52:23 Well, so all of it tells you something about the person, right?
0:52:26 So if you think about, so Enneagram, most people don’t understand this.
0:52:29 So Enneagram basically tells you who you are at your worst.
0:52:35 And there’s nine numbers and basically everyone falls into a number
0:52:38 and then you have what’s called wings, which is kind of where do you tip
0:52:39 from that number?
0:52:42 So for me, I’m a three and I tip two.
0:52:45 So a three is they call the achiever.
0:52:49 My biggest insecurities is that I’m not enough and I want people to like me.
0:52:52 And so again, if you, if anybody’s proud of their Enneagram, it
0:52:53 means they don’t understand Enneagram.
0:52:56 Like, like it’s not a good thing, right?
0:52:59 This basically tells you what are your deepest fears and what, what is
0:53:01 the, your areas of greatest weakness.
0:53:04 But if you can know that about somebody, you can see them.
0:53:06 How is that playing out in their life, right?
0:53:09 So like I, when I’m in my least healthy, I’m a people pleaser.
0:53:11 I say yes to way too much stuff.
0:53:13 Um, I don’t tell people the truth.
0:53:15 Um, it’s really unhealthy.
0:53:17 It’s, it’s highly destructive behavior, right?
0:53:19 I’m very focused on hierarchy.
0:53:23 And, and, and my guess is that you guys have different Enneagrams, right?
0:53:26 I won’t, I won’t guess your Enneagrams, but can you do it?
0:53:26 That’s great.
0:53:27 Yeah.
0:53:29 Do it.
0:53:30 I can’t wait.
0:53:30 Yeah.
0:53:33 My guess is Sean, you’re a three and my guess is Sam’s an eight.
0:53:35 Uh, but what’s three and what’s eight?
0:53:37 Uh, the three is the achievable.
0:53:41 So threes and eights, uh, both achieved, but for very different reasons.
0:53:44 So, so, uh, threes achieved because they want people to love them.
0:53:46 It’s like less about the thing itself.
0:53:48 And then eights really want the thing itself.
0:53:52 So like as a three, like I don’t want money to just like want the, want the money.
0:53:54 Like I want the money because I want people to love me.
0:53:57 Uh, eights really want the money because they want the security and
0:53:59 they want the power that comes with the money.
0:54:04 Uh, so, so I want to learn the, I want to roll over so that I get Pat and
0:54:05 my tail can wag.
0:54:06 Sam just wants a dog treat.
0:54:07 Yep.
0:54:08 That’s exactly right.
0:54:09 Um, that’s right.
0:54:10 What do you think?
0:54:11 Yeah.
0:54:14 Well, like he’s, he’s describing everything in like the most positive way.
0:54:16 So like, yeah, sounds great.
0:54:18 Uh, I’m, uh, I like that.
0:54:21 And then I looked up who other eights were and it’s like Winston Churchill,
0:54:23 Martin Luther King.
0:54:24 I’m like, yeah, okay, cool.
0:54:26 Um, yeah, yeah, for sure.
0:54:29 What you do, but you, what this is like crazy fascinating.
0:54:31 You said like five different things.
0:54:32 So can you give us the exact?
0:54:35 So you said Myers-Briggs, uh, and then you said this, this other test.
0:54:37 What’s like the exact stuff that you’re using.
0:54:38 Yeah.
0:54:40 So, so I, well, there’s two things.
0:54:43 One is when I first meet somebody, I can, I can walk you through what I do.
0:54:47 And then I would say is separately from that in a hiring process.
0:54:50 We, we use that once we get serious about a candidate, then we put them through
0:54:52 a huge battery of testing to make sure we try to understand them.
0:54:53 Right.
0:54:57 For me personally, when I first meet somebody, it helps me so much to be able
0:55:00 to categorize them into what I expect based on just kind of how they’re showing
0:55:02 up in the world, uh, in Myers-Briggs, right?
0:55:04 So you have, you have I and E.
0:55:06 So are they introverted or they extroverted?
0:55:07 Right.
0:55:11 Are they S or they, uh, N, which is, are they, are they in the present?
0:55:13 Are they sensing or are they in the future?
0:55:14 Right.
0:55:17 Um, uh, then are they a thinker or are they a feeler?
0:55:18 Right.
0:55:21 So they, are they primarily excited about ideas or they primarily excited
0:55:24 about, uh, sort of the, the, the people themselves, right?
0:55:29 Um, and then the last one is T and P, which is, um, uh,
0:55:34 are they, uh, it’s kind of, excuse me, J and P, which is, are they, uh,
0:55:39 very focused on rigid schedules and on creating order or do they like to go
0:55:40 and test and try a whole bunch of things?
0:55:41 Right.
0:55:44 And how all these like sort of stack up and combine really gives you
0:55:48 a much more holistic view of who somebody is than when you then pair with
0:55:51 Enneagram, I think gives you probably those two together.
0:55:56 I think creates the most, the quickest and the most holistic view of
0:55:59 who somebody is, where if you can get like a, a pretty good idea quickly
0:56:03 of who they are, like how I would talk to somebody who’s present oriented
0:56:05 is very different than how I talk to somebody who’s future oriented.
0:56:09 And oftentimes, you know, we assume the whole world operates like the way
0:56:13 we do, like my wife and I are literally the opposites in every single one
0:56:13 of these areas.
0:56:17 So you can imagine in our marriage, like how she shows up and how
0:56:21 I show up is so different and it creates all kinds of miscommunications.
0:56:24 We’ve been married now for 16 years and it really, we went through
0:56:28 personality testing together about, oh, three and a half, four years ago.
0:56:30 It was game changing in our marriage.
0:56:34 It was, it completely explained a ton of behavior for her and for
0:56:38 me that had been bothering us for a long time and it was just largely
0:56:39 how we’re wired.
0:56:41 So that’s how we do it.
0:56:44 That’s how I think about doing it in the moment that helps me relate to
0:56:45 people a lot more.
0:56:46 It’s crazy.
0:56:51 By the way, Sean, 16personalities.com is like these websites are huge
0:56:52 that are doing these tests.
0:56:54 Yeah, yeah, yeah, they’re really big.
0:56:55 I mean, this isn’t, it’s an important piece.
0:56:58 I would say five voices is a really interesting one.
0:57:01 They, they, so it’s just the number five voices.com.
0:57:02 I think.
0:57:07 Yeah, those guys have created Steve Cochrum and Jeremy Kubitschek are
0:57:09 the two founders of that business.
0:57:12 They’ve created an overlay for Myers-Briggs that simplifies it.
0:57:15 I think a lot of their stuff is incredible.
0:57:19 And yeah, we definitely use a lot of their work as well.
0:57:22 Then we finish off with a quick tarot reading just to see how the future
0:57:23 is going to go.
0:57:24 And then we’re, we’re all set.
0:57:25 This is amazing.
0:57:28 This is so good.
0:57:31 You, you also have one thing I read that I really loved.
0:57:33 You go, you have this like asshole test.
0:57:35 It’s like, we don’t, nobody wants to work with assholes.
0:57:36 How do we sort of filter for that?
0:57:38 Nobody’s trying to present as an asshole in a job interview.
0:57:42 And you said like, you can eat with them, see how they treat the staff.
0:57:45 You could see them interact with their significant other.
0:57:47 That’ll tell you a lot in their home environment.
0:57:50 And then you said, the most telling environment is to travel with somebody.
0:57:53 It is impossible to fake it when you’re at the airport.
0:57:54 You’re grinding through security.
0:57:57 And if there’s a delay, your, their true colors will come out.
0:57:58 That was great.
0:57:59 Yeah.
0:57:59 Yeah.
0:58:00 It’s fun.
0:58:03 I mean, just want to, I mean, honestly, the business we’re in is predicting
0:58:04 people’s behavior.
0:58:05 Like that’s what we’re trying to do.
0:58:09 And because of all these businesses are predicated on the people who run them.
0:58:12 They’re, they’re all going to have the risks, the primary risks of all these
0:58:13 businesses are going to be the people.
0:58:15 And so what we’re trying to do is get to know people.
0:58:18 Have you guys ever been out with someone and they’ve actually been
0:58:20 an asshole to the wait staff though?
0:58:22 Whenever people say about this, this asshole test, I’m like,
0:58:25 I’ve never been around anyone that’s like rude.
0:58:28 Dude, you don’t remember the dinner we were at where this happened?
0:58:29 Yeah.
0:58:31 But that was like one out of a thousand.
0:58:31 Yeah.
0:58:32 Yeah, it’s true.
0:58:35 The, this guy, we, Sean and I went out with someone and he was like
0:58:39 shooing the waiter when he was like, it was, it was like, it was, it was, it
0:58:41 was, I was, I was ashamed.
0:58:42 I left that dinner.
0:58:46 I’d be like, I felt like, uh, like I had just like participated
0:58:47 in like a porno.
0:58:50 Like I felt like I was like, I’m so ashamed.
0:58:53 Like if people find out about this, like I’m going to be so embarrassed.
0:58:54 That’s rough.
0:58:57 Wow.
0:58:58 Dude, what a fun episode.
0:58:58 This is great.
0:58:59 Oh yeah.
0:59:01 I really enjoyed hanging out with you guys.
0:59:02 That’s the one we guys built.
0:59:03 Brent, thanks for coming on, man.
0:59:06 If you haven’t, go check out his blog and his annual letters.
0:59:07 They’re pretty great.
0:59:08 Follow him on Twitter.
0:59:09 What’s your Twitter handle?
0:59:10 Brent, be sure.
0:59:11 Just Brent, be sure.
0:59:12 Yep.
0:59:12 All right.
0:59:13 Good seeing you, dude.
0:59:14 Thank you.
0:59:14 That’s it.
0:59:15 That’s the pod.
0:59:18 I feel like I can rule the world.
0:59:24 I know I could be what I want to put my all in it like the days on for the road.
0:59:25 Let’s travel never looking back.
0:59:30 Hey, Sean here.
0:59:33 I want to take a minute to tell you a David Ogilvy story.
0:59:34 One of the great ad men.
0:59:36 He said, remember, the consumer is not a moron.
0:59:37 She’s your wife.
0:59:39 You wouldn’t lie to your own wife.
0:59:41 So don’t lie to mine.
0:59:43 And I love that you guys, you’re my family.
0:59:45 You’re like my wife and I won’t lie to you either.
0:59:48 So I’ll tell you the truth for every company I own right now.
0:59:51 Six companies, I use Mercury for all of them.
0:59:54 So I’m proud to partner with Mercury because I use it for all of my banking
0:59:57 needs across my personal account, my business accounts.
1:00:00 And anytime I start a new company, this is my first move.
1:00:01 I go open up a Mercury account.
1:00:03 I’m very confident in recommending it because I actually use it.
1:00:04 I’ve used it for years.
1:00:06 It is the best product on the market.
1:00:11 So if you want to be like me and 200,000 other ambitious founders, go to mercury.com
1:00:12 and apply in minutes.
1:00:16 And remember, Mercury is a financial technology company, not a bank.
1:00:19 Banking services provided by Choice Financial Group and Evolve Bank & Trust
1:00:20 members, FDIC.
1:00:21 All right.
1:00:21 Back to the episode.
1:00:24 (upbeat music)

0:00:06 Today’s episode of YAP is sponsored in part by Rakuten, Factor, Robinhood, Airbnb, Shopify,
0:00:08 RocketMoney, and Indeed.
0:00:13 Get the Rakuten app now and join the 17 million members who are already saving.
0:00:14 Cashback rates change daily.
0:00:17 See Rakuten.com for more details.
0:00:20 Eat smart and fuel your wellness goals with Factor.
0:00:26 Get started at FactorMeals.com/FactorPodcast and use code FactorPodcast to get 50% off
0:00:29 your first box plus free shipping.
0:00:34 With Robinhood Gold, you can now enjoy the VIP treatment, receiving a 3% IRA match on
0:00:36 retirement contributions.
0:00:43 To receive your 3% boost on annual IRA contributions, sign up at Robinhood.com/Gold.
0:00:48 Hosting on Airbnb has never been easier with Airbnb’s new co-host network.
0:00:52 Find yourself a co-host at Airbnb.com/host.
0:00:56 Shopify is the global commerce platform that helps you grow your business.
0:01:01 Sign up for a $1 per month trial period at Shopify.com/profit.
0:01:06 RocketMoney helps you find and cancel your unwanted subscriptions, monitors your spending,
0:01:08 and helps lower your bills.
0:01:12 Sign up for free at RocketMoney.com/profit.
0:01:15 Attract interview and hire all in one place with Indeed.
0:01:19 Get a $75 sponsored job credit at Indeed.com/profit.
0:01:21 Terms and conditions apply.
0:01:39 As always, you can find all of our incredible deals in the show notes or at youngandprofiting.com/deals.
0:01:41 Hello Young and Profiters!
0:01:46 Imagine learning how to turn stage fright into a magnetic stage presence to craft speeches
0:01:50 that captivate your audience and build a brand that doesn’t just speak to people but
0:01:52 speaks for them.
0:01:57 Well, in this YAP Classic episode, we’re talking about brand building, public speaking,
0:02:01 and so much more with one of the world’s leading communication and branding experts,
0:02:03 Rory Vaden.
0:02:07 Rory is the best-selling author of Take the Stairs and Procrastinate on Purpose and the
0:02:10 co-founder of Brand to Builders Group.
0:02:14 I spoke with Rory last year in episode 274 about how to build a personal brand that doesn’t
0:02:19 just attract attention but commands trust and respect.
0:02:22 Whether you’re an entrepreneur, a corporate leader, or just somebody looking to amplify
0:02:27 your voice, this conversation will be a roadmap to mastering the psychology of influence.
0:02:31 So let’s get started with Rory.
0:02:35 Rory, welcome to Young and Profiting Podcast.
0:02:36 Yes!
0:02:38 I’m so excited.
0:02:39 I’m so excited.
0:02:43 I think you’re like my newest, coolest friend.
0:02:44 Thank you for having me.
0:02:45 I think the same.
0:02:47 I’m really excited for this conversation.
0:02:51 Great to bring some great energy to the conversation already.
0:02:55 So, Rory, you are super well-known for actually building brands.
0:02:59 But before you started building other people’s brands, you were, of course, building your
0:03:00 own brand.
0:03:02 And in the past, you said success is never owned.
0:03:05 It’s rented, and the rent is due every day.
0:03:08 So my first question to you is a softball.
0:03:11 Do you still feel like success is never owned?
0:03:15 Do you still feel that way today, like you’re renting your success, or do you feel like you’ve
0:03:17 owned some of your success now?
0:03:18 Not a good question.
0:03:20 Also, you guys went into the backlogs.
0:03:21 You did.
0:03:22 Oh, we went to the backlogs.
0:03:23 Rory paid in like the back catalog.
0:03:27 So that was from Take the Stairs, which has been out over 10 years.
0:03:28 So success is never owned.
0:03:30 It’s rented, and the rent is due every day.
0:03:32 I do still feel that way.
0:03:36 I feel that way, and I feel like the people we work with exhibit that.
0:03:37 You’re still hustling.
0:03:38 I’m still hustling.
0:03:44 Ed Milette, Lewis Howes, our clients, Amy Porterfield, these people are still hustling.
0:03:47 Some people might look at them and go, “Oh, they’re at the top.
0:03:48 Why are they hustling?”
0:03:51 But they don’t look at it that way.
0:03:58 They look at Jay Shetty and go, “Oh, they’re always pursuing somebody or the next level.”
0:04:04 And the other thing about that, Hala, is if you take out that word success and you put
0:04:10 in for it whatever really matters, financial security is never really owned.
0:04:12 It’s rented, and the rent is due every day.
0:04:17 If you start making stupid financial decisions, you can blow a lot of money quickly.
0:04:20 Living in great physical health, certainly never owned.
0:04:22 That’s rented, and the rent is due every day.
0:04:26 A great marriage or a happy relationship, that doesn’t matter if you’ve been married
0:04:27 20 years.
0:04:34 If you don’t treat your spouse or significant other in the way that they deserve, 20 years
0:04:40 can disappear in one moment or a few minutes of bad decisions.
0:04:46 So I do agree with that, and I think I look at people like you constantly leveling up.
0:04:50 You blew my mind when you came on my podcast, and I was just like, “Gosh, there’s such
0:04:57 a next level for me in podcasting, and I got to do the work if I want the results.”
0:05:02 So what a great question, and yes, I would emphatically say there are some things I’ve
0:05:04 changed my mind on, but that’s not one of them.
0:05:05 Success is never owned.
0:05:07 It’s rented, and the rent is due every day.
0:05:08 I loved that.
0:05:11 I resonate with so much of what you’re saying, and I align with so much of what you’re saying.
0:05:15 So when you actually wrote those words, like you said, that was decade ago now, you were
0:05:19 in grad school, living in a crappy apartment.
0:05:23 Can you tell us about that period of your life and how you ended up starting to speak?
0:05:26 I really started even before that.
0:05:31 So I was raised by a single mom, and my mom sold Mary Kay Cosmetics.
0:05:37 So my mom had my brother when she was 17 years old, and then she was divorced from his father
0:05:40 a few years later, and then she had me when she was 22.
0:05:44 And then my biological father, they were divorced six months after I was born, and I never really
0:05:46 saw him again.
0:05:50 So she was a single mom, and she got into direct sales.
0:05:56 So I learned about direct sales, and then when I was in college, I got involved in a company.
0:06:02 I actually went door to door, 14 hours a day, six days a week on straight commission, just
0:06:05 so I could pay my way through school.
0:06:12 And there was a speaker who came and spoke at that company, and I thought, man, that’s
0:06:15 my dream is I want to speak.
0:06:20 And so I went up to him, his name was Eric Chester, and I said, Eric, one day I’m going
0:06:23 to do what you do.
0:06:26 But he had mentioned that he had a son in college, and I said, right now I need your
0:06:32 son’s phone number because I’m going to recruit him to come with me and do this next summer.
0:06:33 And we made like a pact.
0:06:40 He said, if you mentor my son in this program, then when you graduate, I’ll mentor you.
0:06:45 And so he did, I did, and his son, Zach, worked with me for two years.
0:06:46 We became really good friends.
0:06:52 And then when I finished my undergrad and was in graduate school, Eric was the one who,
0:06:56 he was a Hall of Fame speaker, and I asked him, I was like, okay, I’m ready.
0:06:57 What do I need to go do?
0:06:58 And I’ll never forget Hall.
0:07:05 The very first time we sat down, he said, Rory, the difference between a good speaker and
0:07:11 a great speaker is 1,000 speeches.
0:07:19 So the first thing I want you to do is go out and give 1,000 speeches.
0:07:25 And just a couple of years ago, I became the youngest person in US history to be inducted
0:07:27 myself into the professional speaking Hall of Fame.
0:07:28 Oh, wow.
0:07:32 You know, I’ve got a viral TED talk that has like 5 million views.
0:07:36 And I have to tell you, Hala, I’m still excited to go back and see Eric Chester and find out
0:07:42 what step two is because there’s been so much speaking.
0:07:45 So that was how I got my start early on.
0:07:46 Amazing.
0:07:51 And I learned that you spoke over 300 times for free in your first 18 months.
0:07:55 So a lot of people aren’t willing to roll up their sleeves, do free work like that.
0:07:56 What was the logic?
0:08:00 I know you were building your reps, but how did you decide, okay, now I’m going to get
0:08:04 paid and I’ve got enough experience, so tell us about that.
0:08:09 What actually happened was Eric said the fastest way to get stage time is to join a group called
0:08:10 Toastmasters.
0:08:16 And so it’s this worldwide organization that’s been around for decades.
0:08:20 And they had a contest called the World Championship of Public Speaking.
0:08:24 And so I thought, gosh, maybe, you know, at the time I was 22 years old.
0:08:26 And so I had no credibility.
0:08:30 This is long before social media, you know, it was like ever really out.
0:08:36 And I thought, maybe if I could win the World Championship of Public Speaking, maybe that
0:08:39 would give me the credibility to like launch a speaking career.
0:08:41 You know, it was all adults who were in this competition.
0:08:44 And I thought, if I just got more reps and I practiced harder.
0:08:48 And so I did, I went out and I spoke 304 times for free.
0:08:52 The first year I made it to, there’s 25,000 contestants.
0:08:55 I made it to the top 10 in the world and I lost.
0:08:57 And in the next year, I got more coaching.
0:09:02 I spent more time, thousands of hours studying film, made it all the way back to the World
0:09:03 Championship.
0:09:07 And then I lost again, actually, but I came in second.
0:09:12 So I lost better than the first time I was the World Champion, first runner up.
0:09:18 And that was just my strategy, that had been my strategy for life in school and in knocking
0:09:25 door to door was like, I’m just going to do a higher quantity than everybody else.
0:09:32 And I had this belief that if I did more quantity, eventually that would lead to quality.
0:09:34 And that’s what happened.
0:09:36 And then that’s what led us to start our first company.
0:09:37 That’s amazing.
0:09:41 And what do you feel speaking did for your personal brand?
0:09:46 So one of the things that we say at Brand Builders Group, we tell our clients, the shortest
0:09:55 path between turning someone from a complete stranger into a lifelong fan of yours is a
0:09:59 world-class one-hour presentation.
0:10:01 Somebody can go from, I’ve never heard of you.
0:10:03 Now they can do that in a book too, but it takes longer.
0:10:05 It takes four, it’s more like four hours.
0:10:10 But if they see you on stage, if you’ve ever seen Ed Milette on stage, you could go, I’ve
0:10:12 never heard of this guy.
0:10:16 And you walk in, another one of my good friends is Jamie Kern Lima.
0:10:19 She right now I think is one of the best speakers in the world.
0:10:24 If you’ve never heard of Jamie Kern Lima and you step into a room, after a one-hour experience
0:10:27 with her, you become a lifelong fan.
0:10:34 And so that’s the power of the spoken word is it is just a trust accelerator.
0:10:39 And they don’t really teach it in schools and they don’t only teach it in business.
0:10:44 If you don’t study it or get coaching on it, a lot of people think they’re good speakers.
0:10:48 In reality, they’re good talkers and there’s just a big difference.
0:10:54 But we define personal branding, which is most of what we do now, as simply the digitization
0:10:56 of your reputation.
0:10:59 And reputation has been around since the dawn of time.
0:11:04 And the spoken word is like before there was going live and before there was webinar and
0:11:07 before there was podcast and before there was YouTube, there was just the spoken word
0:11:09 in front of live audiences.
0:11:15 I think the reason why social media and the reason why YouTube and podcasting is so valuable
0:11:20 is because if you have the ability to speak, if you have the ability to communicate with
0:11:23 authority, if you have the ability to make an audience laugh, if you have the ability
0:11:29 to articulate points eloquently, then you can create the same level of trust, except
0:11:32 now you can do it at scale.
0:11:39 You can automate trust at scale when you combine some of my superpowers with some of your superpowers
0:11:42 and really growing your platform.
0:11:46 I agree with everything you’re saying because I’ve been doing so much more speaking in the
0:11:48 last two to three years.
0:11:52 And the types of fans that I get after these types of speaking engagements, they’re waiting
0:11:57 in line to talk to me, then they’re reaching out to me on DM, on LinkedIn, and Instagram.
0:12:00 Then they show up to my course and they say, “Oh,” and then they write me a review.
0:12:05 And it’s just a way more passionate type of fan because they feel like they really know
0:12:10 you because there’s just so much transparency and authenticity when it’s you and the flesh,
0:12:12 just being yourself and being on stage.
0:12:15 I totally agree that it creates superfans.
0:12:22 Well, and ironically, I think as AI takes over more and more, people are going to gravitate
0:12:26 towards that human experience, and I think people are going to gravitate back towards
0:12:31 live events because it’s not that far away.
0:12:35 In many ways, it’s already here where you can replicate a video of someone, a voice
0:12:36 of someone.
0:12:42 You can use mid-journey and create an entire person that’s fake and turn them into an influencer.
0:12:50 But what you can’t really do is have someone stand on stage in front of a roomful of humans
0:12:54 and move them emotionally.
0:12:57 Create that human bond.
0:13:02 And I think as AI takes over content more and more digitally, I think there’s going
0:13:07 to be a return of this skill coming back for humans.
0:13:08 Totally.
0:13:12 It’s like humans are going to be the rare thing that everybody wants.
0:13:13 Yeah.
0:13:14 Okay.
0:13:15 So there’s so much to cover.
0:13:19 I want to get into all of your personal branding strategies, but first, we thought that it’d
0:13:23 be really fun to uncover some of your greatest hits from all the different books that you
0:13:29 wrote of time management, focus, procrastination, and just talking about all these topics that
0:13:31 I know my listeners are really curious about.
0:13:35 So I’m going to rattle off quotes, and then you can just elaborate and have follow-up
0:13:36 questions.
0:13:37 You’re going to rattle off my quote.
0:13:38 I’m going to rattle off your quotes from your book.
0:13:39 That’s so interesting.
0:13:40 You’re going to quote me to me.
0:13:42 That’s kind of awkward for me.
0:13:43 But I love it.
0:13:44 I love it.
0:13:46 I did it with James Clear when it was on and it was fun.
0:13:47 Yeah.
0:13:48 So we’ll do it.
0:13:49 We’ll see.
0:13:50 Okay.
0:13:51 Success is not about taking the escalator.
0:13:53 It’s about taking the stairs.
0:13:54 What did you mean by that?
0:13:55 Yeah.
0:14:00 So that actually really should be given appropriate citation to Zig Ziglar.
0:14:01 Okay.
0:14:02 Good.
0:14:03 So Zig said that differently.
0:14:06 Zig said, “There is no escalator to success.
0:14:08 You have to take the stairs.”
0:14:13 And after my world championship of public speaking, I was at an event of the National
0:14:19 Speakers Association event, and we’re sitting in this huge convention and it’s lunch, and
0:14:22 I’m sitting in this cafeteria and I knew nobody, right?
0:14:27 I’m this 20-something-year-old kid and I’m sitting by myself and this guy walks up to
0:14:31 me and he says, “Hey, you’re Rory Vaden, right?”
0:14:34 And I said, “Well, yes, sir, I am.”
0:14:36 And he said, “I heard about you.
0:14:37 You’re the Toastmaster kid, right?
0:14:40 Like you made it to the Toastmaster thing.”
0:14:41 And I said, “Well, yes, sir.
0:14:42 That’s me.”
0:14:43 And I said, “I’m sorry.
0:14:45 I don’t know.
0:14:46 Have we ever met?”
0:14:50 And he reaches his hand out and he says, “My name is Zig Ziggler.”
0:14:56 And people today may not even know who Zig is, but Zig was an absolute legend for decades
0:14:57 in this space.
0:15:01 And he sat down next to me with his wife, who he used to call the redhead if you’ve ever
0:15:04 seen any of his old videos, and we became personal friends.
0:15:06 He was a personal mentor of mine for several years.
0:15:10 I used to travel with him to these big, huge arenas.
0:15:15 He passed away several years ago, but anyways, he was the one that said, “There is no elevator
0:15:16 to success.
0:15:18 You have to take the stairs.”
0:15:24 And so even the whole “take the stairs” concept was a bit of an homage to my mentor’s
0:15:25 Zig Ziggler.
0:15:27 I love that.
0:15:28 So next one.
0:15:31 A key to self-discipline is, of course, commitment.
0:15:35 And you said, “The more we have invested in something, the less likely we are to let
0:15:36 it fail.”
0:15:38 What did you mean by that?
0:15:43 Anything that matters to you is going to be hard to let go of.
0:15:48 The things that matter to you are the things that you’ve put the most time and love and
0:15:51 energy and money and prayer into.
0:15:55 So you go, if you lose a loved one, why is it so hard?
0:15:57 It’s because we’ve spent so much time together.
0:15:59 We have so many shared experiences.
0:16:03 We have so many interests and stories.
0:16:07 The irony is that the more we have invested into something, the less likely we are to
0:16:08 let it fail.
0:16:12 Well, what most people do is they keep their commitments conditionally.
0:16:15 They keep their commitments as long as they’re convenient to do so.
0:16:19 But the moment it becomes inconvenient to keep that commitment, we typically question the
0:16:23 commitment or we challenge ourselves to go, “Oh, maybe I’m not cut out for this or maybe
0:16:25 it’s not worth it.”
0:16:28 And so they go in search of something easier.
0:16:32 In reality, they find that there’s not anything easier.
0:16:36 They keep showing up and the same issues replicate again and again in their life because they
0:16:38 struggle with commitment.
0:16:43 And the real thing to do is when you are kind of tested to go, “I’m not sure if this is
0:16:44 going to work out.
0:16:47 I’m not sure if this is the right thing,” is to increase your commitment.
0:16:50 You increase your level of investment.
0:16:55 If you’re struggling on social media and you just go, “Well, gosh, maybe I’m not cut out
0:16:56 for that.”
0:16:58 Well, of course, then it’s not going to be successful.
0:17:02 But the people who are successful at it are the ones that go, “No, I’m going to figure
0:17:03 this out.
0:17:05 I’m going to spend more time, more energy.
0:17:06 I’m going to hire coaches.
0:17:07 I’m going to hire an agency.
0:17:08 I’m going to learn.
0:17:10 I’m going to figure this out.”
0:17:16 So I think the difference here is going, you don’t have a plan B. You only have a plan
0:17:24 A. Now, you have to be flexible to adapt what plan A is, but leaving or quitting or escaping
0:17:26 is not one of the options.
0:17:29 And that is one of the secrets of ultra performers.
0:17:34 They lock in on a goal and they go, “I am going to achieve this.
0:17:41 How or when, I’m not entirely sure, but I’m target locked and I’m going to find a way.”
0:17:45 Other people go, “I’ll do it if it’s comfortable.
0:17:46 I’ll do it if it’s safe.
0:17:50 I’ll do it if it’s easy, but not ultra performers.”
0:17:51 Yeah.
0:17:55 This reminds me of something that Marie Forleo says, “Everything is figure out of all.”
0:17:56 So it’s like figuring out how.
0:18:01 What are the ways that you’re going to figure out how to do whatever goal that you set out?
0:18:06 And instead of contemplating what is the exact right thing I should do, how do I actually
0:18:08 do the thing that I want to do?
0:18:09 Yeah.
0:18:10 And there’s always a way.
0:18:13 So that’s another thing is that what most people ask when they reach this decisional
0:18:19 threshold of deciding, “Should I continue forward in this commitment or should I not?”
0:18:23 What most people ask is, “Should,” as they say, “Should I do this?
0:18:24 Should I do this?
0:18:25 Do that?
0:18:26 Is it possible?
0:18:27 Do I like this?”
0:18:30 And what the ultra performers do is only one degree different.
0:18:35 They don’t ask, “Is this possible or should I do this or can I pull this off?”
0:18:39 They simply ask, “How is this possible?
0:18:41 How could I make this work?
0:18:43 What would it take in order for it to come true?”
0:18:52 And the moment you ask this question, “How,” it’s like your mind transcends all limitations
0:18:58 and you break free of these preexisting belief barriers and these mental prisons of our own
0:19:04 construction of what we think is possible and what isn’t and your creativity engages.
0:19:09 And the human brain, this is where you get into the neuroscience, well, the neuroscience
0:19:13 of this is that the human brain cannot delineate between positive or negative.
0:19:16 It simply does whatever you tell it to do.
0:19:20 The human brain also cannot delineate between true and false.
0:19:23 It simply believes whatever it is told most often.
0:19:28 So if you tell yourself, “This is hard and I don’t know if this is right for me,” your
0:19:35 brain is going to process and find evidence and documentation and examples for why it’s
0:19:42 too hard and why it won’t work out for you and it will process until it finds a rationalization
0:19:47 that is comfortable for you to accept so that you can quit and you can stay safe.
0:19:52 But similarly, if you ask the question, “How is this possible?”
0:19:57 Your brain will process indefinitely on that and it will process and process and process
0:20:02 until one day you’ll wake up in the middle of the night and boom, the answer comes.
0:20:08 It’s not that most people don’t have the talent or the skill to succeed, it’s that they don’t
0:20:15 have the resolve or the commitment and so they’re not able to see the solutions because
0:20:19 their brain is not actually being programmed to look for solutions, their brain is being
0:20:22 programmed to look for excuses.
0:20:26 Let’s hold that thought and take a quick break with our sponsors.
0:20:31 Yeah, fam, when I first started this podcast, believe it or not, I had an all-volunteer
0:20:33 team to help me out.
0:20:37 But as my business took off, I needed to hire a lot of new people and fast.
0:20:39 It soon became overwhelming.
0:20:44 I had to sort through piles and piles of resumes, conduct countless interviews, you know how
0:20:49 it goes, and then I discovered the easiest way to hire the right people quickly and
0:20:51 that’s indeed.
0:20:54 When it comes to hiring, indeed is all you need.
0:20:57 Stop struggling to get your job post seen on other job sites.
0:21:01 Indeed’s sponsored jobs help you stand out and hire fast.
0:21:05 With sponsored jobs, your post jumps to the top of the page for your relevant candidates
0:21:10 so you can reach the people that you want faster and it makes a huge difference.
0:21:16 According to Indeed data, sponsored jobs posted directly on Indeed have 45% more applications
0:21:18 than non-sponsored jobs.
0:21:22 One of the things that I love about Indeed is that it makes hiring all in one place so
0:21:26 easy because they don’t have to waste time sifting through candidates who aren’t good
0:21:28 fits for my company.
0:21:32 Plus with Indeed’s sponsored jobs, there’s no monthly subscriptions, no long-term contracts,
0:21:35 and you only pay for results.
0:21:36 How fast is Indeed?
0:21:40 In the minute I’ve been talking to you, 23 hires were made on Indeed according to Indeed
0:21:42 data worldwide.
0:21:44 There’s no need to wait any longer.
0:21:46 Speed up your hiring right now with Indeed.
0:21:50 And listeners of this show will get a $75 sponsored job credit to get your jobs more
0:21:53 visibility at indeed.com/profiting.
0:21:58 Just go to indeed.com/profiting right now and support our show by saying you heard about
0:22:02 Indeed on this podcast, indeed.com/profiting.
0:22:04 Terms and conditions apply.
0:22:07 Hiring Indeed is all you need.
0:22:09 What’s up, busy young-in-profitters?
0:22:13 If you’re like me, you’re constantly racing against the clock, skipping meals, or settling
0:22:14 for unhealthy takeout.
0:22:20 Now, I ate way too much unhealthy takeout last year, but this year I was set to make
0:22:25 a change, and a huge factor in my success has been factor.
0:22:29 Factor has chef-made gourmet meals that make eating well so easy.
0:22:34 They’re dietitian-approved and ready to heat and eat in two minutes, so you can feel right
0:22:37 and feel great no matter what life throws at you.
0:22:40 Factor arrives fresh and fully prepared at your doorstep.
0:22:45 They’ve got over 40 options across eight dietary preferences each week, so you never
0:22:48 feel like you’re eating the same thing over and over again.
0:22:53 I personally love their protein plus meals because I really like to work out every day,
0:22:57 but you can also choose from their calories smart or keto plans.
0:23:01 Factor has saved me so much time and so much effort when it comes to meal planning.
0:23:06 I usually just have factor every night for lunch or dinner, and I just cook once a week.
0:23:08 You can also eat factor all day.
0:23:12 They’ve got smoothies, breakfasts, grab-and-go snacks, and so many more add-ons.
0:23:17 Personally, I can’t get enough of their protein shake bundle, so yeah, fam, why don’t you
0:23:22 keep it simple this year and reach your nutrition goals with ingredients you can trust and convenience
0:23:24 that can’t be beat with factor.
0:23:26 So join me and eat smart with factor.
0:23:32 Get started at factormeals.com/factorpodcast with Code Factor Podcast to get 50% off your
0:23:34 first box plus free shipping.
0:23:40 That’s factormeals.com/factorpodcast with Code Factor Podcast to get 50% off your first
0:23:42 box plus free shipping.
0:23:47 Yeah, fam, do you ever wonder why some businesses do incredible and skyrocket with their sales
0:23:50 while others just flounder and barely survive?
0:23:55 Well, I can think of some common denominators of the successful businesses that grow sales
0:24:00 well beyond their forecast, such as Feastables by Mr. Beast or even a legacy business like
0:24:01 Mattel.
0:24:03 They both have a desirable product.
0:24:08 They both have a strong brand identity and influencer-driven marketing, which is the
0:24:09 future.
0:24:14 But sometimes the thing that goes overlooked and that’s not talked about often enough
0:24:18 is the magic that happens behind the scenes with the business behind the business.
0:24:23 The technology that makes selling and buying easy for everyone.
0:24:30 And for millions of businesses, that business that’s powering them is Shopify.
0:24:32 Nobody does selling better than Shopify.
0:24:35 It’s the home of the number one checkout on the planet.
0:24:41 Shopify’s not-so-secret secret is shop pay, which boosts conversions up to 50% with payment
0:24:42 plans.
0:24:48 That means way fewer cards go abandoned and way more sales get done.
0:24:52 So if you’re into growing your business, your commerce platform better be ready to keep
0:24:58 up and sell wherever your customers are scrolling or strolling on the web, in your retail store,
0:25:03 on your social media feed, and everywhere in between Shopify’s got you covered.
0:25:06 Companies that sell more sell on Shopify.
0:25:11 Upgrade your business and get the same checkout that Mr. Beast, Mattel, and yours truly use.
0:25:17 Sign up for your $1 per month trial period at Shopify.com/profiting, that’s all lowercase.
0:25:27 Go to Shopify.com/profiting to upgrade your selling today, Shopify.com/profiting.
0:25:28 That’s so powerful.
0:25:33 And I think all of us have these big dreams, big goals, but a lot of us have a problem
0:25:39 with time management, actually focusing on the things we need to focus on, prioritizing.
0:25:42 And you actually talk a lot about creative avoidance and procrastination.
0:25:46 So my first question to you on that is, why is that so personal to you?
0:25:48 Why have you wrote so much about procrastination?
0:25:52 Yeah, my first book, Take the Stairs, and my second book, Procrastination on Purpose,
0:25:54 Five Permissions to Multiply Your Time.
0:26:01 So really the way this fits in is I have always been fascinated with success.
0:26:07 And really, if you look at the arc of my whole career, Hala, I bucket it with something very
0:26:09 simple called the four levels of influence.
0:26:14 And so level one is influencing yourself to take action.
0:26:17 You’re influencing one person, yourself.
0:26:22 And all of my early work is about level one influence, which is basically the enemy of
0:26:25 influencing yourself is procrastination.
0:26:32 And so we talk about creative avoidance and priority dilution, these terms that I invented
0:26:36 for different types of procrastination that people aren’t aware of.
0:26:37 So we can talk about those if you want.
0:26:42 And level two influence is influencing one other human.
0:26:45 And so that is all of my work in sales.
0:26:48 And our first company was a sales coaching company.
0:26:50 We started that in 2006.
0:26:52 We grew that to eight figures.
0:26:54 We sold it in 2018.
0:26:57 We had 200 people and all we did was sales coaching.
0:26:59 That’s influencing another person.
0:27:04 Also relationships and one-on-one communication is level two influence.
0:27:11 How do I talk and listen and interact with an individual in a way that creates influence?
0:27:13 It moves them to action.
0:27:19 Level three influence is influencing a group of people or a team.
0:27:23 So this is all the area and the work and the study and the writing we’ve done on leadership.
0:27:30 It’s going, how do you act, talk, behave, operate and create systems in a way that activates
0:27:33 a small group of people to take action?
0:27:35 So that’s leadership.
0:27:39 And then level four influence is really what we’re doing now, which is personal branding.
0:27:43 And that is inspiring and moving a community of people.
0:27:45 It’s creating a movement.
0:27:51 It’s activating and influencing people who you may never actually meet face to face,
0:27:55 that you impact them through your writing, your videos, your podcasts, et cetera.
0:27:57 So that’s most of where we spend our world now.
0:28:05 But my early books and my early work really stem from learning how to influence myself
0:28:08 and to battle my own beast of overcoming procrastination.
0:28:14 And one of the things I think not enough people understand that you can’t build a great personal
0:28:18 brand until you build strong personal character.
0:28:19 Yeah.
0:28:25 So you need strong core values that you yourself align to before anybody wants to follow you.
0:28:30 Because if you’re not an impressive person or a well-rounded person with good character,
0:28:34 no one’s going to want to follow you or be a fan of yours because you’re only fans of
0:28:35 people that you look up to.
0:28:36 Totally.
0:28:38 And my pastor said this to me one time.
0:28:45 He said, “Your influence will never grow wider than your character runs deep.
0:28:48 Your influence will never grow wider than your character runs deep.
0:28:50 And if it does, that’s when the implosions happen, right?
0:28:54 That’s when the celebrities and stuff, they have these implosions because they have wide
0:28:59 influence in the public, but they have personal lives that are a mess.
0:29:01 And that’s what causes implosion.
0:29:07 So you have to build a strong personal brand on a foundation of strong personal character
0:29:11 because the reality today is it takes serious muscle.
0:29:15 I mean, you look at the people who are crushing it on YouTube, these are not people just pushing
0:29:17 record and throwing it up there.
0:29:19 They have teams of people.
0:29:20 They have editors.
0:29:22 They’re thinking of hooks.
0:29:25 They’re very intelligent and sophisticated.
0:29:28 You look at the people who do marketing and funnels.
0:29:33 I think a lot of times people go, yeah, just build an online business, throw up a website
0:29:34 and make millions.
0:29:36 It’s like, no, that’s not really how it works.
0:29:42 It takes extreme discipline, focus, commitment, intelligence, strategy.
0:29:43 And that’s true about anything.
0:29:46 And excellence is never an accident.
0:29:53 And so I think we hear a lot more about personal branding these days and we need to hear probably
0:29:56 a little bit more about personal character.
0:29:59 It’s such a strong point and it’s such a great tie-in to everything we’re about to talk about.
0:30:03 But since I brought it up, what is procrastinating on purpose?
0:30:08 Because that feels like you’re speaking directly to me because I am this type of person where
0:30:11 I love to work under pressure because I know I can do things fast, especially if I know
0:30:16 what I’m doing, if it’s boring, it’s more fun for me to procrastinate on purpose.
0:30:17 But what did you mean by that?
0:30:22 Give us any sort of guidance you have about time management and procrastination.
0:30:25 Real quick, there’s three types of procrastination.
0:30:28 There’s classic procrastination, which is consciously delaying what you know you should
0:30:29 do.
0:30:33 I know I should pay my taxes, I know I should work out, I know I should make this difficult
0:30:35 phone call, whatever.
0:30:40 But most of us, while most of us do struggle with classic procrastination, most of us are
0:30:42 aware of that.
0:30:47 Where we’re really losing is to the two types of unconscious procrastination, one of which
0:30:50 is creative avoidance.
0:30:55 Creative avoidance is a term that I coined that is unconsciously creating stuff for yourself
0:31:03 to do so that you can achieve trivial things which make you feel productive because dopamine
0:31:08 is released, that chemical is released from your brain into your body every time you delete
0:31:12 an email or you cross something off your to-do list, dopamine is released.
0:31:18 So it makes you feel good, you feel productive, but really what’s happened is you’re addicted
0:31:20 to accomplishing the trivial.
0:31:24 You’re addicted to completing the insignificant.
0:31:26 That’s what creative avoidance is.
0:31:31 Then there’s priority dilution, which is the chronic overachievers procrastination.
0:31:37 They’re not lazy, they’re not apathetic, they’re not disengaged, they’re not even distracted.
0:31:39 What they are is interrupted.
0:31:44 So you’re building a team now, you’ve got dozens of employees.
0:31:47 As you become more influential, more and more people are vying for your attention.
0:31:51 You get higher and higher profile clients, higher and higher profile opportunities.
0:31:58 And so everybody is coming at you with their agenda, I think of an inbox, an email inbox
0:32:06 as a great literal illustration of this because what is an inbox other than a mechanism for
0:32:10 prioritizing other people’s requests?
0:32:13 Your inbox is none of the things you want to do.
0:32:16 It’s everything everybody else wants you to do.
0:32:22 And most of us sort even our inbox from what has come in most recent and we just see what
0:32:23 is most recent.
0:32:27 Well, often the most recent request is not the most significant request.
0:32:33 And so priority dilution is living in a constant state of interruption, ending your day with
0:32:38 your most significant tasks incomplete, not because you’re lazy, but because you’ve allowed
0:32:43 yourself to fall victim to whatever is vying for your attention rather than the things
0:32:45 that you know you need to do.
0:32:49 So that was introduced and take the stairs.
0:32:53 Well, when we studied ultra performers and we started to look at how do they get past
0:32:54 this?
0:32:57 That was when we invented the system of multiplying time.
0:33:01 Well, we didn’t really invent the system, we just put a vernacular around it, which was
0:33:02 what my TED Talk was.
0:33:05 So my TED Talk that went viral is called how to multiply time.
0:33:13 And all we were doing is we were putting a vernacular and semantics around the unconscious
0:33:20 thought process that the world’s ultra performers use when it came to managing their time.
0:33:23 And people of course say time is the one thing you can never get more of.
0:33:26 Well, that’s not actually true.
0:33:28 It is true inside of one day, right?
0:33:30 There’s nothing you can do to get more time in a day.
0:33:35 We all have 24 hours, which is 1,440 minutes or 86,400 seconds.
0:33:37 But that’s exactly the problem.
0:33:42 Everyone believes they cannot get more time because that’s what they’ve been told most
0:33:43 often.
0:33:44 So your brain believes it.
0:33:48 In reality, you can create more time.
0:33:49 You say how?
0:33:50 Simple.
0:33:53 And this is the premise of the TED Talk and the whole second book.
0:33:59 The way that you multiply time is by spending time on things today that create more time
0:34:00 tomorrow.
0:34:05 While there’s nothing you can do today to create more time today, there’s all sorts
0:34:10 of things you can do today that if you do them today, they will create time and space
0:34:13 tomorrow that you would not have otherwise had.
0:34:17 We bucket those in something called the focus funnel, which again is sort of the flagship
0:34:19 framework of the TED Talk and the book.
0:34:24 Well, it’s eliminate, automate, delegate, concentrate are four of the five.
0:34:31 The fifth one is procrastinate, and procrastinating on purpose is about procrastinating on purpose
0:34:37 with the insignificant tasks, the trivial tasks, and ultimately, when you become an
0:34:41 ultra performer, you ultimately will have to say no to some things.
0:34:46 You will ultimately have to ignore some things because there are too many applicants for
0:34:50 your time, too many applicants for your podcast, too many emails that you can ever respond
0:34:51 to.
0:34:58 You become an ultra performer not by being a master of what you say yes to, but more
0:35:02 of being a master of what you say no to.
0:35:09 If you procrastinate on the trivial things, then that suddenly creates a margin or a pocket
0:35:14 of time that you can then reinvest and reallocate into the things that multiply your time, which
0:35:18 are things that you’ve spent time on today that create more time tomorrow.
0:35:21 That’s the whole book as fast as I can give it to you.
0:35:23 That was so good.
0:35:24 What is the name of the TED Talk?
0:35:25 I knew that went super viral.
0:35:27 It’s evergreen content.
0:35:29 What is it called so people can check it out?
0:35:33 The TED Talk is called How to Multiply Time.
0:35:39 By the way, this is my greatest, my most painful, most expensive marketing mistake I’ve ever
0:35:40 made.
0:35:47 When TED asked me for the talk, they didn’t ask me, “What do you want to call your talk?”
0:35:50 They asked me, “What is the talk about?”
0:35:53 I said, “Oh, the talk is about how to multiply time.”
0:35:58 They titled it for me, How to Multiply Time and it went viral.
0:36:01 When I wrote the book, I had a chance to select the title.
0:36:06 I thought procrastinating on purpose was so catchy and unique and clever and people had
0:36:08 never heard of it.
0:36:10 People have never heard of it.
0:36:17 Maybe it’s intriguing, but the problem is it’s confusing and it’s not enticing.
0:36:21 Everybody wants to procrastinate on purpose, but everyone wants to multiply time.
0:36:26 This is one of the other really big personal branding lessons that we teach people is that
0:36:30 clear is greater than clever.
0:36:32 Clear is greater than clever.
0:36:36 My TED Talk is clearly titled How to Multiply Time.
0:36:41 My book, which is on the same topic, has a crappy title of procrastinate on purpose.
0:36:44 The subtitle is Five Permissions to Multiply Your Time.
0:36:45 It’s the same content.
0:36:47 The TED Talk went viral.
0:36:52 That second book doesn’t sell that well and I’m convinced it’s because of this painful
0:36:55 mistake that I made of mistitling the book.
0:37:00 Well, hopefully you never make that mistake again and now we will never make that mistake
0:37:03 because we know that clear is better than clever.
0:37:05 That’s our first personal branding lesson from you.
0:37:07 I’m sure we’re going to learn many more.
0:37:10 Let’s talk about your business brand builders group.
0:37:13 What are the types of things that you do for your clients?
0:37:16 We are a personal brand strategy firm.
0:37:22 Think of if you were built in a house, you could go to Home Depot, grab some tools, grab
0:37:27 some supplies, roll up on some pile of dirt and start building a house.
0:37:33 You probably would do better if you started with an architect and you had an architect
0:37:39 that understood everything about zoning and permits, slope and grading and everything
0:37:45 about structural engineering and someone who could design something for you that could
0:37:49 hold a skyscraper and not just a shack that you threw up.
0:37:51 Well, that’s what we are.
0:37:53 We are the architects.
0:37:58 We work with several of the biggest personal brands in the world, some that I mentioned,
0:38:03 Ed Milette, Lewis Howes, Amy Porterfield, Tom and Lisa Bilyu, Eric Thomas, ET, the hip
0:38:04 pop preacher.
0:38:05 It goes on and on.
0:38:06 Amazing people.
0:38:07 So many you’ve had on your show.
0:38:09 So many I know that you are friends with.
0:38:14 So what do we do for them in a tactical way?
0:38:19 We tend to help people get really, really clear on their uniqueness and figuring out
0:38:24 what’s the thing that only they can do and talk about that nobody else in the world can
0:38:26 talk about.
0:38:31 So we do a lot around identifying their uniqueness and the identity of their brand, not the visual
0:38:36 identity but the actual personification of their message.
0:38:43 We do a lot around the art of speaking, the business of speaking, live events, monetizing
0:38:46 live events, putting on live events.
0:38:48 We do a lot around book launches.
0:38:52 That’s one of the things that we probably do as good, if not better than anyone else
0:38:53 in the world.
0:38:59 We have helped 29 people become New York Times, Wall Street Journal, or USA Today, national
0:39:01 bestselling authors.
0:39:02 We don’t game the list.
0:39:04 We don’t let authors buy their own books.
0:39:05 We’re not tricking the system.
0:39:11 We just have really proven ways to get real humans to buy books.
0:39:14 So we do that and then monetization strategy.
0:39:22 So if I had to say, it’d be messaging and positioning, speaking, books, and then monetization
0:39:26 strategy, we get into various components of that.
0:39:31 But the single best piece of personal branding advice I’ve ever received, and this is not
0:39:32 a Rory quote.
0:39:37 I wish it was, but it came from a guy named Larry Wingett, and I heard Larry say this
0:39:38 early in my career.
0:39:47 He said, “The goal is to find your uniqueness and exploit it in the service of others.
0:39:51 Find your uniqueness and exploit it in the service of others.”
0:39:54 The first time I heard Larry say that, I was like, “God, that is it.
0:39:55 That is brilliant.
0:39:56 That’s exactly what it is.”
0:40:01 Now, the thing was, he never had a business teaching people or helping people find their
0:40:06 uniqueness, so we developed a methodology, a process that we take people through.
0:40:07 It’s a two-day experience.
0:40:09 It’s this whole set of introspective questions.
0:40:14 We could touch on some of them now if you want to help people figure out what is the
0:40:18 thing that only you can do?
0:40:20 What is the divine calling on your life?
0:40:22 What is your uniqueness?
0:40:29 And once we help people find that, that’s a huge, huge part of everything else falling
0:40:30 in place.
0:40:35 Why is it so important for somebody to focus on one thing, one expertise?
0:40:37 Why is that so important?
0:40:38 Great question.
0:40:43 It’s because of a concept that we refer to as Sheehan’s Wall.
0:40:49 I named this concept after a colleague of mine named Peter Sheehan, who showed me a model
0:40:52 that we have since adapted to personal brands.
0:40:58 He works more in the corporate space, but I saw his model, and here’s how it works.
0:41:03 In any industry, in any vertical, in any market, on any platform, there’s two groups of people.
0:41:06 There are those who are unknown.
0:41:08 They’re living in obscurity.
0:41:13 They’re yet to be discovered or found or popularized.
0:41:16 And then there is a group of people who are well-known.
0:41:17 They don’t have obscurity.
0:41:18 They have notoriety.
0:41:20 They have trust.
0:41:21 They have recognition.
0:41:22 They have reputation.
0:41:28 Well, in between being unknown and well-known, between obscurity and notoriety is this huge
0:41:31 invisible wall that we call Sheehan’s Wall.
0:41:36 What most people do who are living in obscurity is they look at the people in notoriety.
0:41:41 They look at Tony Robbins or Gary Vaynerchuk or whoever, and they look at what they’re
0:41:46 doing, Oprah, The Rock, and they go, “I want to do the things that they do.”
0:41:50 And so they go, “Well, Tony Robbins has all these different topics, like he talks about
0:41:55 money and he talks about health and he talks about unleashing the power with wind and date
0:41:57 with destiny and relationships and spirituality.”
0:41:58 Well, I have all these topics.
0:42:01 So they talk about lots of different topics.
0:42:05 And then they are like, “Oh, I got to be on lots of different platforms, right?”
0:42:08 The whole thing is you got to be on LinkedIn and you got to be on TikTok and you got to
0:42:11 be on Instagram and YouTube and X, Twitter, whatever.
0:42:14 And then every time they go on Facebook or something, they see a new ad for a new business
0:42:15 model.
0:42:18 And it’s like, “Oh, the way to get rich is doing webinars.
0:42:19 No, it’s live events.
0:42:20 No, you should publish your own book.
0:42:21 No, you should become a speaker.
0:42:22 No, you should do masterminds.
0:42:23 No, you should do retreats.
0:42:27 No, you should do one-on-one coaching and all these different business models.”
0:42:29 And then they have all these audiences, right?
0:42:32 And it’s like, “Well, I’m really passionate about talking to stay-at-home moms, but I
0:42:37 want to help kids who are like high school and college age, but I kind of live in the
0:42:41 corporate world and also sort of entrepreneurial.”
0:42:46 So they have too many audiences, too many messages, too many platforms, too many business models.
0:42:51 And what happens is they bounce off the wall.
0:42:57 And the reason that they bounce off the wall is because if you have diluted focus, you
0:43:01 get diluted results, period.
0:43:05 If you have diluted focus, you get diluted results.
0:43:09 And so if you look at Lewis Howes as an example, so he was our very first client.
0:43:11 I had met him at our former company.
0:43:13 We had been friends.
0:43:15 I had casually helped him with his first book launch.
0:43:19 And then when we sold our first company, Lewis and I reconnected.
0:43:23 He actually called us and said, “Hey, I’d love your brain on my business.”
0:43:26 And he’s the whole reason we started Brand Builders Group because we weren’t planning
0:43:28 on doing this.
0:43:32 And we didn’t teach Lewis podcast tactics to grow his show.
0:43:35 We didn’t teach him any of that stuff.
0:43:40 What happened was we took him through this process and we found that he had 17 revenue
0:43:41 streams.
0:43:45 And he had always been told by his friends and community, like, “Multiple streams of
0:43:46 income.”
0:43:49 Well, multiple streams of income is crappy advice.
0:43:54 It is terrible advice when you’re just first starting out.
0:43:59 Nobody who got super rich got super rich from multiple streams of income.
0:44:02 They got super rich by being amazing at one thing.
0:44:05 What you need is not multiple streams of income.
0:44:12 You need one freaking amazing stream of income, one brilliant stream of income, one thing
0:44:16 that you monetize the crap out of that does really, really well.
0:44:18 That’s how you break through the wall.
0:44:22 Once you’re sitting on a pile of money, then you diversify.
0:44:23 Sarah Blakely didn’t have multiple streams of income.
0:44:25 It’s not how she got rich.
0:44:29 Even Warren Buffett, even though he invested in a lot of things, investing is the only
0:44:31 thing he does.
0:44:36 You look at athletes, all of these people, they had one stream of income.
0:44:38 Well, Lewis had 17.
0:44:42 One of the exercises we take people through is called the revenue streams assessment.
0:44:45 We just look at how long have you been doing them?
0:44:46 What’s the total revenue?
0:44:48 How much stress is it causing you?
0:44:52 How much natural momentum does it have for growth in the future?
0:44:54 It’s like the scoring system.
0:44:58 He had this podcasting thing, which at the time was like a side hustle for him.
0:45:00 He was really a course company.
0:45:02 Most of his money was selling courses.
0:45:08 We said, “Well, this little exercise says that podcasting is the thing that is most
0:45:12 taking off with the least amount of energy, causing you the least amount of stress that
0:45:16 is the most fun and has the biggest opportunity for future growth.”
0:45:24 What would happen if we shut everything else down and just went all in on this one thing?
0:45:29 He’s been so generous about his praise of us, but really, that’s pretty much the only
0:45:31 thing we ever did.
0:45:34 He’s been through, I think, nine of our 14 curriculums, so we have worked a lot with
0:45:35 their team.
0:45:40 Like the main thing was just going, “If you’re a small business, just think about it.
0:45:44 If you’re a small business and you have limited resources, you don’t have hundreds of employees.
0:45:46 You don’t have millions of dollars.
0:45:52 If you just have those few resources spread across 20 things, what’s the likelihood that
0:45:56 any of them is going to take off versus going, “If you take those resources and you put them
0:46:00 all in on one thing, the success is inevitable.”
0:46:02 It almost doesn’t matter what the one thing is.
0:46:05 It just matters that there’s one thing.
0:46:09 This is where too many people try to make the right decision, and what ultra performers
0:46:12 do is they make a decision, and then they make it right.
0:46:17 This is so, so smart, and I feel like it’s reminding me a lot about social media strategy
0:46:18 too.
0:46:21 You don’t see somebody blow up on social media where they’re blowing up on every channel
0:46:23 at once.
0:46:27 Somebody blows up on LinkedIn or somebody blows up on YouTube or Instagram or TikTok.
0:46:28 Then they move on to other platforms.
0:46:33 It’s like you also have to build leverage on the social platforms as well, not just the
0:46:34 revenue stream.
0:46:39 So, I think going deep and not too wide is the key when you’re first starting out.
0:46:40 Yeah, you’re breaking through the wall.
0:46:43 Gary Vaynerchuk’s my favorite example.
0:46:48 Everyone says, “Rory, I think your whole finding uniqueness is stupid because Gary talks about
0:46:49 a million things.”
0:46:50 Yeah, Omni Channel.
0:46:51 Yeah, Omni Channel.
0:46:52 Yeah, Omni Channel.
0:46:56 He talks about rap music and sports and Web 3 and social and business and whatever advertising
0:46:59 and all this stuff.
0:47:01 He tells people, “Talk about all the things you’re passionate about.”
0:47:06 Yeah, except that’s not how he got there.
0:47:09 You can’t look at what those people are doing today.
0:47:12 Look at how he got there.
0:47:20 Gary Vaynerchuk in the beginning talked about one thing on one channel, Wine on YouTube.
0:47:22 So, I love Gary.
0:47:24 I don’t know him personally.
0:47:25 I have so much respect for him.
0:47:26 I’ve learned so much.
0:47:30 But I go, “He did not get there by doing what he’s doing now.
0:47:33 You can’t get to where he is by doing what he’s doing now.
0:47:37 You have to look at what he did and you break through the wall on that one thing, on one
0:47:41 channel, one topic and just go, “What’s the likelihood of success?”
0:47:45 Talking on YouTube and TikTok and Podcast and LinkedIn and Instagram about 25 different
0:47:51 things or going, “I’m going to dominate the topic of Wine on YouTube.”
0:47:55 We’ll be right back after a quick break from our sponsors.
0:48:01 With Robinhood Gold, you can now enjoy the VIP treatment, receiving a 3% IRA match on
0:48:03 retirement contributions.
0:48:06 The privileges of the very privileged are no longer exclusive.
0:48:14 With Robinhood Gold, your annual IRA contributions are boosted by 3%, plus you also get 4% APY
0:48:16 on your cash and non-retirement accounts.
0:48:19 That’s over 8 times the national savings average.
0:48:23 The perks of the high net worth are now available for any net worth.
0:48:25 The new gold standard is here with Robinhood Gold.
0:48:32 To receive your 3% boost on annual IRA contributions, sign up at robinhood.com/gold.
0:48:33 Investing involves risk.
0:48:39 3% match requires Robinhood Gold at $5 per month for one year from the first match.
0:48:41 Must keep funds in IRA for five years.
0:48:44 Go to robinhood.com/boost.
0:48:48 Over 8 times the national average savings account interest rate claim is based on data from
0:48:52 the FDIC as of November 18, 2024.
0:48:55 Robinhood Financial LLC member SIPC.
0:49:03 Gold membership is offered by Robinhood Gold LLC.
0:49:06 Let’s talk about why personal branding is not just for influencers.
0:49:11 Why is personal branding something that’s important for anybody who’s in business?
0:49:15 I’ll start with the common sense part first.
0:49:19 The reason that it applies to everybody is because when people hear the word personal
0:49:23 brand or personal branding, they think the wrong things.
0:49:29 They think social media, they think it means podcasting or social media or speaking or
0:49:34 writing books or creating a course, but that’s not how we think of it.
0:49:35 That’s not how we define it.
0:49:40 To us, personal branding is not a new concept.
0:49:43 It’s a new expression of an old concept.
0:49:48 Personal branding is simply the digitization of reputation.
0:49:56 The reputation’s been around since the dawn of time.
0:50:00 What do people know you for and what do they know about you in real life and do they trust
0:50:01 you?
0:50:06 All we’re doing with personal branding is digitizing that and automating trust at scale.
0:50:08 I’m not saying those things aren’t valuable.
0:50:09 They’re super valuable.
0:50:14 They’re super valuable, but many of the most influential people you meet and many of the
0:50:20 most influential relationships also will come offline, not online.
0:50:23 Even you and I, you’ve got this great following.
0:50:25 I’ve never had a huge social media following.
0:50:28 We’ve always been offline people and we’re a coaching company.
0:50:32 Even the service we provide in the world is very human.
0:50:37 It’s one-on-one human-to-human kind of thing, but I met you because Julie Solomon introduced
0:50:42 you to me and then I recognized Jenna and Amy and a lot of our other friends.
0:50:47 It was your offline reputation that really caught my attention and then supplemented
0:50:51 by your online reputation, which is clearly super impressive.
0:50:56 I think the reason it matters in business, I mean, the reason I know it matters in business
0:50:59 is because reputation matters in business.
0:51:05 Today, reputation is determined at least as much by what your online reputation is, is
0:51:06 your offline one.
0:51:10 If you don’t have one, it’s just like going, “Well, would you want to not have an offline
0:51:11 reputation?”
0:51:16 You would never say, “I don’t need a reputation and I don’t need people to say good things
0:51:18 about me or to know about me.”
0:51:19 That’s vain.
0:51:23 You would never say that about an offline reputation, but those are the things we sort
0:51:28 of erently say about personal branding online just because it’s newer and we don’t understand
0:51:33 it and because business people don’t want to point and dance and do trending songs and
0:51:36 spend their whole day trying to deconstruct an algorithm.
0:51:41 That’s not how they spend their time, but it doesn’t change the fact that it’s super
0:51:44 important and becoming more and more and more critical.
0:51:46 That’s the common sense part.
0:51:51 If you look at the data, if you’re going to talk about business people, we’re very, very
0:51:53 data-driven as a company.
0:51:57 Part of why we do the various things we do is because it’s data.
0:52:04 One of the things that we led, a PhD-led academic research study weighted to the US Census,
0:52:08 it’s a statistically valid and it’s a national to the US.
0:52:12 We didn’t do it for the whole world, but we spent tens of thousands of dollars on this.
0:52:20 In fact, if you want to go download the study, if you go to freebrandstudy.com/profiting,
0:52:23 you can download a copy of the full study.
0:52:28 One of the things that we found is that 74% of Americans say they are more likely to
0:52:32 trust somebody who has an established personal brand.
0:52:37 That’s across all ages, income ranges.
0:52:40 We trust people who have an established personal brand.
0:52:45 When you look at the professions, one of the things that we asked, so one of the questions
0:52:50 is, “How important is it to you that each of the following people have an established
0:52:51 personal brand?”
0:52:58 We asked the general public, “Which careers, which professions, does it most matter to you
0:53:01 that your provider has a personal brand?”
0:53:08 The top ranked spot, 61% of people said they want their doctor to have a personal brand.
0:53:12 58% of people said they want their lawyer to have an established personal brand.
0:53:17 55% of people say they want their financial advisor, their banker, their business consultant
0:53:19 to have a personal brand.
0:53:22 53% said they want their insurance agent to have a personal brand.
0:53:26 52% said they want their real estate agent to have a personal brand.
0:53:28 This goes on and on and on.
0:53:30 Here’s what we found.
0:53:36 The higher the requirement for trust, the more the general population cares that you
0:53:39 have a personal brand.
0:53:42 The question is, “How much does trust matter in your business?”
0:53:48 If it matters a lot, you probably need to take this thing seriously because reputation
0:53:52 precedes revenue.
0:53:56 That’s why it matters to business people and some of them have caught onto it, right?
0:54:02 Ed Milette, Jamie Kern Lima, Elon Musk, like Richard Branson.
0:54:05 These people have caught onto it early, and it’s made a big impact.
0:54:09 Other people have not yet, and they’re falling behind.
0:54:13 As you’re talking, what I keep hearing is the opportunity for people in professions
0:54:18 like doctors, lawyers to really step in and dominate their niche.
0:54:21 There’s really not that many people in those types of professions.
0:54:26 You do see the people that do have a personal brand, they’re traditionally on billboards
0:54:27 or buses.
0:54:30 I feel like they probably make way more money than the average person who’s not doing those
0:54:31 sorts of things.
0:54:35 Imagine if they just built their personal brand on social media because I’m getting
0:54:39 more and more like doctors wanting to be on LinkedIn, so I am seeing this as a really
0:54:40 big trend.
0:54:43 You brought up trust.
0:54:49 Why is trust so important and what are the tangible ways that people can build trust online?
0:54:53 In order to answer that question, you’ll see this recurring theme in what we do.
0:54:57 To answer the question, how do you best build trust online, we would say, how do you best
0:55:00 build trust offline?
0:55:06 If you made a list of the top 10 people you trust in your life, like with trust with your
0:55:12 life or with your kids, like I’ve got two toddlers, so if you go, who would you trust?
0:55:16 There’s a good chance that the people on that list, like you would trust with your banking
0:55:22 information or that kind of stuff, there’s a good chance you know those people intimately.
0:55:25 You know where they eat.
0:55:27 You know where they live.
0:55:28 You know about their families.
0:55:30 You know where they went to college.
0:55:31 You know where they grew up.
0:55:33 You know about their siblings.
0:55:35 You know maybe some of their fears.
0:55:37 You know some of their mistakes.
0:55:40 You know those people intimately.
0:55:43 When I first got on social media, I was like, “Oh my gosh, this is so stupid.
0:55:46 Why is everyone posting pictures of what they ate?”
0:55:55 Then I realized, “Oh, because we trust people that we know intimate details about their
0:55:56 life.”
0:56:00 Now, that doesn’t mean you have to post pictures of your kids, right?
0:56:05 There’s a lot of reasons why not to and a lot of fears why not to.
0:56:07 AJ and I happen to do it a lot.
0:56:12 AJ is my wife and she’s also my co-founder and the CEO of Brand Builders Group, by the
0:56:13 way.
0:56:16 We were business partners in our former company that we sold and then we started Brand Builders
0:56:17 Group just the two of us.
0:56:20 She’s the CEO and I’m the CMO and we’re married, right?
0:56:22 We got two kids, so we post.
0:56:26 We happen to share those things occasionally.
0:56:29 We trust people that we know details about their life.
0:56:32 If I see someone walking down the alley, I’ve never seen them before.
0:56:34 I don’t know anything about the person.
0:56:39 If it’s dark and it’s an alley and I’ve never seen the person before, my spidey senses go
0:56:40 up.
0:56:43 I’m in an alley with a stranger.
0:56:44 That’s how it is, right?
0:56:45 Who’s going to buy from a stranger?
0:56:46 Nobody.
0:56:48 They got to know something about you.
0:56:50 Who else do we trust in real life?
0:56:53 Well, we tend to trust people who we learn from.
0:56:55 We trust pastors.
0:56:56 We trust lawyers.
0:56:57 We trust accountants.
0:56:58 We trust doctors.
0:57:00 We trust experts.
0:57:01 We trust teachers.
0:57:02 We trust mentors.
0:57:04 We trust counselors.
0:57:07 We trust people who teach us things.
0:57:09 Who else do we trust in real life?
0:57:12 We tend to trust people who entertain us.
0:57:14 They make us laugh.
0:57:16 They make us inspired.
0:57:19 They’re musical or they’re entertaining.
0:57:20 We see them on movies.
0:57:21 I mean, think about that.
0:57:26 We trust movie stars who we’ve never met, but we see them a lot.
0:57:28 Who else do we trust in real life?
0:57:32 We tend to trust people who encourage us in our darkest moments.
0:57:36 The people who were there when you had your heartbreak, when you didn’t get into that
0:57:42 school or you didn’t get that job or the relationship fell apart or you lost money on that deal.
0:57:45 The people who were there to encourage us in that moment.
0:57:48 Those are the people we trust because it’s like we’ve been through the fire.
0:57:49 I know you.
0:57:51 You got my back.
0:57:56 When you roll that forward to online, we have three simple strategies that we teach.
0:57:59 We call them the three E’s for content marketing.
0:58:03 First of all, educate, encourage, and entertain.
0:58:06 Educate, encourage, and entertain.
0:58:11 We typically say your feed should be more of what you do and it should educate, encourage,
0:58:14 or entertain because strangers don’t care about your cat.
0:58:20 The only people who care about your cat typically are going to be, once they’re intrigued by
0:58:24 you and they want to really vet you out, that’s where they go, “Who are you really?”
0:58:27 I’m a hardcore Bible thump and Jesus freak.
0:58:33 I post Bible verses every day in my stories because I read the Bible every day.
0:58:39 I started a whole podcast just looking at the academic and logical scrutiny for the
0:58:41 evidence of Jesus of Nazareth.
0:58:42 It’s called Eternal Life.
0:58:43 This was a huge side project.
0:58:44 I make no money for it.
0:58:46 It’s not associated with any churches.
0:58:49 There’s no sponsors or anything, but it was a huge personal project that I did.
0:58:52 I shared all of that in my stories.
0:58:54 Occasionally, you see it in my feed.
0:58:58 Occasionally, you see me talk about my kids in my feed.
0:59:03 Most of my feed is education and encouragement because I’m not that entertaining, but if
0:59:07 I was, I’d be entertaining on that feed too.
0:59:09 This is such great advice.
0:59:12 I align with everything that you say, and I think the biggest takeaway that I had from
0:59:17 what you just talked about was the fact that we trust people that we know personal details
0:59:18 about.
0:59:19 I get a lot of clients.
0:59:22 I do social media for folks, and a lot of people are really like, “I don’t want to talk
0:59:23 about my kids.
0:59:24 I don’t want to talk about private life.
0:59:25 I don’t want to talk about politics.
0:59:28 I don’t want to talk about this, that,” and I’m like, “Well, we’re going to need to talk
0:59:34 about something that’s personal to you so that people feel connected to you and can relate
0:59:36 to you and feel like they know you.”
0:59:40 I’m so aligned with everything that you’re saying.
0:59:42 One of my last questions for you on personal branding, and we’re going to start to close
0:59:47 out this interview, is what are the common mistakes that you see people make with their
0:59:48 personal brand?
0:59:52 The number one mistake we already talked about is diluted focus, diluted results.
0:59:57 Too many messages, too many audiences, too many platforms, too many monetization streams,
1:00:01 just too much stuff, you need to find one thing.
1:00:05 If you think about breaking through the wall, literally think about trying to knock down
1:00:07 a concrete wall.
1:00:11 Even if you took a sledgehammer, if you hit all different spots on that wall, you’re not
1:00:13 doing anything to it.
1:00:19 The only way is to hit the same spot over and over and over and over, and eventually it
1:00:20 would be frustrating at first, right?
1:00:23 It would feel like nothing’s happening, but it would chip a little bit, and then it would
1:00:27 chip a little more, and you hit it over and over and over, and it’s like, “This is how
1:00:28 it is.
1:00:33 You’re doing it a consistent, consistent, consistent, same message, really dominating
1:00:38 your niche,” and then eventually you would crack through the wall, and once that first
1:00:42 hole opened up, then the whole wall would collapse.
1:00:44 The mistake is they’re doing too many things.
1:00:46 They don’t have focus.
1:00:52 Our entire methodology, our entire curriculum, is actually 14 different two-day experiences.
1:00:56 That’s like our full, like if you did the full everything we do, there are 14 different
1:00:57 two-day experiences.
1:01:04 Well, the very first question in the first experience is a super simple question which
1:01:11 almost nobody can answer, and it is, “What problem do you solve in one word?
1:01:15 What problem do you solve for the world in one word?”
1:01:18 Most people cannot answer that question.
1:01:21 If you cannot answer that question in one word, there’s no way your audience is ever
1:01:24 going to be able to answer that question, so how are they going to refer you?
1:01:26 We buy solutions to problems, right?
1:01:31 I get a flat tire, I have a flood in the house, and I call a plumber, right?
1:01:33 We buy solutions to problems.
1:01:35 You have to be able to articulate the problem you solve.
1:01:38 If you can’t articulate the problem you solve in one word, this game is over before you
1:01:40 even started.
1:01:41 That’s the thing.
1:01:42 It’s just too much.
1:01:47 Honestly, that’s the only mistake, Hala, that really matters.
1:01:49 Probably that and consistency, right?
1:01:55 Once you get it, everything else is a tactic that can be tweaked or figured out or somebody
1:02:00 brilliant like you has got the answer for how to do it, you just got to find it.
1:02:02 You are like a wealth of information.
1:02:05 First of all, I want to invite you to my mastermind to talk about branding.
1:02:09 I talk a lot about branding, but I feel like you know so much, so I’d love to invite you
1:02:10 to my mastermind.
1:02:13 I know that you actually do free coaching calls at your company.
1:02:15 Can you tell us about that?
1:02:16 Yeah, totally.
1:02:23 We, as I mentioned, we’re very human experience, so we do the first call with everybody for
1:02:24 free.
1:02:28 Free brand call dot com forward slash profiting.
1:02:31 Free brand call dot com forward slash profiting.
1:02:34 I mentioned freebrandstudy.com forward slash profiting.
1:02:38 If you just want to download the study, you can go just get the data, but freebrandcall.com
1:02:43 slash profiting, you can fill out a form and we will do the first call for free with
1:02:45 everybody.
1:02:46 We just want to hear your story.
1:02:50 We want to hear who you are and what you’re about.
1:02:52 Most of the clients we work with are not the celebrities.
1:02:57 A lot of my private clients like you are people that are pretty well known, but our company,
1:03:02 we work with people just starting out to intermediate, to like advance, but all the above.
1:03:07 But if there’s a shortcut to finding your uniqueness, here’s the pattern that we noticed.
1:03:09 We didn’t know this when we started the company.
1:03:12 We figured this out after about like 1500 clients.
1:03:19 You are always most powerfully positioned to serve the person you once were.
1:03:26 Your most powerfully positioned to serve the person you once were.
1:03:30 On our first call, that’s what we usually ask about is who are you?
1:03:31 Who have you been?
1:03:32 What challenge have you conquered?
1:03:34 What setback have you survived?
1:03:36 What obstacle have you overcome?
1:03:38 What tragedy have you triumphed over?
1:03:39 We want to hear your story.
1:03:44 We want to know about you because we know that if we can really understand your story,
1:03:49 put a little strategy behind it, then we can set you on a path and reconnect you with
1:03:54 people like Hala that can give you more and more of the tactics, and you’re going to
1:03:57 blow up, but we got to find your uniqueness.
1:04:00 We got to know what is the divine design of your life?
1:04:02 What is the calling?
1:04:03 Why are you here?
1:04:08 And for most of us, at least for our audience of mission-driven messengers, it’s not to
1:04:09 be famous.
1:04:14 It’s about serving and serving the person that you once were, your most powerfully positioned
1:04:16 to serve the person you once were.
1:04:19 For Young Improfiters, I think you should definitely take Rory up on his offer.
1:04:21 We’re going to stick all those links in the show notes.
1:04:23 You should book a free coaching call.
1:04:27 Rory, I, and my show with two questions that I ask all my guests.
1:04:32 The first one is, what is one actionable thing our Young Improfiters can do today to become
1:04:34 more profitable tomorrow?
1:04:39 Other than requesting a call with us, which is an actionable thing you can do, I would
1:04:46 ask you specifically when it comes to making money, I would say, look at your business and
1:04:50 your life, and go, where do you have the most natural momentum?
1:04:55 Where are you winning the most while trying the least?
1:05:01 The more that you can lean into that, the faster you will make money.
1:05:05 Oftentimes, it’s doing the thing you’re already doing, but doing it better and letting go
1:05:07 of the other stuff.
1:05:12 It often is serving your current customer in a deeper way.
1:05:18 And so consumed with millions of followers and more people and more reach, they’re overlooking
1:05:20 the people that are right in front of them.
1:05:26 Most of us do not need millions of customers to double our income.
1:05:33 Most of us would double our best year ever with a couple dozen of our perfect clients.
1:05:37 So you don’t have to chase the quantity of everything.
1:05:39 Serve the people who are in front of you.
1:05:42 Look at where you have the most natural momentum.
1:05:49 Double down on that and say no, at least temporarily, procrastinate on purpose to everything else.
1:05:50 So good.
1:05:52 Such great advice, Rory.
1:05:54 Very impressed with your interview today.
1:05:58 My last question for you is, what is your secret to profiting in life, and this can
1:05:59 go beyond business?
1:06:00 It’s interesting.
1:06:04 So I mentioned my wife, AJ, who’s now been my business partner since 2006.
1:06:10 So she took a spiritual assessment, like your spiritual gifts one time, and she found out
1:06:13 that her spiritual gift is making money.
1:06:16 And I’m like, yes, that’s what I’m talking about.
1:06:21 I want to be a kept man, you know, high role and wifey.
1:06:31 But in all seriousness, I think that a huge key in someone’s ability to attract money is
1:06:38 for them to develop a healthy relationship that includes a comfortable separation from
1:06:39 money.
1:06:45 People who think of money as a shield or a defense or something that they have to hold
1:06:49 tightly onto, they never get much more than they have.
1:06:50 It’s sort of like a closed fist, right?
1:06:53 You get to keep what’s in your hand, but you’re never going to get more than what’s in there
1:06:56 because nothing can get out, but nothing can get in.
1:07:01 The people who have the most money think of money not as like a shield, but as a tool,
1:07:07 a tool to invest and to use and predominantly to give.
1:07:11 The reason why as a Christian, I want to make loads and loads of money.
1:07:15 I don’t need private jets and private islands and all that sort of stuff.
1:07:21 For me, there is some amount of money that I needed first to get debt free, then to have
1:07:25 the lifestyle that I wanted to have, which mostly included hiring the staff to do all
1:07:30 the things that I wanted to do so that I didn’t have to do them.
1:07:35 After that, you find that that much more money is not really going to satisfy you.
1:07:44 The truth is, peace is the new profit and giving money and using your money to help
1:07:50 other people or investing money into your platform in a way that serves people.
1:07:55 That’s what’s really going to give you peace, not some number in a bank account.
1:07:56 It just won’t.
1:08:00 I mean, we had four billionaire clients with a B last year.
1:08:05 We work with a lot of really wealthy people and I’m telling you, it’s not the amount
1:08:06 of money.
1:08:09 They’re all chasing peace and more money won’t give you peace.
1:08:11 More fame won’t give you peace.
1:08:16 For me, the greatest source of happiness and peace is service.
1:08:18 As a Christian, it’s love God and love others.
1:08:19 That’s the whole message.
1:08:20 It’s service.
1:08:23 That’s where you’ll find peace and peace is the new profit.
1:08:24 So beautiful.
1:08:25 Peace is new profit.
1:08:26 I love it.
1:08:27 Okay.
1:08:29 So where can everybody learn more about you?
1:08:32 I know that you’ve got a podcast.
1:08:33 Remind us about the call.
1:08:34 Let us know.
1:08:38 Honestly, if you’re interested in learning about us, I would just say go to one of the
1:08:46 two places I mentioned, freebrandstudy.com/profiting or freebrandcall.com/profiting.
1:08:49 Whether you, if you want the study or the call or you know, you could do both, but I
1:08:50 would just say go there.
1:08:51 You can learn all about us.
1:08:52 You can learn about our clients.
1:08:56 That’ll point you back to me and other places.
1:08:59 So I would just say go there and let’s be friends.
1:09:00 Awesome.
1:09:03 Rory, thank you so much for joining us on Young and Profiting Podcast.
1:09:05 Hala, thank you so much for having me.
1:09:10 I’m so impressed by you and thus very, very honored to be a part of this.
1:09:11 So appreciate it.
1:09:21 [Music]
1:09:23 (upbeat music)
1:09:32 [BLANK_AUDIO]