Every Business I Tried Before Making My First Million

0:00:03 All right, everyone. On this podcast, we talk a lot about the successes, but I want to talk
0:00:07 about the failures. So here’s about 10 different companies that I started before I made my first
0:00:11 million. Almost all of them, they sucked. It didn’t work. But I’m going to explain how much
0:00:13 I made for each idea and the lesson that I learned.
0:00:23 All right. What’s up, Sam?
0:00:24 What’s going on?
0:00:28 Let’s set this up. Name of this podcast, My First Million. When did you make your first million?
0:00:34 Cash, like cash million. I made it when my wife worked at Airbnb and it went public.
0:00:38 And that’s when we made our first. And then about three months later, I think it went later
0:00:42 in December. My company sold in February and then we made a lot. Leading up to that, we
0:00:45 were doing pretty good too, but I don’t think we had crossed one million.
0:00:50 Okay. So you made your first million, let’s call it 31 years old. Here’s all the businesses
0:00:54 you tried before that, before making your first million, which I think is pretty fascinating.
0:00:57 I want to go down this list. Does it start in high school?
0:00:57 Yeah.
0:00:59 All right. Go for it. Give me number one.
0:01:04 In high school, I made $2,500 one summer by buying graduating seniors old sports equipment
0:01:08 and selling it on eBay. And so what I used to do is I would just buy like people’s like
0:01:13 track spikes or, you know, whatever. And I would sell it on eBay. And most of the time I didn’t
0:01:17 buy it. They would just give it to me. They would hand it to me. And on eBay, I made $2,500.
0:01:20 That was my first business where I actually started making online money.
0:01:26 And this is flipping, basically. This is flipping assets that other people not only undervalue,
0:01:30 they might even not value it to the point where they’re just happy you took it off their hands.
0:01:35 Yeah. And frankly, I did this in college too, which I didn’t list here is when at the end of the college
0:01:39 year, I would, I would stay a few weeks after the end of the school year. And when people were moving
0:01:43 out, I said, I have a storage unit. You can come and put it here and just give it to me. You’re going to
0:01:45 throw it away. Just give it to me. And then I would resell it.
0:01:49 Exactly. I saw people doing this in college with textbooks. They would just say, oh, at the end of
0:01:52 the year, you don’t want to take all these heavy textbooks home. You’re done with that class.
0:01:56 Well, guess what? The next semester, there’s a bunch of people that are going to need that exact
0:02:00 textbook that were happy to buy it used. And so they would just go buy up people’s tech. They would
0:02:05 just take people’s textbooks. And each book was like, you know, a $40 or $50, you know, future sale that
0:02:06 they were able to pick up for free.
0:02:11 Okay. And then at 20, I started a hot dog stand, which everyone makes fun of me for talking about.
0:02:14 I have a hot dog stand. You have a sushi restaurant. They’re sick of us talking about it.
0:02:17 But I had one called Southern Sam’s. A wiener’s as big as a baby’s arm.
0:02:22 Basically, I knew a guy named Doc who had a hot dog stand. He let me rent it from him with very
0:02:25 little money up front. I was able to pay him on the 30th as opposed to the first of the month. So he
0:02:30 hooked me up. And with $500, I went to Restaurant Depot and I bought a bunch of Vienna sausages to get
0:02:34 my supply. And I was in business, baby, within a week of having this idea. And I used to live in a
0:02:39 bad neighborhood. Rydell was my next door neighbor and he became my best friend. He had served 20 years in
0:02:44 prison for attempted murder. And somehow we became best friends. He had the spare key to my
0:02:50 house. This was my guy. And Rydell ended up working with me at Southern Sam’s. And we spent
0:02:55 all day outside and it was a pain in the butt. Some days I would make 50 bucks. Other days I would go to
0:02:59 a concert or like an outdoor place that was popping and I would make $1,000. And I did that when I was
0:03:00 about 20 or 21.
0:03:03 This is your summer in college? What were you doing?
0:03:10 I was in college. I was in class. And so I would work until 3 p.m. I would go to classes from 3 p.m.
0:03:14 to 8 p.m. And then I had a night session where I was out by all the bars and that would be like
0:03:16 9 p.m. to like 1 a.m.
0:03:19 That’s amazing. How did you have the idea to do the hot dog stand? You just saw somebody else doing it?
0:03:23 I met a guy who had a cart and I wanted to do something. Yeah.
0:03:26 Did he tell you like I’m making 300 bucks a night or something?
0:03:32 I saw a video online of a guy saying how much money the Home Depot hot dog guys make. They make
0:03:41 $100,000 a year the ad said. And you were like in. I was a man. I was broke. I had my PhD. Poor,
0:03:45 hardworking, and driven. I was… Would you do this again? This one?
0:03:47 No, man. It was so hard. It was so hard enough.
0:03:50 Not now. But like if you were 19, 20 again, you needed to.
0:03:54 I learned how to sell so well, man. This is what inspired me to get into copywriting. I realized
0:03:58 that you had to like wheel and deal a little bit. You had to schmooze. You had to flirt. You had to do
0:04:03 this. And then I realized, what if I could do this on the internet where I could write something one
0:04:06 time and have an infinite amount of people come and read it. And I didn’t have to sell constantly.
0:04:08 Didn’t have to stand there in the heat.
0:04:12 I didn’t have to stand in the heat. I will post a photo here. I had these horrible… I mean,
0:04:16 look at me. I’m like the whitest guy ever. I had these horrible sunburns that when I took my tank top
0:04:19 off, it still looked like I was wearing a shirt, just a white like beater.
0:04:28 There’s this tweet that’s been going viral. They said, flirt with everyone. Flirt with women. Flirt with men.
0:04:31 flirt with old people. Flirt with kids. Just flirt with everybody. It’s non-sexual,
0:04:36 but literally just be the most playful, charming person you could be at all times. Like practice
0:04:41 this muscle. And I actually think this is 100% true. I know a couple of people in my life that are
0:04:45 like this. I’m not really like that, but I’ve been starting to do it just for fun. Just as a little
0:04:49 mini game. You know, when you’re just living a pretty routine life, you’re just going to the grocery
0:04:53 store. It’s either going to be a forgettable experience or you try something to make it a little
0:04:57 more fun. I’ve been doing this and it’s kind of amazing. You know what I call it? You know how people say
0:05:03 shalant? Be shalant. Be shalant. Don’t be non-shalant. Be shalant.
0:05:05 Shalant as hell.
0:05:07 Yeah. Be shalant. Try hard.
0:05:14 I emailed my wealth manager at Morgan Stanley and I was like, hey, I made this trade and
0:05:18 it like, there’s like a commission of like a hundred something bucks at the end of like the trade. I was
0:05:23 like, is there like a magic button you got over there, man? Like you got this magic button you can
0:05:27 push that makes all those fees go away? And that was what I sent the, you know, the private wealth
0:05:33 manager. And he goes, he just replied, magic button pushed trades, uh, commissions reversed. Enjoy your
0:05:37 trading. And I was like, just flirt with everybody. Like I could have been an annoying Karen. I could
0:05:42 have just, I could have just took it, done nothing. I could have been a Karen complaining, just flirt a
0:05:44 little bit. And everybody likes to be flirted with.
0:05:49 So my next business after that, I started this thing basically in Tennessee at the time,
0:05:54 white whiskey, which it’s called moonshine. Moonshine technically means illegal whiskey,
0:06:00 but there was these companies making whiskey that was in a Mason jar and it, they called it moonshine.
0:06:05 And I started selling that online and I thought I was doing it the right way because I kind of like
0:06:09 Googled it. And I talked to like a lawyer where I was like selling it as a novelty because it was
0:06:15 kind of like a gift item. I did that for about two or three months. And then I went to
0:06:19 my university’s, uh, like entrepreneurship program where they had free legal advice.
0:06:24 And I was like, Hey, I’ve made 10 grand in like the last, like, you know, 30 days or something
0:06:27 selling this whiskey online. I think I’m following the right rules, but is there anything else I need
0:06:31 to be doing? And they’re like, yeah, brother, you gotta, you better shut that down tonight.
0:06:38 Uh, and so that was like my second internet business, which inspired me to get into the game of the
0:06:43 internet. And my lesson learned on that one was if you’re going to do something like this,
0:06:47 you better really do it right. And you better pick something that aligns with your values around this
0:06:52 time. I was still drinking and I didn’t even like alcohol. I mean, you know, I had a love hate
0:06:55 relationship and I was like, why am I going to start selling this? I don’t want to do this is stupid
0:06:59 anyway, but you’re going to see there’s a pattern. It was definitely like a quick money, which I think
0:07:05 everyone who becomes a good entrepreneur, they, they do the gray hat gray hat area phase. And this was my gray hat
0:07:10 phase. Okay. I like it. You started it online. Did you learn about online marketing through this? Like,
0:07:14 were you, I mean, how’d you, how’d you get the 10 K? Where’d you, where’d you get your customers from?
0:07:21 I posted on forums, like motorcycle forums. Like, so basically like this whiskey that I was selling,
0:07:25 people were already searching for it because the guy. Drink and drive. Of course.
0:07:33 That should have been the name. People were already searching for this whiskey, but it was very early.
0:07:39 And so I was able to rank super easily on Google and I posted on message boards, forums of people who
0:07:44 wanting people who wanted it. And that’s how I made money. Nice. All right. So a lot of people
0:07:49 watch it, listen to the show because they want to hear us just tell them exactly what to do when it
0:07:53 comes to starting or growing a business. And really a lot of people who are listening, they have a full
0:07:57 time job and they want to start something on the side, a side hustle. Now, a lot of people message
0:08:01 Sean and I, and they say, all right, I want to start something on the side. Is this a good idea?
0:08:05 Is that a good idea? And again, what they’re really just saying is just give me the ideas.
0:08:11 Well, my friends, you’re in luck. So my old company, The Hustle, they put together a hundred
0:08:18 different side hustle ideas and they have appropriately called it the side hustle idea database. It’s a list
0:08:22 of a hundred pretty good ideas. Frankly, I went through them. They’re awesome. And it gives you how
0:08:26 to start them, how to grow them, things like that. It gives you a little bit of inspiration. So check it
0:08:31 out. It’s called the side hustle idea database. It’s in the description below. You’ll see the link.
0:08:33 Click it, check it out. Let me know in the comments what you think.
0:08:39 Okay. So now you moved to San Francisco. I think you, you, don’t you just do like a cross country
0:08:44 motorcycle ride to get to San Francisco as well? I do it at a later date, but this time I flew out
0:08:49 there because I had a job offer at Airbnb, which got rescinded when I got there because I’d lied on my
0:08:54 resume about getting a DUI. And so I was out there. I’m like, what the hell am I going to do? I got to meet
0:09:00 people. And so I started a thing called the anti-MBA book club and I tried monetizing it,
0:09:07 but I couldn’t really at first. And so what I did was I posted ads on Craigslist and on Reddit.
0:09:13 And I think I posted on Facebook and I got 2000 people to sign up, but here was the premise.
0:09:17 It was called the anti-MBA because I was very envious of Stanford students and Berkeley students.
0:09:21 I was very envious that they had this network and said, I’m going to read it one book per month.
0:09:25 We’re going to break it up into a quarter. So a week, a week, a week, a week, and I’m going to find
0:09:29 an expert on that book’s topic. And we’re going to come and discuss it with that expert. I’ll organize
0:09:35 and get the expert. You come, it’s free. And I got 2,100 people to sign up to my emailing list. And I
0:09:40 had about 20 people show up every single week. Some of those people include Siava, who’s now one of my
0:09:45 best friends. It was one of your close buddies, Neville Medora, who’s now, who was the best man
0:09:50 at my wedding, came from that. And so it was my best friends came to the anti-MBA book club.
0:09:55 And I posted a photo. If you zoom in on the top left of the photo, you’re going to see a skee-ball
0:10:00 machine. I found an arcade that let me host the book clubs for free in that place, as long as we’d
0:10:01 play skee-ball.
0:10:06 And you were reading books. Now, what kind of books were you reading in this? Is this like,
0:10:11 were the books actually useful for you in business? Or was selling white whiskey the right way to learn
0:10:11 business?
0:10:14 I don’t remember everything we read. But it was like, it was like Tim Ferriss’s book,
0:10:18 The 4-Hour Workweek. So you know how like, you want to like, if I was a techie, I would have built
0:10:22 like Clubhouse or something actually cool. But I didn’t have like anyone discuss these books that I
0:10:25 wanted to read. But it was kind of a forcing function, because I was like, like, I need to get good at
0:10:30 business. I better like get educated. What I could do is I can get these people to come to this book club,
0:10:33 and I’ll just read one week in advance and take really good notes. And I’ll sort of teach it.
0:10:37 Because when you do a book club, by the way, no one reads a book, just the one guy who is organizing
0:10:41 it. And so I was just going to organize it, organize and talk about it.
0:10:42 Okay, what came next?
0:10:48 Okay, and then around that same time, when I moved to San Francisco, I met a guy who had an idea for a
0:10:53 roommate matching app. And I was like, hey, I don’t have anything to do. May I please join you?
0:10:59 And so I previously had a pickup truck in Nashville, where I live, I sold it, I had roughly $5,000. He had a
0:11:04 little bit of money, we put it together. And we started with this idea called bunk. And the idea
0:11:09 with bunk was it was a roommate matching party website. And so we went to landlords who had two,
0:11:13 three, four or five bedrooms. And we would say, we’re going to post an ad on Craigslist. And we’re
0:11:17 going to advertise this three bedroom as a one bedroom apartment, meaning, instead of a $3,000
0:11:21 three bedroom, we’re going to advertise it as a $1,000 one bedroom. And we’re going to get 100 people
0:11:26 who are interested. And we’re going to host parties to help them team up and move into this apartment
0:11:30 and potentially other apartments. Sounded interesting. And it was somewhat interesting.
0:11:34 Couldn’t figure out how to monetize it. Roommate matching apps are one of like four businesses that
0:11:40 every just graduated college kid tries to start. That’s one of them. It doesn’t really work. So we
0:11:44 got Aqua hired roughly nine months later, which basically meant we got a job and we got some
0:11:49 bonus money if we like accomplish a couple things. But what we did do that was interesting. And I was not
0:11:53 able to do this. I was definitely like the marketing guy. But we turned that idea into Tinder for
0:11:58 roommates. And that was really dumb. Because most people when we launched when we got we actually got
0:12:03 10s of 1000s of people to sign up for via these infographics that I linked to that we made. But
0:12:07 most people are many people who are using it. We’re just meeting it to date. We should have just done
0:12:13 Tinder for Tinder. It would have been way smarter. And so that didn’t really work out.
0:12:18 Okay, so I think that to win in business, you got to have essentially three components.
0:12:23 The first component is you need to have a money making skill, meaning you have to have something
0:12:28 that drives value. This is either going to be learning to sell, learning to make things,
0:12:34 learning to hunt down interesting deals, right? You need a money making skill. What was your money
0:12:38 making skill you were developing during all these across all these different little projects?
0:12:44 Copywriting and also just like tenacity, but like getting after it. But copywriting was the one and
0:12:49 marketing. Marketing, right? Learning to sell. In your case, learning through sell, learning to sell
0:12:54 through? Getting website traffic and getting the web visitor to do what I wanted them to do.
0:13:01 Cool. The second thing is, you got to learn to be sort of tenacious and scrappy, which comes not as a
0:13:05 thing you want to do, but as a thing you are forced to do, because you really have no other choice.
0:13:09 But once you find that gear, you now know you have it. That’s how I would describe it. Is that
0:13:14 accurate? It sounds like it’s what happened in your case too. Nobody wants to be scrappy,
0:13:18 to be clear, right? Like if you had the option to not have to tough it out, you would probably have
0:13:23 taken that. But when you’re forced to do it, you learn, okay, I have this sort of animal inside.
0:13:28 I can do this. And now I’m going to use this and every single thing I do. Whereas somebody who
0:13:31 doesn’t know if they could do that, they’re hesitant to go for it.
0:13:36 Yeah. And what’s funny about that tenacity or sorry, being scrappy is there’s this chart where
0:13:40 basically like you, you start that way and you don’t like it. And then you like kind of get some
0:13:45 a little bit of fancy. But then once you already are fancy or successful, you realize you should
0:13:49 always be scrappy. You know what I mean? There’s like a reason that like Amazon has like the pizza
0:13:52 rule where it’s like you’d only have a team of people that are like four people because small
0:13:57 scrappy teams do significantly better in many cases than bigger teams. And so, yeah,
0:14:01 when we, when we met, it’s actually hilarious. If you had just taken a picture of both of our
0:14:06 offices and you had said, which of these two guys is a successful entrepreneur?
0:14:12 My office was like a museum. You had a dude, if you walked up to Sean’s office, I’m not exaggerating
0:14:16 you. In San Francisco, we live by Yosemite and the redwood trees. They’re huge. You could drive it.
0:14:21 You could cut a hole in it and drive a car through it. Sean’s office as it’s as if they made a like
0:14:26 a coffee coaster for your cup out of a redwood tree. And it was the size of like 18 feet long.
0:14:31 It was like a 18 foot in diameter circle. That was like a, probably a half a million dollar table.
0:14:38 Yeah, it was. We had four stories. We had an entire apartment built in with heated bathroom floors.
0:14:42 So if you needed to stay the night, you could sleep there. Every, every wall was made of one way,
0:14:45 one way mirrors. So you could like see out, but it couldn’t see in.
0:14:50 We had a chef. We had a chef there every single day. We had a masseuse on Fridays. We had open bar.
0:14:56 So every Friday we had, so all these things, it’s a full, it’s a 30,000 square foot office
0:15:01 decorated by Ken Folk, one of the fanciest designers in the world. And that was my office. I remember Sam
0:15:05 came over one time and he picked up the ashtray, which nobody smokes inside. I don’t even know why we
0:15:10 have an ashtray. It’s like illegal to do that. And he picked up the ashtray, flipped it over and he goes,
0:15:15 this is a $700 ashtray because the sticker was still on it. And I was like, I don’t know what to tell you.
0:15:18 I don’t know what, I don’t know what I’m doing here. And I stole it.
0:15:23 It’s like the Titanic got built and then they just plucked like a 23 year old idiot. And they’re like,
0:15:28 you drive. And I was just driving that, that company into the ground. And you had this, um,
0:15:33 like half an office. It was like somebody’s apartment. It was, uh, an apartment that was
0:15:38 $700. Me and Siava shared it. Yeah. Like the bathroom didn’t have a door. Like you just had to be
0:15:43 like, Hey, I’m taking a shit. You know, like it was like the craziest scenario. Siava was just sitting over
0:15:48 there. He doesn’t even a part of your company. Just like another guy was just there. And, um,
0:15:54 like the, the, the wall, like there was, everything was so strange. Like nothing made any sense.
0:15:59 You like didn’t have wifi and you were building this internet company. And yeah, you actually were the
0:16:03 one who was building something successful. And at that period of our lives, like you were actually
0:16:07 onto something. And I was sitting here just like, you know, making things that nobody wanted. And so,
0:16:12 uh, you know, your scrappiness was well-deserved at that time and, and, and earned you some good
0:16:16 things. I had to go through my scrappy period at a different time. So the third thing I would say,
0:16:21 so one was, uh, the tenacious side, uh, developing that scrappy mentality of being willing to be at the
0:16:26 bottom and like survive at the bottom. Two is the money-making skill. And three is project selection.
0:16:31 So starting to figure out like almost through process of elimination, what are all the bad businesses that
0:16:35 you should not be in? I was in the elimination phase for sure. Yeah. You eliminated like,
0:16:39 hey, I probably don’t want one where I’m standing outside in the heat selling hot dogs. Cause I’m
0:16:43 going to be capped at like how long I can stand outside in the heat. That’s probably not a good
0:16:48 idea. Right. So manual labor is not scalable. Um, you know, another one that you did was like
0:16:52 illegal business. Like, oh great. A lot of people want this moonshine, but like, it’s only going to
0:16:58 go, the bigger it gets, the more likely I am to go to prison. So that’s probably not a good project
0:17:02 to select. So you were going through process of elimination on project selection. And so you go
0:17:05 through this roommate matching app, you’re making apps now that’s already better.
0:17:11 If I say like, what’s the Sampar criteria now after the, after doing all 10 of these things,
0:17:14 what is a good project to be in for you?
0:17:19 I believe in Ikigai, which is like, what’s the world want? What’s the world want to pay for?
0:17:22 What am I good at? And what I’m passionate at? And I try to find that in the middle,
0:17:27 but I, uh, my goal. And then, okay. So that’s like the woo woo stuff that I totally believe in.
0:17:31 But then the other side is, can I get something? Can I bootstrap it to a hundred million in revenue
0:17:37 in 10 years? Okay. But can I bootstrap it? So there has to be some, something you’re answering
0:17:42 underneath that. That’s like saying, you know what? My strategy in chess is checkmate, right? Like,
0:17:46 okay, yeah, I get it. But how do you get there exactly? So what do you look for? That’s going to
0:17:51 be a thing you can bootstrap. So are you looking for, I can see that somebody has done a similar
0:17:57 thing in another space that I can recreate or apply over here. Seemed like the hustle was very much that
0:18:00 way. Um, the newsletter, right? You looked at the scam, you looked at a couple others. You were
0:18:03 like, Oh, I get what they’re doing. And I could do that just in my way.
0:18:07 Yeah. So I like to, I call it like a forgotten business. So there’s a lot of these businesses
0:18:11 that I haven’t even talked about on MFM, but basically like there’s a bunch of businesses
0:18:16 like Hampton that are doing hundreds and hundreds of millions of dollars a year in profit. And what I
0:18:19 tend to do when I look for Hampton, I mean, Hampton’s my only company, that’s what I’m going to be
0:18:23 doing for a very long time. But before I started it, I researched and I go and talk to the
0:18:28 owners and I do diligence and I thought of it this way. But then when AI started coming
0:18:31 in play, it really solidify it, which is like something that can’t be disrupted easily.
0:18:36 I also like looking at things that serious operators don’t take serious because I think
0:18:41 that, um, there’s less competition. So like with the hustle, people laughed at me when we
0:18:44 started it, but I was like, well, if you do the math, it definitely can get to a hundred
0:18:48 million in revenue. And I sold before it got there. But Austin Reef, who founded Morning Brew,
0:18:51 he only sold part of the business and still kept running it. And they’re in the 80 or 90
0:18:55 million revenue, I think, range now. So like the math was right. And so I look for things
0:18:59 that, uh, can be real opportunities, but the ballers aren’t taking it serious.
0:19:03 Yeah. What Charlie Munger says, the secret to success is weak competition.
0:19:09 And so if I was to say from afar, I’ve known you for, I don’t know, how long have I known
0:19:11 you? 12 years, maybe.
0:19:17 Long time. Um, three Obamas. And what I would say is I’ve noticed that what, one thing you do
0:19:23 really well is you’re very good at sniffing out interesting things in spaces where other
0:19:28 people are not, not even looking, which is you mostly just following your curiosity and
0:19:34 taste. Uh, but you go and you do a lot of research. You do, you come across nonchalant, but you’re
0:19:35 pretty fucking chalant about the research.
0:19:40 You go really detailed. You go meet them. You like talk to the bankers. You talk to a lot of
0:19:45 people in a space to get a real, like a real idea of like what those companies look like.
0:19:50 And because I want to eliminate the uncertain, like, okay, so entrepreneurship, I’ve been thinking
0:19:54 about this. The reason I, I think entrepreneurship is almost philosophical to me and a lot of people
0:20:00 is because entrepreneurship is sort of like how much uncertainty and fear can you take and still
0:20:04 continue moving forward? Because entrepreneurship is basically like you work on the same thing for
0:20:10 six, 12, 18, sometimes 24 months. And you’re like, I’d still see barely any progress. Is this going to
0:20:15 work? And the price that you’re paying for potentially a big outcome or potentially for
0:20:20 building a business or potentially being free, it could take five or 10 years. And the ones who win
0:20:23 are the ones who can handle that uncertainty for a long period of time. That is what entrepreneurship
0:20:28 is. Ultimately, in my opinion, it’s dealing with uncertainty and dealing with fear. You have fear
0:20:32 over hiring someone when you only have $30,000 in your bank account. You have, I remember when my
0:20:36 first employee had a kid and I was like, it feels like I had a kid. I felt so much fear. Now this
0:20:41 really has to sustain itself. You have fear over finding your first customer and thinking I am
0:20:44 promising one thing. Now I really have to work my butt off to like make it work out for them. You
0:20:49 have fear over getting hate and people making fun of them. And so the name of the game of
0:20:52 entrepreneurship is just, can you handle the fear? And can you handle what’s worse is the
0:20:55 uncertainty over potentially five or 10 years?
0:21:00 Beautifully said. Monish Parai had a good addition to this, which he said,
0:21:04 understand the difference between risk and uncertainty. So he was talking about it with
0:21:09 the stock market. He goes, basically the stock market, stock market investors hate uncertainty.
0:21:13 Like if they don’t know whether your earnings are going to be good or bad, they will just sort of
0:21:18 assume bad, right? Like you basically get a huge discount for uncertainty, but it’s not the same
0:21:25 thing as actual risk. And risk is like, what do you have to lose? Uncertainty is just not knowing
0:21:30 what’s going to happen. And so people think that entrepreneurs take a lot of risk, but I actually
0:21:34 think that you are a good example of what most entrepreneurs really do, which is they’re actual
0:21:40 risk minimizers. It’s like, how do I win while taking the least amount of risk necessary to win?
0:21:44 I’m not trying to take risks. I’m not trying to take unnecessary. I’m trying to vaporize risk
0:21:49 everywhere I can. And whatever’s left over, fine. I’m willing to live with what’s left over.
0:21:55 And he tells the story of Richard Branson. So he says, Branson is seen as this like freewheeling
0:22:00 gunslinger, Mr. Risk type of guy, partly because of his look, his brand, et cetera.
0:22:06 He goes, when Branson started his airline, which is a very, what people would think is a very risky
0:22:10 business to be in. Most airlines fail. Even today, most airlines don’t even make any money.
0:22:16 Even the airlines that exist are razor thin margins. And when he started Virgin, he called
0:22:20 up, I think it was British Airways, and he was trying to get one plane. So he was like,
0:22:27 hey, do you have like, whatever, a 747? And they were telling him, no, we don’t just give out.
0:22:31 We’re not going to sell you random guy on the phone. Like he called the customer support.
0:22:36 We don’t sell you a 747. He’s like, can you just connect me to the person who does sell 747?
0:22:41 We don’t sell 747. He’s like, all right, do you guys have extra capacity of 747? So you’re not
0:22:45 currently in use in your fleet? They’re like, yeah, we do. He goes, okay, well, would you lease one to
0:22:52 me? And basically he started Virgin by leasing the plane, not buying the plane, which reduced risk.
0:22:58 He released it and he was only on the hook for the payments like 60 or 90 days later, but he was
0:23:02 already going to pre-sell the tickets for the flights. Like the airline business works where you sell the
0:23:06 tickets before you end up paying for the, for the plane and the fuel and all the actual cost of
0:23:10 operating it. And so he realized like, actually, well, what’s the worst case that happens? I just
0:23:15 give them the plane back. Like that’s all I’m on the hook to do is give them the plane back. If I can’t
0:23:19 follow through on my commitment, but if I can get it to work, I’ll know ahead of time. Cause I sell the
0:23:25 tickets up front. So it was actually a, uh, very like risk reduction approach to doing what other
0:23:29 people see is taking massive risks. And I would say you’re the same way where when I’ve seen you go into a
0:23:35 business, you’re looking to reduce risk everywhere possible. So you’re like, do, uh, does another
0:23:39 business like this already exist and work? So I know that there’s demand and I know the business
0:23:43 model works. Can I apply it into this space where there’s not a lot of competition or there’s weak
0:23:47 competition? There’s not a lot of other really smart, super geniuses running around San Francisco
0:23:52 trying to do what I’m doing. Cool. That’s a way of reducing risk. A third way of reducing risk is you
0:23:56 try to bootstrap it. You don’t take on external investment. You try to do it where I can start this
0:23:59 with pretty much no money. So what do I have to lose? Just my time. I’m not actually going to be
0:24:04 in the hole if I, if this goes wrong, that’s another way that you reduce risk. And the fourth
0:24:09 one is, can I use basically my copywriting skills to attract demand before I have to fulfill the service?
0:24:14 I would sell sponsorships before. Yeah. I sold sponsorships. I wouldn’t sell, but yes, I would,
0:24:15 I would pre-sell as much as possible.
0:24:20 Right. And so, you know, and you would do a bunch of research to reduce risk. You would talk to the
0:24:23 bankers to figure out, you know, what works in these businesses. You talk to the ex CEOs,
0:24:27 the ex employees to understand what works, what doesn’t work in this business. And so I think you’re
0:24:31 a master risk reducer. And so when somebody sees the businesses that you do, they all sound kind
0:24:37 of random, but I would say like where you’ve come to, I think at the end is you’ve figured out your
0:24:42 money-making skill. You figured out how to be tenacious and scrappy. And then lastly, you’ve gotten
0:24:48 better at project selection and ultimately we’ll, we’ll use sort of a risk reduction method to pick a
0:24:53 project that you think is like kind of a, I wouldn’t say slam dunk, but like, you’re not
0:24:58 hoping for this sort of one in one in a hundred outcome. It’s kind of like, I have to fumble
0:24:59 execution for this to fail.
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0:25:28 You should hold your breath still on saying I had good project selection because in 2015,
0:25:31 I started a business called Itch Juice, a poison ivy treatment.
0:25:33 Scratch your own itch, as they say.
0:25:39 So stupid. So there was this like type of lotion that mechanics use. It was like a called a green
0:25:43 scrub. I forget exactly what it’s called, but it turns out it was also had the same ingredients
0:25:50 as poison ivy treatment. And I bought in bulk, like a, like a, like a barrel that you would have
0:25:56 at a mechanic shop. And it was like 20 cents an ounce, but that as poison ivy treatment, it sold
0:26:03 for like $20 an ounce. And I realized I could rank high on Google. And so I was, I got in the poison ivy
0:26:07 treatment business and I learned the same thing there or that I learned in the alcohol business,
0:26:12 which was, and this, this did, this was starting to make money, which is like, do these short little
0:26:17 get rich quick schemes that you jump into without like doing the Ikigai, uh, preparation of like,
0:26:20 what am I actually passionate about? They’re stupid. So I learned that one.
0:26:24 I feel like I was a lawyer who just stood up and told the jury, my client is innocent.
0:26:28 And then at the very end, you were like, I did it by the way.
0:26:29 Yeah.
0:26:32 It’s like, Oh, I told you just don’t say anything.
0:26:38 Now I think I did good at selecting new things. So I got rid of that.
0:26:43 And then, um, I started 10 years. I think that I have the same story where it took 10 years
0:26:45 for me to even figure out what a good business is.
0:26:51 Dude, I don’t know how, like I read about these prodigies, um, who do, who like are so mature
0:26:57 when they’re like 26, 27. And I just, I’m like, am I, was I just like slow to develop?
0:27:03 Like when I see some of these smart 26, 27 year olds, I think to myself, I still don’t
0:27:07 behave that way. And I’m 10 years older than that. So I don’t like when I was 26 and 27, like
0:27:12 I didn’t know anything. I knew nothing. And I actually felt this way about you. And I was like,
0:27:16 he’s right stuff on a whiteboard and he’s got these like frameworks way of thinking. I don’t
0:27:17 think it frameworks. I just like do.
0:27:21 Yeah. While I was sitting there being like, why am I just on a whiteboard? This guy’s out there
0:27:25 just doing it. I got to do what this guy’s doing. It took, it took me 10 years to even figure out
0:27:30 at all what the hell is going on. 10 years and 10 years. You could say that, look, I said that in
0:27:36 10 seconds. It took me 10 years. Watch. That was so quick. When you’re in it, 10 years is like an
0:27:40 eternity, especially because you don’t even know that if I knew, by the way, it’ll take me 10 years,
0:27:44 but I’ll figure it out. It would have felt so much better at the time. It’s like the tunnel is still
0:27:49 dark and I don’t even know where, if, and when the tunnel ends. And I don’t know how much like time
0:27:52 I’ve got left to get there. So it feels much worse in the moment. So for anybody who’s out there,
0:27:58 who’s in their kind of tenure, tenure doing dumb stuff arc, you know, I feel you. Uh, it’s, it’s,
0:28:02 it’s normal. It still works. Just keep going. So, uh, Lewis and Clark is like one of my favorite
0:28:06 stories ever, but they basically, they were sent out starting in St. Louis. Thomas Jefferson was like,
0:28:12 Hey Lewis, Hey Clark, do me a favor. Just walk in that direction and tell me, does it end? And
0:28:17 what’s it look like? And what’s on the end? And they just go. And back then, obviously phones didn’t
0:28:22 exist. Males, mail didn’t exist. They were just walking around, uh, and they didn’t know where
0:28:27 they’re going exactly. And it took them two years. So imagine that, imagine sending someone off on a
0:28:30 trip for two years and having no idea like what’s going on, if they’re ever going to come back.
0:28:34 And that’s what entrepreneurship kind of feels like. It could have took two years. It could have took five
0:28:38 years. Who knows? But we’re just going to go in that direction. And I pray. And I hope that we’re
0:28:40 going to find something. That’s like what the uncertainty feels like.
0:28:48 Exactly. And every year you’re like, now I know now. And then you say that again, the next year,
0:28:52 like, Oh, well last year we were so, so dumb, but this year now we haven’t figured it out.
0:28:58 And it takes a certain amount of self delusion to not be like, Hey man, listen, you said that three
0:29:04 times already. And now do I really believe you this time? And so you need, you need delusion. I think
0:29:08 that’s true. That’s also why you got to move to San Francisco is because you’ll be surrounded by
0:29:11 success stories and you’ll see them and be like, okay, cool. That guy’s not special. I could do it.
0:29:15 If you could do it, I could do it. And also everybody around you is similarly diluted,
0:29:22 which really helps because, um, you sort of brainwash yourselves into this mode where you’re
0:29:26 going to keep going, keep taking shots. And that that’s a normal rational thing to do, even though
0:29:29 it’s a completely abnormal, irrational thing to do. I think it’s one of the biggest benefits of coming
0:29:30 to Silicon Valley.
0:29:35 Can I write off, uh, just a few tiny ones. So I did this thing called, called a Frisco disco
0:29:41 taxi where we dressed up in disco outfits with, uh, afros and we gave rides home for people
0:29:41 on New Year’s Eve.
0:29:42 Was this like before Lyft?
0:29:45 Yeah. Before Lyft. Or maybe like right on.
0:29:47 You literally had Lyft figured out.
0:29:49 Yeah. Yeah. I tindered too.
0:29:50 Tindered too.
0:29:56 Yeah. Uh, we made $800 that night. I did a copywriting class with Neville. We actually hosted
0:30:01 it at your office. I think we each made $10,000 or maybe we made $10,000 total. And then another
0:30:07 couple of failures, I, uh, bought some real estate and I learned that basically the way
0:30:11 you make real estate is through doing the most due diligence upfront and looking at tons and
0:30:15 tons and tons of property because you make your money when you buy. And that is not my skillset.
0:30:20 And then of course I had the hustle. The hustle started as a conference, then to a blog, then
0:30:25 to a newsletter, which worked. We launched this thing called trends, which was a fairly successful
0:30:29 thing. And then we expanded our events business. Events businesses, horrible. The way that we did
0:30:34 it, horrible. We had hundreds or thousands of people coming to each event way better to go
0:30:38 after smaller groups and charging a lot more. But back then I couldn’t even imagine the idea
0:30:42 of someone being willing to spend two or three or four or $5,000 per ticket to a trade show.
0:30:45 And I wish I would have, um, figured that out.
0:30:52 So me and Tyler, the CEO of Beehive came up with a little challenge for you. It’s the newsletter
0:30:56 challenge. Now, if you know me, you know that I’m a big fan of newsletters. I got my own newsletter. I
0:30:59 also had a business that was a newsletter business. That was amazing. I wrote this newsletter about
0:31:04 crypto. We grew it to quarter million subscribers and we ended up selling it after a year for millions
0:31:08 of dollars. And I want you to be able to do the same thing in your business. So we’re doing a
0:31:12 challenge. 10 grand is on the line. Plus me and Tyler will actually be in your corner as growth
0:31:17 advisors. You just need to go to beehive.com slash MFM and you either start a new newsletter
0:31:21 or you move your current newsletter over there. And five finalists will get picked to pitch me and
0:31:26 Tyler, sort of like shark tank and the winner gets 10 grand. So go to beehive.com slash MFM.
0:31:29 That’s beehive.com slash MFM to enter the challenge today.
0:31:34 And then this podcast turned out to be a business. We didn’t really realize it. You know, I definitely,
0:31:39 I started it alone. I definitely didn’t think of it as a business that you join. I still don’t think
0:31:42 we thought of it as a business for what the first two or three years.
0:31:46 For the first nine months, I’m almost certain it made $0, right?
0:31:50 No, I had a sponsor somewhere there. I mean, round down to zero. Yes.
0:31:53 Like, you know, like 10, 20 grand.
0:31:58 So I posted this photo. I want, I want people to like understand this. So Sean came up with the
0:32:03 podcast, I think in July. And then I think I joined him in September. So he did a bunch of
0:32:08 loan and then I joined him later on. I think sometime in December. So we’re talking six months
0:32:14 in. Lance Armstrong, for some reason, read The Hustle and I became friendly acquaintances with him.
0:32:21 He wanted to use my office where Sean and I were recording the podcast. And so he came that day when
0:32:25 Sean and I were recording because he messaged me saying, I need to use an office for a meeting.
0:32:26 Can I use this? And I said, yeah.
0:32:33 We pull him into the podcast as we’re recording. And I posted this photo of me, Lance and Sean
0:32:41 standing there. And we only have two microphones and two chairs and two chairs. And Sean’s like
0:32:52 sitting on like the arm of my chair. And during the episode, when Sean wants to talk, he has to like
0:32:59 lead in to reach my microphone. And then another episode, we had someone like we had a guest call
0:33:03 it. It was like a digital guest. It was me and Sean in real life. We had a guest. For some reason,
0:33:09 one of us didn’t have AirPods. And so we just like shared an AirPod. Like we each had one in our ear.
0:33:14 And I think we were recording on an iPhone. Like it was so janky even six months into it.
0:33:19 Yeah. Which was funny, too, because it’s not even like these were the early days of podcasting.
0:33:23 It’s like pretty late in the game of podcasting.
0:33:28 Someone should go and look at those old chairs that we use. We picked these chairs because there
0:33:33 was a podcast at the time called Fighter and the Kid. And they use these bright red chairs,
0:33:36 the brightest red chairs. And we figured they use it so it sticks out on a thumbnail,
0:33:41 which I don’t even know if we did YouTube at the time. But we wanted those chairs. And it is
0:33:47 just a hilarious looking set. Honestly, it got to be pretty cool. When we were in person together,
0:33:49 it was pretty amazing. It was awesome. I still wish we could be doing that.
0:33:54 Oh, my God. Because it was so good. It would be the best. It would be the best. It was so much fun.
0:34:02 And we ran to Best Buy and bought a video camera. And we had an intern record us. And the shot is just
0:34:07 you and I. It’s dead on. You and I talking. And the guys that we were copying was Theo Vaughn
0:34:11 in Brennan’s shop, who obviously, Theo Vaughn is Theo Vaughn now. But back then, he was
0:34:15 like a cameo. He came in as a cameo for this other podcast.
0:34:19 Yeah. Good times.
0:34:25 It feels nostalgic going through this stuff, doesn’t it? Because you were with me for most of it,
0:34:30 or a lot of it. But isn’t this kind of fun to look back and it’s crazy, the stuff that we’ve done.
0:34:36 Yes. I mean, when you’re in it, you just want to get out of it so bad, right? God, I just want
0:34:42 something to work. Anything. Is this going to work? I really hope this thing works. And I just wanted to
0:34:46 get out of it so bad. And then now you’re right. You know, you look back and I’ve really never had as
0:34:51 much fun since as I did on the come up. Like the come up was really, it was a lot more, I don’t know,
0:34:56 high variance or just like unpredictable and like crazy stuff happened. And it was fun things that I would
0:35:00 never make the time to do now. Like you’re never going to go do Sam’s Frisco Disco now. You’re never
0:35:05 going to go do the hot dog stand now. But actually those are pretty fun, like kind of random projects,
0:35:11 great stories, great photos, great like memories of trying to pull it off that you were at the time,
0:35:15 you know, too dumb to know it was dumb. And now, unfortunately, you know, you sort of have the
0:35:22 curse of knowledge the further you go, where you’re less likely to go try random dumb things that might
0:35:27 actually have high, you know, high upside or high fun or high memories, you know, that come at the
0:35:27 end of it.
0:35:33 We have a lot of like young guys listening to this who are in their 20s. Enjoy it, man. It was it was
0:35:38 such a blast. It doesn’t feel that way. But I would say with a high degree of certainty, if you do the
0:35:44 same thing, or you try really hard for 10 years and keep taking risks, you and I, Sean, have dozens of
0:35:49 friends from that same era. And we have seen dozens of them, like many, many, many of them succeed, not
0:35:54 always like total home runs, but we have many of those, but a lot of base hits, a lot of doubles, a lot
0:36:00 of life changing businesses have been built. And it’s so exciting to like, look back and be like, it works.
0:36:01 You just got to do it.
0:36:09 It is. I mean, it sounds corny. But the truth is, at the time you think your success is about how hard you’re
0:36:15 working and maybe your idea, or your team or your execution of the individual thing. And that’s true, like
0:36:19 at the project level, but at a personal level, the only thing that’s going to determine your success is
0:36:24 basically your rate of learning. How quickly are you figuring things out? Are you adapting and learning
0:36:28 and getting better at your next shot than you were at your last shot? It’s that rule of a hundred,
0:36:33 right? Like do a hundred, try it a hundred times and each time try to make one thing better. If you do
0:36:37 that, your success is pretty much inevitable. But at the time, you don’t think like that. At the time,
0:36:42 you don’t really realize that. But looking back, that’s very much the case. I’m sure there’s some
0:36:45 people who have a way to get there a lot faster. You know, for both you and I, it took 10 years
0:36:49 because we sort of, through process of elimination, got rid of most of the dumb things.
0:36:54 You did do one thing differently than I think most people did. You’d ever made the mistake of
0:36:59 building something nobody wanted, which is maybe the main mistake I did. I had a bunch of things that
0:37:04 the business sounds great on paper. If it works, it’s going to be huge, but nobody even wants the
0:37:09 thing to begin with. So you die on the launch pad. Whereas you made the opposite. Everything you made,
0:37:14 people wanted, whether it was hot dogs, whiskey, whether it was like, you know, a way to get rid of
0:37:18 their itch, whatever it was, you know, you, you had a way you always made something that people
0:37:23 wanted. Sometimes the business model was broken or the scalability was broken. But I feel like you did
0:37:27 the, you did one thing really well, which is you never made the cardinal sin, which I would say most
0:37:30 entrepreneurs make, which is you do something that sounds good on paper, but nobody actually wants
0:37:34 the thing you’re making. And you spend all your energy trying to convince them why they’re wrong and
0:37:37 why you’re right. And actually, no, they just don’t want it. They don’t need it.
0:37:43 You know, what’s funny, looking back, I like, for example, the hustle, I think we are at 100,000
0:37:47 subscribers in year one. And then I think it was 500 in year two, and then a million and three,
0:37:53 something like that. And that sounds lovely. It didn’t feel like it at the time, it still felt
0:37:58 like I was pushing a rock up a hill. And so you’re saying I made things that people wanted. Looking
0:38:03 back, I agree. But when you’re going through it, like I remember Ryan Hoover launched Product Hunt,
0:38:07 and people were talking about his product way more than like my product. And I was like,
0:38:13 that’s what product market looks like. Not mine. I’ve never experienced that. What the hell? And I
0:38:17 look back at it, and I did have it. And so some of these things, when you’re in the thick of it,
0:38:25 you have to really work hard to try to come up with these lessons in this, like at the time. And you have
0:38:30 to like, sit by yourself to come up with these lessons in the time. Because there has been so many
0:38:33 things looking back where I’m like, had I only done this, I would have had so much more, I would have
0:38:38 worked so much better. But I didn’t learn those lessons in the process. So for example,
0:38:45 I used to think that I was like, I want to become a big company. So I have to act corporate. Now I know
0:38:51 you want to act small as long as you can. Or if you have something that is growing at like 50% a year,
0:38:56 don’t mess with it. That’s a great growth rate. Whereas if you see other people, or I saw other people
0:39:01 at the time growing significantly faster, but they ended up like dying and blew up. But I was like,
0:39:05 I want to grow that fast. What the hell? And I’m looking back, I’m like, No, no, no, that was that
0:39:09 was a rocket. That was fantastic. That was great. It was bootstrapped. It was it was beautiful. I think
0:39:16 that I heard this line that basically says, VC is like rocket fuel. And you know who deserves rocket
0:39:22 fuel? Rockets, not fast cars, not cool cars, not cars that you love rockets. And the thing about
0:39:27 rockets is most of them blow up and don’t go anywhere. A cool car, a great car, a car you love, that could be
0:39:31 an amazing life. And it could actually get to the destination eventually, but it might go a little bit
0:39:35 slower. And I thought that was an insult to me. I said, but I want to rock it and I want it to work
0:39:43 nonsense. I wanted a car. And I wish I would have like had the confidence back then and learn that
0:39:49 lesson that that was the way. All right. So that’s Sam story made his first million at 31. But instead
0:39:53 of focusing on how he did it, which we’ve talked about before, it’s the, you know, I don’t know, 10,
0:39:58 15 things he tried before that, the stumbles and fumbles on the way to success. I’m going to do
0:40:02 mine. We’ll do one next episode. I’ll do my, I’ll do my version of that where I tell you all the
0:40:05 terrible, terrible ideas that I had going up to finally making it.
0:40:19 Hey, let’s take a quick break. I want to tell you about a podcast that you could check out. It is
0:40:25 called the science of scaling by Mark Roberge. He was the founding CRO of HubSpot and he’s a guest
0:40:30 lecturer at Harvard business school. The guy’s smart. And he sits down every week with different sales
0:40:34 leaders from cool companies like Klaviyo and Vanta and OpenAI. And he’s asking about their
0:40:39 strategies, their tactics, and how they’re growing their companies as head of sales or chief revenue
0:40:44 officer. If you’re looking to scale a company up, if you’re a CRO or head of sales, just looking to
0:40:48 level up in your career. I think a podcast like this could be great for you. Listen to the science
0:40:50 of scaling wherever you get your podcasts.