How I Made My First $1M – The Andrew Wilkinson Story

0:00:04 I was making a small amount of money for something I hated and then I started making a large amount
0:00:08 of money for something I would have done anyway, like it was fun.
0:00:20 All right, what’s up? We got our friend of the house, Andrew Wilkinson here. Andrew
0:00:26 famously is the co-founder of Tiny. He started off as a barista, ended up creating a design
0:00:32 agency that was super, super successful, designed Slack and a bunch of other popular Silicon Valley
0:00:36 products that you may have may have used, started buying businesses right about Warren Buffett,
0:00:40 right about Charlie Munger, started buying businesses, now owns like an portfolio of
0:00:44 30 plus companies, I think, and recently took the company public and then stepped down to
0:00:49 CEO. And Andrew is here on his, I don’t know, vacation tour after stepping down to CEO. Andrew,
0:00:54 good to see you, man. Your skin looks great. The glow looks good. You seem happy. You got that
0:01:01 non-operator glow. All right, I want to tell you about a really cool feature in Hubsoft that I
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0:01:22 for all the different platforms in one click, or they have leads scoring, which will basically
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0:01:31 analytic suite. So you get reports, KPIs, and all kinds of AI-powered insights that you can share
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0:01:39 recommend you check out the content hub and marketing hub for HubSpot. You can visit HubSpot.com
0:01:45 to get started for free back to this episode. Enough about talking about how much of a babe you are.
0:01:50 All right, so Andrew, I sent you a voice note. You started off as a barista at a coffee shop,
0:01:54 and you’ve done very well in business. And I said, I want to know what were the different jumps,
0:01:59 like income jumps that actually made a difference. And you said there was four levels.
0:02:06 Yeah, totally. Well, I think the best money that I ever made was jumping from being a barista to
0:02:10 making like 60 bucks an hour. So you go from barista, you start designing websites. So you go
0:02:15 from 650 an hour to $60 an hour. And it sounds like that might have been somewhat happenstance.
0:02:19 Did you, was that intentional to make that shift or just kind of you got an opportunity or lucky
0:02:26 balance came your way? What made that shift happen? So I was working, making coffees every day for
0:02:30 all the people who come in. And there’s these two guys that would come in every single day.
0:02:35 They’d roll in looking like they just got out of bed at 10 in the morning. They’re probably like
0:02:40 five years older than me. So like 24, 25, and they would just come in and they would sit on their
0:02:48 laptops all day just drinking espresso after espresso. And one day I asked them, what do you
0:02:54 guys do? Like, don’t you have jobs? And they go, oh, we’re web designers. We just walk into random
0:02:59 businesses. We asked them if they have a website. And then we say, we’ll make one for 500 bucks.
0:03:05 And so that day I was like, well, forget this. Like, I don’t want to make the espresso. I want
0:03:10 to be drinking the espresso. I want to be these guys. And so I went and I bought a book on web
0:03:16 design. And a couple of days later, I walked into a place and sold the guy website. And within a
0:03:22 couple of weeks, I’d quit my job. Wait, did you know anything about design? Yeah, I did actually,
0:03:28 because when I was a teenager, I had a tech news website and I knew how to use like Dreamweaver,
0:03:33 like really basic web design and stuff. So it like wasn’t rocket science to me. Like,
0:03:38 I knew these guys were smart, but they weren’t, you know, they didn’t have any crazy qualifications.
0:03:42 It was nothing I couldn’t learn. And so I just kind of dove in and got lucky. Do you remember
0:03:46 who you approached that first one? Yeah, it was a pulled pork barbecue joint. And
0:03:54 it was this place called pig here locally. And yeah, it was like, I think I got like 500 bucks
0:03:59 and some free pulled pork sandwiches. You know, I basically got unlimited sandwiches for a while.
0:04:04 That’s pretty awesome. I was making a small amount of money for something I hated. And then I started
0:04:09 making a large amount of money for something I would have done anyway. Like it was fun. It was fun
0:04:14 designing websites and coding websites. The first money I really ever made outside of like a college
0:04:19 job when I was in school was I actually won a business plan pitch competition. And we won
0:04:27 $25,000 of cash. And they made some MBA, some graduate business school student work for us for
0:04:34 5k. It’s everyone $30,000 of total comp. And me and my two co founders lived for one year together
0:04:40 on $25,000. But it was awesome. We didn’t really know how much money a business takes. We didn’t
0:04:43 know how much money it takes to live because we had just been in college the whole time.
0:04:47 So to us, that was like, oh, that’ll last us a long time. And we lived off of it for one year,
0:04:52 but it was the best money at that time. It was a big jump because we didn’t have to get a job. So
0:04:57 it was freedom. It’s like, oh, we don’t even have to think about money or a job because we got the
0:05:04 lump sum cash up front. And we got to go try the thing we wanted to try, you know, together as
0:05:09 friends. So that was probably the first level. And like Andrew’s saying, the early dollars create
0:05:13 a lot more freedom than the later dollars, I think is the way that you’re explaining it. And
0:05:18 those early dollars and early freedom matter a lot more than the later dollars because you only
0:05:21 get so much incremental freedom. In fact, you might actually get less freedom if you start
0:05:26 buying a bunch of shit that now you are a slave to. My first level was almost the same as yours,
0:05:32 Sean. It was $24,000. I think I was 23 or maybe 24. I had a small website that I sold,
0:05:35 but I still had to work there. It was basically an aqua hire. But after taxes and everything
0:05:40 was said and done, I think I had $24,000. At the time, I was spending $2,000 a month in living
0:05:46 expenses. And I said, I have a year. I have a year of expenses saved up. And I felt like, I was like,
0:05:52 let’s go to Australia. Let’s live. Let’s go take a trip. Let’s go to Thailand. Having $24,000,
0:05:57 I felt incredibly wealthy. By the way, that’s a powerful thing to do is change the denomination
0:06:04 into time instead of money. So, you know, if you have $24,000, $36,000 or $90,000, it’s kind of like
0:06:09 Chuck E. Cheese money. It’s tokens that you don’t really understand what this does for you.
0:06:13 And what most people do is they just sort of keep working blindly. They’ll put it in the bank,
0:06:17 and then they don’t really know how to use it, what to do with it. A more important question is,
0:06:21 how do I get myself a year of freedom or 18 months of freedom where I could either just go
0:06:27 enjoy myself purely or go take a shot at creating a new life for myself, a new chapter, a new path
0:06:32 for myself. And early on, it doesn’t take much to get a year. Like both of us basically did it
0:06:36 on $25,000, which I think is surprising. It’s surprising even for me to hear it right now,
0:06:40 because my current life burn rate is a lot higher, right? But you know, we slept on air mattresses.
0:06:44 It’s like, well, why do we need, you know, and then we got to mattress and headboard money eventually.
0:06:48 But at first, it doesn’t really matter. But a year of freedom or 18 months of freedom,
0:06:52 24 months of freedom is a good way to dominate things when you don’t have a huge sum of money.
0:06:57 I use this app. I didn’t use Mint. I use this one app where every time I spent anything,
0:07:01 I typed it in how much money I’d spent for that. So if I went and got coffee, it was 250.
0:07:05 I wrote 250 in there. And then I had this spreadsheet where I took the average of the
0:07:09 trailing six months. And I said, that is my monthly burn. And then here’s how much money
0:07:13 I’ve saved get to 12 months. And so I used an app. All right, guys, really quick. So back when I was
0:07:18 running the hustle, we had this premium newsletter called Trends. The way it worked was we hired a
0:07:23 ton of analysts and we created this sort of playbook for researching different companies and ideas and
0:07:27 emerging trends to help you make money and build businesses. Well, HubSpot did something kind of
0:07:31 cool. So they took this playbook that we developed and we gave to our analysts and they turned it
0:07:36 into an actionable guide and a resource that anyone can download. And it breaks down all the
0:07:41 different methods that we use for spotting upcoming trends, for spotting different companies that are
0:07:45 going to explode and grow really quickly. So if you want to stay ahead of the game and you want
0:07:50 to find cool business ideas or different niches that most people have no idea they exist, this
0:07:54 is the ultimate guide. So if you want to check it out, you can see the link down below in the
0:07:59 description. Now back to the show. All right. So you’ve made it to level two. Now the next level,
0:08:04 you said, I went from self-employed to boss. So what does that mean? What I over time discovered was
0:08:10 that there was all these online job boards and there was companies in San Francisco posting,
0:08:16 looking for freelance designers and developers and stuff. So I was doing these like little $500
0:08:24 local websites and I found these Silicon Valley startups posting and this was like what you would
0:08:29 call today like product design or interface design. And so I got this project designing an
0:08:35 interface for an ad manager for some startup and I did a really good job. The guy really liked it
0:08:40 and it was like $2,000 for basically no work. This is the project I mentioned before. So it was
0:08:47 like maybe five days of work for two grand, which ended up being $2,600 Canadian. So it’s very sweet
0:08:53 and the guy goes, hey, this is pretty good. Can you do coding? Can you do some JavaScript work?
0:08:59 And I just say yes and I don’t know anything about JavaScript. I’m like, whatever, I can figure it out.
0:09:06 So I frantically try and learn JavaScript and I can’t. And so I go to my friend who’s literally
0:09:13 just my girlfriend’s best friend’s boyfriend who’s in computer science and I say, hey,
0:09:18 how much would you charge me to do this JavaScript work? And he goes, I’ll do it for 500 bucks.
0:09:22 And so I think I’m going to get negotiated down by this client. And so I go to the client and I
0:09:29 say it’ll be a thousand bucks. And they say, okay, sounds good. And so in that moment, I was like,
0:09:36 oh my God, I just made $500 and I did absolutely no work. So that’s such crazy transition of going
0:09:42 from being a self-employed person, selling your time to being someone who can sell other people’s
0:09:47 time, which to me is like the big leverage point. That’s great. So you have that realization,
0:09:53 did you start devouring any books or how did you learn how to do that better than being an
0:09:59 absolute rookie at it? It was mostly trial and error in the beginning. And it was really stressful,
0:10:04 honestly, because I think when you start delegating to other people, they always do a worse job
0:10:11 than you do. And so you are kind of panicking and there’s no process or system or anything.
0:10:16 And around that time, I read this book called The E-Meth. It’s kind of cheesy. It’s by Michael
0:10:20 Gerber, but I recommend it to everyone. And he really talks about this idea of trying to think
0:10:28 of your business as a machine. And I think for me, that was a big breakthrough, that mental model of
0:10:33 my business as a machine and I’m the engineer. And all the different people are widgets within
0:10:39 the machine. And if one doesn’t work or something is squeaky, you can swap out the people. But at
0:10:44 the end of the day, you have a process, you have a strategy and you have people on the bus. And
0:10:47 if you have the right people on the right bus, the right strategy and the right vision, things will
0:10:53 go well. And that was when things really took off. That was when I started hiring. I had like a
0:11:01 dozen people. I was making over a million dollars a year personally. I got a BMW. I started dressing
0:11:07 nice. And really, that was like the, the kind of sloppy, like the first phase was like, you know,
0:11:12 okay, I can do all the stuff I wanted to do in college. I can buy beer. I can go for a nice dinner
0:11:17 and stuff. Wait, how old were you when you made your first, is that million profit? Yeah, I think I
0:11:24 was 20, 22 or 23 somewhere in there. That’s huge. Oh yeah, it was amazing. You didn’t go to college,
0:11:29 right? Or you dropped out? I dropped out of college. I went to journalism school for like two
0:11:34 or three months. So you did a million in profit two years into being an agency? I started when
0:11:40 I was 19 years old. And so probably four years in something like that, three or four years in.
0:11:44 That’s massive. It was, it was crazy. I mean, it felt like, it felt like an absolute fortune. And
0:11:49 frankly, it was. And at that point, like, that was when I was like, Oh, like, I’ll just buy
0:11:55 whatever I want. Like I would walk into Best Buy and just buy like a crazy TV. I would buy,
0:12:00 you know, the best speakers money could buy. I would buy video games, like whatever an idiot,
0:12:05 23 year old wants to spend money on, I would spend money on that. And ultimately, it was like,
0:12:12 it was very $800. You’re like, okay, well, now what? My taste don’t even match my income right now.
0:12:15 Yeah, it was very, it was very kind of empty and hedonistic.
0:12:19 Have you ever read Rich Dad Poor Dad, Andrew? Yeah. He has that,
0:12:22 Sam, have you read that book? He’s got that quadrant thing. Do you know about that?
0:12:27 Yeah, people hate on that guy. I’m not sure why, but what about it?
0:12:33 Well, I mean, any, any business guy who becomes popular and start selling anything, I think he
0:12:36 sells a lot of shit. He sells like gold, he sells like real estate courses, he sell a lot of stuff.
0:12:40 But Andrew, you basically just described his thing. I remember reading this book,
0:12:44 and I had this mental model then of what you’re supposed to do in your career. So basically,
0:12:48 he’s like, he has this four quadrant grid. And it’s basically, he is the first one,
0:12:52 you’re an employee, you have a job. And he’s like, for most people, this is what your parents tell
0:12:57 you, go to a good school so you can get a good job. And they kind of make it sound like getting
0:13:01 a good job is the end point. That is the like, that’s the end of the rainbow. That’s the pot
0:13:04 of gold. And what he’s, what he points out, he’s like, you know, basically you start as a E,
0:13:09 then you go to the bottom quadrant S where self-employed. So you go from employed to self-employed.
0:13:14 That’s what you described, barista to solo freelance web designer. Then you go to B,
0:13:18 business owner. That’s when you owned your agency. And the last one is I, he’s like the goal,
0:13:22 the goal for everybody is to get to I where you’re an investor, your money works for your money.
0:13:26 And you do whatever the hell you want. And so eventually with time you became I,
0:13:33 you became an investor. But like this path going from ESBI is one that for me, I didn’t even really,
0:13:38 I didn’t understand how the board game was laid out. I didn’t know where you’re supposed to go,
0:13:42 right? It’s like playing a video game, but not understanding. You need to save the princess
0:13:46 from the castle. It’s like, oh, once I know that, now I can start to move in that direction. But
0:13:49 until I even knew that, I didn’t really even understand what the hell I was supposed to be
0:13:54 doing. This one diagram was very useful for me. And that was in level two for you was between
0:13:59 what a million dollars a year and what was your upper limit? Yeah, I mean, I was paying myself
0:14:07 500 to a million a year and I was profiting more than that. And I started incubating businesses.
0:14:12 And so I had that classic thing where I had overconfidence. The way I would put it is that
0:14:18 my first business was a very easy business. So I did the equivalent of walking into the gym
0:14:24 and I got lucky. I picked up really light weights and it built my confidence. And then
0:14:30 for the next five, 10 years, I would walk into the gym and try and deadlift 300 pounds,
0:14:35 but I didn’t know that was hard, right? And so I started an e-commerce business. I started a
0:14:41 restaurant. I started multiple software businesses that I bootstrapped and lost in one case to over
0:14:47 $10 million. But it was really fun because I would just be in the shower and I would think,
0:14:53 “Oh man, that’s a great business idea. I’ll start that right now, today.” I had no filter
0:14:59 whatsoever and it was really exciting, frankly. I was just constantly starting new stuff.
0:15:01 Starting a restaurant is an awesome way to lose money, though.
0:15:06 Oh yeah, and I think I lost a million bucks doing that. Do you still have it?
0:15:15 Cat furniture, restaurant skin cream, SaaS company. You did the full decathlon of business ideas.
0:15:22 We had a blog. We had a viral blog. We tried to write a book for it. We had a concierge service.
0:15:28 What was the viral blog? We had clients from hell. It was really big on Tumblr for a while.
0:15:35 Do you know it? No, I don’t know it. We basically would have all these… We would go to conferences
0:15:40 and meet other designers and stuff and everyone would bitch about their crazy clients and share
0:15:44 screenshots of insane emails they would receive and stuff where it’s just like
0:15:48 the guy asking for them to make the logo bigger over and over again.
0:15:54 We started sharing those and it just went crazy viral. We ended up making a book.
0:15:59 We need to bring back Tumblr. Tumblr was great. I love the Tumblr days. I still go back and I’ll
0:16:05 read old people’s Tumblers. It’s awesome. Twitter is that now, but I felt Tumblr had a better
0:16:08 environment and it was more friendly and better content.
0:16:14 I made so many friends from Tumblr and I still meet people at conferences that know me from
0:16:17 Tumblr back in the day. What age were you when Level 2 ended?
0:16:25 I ended that. Probably like 27. I think that was when I sold my first business.
0:16:32 What did you sell for and what was it? I sold it for 7 million bucks and it was the one business I
0:16:39 started in Level 2. I started all these different companies. I had my original web design company
0:16:46 Metalab. It was profitable. I would live off part of that profit and then the rest of it went to
0:16:52 starting all those other businesses I talked about. The one business that worked was I met
0:17:01 Toby from Shopify and Harley as well in 2010 at a conference. At the time, Shopify was pretty small
0:17:05 and they said, “Hey, we really love your design work. Would you make some templates,
0:17:13 some themes for Shopify?” I was like, “Oh, I guess we could do these guys a favor. They seem nice.”
0:17:16 I tried to get them to pay me and they actually said, “No, no, no. This is going to be a store,
0:17:23 like the iPhone or App Store.” I was like, “Okay, I guess so.” We did it. I literally
0:17:27 thought we were doing them a favor and we put up a bunch of themes in their store and we started
0:17:36 making like $10,000, $20,000 a month, basically immediately. What year was that? 2011 probably.
0:17:43 All right. 2011, you’re doing $20,000 or $30,000 a month. Is this called Pixel Union?
0:17:50 It’s called Pixel Union. I had the original design agency. I had Pixel Union and that started
0:17:56 making quite a bit of money. Then I had all these chaotic other businesses. Basically,
0:18:02 what happened was I decided that I wanted to have like a nest egg. I wanted to have enough
0:18:07 money in the bank that I didn’t have to worry about money anymore because what I had had is
0:18:11 cash flow. I had a ton of cash flow, but I never kept much money in the bank. I’d spend whatever
0:18:16 I needed personally. Everything else would get invested even though I didn’t really understand
0:18:22 investing in these businesses I was incubating. I ended up getting an offer to sell that business
0:18:30 for $7 million. It was $3 million upfront, $1.5 earn out, and then the rest in stock
0:18:36 in the new business. I remember I went to the ATM on the day it closed and I checked my balance.
0:18:42 I was in like a strip mall and I saw $3 million. It was like $3 million, $100,000 or something
0:18:50 like that on the chip. I was like, “I’m done. I’m rich. I’m good forever.” That was a big mindset
0:18:57 shift. Suddenly, I had more money than I could use to incubate businesses. I’d also incubated a lot
0:19:02 of businesses and I realized that starting companies is really hard. If you think about
0:19:08 my failure rate, I probably started 10 different projects or companies and one of those worked
0:19:13 really well. There was a lot of pain and I had to lay a lot of people off and go through a lot of
0:19:19 hard times to do that. Frankly, I felt pretty burnt out. Around that time, I was like, “Well,
0:19:24 I guess I’ve got to learn how to invest.” But to me, investing was something that guys in
0:19:29 suits did. It was super boring. I had no interest in real estate or stocks, but I’d always heard
0:19:34 about Warren Buffett. When I read about Warren Buffett, that changed everything for me. What I
0:19:41 ended up doing is I had all the incubated businesses. I actually shut almost all of them down and I’d
0:19:48 sold that business for $3 million. I had another $1.5 coming and I also got dividends out of that
0:19:52 business because I’m still in 20% of it. Then MetaLab, by this point, was making
0:20:02 $3 or $4 million of profit a year. I went from burning a lot of cash and living a nice lifestyle
0:20:08 to suddenly having a pile of cash and a lot of unencumbered cash flow coming in that just kept
0:20:15 piling up. By that point, if you think about if you’re making $4 or $5 million a year, at this point,
0:20:21 I buy a really nice house. Not as crazy. I could have gone crazy, but I bought a responsible,
0:20:28 nice house. I bought a nicer car. I bought myself a Porsche and I had a Tesla, which at the time
0:20:35 was super crazy. I started getting into investing at this point. What was this 20% rule you had?
0:20:42 Basically, I was like, “I will spend up to 20% of my cash flow personally and the other 80%
0:20:50 has to go back to investing.” I knew that on 20% of $5 million, I could live a pretty damn good
0:20:55 life spending a million dollars a year. I wouldn’t go out of my way to spend that much. Post-tax
0:21:02 or pre-tax. I would basically live it up as much as possible, but then I also knew I’d always be
0:21:07 compounding the rest. That model actually worked really well for me because I didn’t have this
0:21:11 mindset that so many entrepreneurs have where they’re like, “Shit, I got to live like a popper
0:21:15 and then I got to become a prince. I got to sell my company for some huge amount of money.”
0:21:18 I was just able to live on cash flows the entire time.
0:21:26 Sam, can we talk about some of your popper tendencies you had as Sam chugged a Dr. Pepper
0:21:30 while you were talking? Sam, what were you doing when you were building the hustle? How did you
0:21:38 live? Were there any cheapskates? My wife worked at Facebook at the time. I gave her Tupperware
0:21:42 containers and she would bring home prosciutto and cheese because they always had like charcuterie
0:21:49 reports. Dinner was sponsored by Meta every night? I was on a prosciutto diet because that didn’t
0:21:54 get old fast. The second thing, I’m ashamed to say I did this, but listen to this. Do you guys
0:22:02 remember when Uber Eats and DoorDash and what were the other ones? Caviar. These meal delivery
0:22:07 services all came out at the same time. You would get $20 for free for your first order.
0:22:13 I built an iPhone emulator on our computer where we created this ring where we were constantly
0:22:23 referring each other to these. I basically had $5,000 of free caviar. People would be like,
0:22:27 “Is your startup funded?” I was like, “No, but we are fueled. We’re fueled by VC, but we’re not
0:22:33 funded.” I did that for a long time. I also would sneak on the bus and not pay. I would get caught
0:22:38 all the time, but the thing is, if they asked for your ID, you just say you don’t have an ID.
0:22:44 It’s not illegal not to have an ID. I got away with two grand worth of bus tickets.
0:22:49 Yeah, there’s nobody checks on San Francisco. They did. I used to get trouble all the time,
0:22:53 but they would say, “Do you have your ID?” I’m like, “I don’t have an ID.” I’ll tell you,
0:22:57 but yeah. Hopefully, there’s a statute of limitations on these things because I definitely
0:23:03 broke the law a little bit. I was also on a whole food scholarship as well. Let’s just say that
0:23:10 the hot bar was right next to the exit. So, Andrew, when you were spending 20%
0:23:16 pre-tax, that’s like you’re spending 40% of your post-tax money. That’s a lot to be spending during
0:23:21 that time. Then you shifted it. Once you started investing, you made a change. You’re like,
0:23:24 “No more 20% rule. You changed it to some other rule.” What did you shift to?
0:23:29 Yeah, I just kept dropping that percent over time. As the numbers got bigger, I just kept
0:23:34 dropping it and dropping it and dropping it. But not because you’re spending less.
0:23:38 No, not necessarily. In some cases, I was spending more. The numbers just got bigger.
0:23:44 So, around this time, I’ll talk about some of the things I started doing. I started angel investing.
0:23:49 So, I’d meet a friend or some interesting entrepreneur and I’d invest 25 grand in their
0:23:54 company. If I look back, I probably should have bought stocks in real estate. I didn’t
0:24:00 understand the lack of liquidity and that and just how high risk it is and crazy. So,
0:24:04 I have a whole bunch of investments from that era. I have no idea what’s going to happen with them.
0:24:11 But mostly, a lot of that time was actually spent having this breakthrough moment of realizing that
0:24:19 I don’t need to be the CEO. That I don’t need to run my own companies. And so, at that time,
0:24:26 every single company, I was the CEO of it. So, as me and Chris, I’m the CEO. He’s the CFO.
0:24:30 And we’re just jumping around like chickens with our heads cut off between all the different
0:24:37 businesses. And when I read about Warren Buffett, I was just like, “Oh my God, this guy has abstracted
0:24:44 business to the craziest degree to the point where he doesn’t actually do anything except for a read
0:24:49 and buy one business a year.” And the idea that you could just hire a CEO to run your company
0:24:55 was kind of crazy. I think a lot of people have this feeling around, “Why would someone come and
0:25:00 work for me?” I felt like that all the time. I’m like, “What are you doing?” Yeah, it’s like,
0:25:05 “Why don’t you know the math? This doesn’t make any sense.” But then, over time, you realize people
0:25:10 want stability and they want surety and they want to have health benefits and all this stuff you
0:25:16 don’t get. And so, I realized there’s this whole other class of people where they want to run a
0:25:21 company for somebody else. They want to be a CEO. They want to be able to make millions of dollars,
0:25:27 but they don’t necessarily need to make a billion dollars. And that was crazy for me when I started
0:25:34 hiring CEOs because before I knew it, all the businesses started doubling. And the reason they
0:25:40 doubled was because I was only giving 20% of my time to all the companies. And frankly, I didn’t
0:25:44 know what I was doing. And I just started hiring better and better people to run my companies.
0:25:50 And there’s this crazy inflection point where we started spinning out the companies, hiring CEOs,
0:25:55 and then buying new businesses and just putting CEOs in to run those businesses.
0:25:59 And when we started doing that, the numbers scaled really, really quickly.
0:26:03 So, you did a lot of angel investing in this period. And we’ll talk about the rest of the
0:26:08 stage, but have you seen a good return from those investments? Because that was a good era.
0:26:13 Yeah. I mean, I don’t know, to be honest. The problem with angel investing is I just still,
0:26:22 I’ve slowed down, but I mostly just do it on gut. And so, I think I have 25 or 30 million dollars
0:26:27 of venture. And it’s just been this death by a thousand paper cuts thing. So, I think if you
0:26:33 take that cohort, I had one, my friend, Stuart, who we used to share an office with, I put 75
0:26:40 grand into his business, and then he sold it to workday. And I 10x my money there. And I think
0:26:44 that that, between that and a few other investments, I think I’ve definitely got my money back from
0:26:48 that cohort, maybe made a good, you know, a reasonable return. But the problem is I’ve
0:26:53 just kept going and I don’t really track it. Like it’s all in one big Excel spreadsheet somewhere.
0:27:00 And I don’t market 25 million dollars of angel investments. That’s a ton. Maybe even 30.
0:27:07 That’s an insane amount of angel investing. What? That’s fiscally irresponsible, my friend.
0:27:11 I know. I know. That’s the problem with angel investing. 10x is not going to return all that
0:27:13 money. Why do you think you’ve returned 30 million dollars? I don’t think that’s-
0:27:17 No, no, no. I’m not saying I’ve returned 30 million. I’ve literally put 30 million dollars
0:27:21 into venture. I know, but you say you’ve maybe broken even, right? You think you think you’ve
0:27:23 broken- No, no, no, no. Oh, no, no, no, no. To be clear, I’m not going to 30 million dollars.
0:27:25 I think you are so full of shit. I’m saying-
0:27:29 You’re telling me you don’t have a spreadsheet that just like, if I have 30-
0:27:29 No.
0:27:30 My friend.
0:27:30 No.
0:27:34 It doesn’t matter if you’re a billionaire, if you are many billions of dollars,
0:27:38 you track 30 million dollars. That’s not a couch money, regardless of who you are.
0:27:44 No. So I actually have, when I say a return, I mean from that cohort, so like maybe I invested
0:27:49 like two or three million dollars over that period. And I’m saying I might have got that money back.
0:27:56 But the rest, so much of it was done over the last 10 years in bursts that I don’t even know,
0:28:00 I don’t know where we’re at in terms of payback. Honestly, I don’t track it because
0:28:04 it’s such a pain in the ass to get marked to markets and I don’t trust them.
0:28:08 And so I’m literally just going, either they sell or we get liquidity or we don’t.
0:28:12 And so for me, it’s all marked at book value until-
0:28:14 I think it sounds crazy, but that is actually
0:28:20 more par for the course, I think, for the way angel investing works.
0:28:22 Because I think if you’re listening to this, you don’t angel investing, it sounds insane.
0:28:27 And there is a bit of it that’s insane, that’s a very big number to have put it to it.
0:28:32 But these are like 10-year oddities. People stop sending updates.
0:28:37 Even when they raise it up rounds, you don’t fully believe, you don’t fully know if that’s,
0:28:41 you can’t really take that and count that until it’s fully realized.
0:28:45 And so it is very easy to lose track of the portfolio and where it’s at,
0:28:47 because you don’t really know where it’s at.
0:28:49 That’s kind of the reality of the situation.
0:28:51 Playing in a company will raise money at some huge valuation.
0:28:53 And then a year later, it’s going out of business.
0:28:56 And so I’ve invested a lot of money in Angel as well.
0:28:59 And I track which company and which year I invested in,
0:29:01 but half of them don’t send updates.
0:29:03 The other half, they have markups and I’ll put it in there,
0:29:05 but I don’t count it as real net worth.
0:29:08 And then I’ll be, and then another portion, when they sell,
0:29:12 you don’t know they’re going to sell until when the deal’s done, a large part of the time.
0:29:15 I counted as my net worth, by the way, as the principal I invested.
0:29:18 But half totally a hundred percent.
0:29:19 That’s how I think about it too.
0:29:20 I think of it as roulette.
0:29:23 And I think like this period that we’re talking about
0:29:25 was about me learning how to play poker, right?
0:29:27 Poker has way better odds than roulette.
0:29:29 If you’re good at poker, you can actually win.
0:29:31 You’ve got, you know, 60% odds.
0:29:33 When you play roulette, you’ve got 50% odds.
0:29:35 It’s a terrible game.
0:29:38 And angel investing is frankly a roulette table.
0:29:42 You’re just having fun and it’s fun to be able to say, you know,
0:29:46 oh, I gave this entrepreneur who ended up building this great company,
0:29:47 25 grand along the way.
0:29:52 But I’ve realized it’s a lot more kind of soulless than playing poker.
0:29:53 It’s more fun.
0:29:54 You feel smart playing poker.
0:29:55 You feel dumb playing roulette.
0:29:58 Also the narratives we tell ourselves is just like roulette where you’re like,
0:29:59 I knew it.
0:30:02 I thought 11 was coming because I saw an 11 flash up over there.
0:30:05 And then that’s why, and if you, if you talked to a lot of angel investors,
0:30:08 it’s like, you know, you bet on two guys when they had a different idea.
0:30:11 And then it turned, you know, you bet on Stuart Butterfield
0:30:13 who’s building a game and then it turns into Slack.
0:30:16 And, you know, did you know, you might have known that Stuart was good,
0:30:21 but did you really know, you know, and I think a lot of people attribute skill
0:30:23 to where there was luck or not the other way around.
0:30:27 And it sucks that you’re making your money, you’re making your money right
0:30:31 at the beginning of the greatest bull market in American history.
0:30:35 And so starting in 2010 or so, you’re, you know what the average returns are
0:30:37 for the last 15 years for S&P 500.
0:30:40 Before inflation, I think it’s 14%, which basically means you double your
0:30:41 money every five years.
0:30:42 So what would that be?
0:30:44 1 million become 2 million become 4 million.
0:30:47 So you would have forexed your money just doing that boring shit,
0:30:48 but that’s way more boring.
0:30:50 Yeah. Yeah, that’s the thing.
0:30:54 I think like one of my regrets looking back is I wish that I had bought
0:30:58 apartment buildings or something really boring just as a diversification thing
0:31:01 and stocks and just been really disciplined there.
0:31:06 And instead, you know, I was maybe, I was just shoveling, you know,
0:31:09 $100,000 a month out to all these different startups.
0:31:14 And then that number went up and up and up over time as I had more free cash to
0:31:15 deploy.
0:31:19 And again, like I have winners in there, like I invested in SpaceX.
0:31:21 I’ve invested in some great funds.
0:31:23 There’s some awesome companies in there.
0:31:27 But to Sean’s point, like unless you’re reporting the LPs and making up numbers,
0:31:30 frankly, with up rounds, like you just have to wait.
0:31:32 Yeah. All right.
0:31:36 First of all, thank you for sharing all those levels because A, it’s interesting.
0:31:37 It’d be, you don’t have to.
0:31:40 And most people do not props to you for being transparent about it.
0:31:44 And also the takeaway I have is like, it takes a lot of wandering.
0:31:47 And you go through these eras, you go through these phases.
0:31:49 It’s kind of the same way you were talking about Tumblr.
0:31:51 And it’s like, yeah, I had my teen emo phase.
0:31:52 It’s like, yeah, you go and experiment over there.
0:31:55 And then you kind of learn, you have some fun, but you kind of learn that’s not it.
0:31:57 That’s not the right path for me.
0:32:01 And it sounds like you had a bunch of those and I’m glad you shared it.
0:32:02 I want to ask you, you have a question here.
0:32:04 Do you really need to be a billionaire?
0:32:06 What are your thoughts on that?
0:32:08 We forgot one level.
0:32:09 We forgot one level.
0:32:10 What’s the last level?
0:32:14 So last level is when I took my company public.
0:32:19 And I had tens of millions of dollars in the bank, both in my companies and personally.
0:32:24 And what’s weird is I’d reached the end, right?
0:32:28 I think that’s the goal that so many entrepreneurs think they want.
0:32:34 And what I realized is even then with all that money in the bank, I was still anxious.
0:32:37 I still fought with my partner.
0:32:41 I still got irritated with day-to-day life problems.
0:32:44 Like ultimately, like it’s kind of like travel.
0:32:46 We all think we want to go to Bali.
0:32:48 If only I moved to Bali, then I’d be happy.
0:32:51 The problem with moving to Bali is your brain comes with you.
0:32:54 And it turned out my brain is just really anxious.
0:32:59 Before I had anything, I would want to pump my own chest all the time because I felt like
0:33:00 I haven’t lived it to my potential.
0:33:03 Once, you know, I got lucky and things kind of worked out.
0:33:05 I was like, you know, I’m going to not talk about the shit anymore
0:33:07 because there’s more to life now.
0:33:09 And this burden does feel weird.
0:33:10 I don’t even want to bring it up.
0:33:12 So I’m just going to be kind of a little more private about this.
0:33:15 Why not just act like that?
0:33:18 Because I wish somebody had told me.
0:33:22 It’s kind of like, oh, money didn’t make you happy.
0:33:25 Kind of figured that, meaning you made a bunch of money
0:33:29 and it didn’t fundamentally change your overall level of happiness.
0:33:32 Or these materialistic things didn’t make you happy.
0:33:36 I think you’re probably smart enough to have not been totally surprised by that.
0:33:38 What did surprise you?
0:33:44 Well, I think what surprised me was the weight of the money, right?
0:33:48 So, you know, we wrote this in the prep doc, but like this question of like,
0:33:51 do you really need to be a billionaire or do you want to be a billionaire?
0:33:52 But you wanted to be.
0:33:53 I wanted to be.
0:33:58 I always wanted to be because I didn’t have enough money growing up.
0:33:59 Money was a four letter word in our house, right?
0:34:01 My parents fought about money all the time.
0:34:04 And so in my weird little anxious child brain,
0:34:06 I said, okay, I want as much money as possible.
0:34:10 If I have a lot of money, then everyone will stop fighting.
0:34:14 And I think what was counterintuitive is that it didn’t, it didn’t cause that.
0:34:17 So it actually caused familial discord.
0:34:18 It didn’t get me friends.
0:34:21 It isolated me from other people because I was unrelatable.
0:34:23 What’s the thing you wish somebody told you?
0:34:25 So you wish somebody told you, hey,
0:34:27 these things are not going to fundamentally make you happy.
0:34:30 The anxiety you’re carrying, you’re going to carry it over here too.
0:34:32 What do you wish that they told you instead?
0:34:36 The question is like, what’s the actual amount of money you want to spend each year
0:34:37 that makes you happy?
0:34:40 And just working in reverse from there.
0:34:42 And then figuring out, okay, what does my life’s work after that?
0:34:47 I think overshooting is a mistake that a lot of people make myself included.
0:34:50 And I think they think, okay, I need to be a billionaire
0:34:52 or be worth hundreds of millions of dollars.
0:34:55 When in reality that is overdoing it.
0:35:00 It’s like, look, you have a belly and you can only eat so much food.
0:35:02 Why do you need 100x that amount of food?
0:35:04 If you have 100x the amount of food you need,
0:35:07 well, it’s actually kind of stressful because A, it’s wasteful.
0:35:10 You don’t want the food to go bad and you got to do something with the food.
0:35:17 And so the book, frankly, is like, it’s kind of like a letter to myself 10 years ago
0:35:19 to say like, hey, you don’t need to go there.
0:35:23 Like just like good things are not where you think they are.
0:35:26 If money, so you’re in a weird position where your job is,
0:35:30 as an investor, your job is you’re doing a good job based on your return.
0:35:35 So you’re doing a good job based on how much money your clients or you yourself make.
0:35:39 But if money wasn’t part of it, would you still be investing?
0:35:40 Did you just get into that to make money?
0:35:42 Or is this how you’d spend your time regardless?
0:35:45 I really like relationships.
0:35:49 And I think business is a great way to build relationships.
0:35:50 That sounds kind of cheesy.
0:35:56 But business is a shared language where if I meet even a guy who owns a plumbing company,
0:36:00 I know I’ll be able to get along with him because we speak the same language.
0:36:02 We can get into interesting conversations.
0:36:04 And through that, I can make friends.
0:36:11 And I’ve found that for me, my zone of genius is building relationships with people.
0:36:16 And so if I can build relationships with people and invest in their businesses or buy their businesses,
0:36:19 I’m really happy doing that.
0:36:20 I love doing that.
0:36:25 So here’s the deal.
0:36:28 I made most of my money from a newsletter business.
0:36:29 It was called The Hustle.
0:36:32 And it was a daily newsletter at scale to millions of subscribers.
0:36:34 And it was the greatest business on earth.
0:36:38 The problem with it was that I had close to 40 employees
0:36:41 and only three of them were actually doing any writing.
0:36:43 The other employees were growing the newsletter,
0:36:46 building out the tech for the platform and selling ads.
0:36:48 And honestly, it was a huge pain in the butt.
0:36:51 Today’s episode is brought to you by Beehive.
0:36:55 They are a platform that is built exactly for this.
0:36:57 If you want to grow your newsletter, if you want to monetize a newsletter,
0:37:01 they do all of the stuff that I had to hire dozens of employees to do.
0:37:03 So check it out. Beehive.com.
0:37:07 That’s B-E-E-H-I-I-V.com.
0:37:12 So, Andrew, if you were going to go back and you said,
0:37:14 you should calculate how much you want to spend every year
0:37:16 and then kind of work backwards from that.
0:37:17 So let’s do the math.
0:37:19 What would you, you get to go to Time Machine,
0:37:22 you go back to 25-year-old you,
0:37:23 and you get to have this conversation.
0:37:26 What would you write down on the pen and paper to figure that out?
0:37:29 Well, I think what you want to figure out is you want to say,
0:37:32 what do I want to spend every year and then times it by 20?
0:37:34 What do you think you would want to spend every year?
0:37:38 Back then, I think a million, I mean, okay.
0:37:39 So let me put it this way.
0:37:44 So a million dollars, you can live an incredible life
0:37:49 and have one house go on incredible vacations.
0:37:51 Like you can live an amazing life.
0:37:55 If you want to fly private, add another million dollars.
0:37:56 So that’s two million dollars.
0:37:59 And then you want a buffer, so call it three.
0:38:02 And that allows you, you know, you basically go
0:38:06 and you get into hobbies and toys and you collect cars
0:38:07 or do whatever you want, right?
0:38:09 So call it three million bucks.
0:38:10 So what’s three times 20?
0:38:12 So $60 million.
0:38:13 I think $60 million.
0:38:15 If you’ve got it liquid, that’s, you know,
0:38:16 you can live an incredible life
0:38:18 and spend three to $4 million a year.
0:38:21 And it’s awesome.
0:38:22 So that’s your target.
0:38:22 I think about it.
0:38:23 That’s your target.
0:38:24 Then you’d work backwards from that.
0:38:28 And you also had these like three steps that you texted us.
0:38:29 I don’t know exactly what they mean,
0:38:31 but you said launch pad, enough and life’s work.
0:38:32 What do those mean?
0:38:33 Yeah.
0:38:35 So I think these are, these really are the kind of goals
0:38:36 that everyone should have.
0:38:41 So launch pad is like, how do you make 250k a year, right?
0:38:43 And ideally passive.
0:38:46 And if you can make 250k a year passive,
0:38:47 then you don’t need a job
0:38:49 and you have the freedom to be generative
0:38:51 and start the things that you want.
0:38:54 Past that enough is like, what’s the amount you,
0:38:55 what’s the, what’s the number?
0:38:57 What’s that number we were just talking about
0:38:59 that you want to spend every year?
0:39:00 And how do you work backwards from there?
0:39:03 So phase one might be you start a business,
0:39:05 let’s say some online business
0:39:07 that makes you 250k a year passive.
0:39:07 Great.
0:39:09 That’s your launch pad.
0:39:11 Then for the next five or 10 years,
0:39:13 you try and build up to that net worth number
0:39:14 that you really want to get to.
0:39:18 Call it, you know, 20, 30, 40 million dollars,
0:39:19 whatever that is.
0:39:21 And then you’ve got complete freedom.
0:39:24 And then this is where the hard part comes in,
0:39:26 which is discovering your life’s work.
0:39:27 It’s like, what is that thing
0:39:29 that you’re just intrinsically drawn to
0:39:30 that creates meaning?
0:39:36 And also, how do you take the byproduct of your machine?
0:39:37 You’ve now built a money machine, right?
0:39:40 All your investments and all your businesses
0:39:42 and the byproduct of that is money.
0:39:45 And how do you make meaning out of that money?
0:39:48 For some people, it’s compounding it in more businesses.
0:39:50 For other people, it’s giving it away
0:39:51 and doing philanthropy.
0:39:54 For others, it’s doing art projects or whatever it is.
0:39:56 And I think that’s the hard part
0:39:58 is figuring out that second mountain they call it.
0:40:00 Sean, have you done the math?
0:40:02 Like, have you thought about that for you?
0:40:02 Yeah.
0:40:03 With yours?
0:40:05 Yeah, I did a long time ago.
0:40:07 Before I sold my first business, I did this math.
0:40:11 My assumption was that I would spend $300,000 a year,
0:40:14 and then I tried to do the 4% or 5%.
0:40:17 Assuming that that’s 4% or 5% of your total.
0:40:20 I remember getting to $6 million.
0:40:22 And I said, what is that math?
0:40:24 That’s, yeah, that’s exactly it.
0:40:26 So $300,000 a year of spending, and I thought $6 million.
0:40:27 That’s the target.
0:40:30 And I drilled that into my brain.
0:40:32 I said, financial freedom is at $6 million.
0:40:35 $6 million means I could spend whatever I want.
0:40:39 And I made it part of all of my passwords when I would log in.
0:40:40 I had the number six in it.
0:40:41 And I did all these things.
0:40:44 I just kept at that time, I was really focused on it.
0:40:49 And I think actually it was the right way to think about it.
0:40:52 Today, I probably spend a little bit more than that.
0:40:56 So it’s not like I was way off in my estimate.
0:40:58 But I think round number, $10 million,
0:41:01 is financial freedom for almost everybody.
0:41:04 And $10 million is not that hard to get to
0:41:07 if you own a business.
0:41:10 You should be able to get to, let’s call it,
0:41:14 one to two million a year profit a year,
0:41:17 and sell that thing for somewhere between five and 10x multiple,
0:41:18 depending on what industry you’re in.
0:41:20 That’s not a hard way to get to $10 million.
0:41:21 It’s hard, but it’s simple.
0:41:26 Yeah, I guess what I mean is most people will never get to
0:41:28 true financial independence.
0:41:29 But they’re like, yes, I’ve made it.
0:41:31 I don’t have to worry about money ever again.
0:41:35 That’s a very lucky few people, a few percentage of the population.
0:41:37 I’ll tell you this.
0:41:40 I did this thing the other night, which I’m not really proud of.
0:41:45 I went on LinkedIn and I searched my college class.
0:41:48 So I was like, okay, let me go look at Duke 2010.
0:41:51 Dude, that’s my Friday night routine.
0:41:52 I do it every Friday night.
0:41:53 I literally do this on a Friday night.
0:41:54 I got it on my schedule.
0:41:54 And I knew–
0:41:59 I got a reminder on my calendar, 1 o’clock AM Friday night.
0:42:00 I got to like–
0:42:00 You joke?
0:42:01 This is literally what I did.
0:42:02 My kids went to bed.
0:42:03 My wife went to bed.
0:42:05 And I was like, all right, dig in, baby.
0:42:06 Let’s do this.
0:42:07 I had never done it before, but I was like, let’s do this.
0:42:11 And I knew at the time I’m doing this for kind of an F’d up reason,
0:42:13 which is I just wanted to feel good about myself.
0:42:14 I was like–
0:42:14 I kind of knew.
0:42:17 I was like, I think I’ve done well relative to the people in my class.
0:42:20 But I knew maybe skill or intelligence or talent-wise,
0:42:22 or even work ethic-wise, I was definitely
0:42:24 averaged to maybe below average in my class.
0:42:26 And so I was scrolling through it.
0:42:28 I was looking and it was amazing, man.
0:42:31 These people who I know, I know these people.
0:42:32 These people were smarter than me,
0:42:34 harder working than me, more talented than me.
0:42:37 They’re doing just kind of random jobs.
0:42:40 And I texted my college roommate and I was like, man, it’s crazy that–
0:42:42 like this person, this one girl I remember,
0:42:44 I was like, she literally could have been president.
0:42:46 Like she was polished.
0:42:48 She was a phenomenal speaker, super hardworking,
0:42:50 just knew everything about everything.
0:42:51 And I was like–
0:42:53 And today she was like running–
0:42:56 she was like an e-commerce manager at some e-com brand that sells
0:42:58 like some food product online.
0:43:00 And nothing wrong with that.
0:43:01 That’s not like a bad thing.
0:43:05 But I definitely feel like the potential was there for a lot more
0:43:06 if somebody had kind of sat us down and said, look,
0:43:08 here’s a blueprint.
0:43:12 Here’s a path that could get you to complete financial independence.
0:43:13 Like if somebody, our senior had come and said, look,
0:43:16 how much– do you even know how much money you want and need?
0:43:17 And I’m like, none of us would have known.
0:43:18 It’s like, do the math.
0:43:19 You sort of get there.
0:43:22 You think, OK, maybe you get to $5 million or $10 million.
0:43:23 And I said, do you know how do you get there?
0:43:25 And I would have been– me as a senior would have said,
0:43:27 I have no clue how you get there.
0:43:29 Is that like salary and save up?
0:43:30 Like, what am I supposed to do?
0:43:32 And if somebody had said, no, no, here’s what you do.
0:43:32 You could start a business.
0:43:33 I guess it is.
0:43:34 You sell for this multiple.
0:43:36 That whole thing might take you five to seven years,
0:43:38 maybe 10 years total.
0:43:41 And by the time you’re 31, you might be there.
0:43:41 Right?
0:43:43 If somebody had sat me down, I would have really felt like
0:43:47 thankful and been like, wow, I don’t have to go do that.
0:43:49 But I’m glad I know what it–
0:43:51 I’m glad I even know what that looks like.
0:43:52 Because I didn’t know that.
0:43:53 My parents didn’t do that.
0:43:54 So they didn’t teach me that.
0:43:56 That’s not something they knew.
0:43:56 Right?
0:43:57 Like, I saw this great quote.
0:43:59 You can’t ask somebody for directions to a place
0:44:00 that they’ve never been.
0:44:04 And I guess like growing up, I was asking people for directions
0:44:05 to a place that they had never been.
0:44:07 And so therefore, they were just giving me all kinds of screwed
0:44:10 up directions to places that I didn’t want to go.
0:44:12 And so, yeah, I guess like this along with the way of saying,
0:44:14 I think when I looked at that class thing,
0:44:15 I guess like the–
0:44:17 I went into it trying to feel good about myself.
0:44:18 But actually, I ended up feeling bad.
0:44:22 I was like, man, I feel like there was a lot of potential
0:44:22 on the table.
0:44:25 And most people took basically safety and prestige.
0:44:28 Like, they had a good job at a great company.
0:44:32 And I’d rather have no job at my company.
0:44:32 Right?
0:44:36 That’s the shift that I wish like at least 25% of those people
0:44:39 could have done that and been in a totally different position.
0:44:42 Yeah, I see so many people do this, too, with startups where
0:44:45 they go, you know, my goal is financial freedom.
0:44:48 And then they go and start a venture-backed startup.
0:44:51 And it goes back to that roulette versus poker where it’s like,
0:44:53 look, if you just started a boring business,
0:44:56 like a trash hauling business or window cleaning business
0:44:59 or whatever it is, you get it to $1 or $2 million of cash flow,
0:45:02 sell it or hold it, you’re set for life.
0:45:04 And instead, they go off and they raise all this money.
0:45:08 And they don’t realize that they really have a 1%–
0:45:13 call it a 1% to 5% chance of success and maybe a 10% chance
0:45:16 of like an OK outcome where they basically just make whatever
0:45:20 they would have made over 10 years in a payout
0:45:22 if they’d just done that or something.
0:45:25 I feel like so many people are trapped in that way of thinking.
0:45:28 And I think there’s this other great book that really inspired me
0:45:30 with mine, which is called How to Get Rich.
0:45:31 That’s the best book.
0:45:34 I mean, that’s by far one of the best business books ever read.
0:45:37 Because I read part of it.
0:45:38 I read like a third of it.
0:45:41 The book– I mean, the real takeaway is similar to my book
0:45:44 in some ways, right, where it’s like, at the end of the day,
0:45:47 the money like ruined– the money like ruined him, right?
0:45:49 He became like addicted to money.
0:45:53 And he basically in it goes, look, all my life,
0:45:54 I wanted to be a poet.
0:45:58 And instead, I got obsessed with money and addicted to drugs.
0:46:00 And I wish that I just quit at 35.
0:46:04 He said– he goes, I was a punch drunk boxer.
0:46:06 But instead of boxing, it was making money.
0:46:09 And I ended up spending $100 million on crack and whores.
0:46:12 Because he actually became– he was a crack addict.
0:46:14 And he died with a partner.
0:46:16 And that was a prostitute.
0:46:20 Like his then girlfriend was a prostitute he met.
0:46:23 But the book has like 10 or 15 chapters.
0:46:25 And each is a different lesson.
0:46:28 But the main takeaway is that he’s a really wealthy guy.
0:46:29 And he keeps it real.
0:46:30 Beautiful writing.
0:46:34 And he talks about how– yeah, he got drunk on it.
0:46:37 And he talks about– I mean, this kind of thing
0:46:39 we’ve been doing in this episode where we talk about the levels,
0:46:40 right?
0:46:42 What are all different levels of wealth and what do they mean?
0:46:46 And I remember reading it when my net worth was like 500 grand.
0:46:49 And he’s saying, oh, you know, if you want to be really–
0:46:51 if you might think like 50 million is a lot.
0:46:53 But that’s actually nothing.
0:46:55 You know, here’s what you get at 250 million.
0:46:56 He’s got like a billion–
0:46:59 Comfortably poor, comfortably rich.
0:46:59 Yeah.
0:47:00 And it’s got a bunch of different levels.
0:47:02 And all the levels are quite high.
0:47:02 You read that.
0:47:04 You get very humbled.
0:47:06 Are you looking at the levels right now?
0:47:06 Yeah.
0:47:08 So he has two of them.
0:47:10 He has levels of non-liquid money.
0:47:12 And then he has levels of liquid money.
0:47:15 So he says, wealth measured in cash in hand
0:47:17 or quickly realizable assets.
0:47:19 So kind of like liquidish assets.
0:47:21 And what he says is 100 to 400k.
0:47:23 That’s the comfortably poor.
0:47:25 400 to 1 million, the comfortably off.
0:47:27 1 to 2 million, the comfortably wealthy.
0:47:29 And then it goes, the lesser rich, the comfortably rich,
0:47:30 the rich, the seriously rich.
0:47:32 That’s 70 to 100 million.
0:47:33 What does rich start at?
0:47:35 100 to 200, the truly rich.
0:47:37 And then over 200 million, the filthy and super rich.
0:47:40 Yeah, it’s a great chart that he made.
0:47:41 I love that chart.
0:47:41 Yeah.
0:47:43 And by the way, I guess for what it’s worth,
0:47:46 even though I just went on this rant about how
0:47:48 you can kind of reverse engineer financial independence,
0:47:50 I got a disagree with one thing that you said, Andrew.
0:47:51 So I think you have a–
0:47:53 I think– am I characterizing this right?
0:47:55 I think you have a belief which is like,
0:47:57 you should kind of focus on these increments.
0:48:01 Like, get to the 250k, get a few million in the bank,
0:48:02 and then start–
0:48:04 then you start kind of finding your life’s work as you go.
0:48:06 You can decide how much money you really want,
0:48:09 get to your enough number, and then figure out your life’s
0:48:09 work.
0:48:11 Is that correct?
0:48:13 Yeah, but I think that if you overshoot,
0:48:15 then it causes a lot of stress.
0:48:16 Right.
0:48:17 I had a meeting once.
0:48:18 I want to tell you guys about it.
0:48:20 My company got acquired by Twitch.
0:48:21 And Twitch hires this new guy.
0:48:24 The guy who’s currently the CEO of Twitch is got Dan Clancy.
0:48:27 And I go into Dan’s office, and he’s my new boss.
0:48:30 And he’s like, all right, yeah, I want to do a one-on-one.
0:48:32 You’re one of– he has like five direct reports.
0:48:33 I’m one of his direct reports.
0:48:35 And he’s like, you know, I always–
0:48:36 I want to have a good relationship.
0:48:38 I want to understand where you’re trying to go,
0:48:39 and then I can help you get there.
0:48:41 So like, you know, what’s the dream for you?
0:48:42 You’re like at L–
0:48:43 I was like at L7 at the time.
0:48:45 He’s like, you want to get to L8?
0:48:48 Like, the little ladder they create inside the company.
0:48:50 And I think L10 is like the CEO.
0:48:51 And there’s no nine.
0:48:53 It’s like some weird system where you get to eight,
0:48:54 then you either get to 10, or you don’t get there.
0:48:56 Going clear in Scientology.
0:48:57 Yeah, exact.
0:48:59 I think Bezos is a 12 or a 13 or something like that.
0:49:01 And that’s the top level.
0:49:04 So he’s like, what’s the goal?
0:49:07 And I was like, in my head, I was like, do I tell this guy?
0:49:09 I don’t really give a fuck about being at this company,
0:49:11 or do I have to lie and pretend I want to be here?
0:49:13 And I’m really just vesting out for like the next year.
0:49:15 I was like, all right, let’s go with the truth.
0:49:18 So I go, honestly, like I did this deal.
0:49:20 That’s how I got here.
0:49:21 That amount of money kind of matters to me.
0:49:22 I want to vest that out.
0:49:23 I want to have fun while I’m here.
0:49:24 I want to do good work while I’m here.
0:49:26 I want to meet cool people.
0:49:29 But honestly, like not looking for a long term fit here.
0:49:30 You know, this is not a one night stand.
0:49:32 It’s like a one year stand for me.
0:49:35 And I tell him this, and he’s like, OK, great.
0:49:36 He doesn’t flinch.
0:49:37 And I’m like, OK, I respect this guy.
0:49:39 And he goes, I don’t want to waste my time
0:49:41 trying to figure out your path here.
0:49:43 But he’s like, I also don’t want to check out on you.
0:49:43 I was like, oh, thank you.
0:49:44 I was like, that’s my hesitation.
0:49:47 I didn’t want to tell you that because I didn’t want you to totally
0:49:49 write me off as a guy you don’t want to spend any time with
0:49:51 for the next year because I’m not a part of the long term.
0:49:52 He’s like, no, no, no.
0:49:56 And he goes, so tell me, what is the plan then outside of here?
0:50:00 And I go, you know, and this is where I went to like,
0:50:02 this is how I used to think at the time.
0:50:05 I had this insecurity, which made me want to say something
0:50:06 very ambitious.
0:50:08 I thought, you know, I live in Silicon Valley.
0:50:09 And, you know, in Hollywood, you’re
0:50:12 measured on your beauty and your IMDB.
0:50:15 In Silicon Valley, it’s how ambitious is your story?
0:50:18 What are you trying to change and disrupt and all this stuff?
0:50:20 So I said, I said, I really want to start a school,
0:50:21 like a university.
0:50:22 So I go into the speech and I tell him this thing.
0:50:24 And I don’t know if you guys have ever done this,
0:50:26 but you give your material as an entrepreneur.
0:50:29 You’re saying it to your employees, your investors all the time.
0:50:30 You have these speeches that you kind of know the reaction
0:50:31 that you get.
0:50:35 And if you always get like a nodding, like, wow, that sounds great.
0:50:35 It sounds really well thought through.
0:50:37 That’s a great framework for that.
0:50:38 You start to get used to that.
0:50:39 So I give him my framework.
0:50:40 I say, to do this, you need three things.
0:50:43 You need skills, you need capital, and you need connections.
0:50:45 And what I’m doing right now is the next three years,
0:50:46 I’m building those three up.
0:50:48 I’m building my capital by being here.
0:50:49 I’m building my skills by doing this.
0:50:51 I’m building my connections by, you know, doing this.
0:50:53 And that’s what I need to do the thing.
0:50:55 I give him this whole speech and I’m so used to people being like,
0:50:56 oh, that sounds really well thought through.
0:50:57 You know, it sounds great.
0:50:59 He’s going to be like Mark Wahlberg in the department
0:51:01 being like Hawthorn.
0:51:03 Like, come on, man, like, get rid of that.
0:51:04 That’s literally what he did to me.
0:51:07 He goes, yeah, I don’t buy all that.
0:51:09 And he doesn’t even tell me what.
0:51:12 I’m just like, OK, well, that’s all I got.
0:51:14 So what do you want me to say?
0:51:17 He goes, I don’t believe in the deferred life plan.
0:51:20 He goes, anytime he’s like, I’m older and wiser.
0:51:21 He’s like, you know, I just, if I ever
0:51:23 hear somebody who wants to do something
0:51:25 and then they give me a bunch of reasons why they’re not just
0:51:28 going and doing it right now, it tends to be a bad decision
0:51:29 to not go do the thing you want to do.
0:51:32 He’s like, it’s OK if you don’t know what you want to do.
0:51:35 Then sure, you go wander around, you try to figure it out.
0:51:38 But if you know, he’s like, you’re an entrepreneur.
0:51:39 If somebody told you they wanted to start a business,
0:51:41 would you tell them first go to business school,
0:51:44 read these 10 books first, then go start, you know,
0:51:47 go do a practice session doing this, go hire a coach.
0:51:49 No, you tell them, like, start the business
0:51:50 and you’ll figure it out as you go.
0:51:53 That’s how you how you get good at business by doing business.
0:51:55 There is no real substitute to getting good at the thing
0:51:57 besides doing the thing.
0:51:59 And he goes, if you want to do that, you should go do it.
0:52:00 I don’t believe in the deferred life plan.
0:52:04 And ever since he said that to me,
0:52:06 you know, there’s something good about getting just like served
0:52:08 like that, just getting on to your face.
0:52:10 And you’re like, huh, thank you.
0:52:12 That was like a real gift that you gave me
0:52:14 because you could have just like everybody else just nodded
0:52:16 along and said, all right, sounds good.
0:52:17 Good luck.
0:52:19 And instead, he kind of shook me up a little bit
0:52:20 and changed my frame on that.
0:52:22 And so that’s the only one thing I would say Andrew is like,
0:52:24 you have this thing of like, go figure out your life’s work,
0:52:27 which is, I don’t know, maybe a better plan is to like start
0:52:28 by saying, what do I really love doing?
0:52:30 Are you loved designing websites, designing products?
0:52:32 And you might have just been happier doing that.
0:52:33 And you might have made as much money
0:52:36 if you had just like gone for that versus I think the way
0:52:38 that maybe you do things, but definitely the way I did things
0:52:41 which was first I’m going to go make the money,
0:52:43 then I’m going to do the things I want.
0:52:44 And actually, as I look back now,
0:52:46 and if I was going to give advice to myself now,
0:52:48 I would say, I don’t think you need to do it that way.
0:52:48 That works.
0:52:50 That is one way to work to make it work,
0:52:52 but you might be better off just going
0:52:54 and trying to do the thing if you know what the thing is.
0:52:56 – You know, do you know that parable,
0:52:58 the fisherman in the business man?
0:52:59 You know that one?
0:53:00 – Yeah, love that one.
0:53:01 – So good.
0:53:02 – Tell us, you can tell us.
0:53:05 – Okay, so there’s this like, you know, Wall Street guy
0:53:08 and he’s on vacation on a small tropical island.
0:53:11 And he sees this man who’s fishing down by the water
0:53:14 and he walks up and he says, “Hey, what are you up to?”
0:53:17 And he says, “I’m fishing for the morning
0:53:20 and I’m going to get a fish and I’m going to feed my family.”
0:53:22 And the guy goes, “Oh, will you ever think about
0:53:23 turning that into a business?”
0:53:25 And he goes, “Well, how would that work?”
0:53:27 And he says, “Well, first you get a couple other buddies
0:53:30 and you fish more, you get more fish
0:53:32 and then you sell them at the market.”
0:53:33 Well, and then what?
0:53:36 Well, and then you would buy a boat
0:53:38 and you’d be even more efficient
0:53:39 and you could freeze them
0:53:41 and you could ship them all over the world
0:53:42 and you’d have a great business.
0:53:44 And then he goes, “Well, then what?”
0:53:48 And then he says, “Well, you then get a fleet of ships.”
0:53:49 Well, and then what after that?
0:53:52 Well, and then you take the company public and then what?
0:53:53 Well, and then you could retire
0:53:56 and you could just fish all day.
0:53:58 And so the joke is like the guy is already doing
0:54:00 the thing he loves.
0:54:02 Why would he go and build this big business?
0:54:03 And I think it’s like,
0:54:05 “Look, do you want to chop wood in your backyard
0:54:07 or do you want to own a sawmill?
0:54:10 Do you want to be Jiro from Jiro James of Sushi
0:54:11 or Steve Ells from Chipotle?”
0:54:13 I think that is the ultimate question of like,
0:54:15 what is your happy place
0:54:18 and how can you optimize your life around being in that?
0:54:23 – Yeah, I mean, I remember one time I told that story
0:54:26 and I was like, “Wait, what’s the punchline?”
0:54:27 You remember that, Sean?
0:54:28 I was like, I told that story and I’m like,
0:54:29 I’m not really sure what the takeaway is,
0:54:34 but like, should I go and like, fish or I don’t know?
0:54:38 You remember that?
0:54:39 No, it’s a good story though,
0:54:42 but Andrew, when’s the book officially come out?
0:54:45 – July 9th.
0:54:46 – It’s actually a great book.
0:54:49 Like I have a lot of friends that have come out with books
0:54:52 and never enough is actually one that I sat down
0:54:53 and read the entire thing.
0:54:55 Not because I was trying to be your friend,
0:54:57 but because I thought it was awesome.
0:54:58 The writing’s good.
0:55:00 What are you looking at, Sean?
0:55:00 – I’m looking at the book.
0:55:01 Well, I had the same reaction.
0:55:03 I would have said it’s a good book anyways,
0:55:04 ’cause I’m your friend,
0:55:05 but it actually is a good book.
0:55:06 I read it in like three nights, basically.
0:55:08 – I read it when it was still a PDF.
0:55:10 – There’s three good stories I remember from Andrew.
0:55:12 So there’s the Charlie Munger story.
0:55:15 So it’s basically the crazy way
0:55:17 that you actually ended up meeting your hero
0:55:19 and kind of almost doing a business deal with him.
0:55:22 There’s the Pixel Union sale and then buyback story.
0:55:24 I thought that was a great one
0:55:26 of kind of like your first big win
0:55:28 in terms of an exit and you shared the numbers
0:55:30 and you talked about how it went down
0:55:32 and then like how it went slightly wrong.
0:55:33 I like that story.
0:55:35 And then the last one,
0:55:37 I won’t give away the ending,
0:55:37 but the ending is dope.
0:55:39 And the ending was so good.
0:55:42 I was like, did he just do this for the book?
0:55:43 Like, I was like, did he just make this ending so,
0:55:45 like he needed a good ending for the book
0:55:46 so he just did this thing in real life
0:55:48 or was that real?
0:55:49 But it was a very good way to end the book.
0:55:50 I liked it.
0:55:52 It is all real.
0:55:53 – Dude, thanks for doing this again.
0:55:54 And never enough.
0:55:58 What’s the best place to buy a website or Amazon?
0:55:59 Does it matter?
0:56:01 – Yeah, just go to neverenough.com.
0:56:01 There’s all the links there
0:56:03 or you can just go on Amazon and buy it there.
0:56:04 – And that’s the pod.
0:56:07 (upbeat music)
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