0:00:01 Josh Wolf has this phrase where he says,
0:00:04 “chips on shoulders equals chips in pockets.”
0:00:06 Basically is when you meet an entrepreneur
0:00:11 who’s got an uncurable, unhealable identity wound,
0:00:13 that ends up being somebody who ends up doing really well.
0:00:15 ♪ I feel like I can rule the world ♪
0:00:18 ♪ I know I could be what I want to ♪
0:00:21 ♪ I put my all in it like no days off ♪
0:00:22 ♪ On a road let’s travel ♪
0:00:24 – Let me fill you in on some things that I saw this week
0:00:26 that I just want to get your opinion on.
0:00:28 Sam Lesson, so Sam Lesson,
0:00:31 I think he was like an early Facebook employee
0:00:32 and now he’s an investor.
0:00:34 He says a lot of interesting stuff.
0:00:39 So he did this tweet where he talked about revenge businesses.
0:00:41 People who have started stuff
0:00:42 because they want to get revenge.
0:00:45 And an example of this is this guy named Parker Conrad.
0:00:47 Basically he started this company called Xenophis,
0:00:49 which was fast growing company.
0:00:51 It kicked ass, whatever.
0:00:54 He gets fired because it was like a Broadway culture.
0:00:56 There was like people caught like having sex
0:00:59 and like the stairwells, like people doing drunk dumb shit.
0:01:01 Like there was also like some compliancy issues
0:01:03 of like not everyone was like compliant.
0:01:04 And so he got fired.
0:01:06 And so we start this new company called Rippling,
0:01:08 which has taken off like a rocket.
0:01:10 And Sam Lesson, I guess, invested in it.
0:01:11 Sam with Palmer Lucky.
0:01:13 Guy got fired from Facebook.
0:01:14 He started Oculus.
0:01:16 Now it starts what’s called Andrel.
0:01:18 – Yeah, Andrel, yeah.
0:01:21 – And so anyway, Sam Lesson has this really cool line.
0:01:24 He says, “If you have in your diligence checklist,
0:01:27 is this company a form of deep revenge?”
0:01:29 The answer is yes, cut the check.
0:01:32 And the reason I’m bringing this up is because oftentimes
0:01:34 you’ll talk to someone and they’ll say,
0:01:36 “Hey man, you got a lot of hate in your heart.
0:01:37 You gotta let that out.
0:01:39 You can’t hold that in your heart.
0:01:41 You can’t like live with that.”
0:01:42 I’ve taken the opposite approach
0:01:44 for like the last handful of years.
0:01:47 I actually think that hate, if you have in your heart,
0:01:48 it can be really useful.
0:01:51 Like revenge and rage is like a very useful feeling.
0:01:52 So is shame.
0:01:54 People will be like, “Why are you guilting someone
0:01:55 into like doing this or that?”
0:01:59 I’m like, “Well, guilt is a wonderful emotion to improve.”
0:02:02 And I wanted to get your opinion on his take care.
0:02:05 – I mean, I think it’s honestly kind of genius.
0:02:08 And I think people don’t like to say things like this,
0:02:13 but there are a bunch of heuristics for investing
0:02:17 that sounds so stupid or sound inappropriate,
0:02:20 but are actually true and useful.
0:02:25 So, for example, and you can frame these different ways,
0:02:27 but I have a friend who was like,
0:02:29 you know how Paul Graham talks about,
0:02:32 he wants to invest in fierce nerds and a fierce nerd
0:02:36 is basically it’s a nerd who’s like overly competitive.
0:02:38 – And also like a little bit of a shithead.
0:02:39 – Yeah, exactly.
0:02:42 Is looking to sort of break the system,
0:02:45 beat the system is overly competitive,
0:02:48 maybe unrefined in certain other areas of their life,
0:02:50 but that’s what you want.
0:02:50 And my friend was like,
0:02:53 “Yeah, I look for fierce nerds who love money.”
0:02:55 He’s like specifically the for love who love money
0:02:59 is a multiplier on the fierce nerd concept.
0:03:01 And, you know, we’ve joked on this pod before
0:03:04 about like, you know, if in your pitch deck,
0:03:07 I’m like, okay, went on a Mormon mission
0:03:09 or like, you know, grew up in, you know,
0:03:11 a Slavic country, Eastern Europe.
0:03:13 I’m like, you know, little plus points
0:03:14 are going off in my head.
0:03:16 These are green flags in my head.
0:03:19 It’s not a, for sure, yes, but like, I’m not stupid.
0:03:21 Like eventually you realize,
0:03:23 God damn these people from Utah can sell.
0:03:26 Or, wow, these programmers from this area of the country
0:03:28 are pretty, pretty bad ass.
0:03:30 Or when somebody is, you know,
0:03:32 it’s like getting up, being a Harvard dropout
0:03:35 is a stronger signal than being a Harvard graduate.
0:03:36 There’s all these things that sound silly,
0:03:38 but actually end up being true
0:03:39 because if you’re the type of person
0:03:40 who can get into Harvard,
0:03:42 and that has enough conviction and an idea
0:03:43 to drop out of Harvard
0:03:45 against the social pressures of Harvard,
0:03:46 that actually turns out to be a pretty good filter.
0:03:48 Now, of course, these things can be gamed
0:03:50 if people realize that these are the signals
0:03:51 you’re looking for, right?
0:03:53 Like people showing up to pitch meetings
0:03:55 and like acting a little extra autistic.
0:03:57 It’s like, okay, we kind of know what you’re doing here.
0:03:58 You’re trying to fit some pattern
0:04:01 that this investor is trying to match against.
0:04:02 So all of these things would be gamed,
0:04:07 but it’s great when you can figure out a signal
0:04:09 that is not yet common.
0:04:12 And so this one of, is this person, you know,
0:04:13 is this a revenge company?
0:04:14 It’s a great signal.
0:04:16 It’s a green flag signal.
0:04:20 (upbeat music)
0:04:22 All right, so when I ran my company, The Hustle,
0:04:24 I think we had something like two million subscribers.
0:04:26 And we made money through advertising.
0:04:28 We didn’t actually make that much money per person
0:04:31 reading the newsletter because advertising in general
0:04:33 is kind of a crappy business model.
0:04:35 And so I remember sitting down and I’m like,
0:04:36 what are all the different ways
0:04:38 that I can make money off The Hustle
0:04:39 that aren’t advertising?
0:04:42 And so to make sure that you don’t make this mistake,
0:04:43 Sean, me and the Hustlebot team,
0:04:46 we went and looked at a bunch of different ways
0:04:48 to monetize your business.
0:04:51 And we put it all together in a really cool document
0:04:53 where we lay it all out along with our research
0:04:55 and we call it, very appropriately,
0:04:58 we call it the business monetization playbook.
0:05:00 Go to the description of this episode
0:05:02 and you’re gonna see a link to that
0:05:03 business monetization playbook.
0:05:04 It’s completely free.
0:05:05 You just click the link and you can see it
0:05:06 back to the episode.
0:05:09 (upbeat music)
0:05:13 – Have you seen the Ted Turner documentary
0:05:15 that recently came out on HBO?
0:05:16 – No.
0:05:18 – Everyone should go and watch this.
0:05:20 So Ted Turner has been one of my heroes for decades
0:05:23 because his biography was so good.
0:05:25 And basically his story is that he inherited
0:05:27 a billboard business from his father.
0:05:29 And it was a great billboard company.
0:05:31 Like it was in the South and it was thriving.
0:05:32 He took the money from that
0:05:34 and he started a local TV station.
0:05:36 He eventually bought the Braves for cheap.
0:05:38 He bought the Atlantic Hawks for cheap.
0:05:39 Then he parlayed all of that
0:05:41 and bet all of his money in CNN
0:05:44 and was constantly on the brink of bankruptcy.
0:05:46 Not because his businesses sucked,
0:05:50 but because he was just like pushing it 100% all the time.
0:05:51 And so there was this great line.
0:05:53 It said, this is about one of his employees.
0:05:56 He was, Ted had a great sense of paranoia
0:05:59 within the company, a sense that we were the little guys
0:06:02 fighting for our lives against some big unknown guys.
0:06:05 And the truth is, is that we were one of the biggest
0:06:06 billboard companies in the South,
0:06:08 one of the biggest in the country,
0:06:10 but we wanted to make everything seem more important
0:06:11 than it probably was.
0:06:15 In fact, he insisted on taking his telephone calls
0:06:18 outside on pay phones because he wanted everyone to believe
0:06:20 that his phone was being tapped.
0:06:23 And if you watch his documentary,
0:06:24 he does all these amazing things.
0:06:26 Like for example, he’s like, I have to launch CNN
0:06:28 because Americans at the time,
0:06:30 CNN was the first ever 24 hour news network.
0:06:32 He was like, we owe it to America.
0:06:34 Like Americans need to have an option
0:06:36 to know what’s going on in the world.
0:06:39 Like everything had this grand sense of like,
0:06:40 we have to do this for America.
0:06:42 Or like, they’re trying to crush us.
0:06:44 And it’s like, who’s they, we’re the best.
0:06:47 And that was a big takeaway from Ted that I loved.
0:06:49 And this post kind of reminded me
0:06:51 that same lesson posted about them.
0:06:53 There’s a couple of other things that come to mind on this.
0:06:57 One, Travis Kalanick is kind of like this.
0:07:00 So he had, he had gotten, gotten screwed
0:07:02 in his first startup, literally,
0:07:05 I think by Michael Ovitz and others.
0:07:08 Basically it was like during the Lime Wire.
0:07:10 Well, the background is Travis Kalanick,
0:07:10 the founder of Uber.
0:07:12 Before Uber, he started Red Swoosh,
0:07:14 which was some type of Lime Wire competitor.
0:07:17 File sharing service, peer-to-peer file sharing service.
0:07:19 And he ends up not making a lot of money from it.
0:07:20 By the way, Neval, same thing.
0:07:23 He has Neval’s first hit, Neval’s now like, you know,
0:07:27 this wise sage, you know, billionaire type of dude.
0:07:30 But he was kind of like an angry vengeful dude
0:07:33 when he started Epinions back in the day.
0:07:35 The VCs kicked him out of the company.
0:07:37 I think Epinions ended up going public during the dot com
0:07:38 or had like a kind of a big exit.
0:07:39 He got nothing.
0:07:41 He got screwed by his own VCs.
0:07:42 He didn’t make anything from that?
0:07:44 No, and he ends up suing them.
0:07:47 So he does the thing that normally in Silicon Valley,
0:07:49 the founders are very afraid to fight back against the VCs.
0:07:52 He publicly sues his own investors
0:07:55 and ends up creating Venture Hacks,
0:07:59 which is a blog dedicated to helping founders
0:08:00 not get screwed by VCs.
0:08:03 He’s like, dude, I didn’t know how to read these term sheets.
0:08:04 And I didn’t know what these contracts meant.
0:08:06 And they just kept telling me the dangerous words.
0:08:08 Oh, don’t worry, it’s all standard.
0:08:10 And he goes, there’s nothing more dangerous
0:08:12 than something that when a lawyer or a VC tells you
0:08:14 this is standard, don’t worry about it.
0:08:17 And he goes, what was standard ended up getting me screwed.
0:08:19 So he starts Venture Hacks, a blog,
0:08:21 and that leads to AngelList,
0:08:25 which basically took the power away from, in many ways,
0:08:28 the VCs and gave it to Angel investors,
0:08:30 the founders that created a marketplace.
0:08:33 So it created more transparency, more liquidity,
0:08:35 more competition in that marketplace.
0:08:37 And AngelList becomes a multi-billion dollar company.
0:08:39 Elon is on a revenge tour right now.
0:08:42 Literally the Democrats were attacking him
0:08:47 or demonizing him, suing Tesla and SpaceX
0:08:51 and all of his companies and adding more and more regulation.
0:08:54 And so he just flips the script, goes all in on Trump.
0:08:55 Doe goes on a revenge tour.
0:08:58 Now he’s basically like a de facto president.
0:09:01 And he’s now going, now he’s going in with Doe.
0:09:04 He’s trying to like rip out the guts of the bureaucracy, right?
0:09:07 Like these revenge tours are really, really strong.
0:09:09 Josh Wolf has this phrase where he says,
0:09:12 “chips on shoulders equals chips in pockets.”
0:09:13 Basically is when you meet an entrepreneur
0:09:15 who’s got a deep chip on the shoulder
0:09:20 and it’s sort of an uncurable, unhealable identity wound,
0:09:24 that ends up being somebody who ends up doing really well.
0:09:27 Dude, that’s a 10 out of 10 phrase, by the way.
0:09:28 Chips in shoulders or chips in pockets?
0:09:32 Yeah, that’s a beautiful, he knocked that one out the park.
0:09:32 It’s a good one.
0:09:34 And I’ve actually had trouble with this.
0:09:37 I used to go the other way, we would meet somebody
0:09:40 and they would say something that just sounded like,
0:09:42 oh dude, there’s a party that’s broken inside.
0:09:46 Like you’re really carrying this revenge against somebody.
0:09:50 I used to try to A, convince them that they shouldn’t hold that
0:09:53 or be like, this person, they’re not mature,
0:09:54 they’re not wise to it.
0:09:58 And I immediately missed out on several big opportunities.
0:09:59 And again, in that moment,
0:10:02 my reaction is to either A, judge,
0:10:04 which gets you nowhere,
0:10:06 or distance myself and say, all right,
0:10:09 this person’s not as, they’re not like-minded,
0:10:11 they’re not seeing the world the way I’m seeing it.
0:10:12 And now what I’ve realized is,
0:10:15 no, no, no, I need the exact opposite reaction.
0:10:17 You go really close to that person
0:10:18 and you hand them a check and you say,
0:10:19 can I be a part of what you’re doing?
0:10:22 I’d like for your crazy psychosis
0:10:23 to be to my financial benefit.
0:10:24 (laughing)
0:10:26 And so like, I’ll give you an example.
0:10:28 So I’m very close to this person
0:10:31 and they have basically made something,
0:10:34 they had a bankruptcy back in their 20s,
0:10:35 late 20s, I think.
0:10:37 So they were doing really well,
0:10:39 got to like a $25 million at worth,
0:10:41 but we’re overextended, they’re in the real estate game.
0:10:42 We’re a little bit overextended.
0:10:44 They were doing development on behalf
0:10:46 of this person who was expanding.
0:10:48 There’s like a guy who was expanding
0:10:49 a bunch of locations.
0:10:51 So he’s like, cool, you’re gonna do 15 locations?
0:10:53 Great, I’m in, I’ll go buy these
0:10:54 and I’ll develop them for you.
0:10:55 And then that guy got in trouble,
0:10:56 that guy went to jail.
0:10:58 So now he’s holding the bag on these 15 locations
0:11:01 that could only be used for one type of business.
0:11:03 And so you’re saying like,
0:11:04 it was like some guy,
0:11:06 let’s say it’s like a fast food franchise,
0:11:08 it was like, I’m gonna be creating like 50 locations
0:11:09 or whatever.
0:11:11 Well, you go develop them and I’ll meet you there.
0:11:13 They did deal one, it was great, deal two,
0:11:14 it was great, deal three, it was great.
0:11:15 And so he goes, awesome.
0:11:18 You want to do 18 more of these boxes, right?
0:11:20 And he goes and gets them permitted for this exact thing.
0:11:21 He does exactly what he’s supposed to do
0:11:23 as the real estate developer.
0:11:25 But then that guy got in trouble for tax.
0:11:26 He hadn’t been paying his taxes or whatever.
0:11:28 He can no longer do this.
0:11:30 So now he’s on the hook for like whatever,
0:11:33 18 payments for a business he can’t run
0:11:34 and he can’t use for any other purpose
0:11:36 and he can’t really sell it ’cause it’s distressed
0:11:37 and it’s, and this happened right in ’08
0:11:39 when the bank crisis happens.
0:11:41 And so nobody’s investing in real estate anymore.
0:11:44 So he gets like, basically this series of events
0:11:45 ends up going bankrupt.
0:11:49 Well, he has a traumatic experience
0:11:52 and he goes bankrupt, not only he goes bankrupt,
0:11:55 he was, I think he was engaged or just gotten married.
0:11:58 And all of a sudden he’s back in his childhood bedroom
0:12:00 with his wife.
0:12:01 They’ve had to move back to his parents’ bedroom.
0:12:02 He’s sort of ashamed of that.
0:12:05 And he had a $25 million net worth before that.
0:12:06 Yeah.
0:12:07 That’s crazy.
0:12:08 He’s like buying like a million dollar engagement ring,
0:12:10 like that kind of thing.
0:12:12 And they turn off the lights to go to bed
0:12:13 and he’s like, he’s telling her, he’s like,
0:12:15 “You know, I promise you, I will figure out a way.”
0:12:17 Like, “I don’t care what the hell I have to do.
0:12:18 I will fight back.
0:12:19 I will figure out a way to make this right.”
0:12:20 Give me nine months.
0:12:23 We’re gonna be here for nine months in this room
0:12:23 and like whatever.
0:12:25 And he gives her this inspiring speech,
0:12:27 this like gladiator speech.
0:12:28 And then he turns off the lights.
0:12:29 It’s like, “Oh, shit.”
0:12:30 And like, he had like the stars from,
0:12:32 you know those like sticker stars on the ceiling?
0:12:34 The neon ones that they start glowing
0:12:35 and they just crack up laughing.
0:12:37 He’s like, “Oh my God, where am I?”
0:12:39 And so, and then he starts basically his revenge tour.
0:12:42 And he’s in the 10 years since then
0:12:44 has built up like a billion dollar real estate portfolio
0:12:47 using only his own money, no outside investors.
0:12:48 Probably has, you know,
0:12:49 I don’t know something like four or five million
0:12:52 of his own equity in these deals.
0:12:54 And has, you know, really come back strong.
0:12:57 And so I for years have been looking
0:12:59 for a good way to invest in real estate.
0:13:01 Like I looked at, should I buy my own property?
0:13:02 Should I have some rental properties?
0:13:05 I think, I think I kind of should take this internet money
0:13:06 that I’m making, like I’m all in on the internet.
0:13:07 And I think I should take like, you know,
0:13:10 10, 20% of it, have it in like hard rock,
0:13:12 tangible assets you can go touch and feel.
0:13:13 That seems like a smart thing to do.
0:13:14 But I never knew how.
0:13:16 Should I do it myself?
0:13:18 I’m a beginner and that takes time
0:13:20 and I don’t want to go fix broken toilets.
0:13:22 Should I give it to one of these funds or syndicators?
0:13:24 And then you would like meet them
0:13:26 and you realize these guys are just fee monsters.
0:13:27 They make all their money on the buy.
0:13:28 They don’t make any money.
0:13:30 You can, good luck on the sell.
0:13:31 They make their money on the acquisition fees
0:13:33 and management fees.
0:13:34 So I didn’t like them.
0:13:36 And then when I met, and then when this guy was like,
0:13:40 Hey, you know, like, do you want to do a deal with me?
0:13:43 I was like, I’m all in because the chip on this guy’s shoulder
0:13:45 of proving his dad wrong and like coming back
0:13:47 from that bankruptcy and all of this, like,
0:13:51 even though today he’s super wealthy, he’ll never stop.
0:13:52 – If you know, if you’re a grown man who knows
0:13:55 what it feels like to sleep with your wife in a twin bed,
0:13:57 like, you know, that sticks with you, you know?
0:14:00 Like the feeling of like exposed ankles of blankets
0:14:03 that don’t cover your ankles stays with you.
0:14:04 – If you’ve ever had to call top bunk
0:14:08 with your wife, you’ve experienced a trauma
0:14:09 that I would like to invest in.
0:14:10 – Yeah.
0:14:12 – When we were selling the Milk Road,
0:14:14 I remember talking to, I think I could say this,
0:14:17 I remember talking to some of the potential buyers
0:14:21 and was like, wow, you’ve been really successful.
0:14:23 And I was like, what, and I’d try to get to the root.
0:14:24 What was the motivation?
0:14:26 Like, why did you even go this path?
0:14:28 Was it just, you had an idea
0:14:31 and or you had, you wanted to solve this problem.
0:14:34 And I talked to two people and one was like,
0:14:36 no, this girl rejected me in ninth grade.
0:14:38 And I just remember thinking like, F that,
0:14:40 like I’m gonna become somebody.
0:14:42 I’m gonna be, and he’s like, yeah, I know it sounds stupid.
0:14:44 And like, it was stupid, but it was effective.
0:14:45 And the other one said the same thing.
0:14:50 He’s like, I was trying to live in a house.
0:14:52 We had six friends and we were all like,
0:14:53 hey, let’s live together next year.
0:14:55 And then we found this awesome house,
0:14:57 but it was a five bed house.
0:15:01 And they were like, hey man, it’s only five beds.
0:15:03 He’s like, I realized I was in the bottom of my group.
0:15:04 And I was like, F those guys,
0:15:07 like every night they’re having fun in that house,
0:15:09 I am going to be building an empire.
0:15:11 And I remember just thinking like, really?
0:15:13 First of all, that was like 20 years ago, 15 years ago.
0:15:16 Like that’s still bothered, like that still motivates you.
0:15:18 And they’re like, don’t you feel kind of silly
0:15:20 that that bothers you so much?
0:15:22 Like, you know, and they were like, no,
0:15:25 I feel they were silly forever counting me out.
0:15:26 And I was like, wow, okay.
0:15:28 I am not wired like these people.
0:15:30 I am not fueled by the same rage
0:15:32 and like kind of revenge instincts.
0:15:33 And I’m not saying that’s the only thing
0:15:34 that motivated them.
0:15:37 But the fact that that was there still 15 years later
0:15:38 was very surprising to me.
0:15:40 And I’ve now learned to bet on it.
0:15:44 – I think that I’m not surprised
0:15:46 that you’ve never had issues
0:15:48 ’cause you’re, I’ve said this a bunch of times,
0:15:50 you’re very emotionally healthy.
0:15:52 Dude, I use rage and like guilt.
0:15:54 And like, I want to-
0:15:54 – Nicotine.
0:15:55 – I want to end nicotine, no.
0:15:57 And I want to get back against someone.
0:15:59 Like there’s times that I remember
0:16:02 my big brother like saying something smart alec to me.
0:16:05 And I still feel that like,
0:16:06 oh, I’m going to prove you wrong.
0:16:08 Like I still feel it.
0:16:09 Yeah, that shit runs deep.
0:16:11 But it is pretty helpful.
0:16:15 It makes you pretty miserable at life,
0:16:17 but it makes you like fairly productive.
0:16:20 – I’m not going to lie, I’m kind of jealous about it.
0:16:21 Like, I think it on the whole is probably good.
0:16:25 I don’t have that, but it does seem kind of badass
0:16:26 when I hear it.
0:16:27 – It takes like, it’s crazy.
0:16:30 So you know how I hate flying?
0:16:32 I went through like 10 years of therapy
0:16:34 to figure out why I don’t, like I’m so claustrophobic.
0:16:37 It comes down to when I was like in second grade,
0:16:40 my brother put me in a full Nelson,
0:16:42 you know, like a full Nelson with like a big brother.
0:16:44 And he dipped me underwater in our pool.
0:16:47 And he was like, you know, like teasing me,
0:16:48 but I sucked in a little bit of water
0:16:51 and I legitimately felt like I was drowning.
0:16:53 I distinctly remember like, I’m dying right now.
0:16:54 I’m about to die.
0:16:55 And he kept dunking me and I was like,
0:16:58 you fucking asshole, like I’m dying right now.
0:17:00 And like, it’s crazy how little moments,
0:17:03 like since then, by the way, I cannot stay in elevators.
0:17:04 I don’t like take subways.
0:17:05 – You’ll swim.
0:17:07 You just don’t, you’re like, I won’t fly.
0:17:08 – I’ll swim.
0:17:09 I don’t like anything where I’m constricted
0:17:10 and I can’t escape.
0:17:13 It’s rooted in like, I can’t escape.
0:17:15 So if it’s like a boat that like you’re going to go on
0:17:16 and you can’t see the shore, it’s like, no,
0:17:17 I’m not feeling that shit.
0:17:18 – Is this the hypnotist unlocked in you
0:17:20 or you’re saying you figured this out
0:17:21 through therapy or something else?
0:17:22 – Therapy and hypnotherapy.
0:17:25 Yeah, like I’ve spent so much time and money
0:17:26 to like figure out the root cause
0:17:31 and how to overcome this all from like a 60 second interaction
0:17:33 with my brother where he was a kid too.
0:17:35 He was being innocent and just messing with me.
0:17:36 Isn’t that crazy?
0:17:38 How like the things that happen as a kid
0:17:40 can like impact everything.
0:17:42 – By the way, does it help when you figure out
0:17:45 the root cause or like does it go away a little bit?
0:17:47 – No, a little bit.
0:17:49 Like I guess like there’s this like idea
0:17:50 of like getting over the stuff.
0:17:52 It’s called like walking to the gallow
0:17:54 where like when you get panicky,
0:17:55 it feels like you’re dying.
0:17:56 And in order to overcome that,
0:17:59 you just gotta be like, fuck it, I’m gonna go die.
0:18:02 Like I’m gonna like experience this thing
0:18:05 that I’m fearful of and you just have to do it.
0:18:08 And it’s like, it’s pretty bad.
0:18:09 And like, so you have to tell yourself
0:18:11 all these stories to help get over it.
0:18:13 And one of them is like, I only feel this way
0:18:15 because John did this to me long ago and I was fine.
0:18:16 Okay, I was fine.
0:18:18 I will make it through this.
0:18:19 And so you gotta like walk to the gallow
0:18:21 and you gotta like tell yourself all these stories.
0:18:24 And so that’s like one of the many coping mechanisms,
0:18:25 but it’s just all happens
0:18:26 because of a small thing when you’re a kid.
0:18:28 So it could have been like some girl said this,
0:18:29 some guy said this to you.
0:18:29 – Right.
0:18:30 – And it like, it’s crazy.
0:18:33 It just shapes like 50 years of your life.
0:18:34 – Dude, what a sick phrase, walk to the gallow.
0:18:37 Wow, what a, what is a gallow even?
0:18:38 Is that like–
0:18:39 – Like that’s where you get hung.
0:18:42 It’s it from a, I think it’s where you get hung.
0:18:45 It’s like, so the gallow is like the structure
0:18:46 where you have to get hung.
0:18:48 And so like, by the way, I tried to break this the other day.
0:18:51 I went on the subway for the first time ever in New York.
0:18:54 I was like, deathly afraid to go into the subway.
0:18:55 And I’m like, we’re just gonna go one stop.
0:18:57 And I was like, fuck it, we’re walking to the gallow.
0:19:00 – There’s also this, this isn’t just for business.
0:19:02 This is also like, you know, revenge body is a thing.
0:19:04 And remember that, that medium post we both love
0:19:05 how to lose weight and four easy steps.
0:19:09 And it’s like portion control, you know, avoid beer.
0:19:10 And then it’s like, have your heart broken
0:19:11 into not just broken shattered
0:19:14 into into a million itsy bitsy pieces.
0:19:16 It talks about basically it’s the heartbreak
0:19:18 that’s like the fuel for the gym.
0:19:21 Like in the same way that like, you know
0:19:24 if you want Adele to go triple platinum
0:19:25 she just needs a bad heartbreak, right?
0:19:29 It’s, it fuels artists, it fuels fitness,
0:19:31 it fuels business.
0:19:33 And I think it’s sort of undeniable.
0:19:35 I don’t know if it’s healthy, but it’s definitely effective.
0:19:37 – Taylor Swift wouldn’t write hits
0:19:40 if she had a successful wonderful relationship.
0:19:41 – Well, we’ll see.
0:19:42 Travis Kelsey.
0:19:45 – Well, she hasn’t had any new hits yet.
0:19:48 (all laughing)
0:19:50 You know, she has hits for a reason.
0:19:57 – All right, so a while back we had Gary Tan.
0:19:58 He’s the president of Y Comediar,
0:20:00 which is the most successful incubator of all time.
0:20:02 We had him on the podcast and he said
0:20:05 that the future of businesses is creator led.
0:20:08 And that’s why I’m interested in the podcast.
0:20:10 Creators are brands.
0:20:12 Creators are brands explores how storytellers
0:20:14 are building brands online.
0:20:16 They’re gonna cover the entire creative process.
0:20:18 They’re gonna talk about navigating brand partnerships.
0:20:20 They’re gonna talk about what you need to know
0:20:22 about growing your social media platforms.
0:20:23 Everything you need to know on this topic.
0:20:26 Creators are brands is the pod.
0:20:28 So check it out wherever you get your podcasts.
0:20:31 Again, it’s called Creators Are Brands with Tom Boyd.
0:20:33 All right, back to the episode.
0:20:37 – All right, what else you got?
0:20:40 – All right, so something a little bit happier.
0:20:44 I saw this on 60 Minutes, I think two weeks ago.
0:20:46 I could not stop thinking about this.
0:20:48 So let me fill you in on this story.
0:20:50 So there’s a small country called Bhutan.
0:20:54 Bhutan is in between India and China.
0:20:57 So it’s between these behemoth countries.
0:21:00 And because of that, a lot of people don’t know about it.
0:21:03 – And it’s tiny, half the size of Indiana.
0:21:03 – It’s tiny.
0:21:06 I think their stock market is 18 companies
0:21:08 and the total market cap of their stock market
0:21:13 is $800 million, which is 170,000th the size
0:21:14 of the US stock market.
0:21:16 So it’s like this super small country.
0:21:18 In fact, I read that in 1999,
0:21:20 that was the first year they got TV.
0:21:21 So it’s like this tiny country.
0:21:25 Well, in the ’70s, the king of Bhutan
0:21:27 did a diplomatic trip to India.
0:21:30 And according to the story,
0:21:34 this Indian reporter goes, “Hey, King, we’re neighbors,
0:21:36 but I don’t know anything about you.
0:21:37 Like what’s your deal?
0:21:38 What are you about?”
0:21:40 And in fact, what’s your gross national product?
0:21:41 Like tell me, what are you guys known for?
0:21:45 He goes, gross national product?
0:21:45 What?
0:21:46 What are you talking about?
0:21:47 GDP?
0:21:48 What are you saying?
0:21:52 In Bhutan, gross national happiness is more important
0:21:53 than gross national product.
0:21:55 And it was this like off-handed comment
0:21:58 that he made saying their biggest export is happiness.
0:22:00 We care about happiness.
0:22:02 And that totally hit.
0:22:03 It went viral.
0:22:06 Everyone was like, this little country’s,
0:22:07 they must be the happiest place on earth.
0:22:08 But the king says that they care more
0:22:11 about gross national happiness than money.
0:22:16 And the king was like, “Oh, people really resonate with that.
0:22:17 Let’s make that our thing.”
0:22:20 And so over the next five, 10 years,
0:22:24 they actually implement this and make this their thing.
0:22:26 And so in this country, Bhutan, to this day,
0:22:30 every five years, surveyors traveled the country
0:22:33 and they asked the people about education level,
0:22:34 salary, and material possession.
0:22:36 So like a lot of like normal stuff.
0:22:39 And they also say, like, do you have negative thoughts?
0:22:41 Do you have positive thoughts?
0:22:42 How much time do you spend working?
0:22:45 How much time do you spend praying and sleeping?
0:22:49 And the data that they get is factor in
0:22:53 to a lot of the rules and things like that that they make.
0:22:56 And I thought it was like a great story
0:22:59 about how you can care about things
0:23:03 that aren’t seemingly important like happiness.
0:23:05 And I had, well, you know what I mean?
0:23:07 Like, it’s like, you know, we care about like money.
0:23:11 And like, yeah, and there is a few critiques,
0:23:13 which is like, according to the world happiness report,
0:23:15 Bhutan is like average.
0:23:18 Like it’s like not kicking ass.
0:23:20 But like, you know, I don’t know if that’s a matter
0:23:23 of like different ways of measuring things like that.
0:23:24 ‘Cause happiness is like a way,
0:23:26 like it’s kind of hard to measure happiness.
0:23:28 Is it like that fleeting moment that you feel
0:23:30 like the 30 seconds after you’ve eaten a good meal
0:23:32 or is it like, I feel contentment, whatever.
0:23:34 But I thought it was cool for three reasons.
0:23:37 One, the king just said some shit and it hit
0:23:38 and he ran with it.
0:23:41 (laughing)
0:23:45 – It’s been there, bro, I feel that becomes a thing, right?
0:23:49 – Yeah, it’s like wearing a certain outfit in fourth grade.
0:23:50 And you’re like, I guess this is my identity.
0:23:51 – ‘Cause I’m a high stock guy.
0:23:53 – Yeah, like I’m a chain wall, it’s my guy.
0:23:55 Like I’m a chain wall guy.
0:23:56 Like that’s just my thing.
0:23:57 ‘Cause the teacher said that.
0:24:00 The second thing is that I do think it’s like pretty fascinating
0:24:03 that in a culture that you and I are part of
0:24:06 and America’s particularly because we’re such hard workers,
0:24:07 it’s all about work, work, work.
0:24:09 But that’s not really like the point of all this.
0:24:10 It’s like to be happy.
0:24:12 So I thought it was cool that they were measuring that.
0:24:15 But another third and final thing
0:24:16 that this makes us interesting.
0:24:18 Have you ever heard of a pairing metric?
0:24:21 – Yeah, basically like two metrics that let’s say
0:24:22 you have revenue on one side,
0:24:24 but you might have profitability on the other
0:24:26 in order to make sure that like,
0:24:28 if you over-optimize on just revenue,
0:24:30 you might totally nuke your profits.
0:24:34 Or if it’s about growth, you want, you know, NPS score,
0:24:35 make sure your customers are happy.
0:24:35 Is that what you mean?
0:24:38 – Yeah, and so when Tim Ferriss invested in the hustle,
0:24:40 we, I got to hang out with him for an hour or so.
0:24:42 And I was telling him about how many subscribers
0:24:43 that we were growing by.
0:24:45 He’s like, well, you need like a pairing metric.
0:24:48 You need, you know, not just top-line like subscribers,
0:24:50 email subscribers, but like, are they engaging?
0:24:51 Are they opening? Whatever.
0:24:52 You have to have a pairing metric.
0:24:54 Otherwise, it kind of ruins the whole thing.
0:24:56 And that was like kind of fascinating to me.
0:24:58 I never heard that phrase.
0:25:00 And I didn’t think about having a pairing metric
0:25:02 with like government policy or, you know,
0:25:04 like anything other than business.
0:25:08 And this is like a really great example of a pairing metric
0:25:11 where it’s about GDP, traditional metrics,
0:25:14 but also, you know, make sure that your people
0:25:15 are happy along the way.
0:25:17 So I thought it was pretty cool.
0:25:19 – Yeah, I love this story.
0:25:20 I think I was telling you before this.
0:25:23 I think we both somehow, the odds of us both having Bhutan
0:25:26 on our list are so weirdly low.
0:25:27 I think maybe we both saw the same thing.
0:25:30 I saw the 60 Minutes thing a few weeks ago.
0:25:31 – What did you think?
0:25:32 – First of all, it’s so funny.
0:25:35 When you watch 60 Minutes, 60 Minutes looks so old, dude.
0:25:37 It looks, and 60 Minutes is basically
0:25:39 just a YouTube channel.
0:25:41 – It’s great though, right?
0:25:43 – It’s great, but why does it look so old?
0:25:46 Like literally the person on there is old.
0:25:49 The clock they use for the 60 Minutes thing is so old.
0:25:50 All of the editing is so old.
0:25:52 They don’t know like, well, like a jump cut is.
0:25:53 It’s insane.
0:25:54 – I think it’s a fun fact.
0:25:55 I had almost positive.
0:25:58 It’s the only TV show without a theme song.
0:26:02 It’s literally just tic, tic, tic, tic, tic, tic, tic, tic.
0:26:03 – Yeah, exactly, it’s crazy.
0:26:06 So when you watch 60 Minutes, it’s interesting to just look
0:26:07 at it and be like, what is this, dude?
0:26:10 Anyways, here’s a couple of the things
0:26:12 that stood out to me about this.
0:26:14 So first, why do I, why am I interested in a country?
0:26:16 I’m interested in a country because in the same way
0:26:19 I’m interested in companies that are run in interesting ways,
0:26:21 or if a company had a unique mission or business model
0:26:24 or a unique way of doing things that’d be interesting to me,
0:26:26 countries are just big companies.
0:26:27 And I found this pretty interesting
0:26:29 that if you looked at it like a company,
0:26:31 where it was like, oh, what’s our main metric?
0:26:33 It’s not revenue, it’s happiness.
0:26:35 So it’s like, instead of the GMV,
0:26:37 they’re looking at how much happiness they’re producing
0:26:39 in their own economy.
0:26:42 And I like that they measure their own.
0:26:45 And like, did you look at their happiness index,
0:26:47 kind of zero to one and how that all works?
0:26:49 – Yeah, it’s like a weighted score, right?
0:26:51 What were all the metrics?
0:26:52 – It’s basically, it’s a weighted score.
0:26:55 Then they sort of, they ask people a bunch of questions
0:26:59 about their psychological wellbeing, their health,
0:27:02 their time, their education, all these different things.
0:27:05 And they end up with like, basically,
0:27:09 they’re a 0.781 on their scale, which is pretty good.
0:27:12 And they measure, oh, that’s up 3.3% since last year.
0:27:15 And basically 9.5% of Bhutni’s people are deeply happy,
0:27:19 38% are extensively happy, 45% are narrowly happy,
0:27:22 and 6.4% were unhappy, according to them.
0:27:26 And what I thought was cool was that a couple of things.
0:27:29 Number one, it’s one of the very few cases
0:27:31 where someone in power gives it up.
0:27:34 So they had a king and he voluntarily is like,
0:27:36 “You know what, this could just go to my son,
0:27:38 but we need a democracy.”
0:27:39 And the funny thing is the people there were like,
0:27:42 “No, no, king, stay king.”
0:27:43 And he’s like, “No, no, no, we need a democracy.”
0:27:46 They’re like, “Democracy, you see, India is a democracy,
0:27:47 Pakistan is a democracy, look at those places,
0:27:51 they’re always at war, it’s violent, forget democracy,
0:27:52 we don’t want it, we’re happy.”
0:27:55 And he was like, “Well, if I just keep giving this power
0:27:57 down by birth, this won’t end well.”
0:28:00 So I thought seeing somebody relinquish power
0:28:04 in the crime is so rare that you just overlook it
0:28:05 when you’re on the surface.
0:28:06 But if you actually think about that deeply,
0:28:09 that actually is like a really noble and very cool
0:28:11 and very unique thing.
0:28:13 How few, Biden didn’t want to give up power
0:28:15 and Trump doesn’t want to give up power,
0:28:16 nobody wants to give up power.
0:28:19 Power is one of the most addictive things in the world.
0:28:20 And so I just thought that was really noble
0:28:23 and really cool of him to voluntarily go to democracy
0:28:25 at a time of peace, which is not usually what happens.
0:28:27 Usually, if a democracy happens,
0:28:30 it’s after a time of violence or war, people need change,
0:28:33 or the Western country comes in and helps
0:28:35 and tries to force a democracy on them.
0:28:36 So I thought that was cool.
0:28:38 Did they say that was the only time
0:28:39 that’s ever happened that way?
0:28:42 It’s the only one I know of, they kind of referenced
0:28:44 that that’s never really happened before,
0:28:47 that a democracy happened in a time of peace voluntarily.
0:28:52 Also crazy that just like until the 70s, like in 1974,
0:28:53 there’s people listening to this podcast
0:28:57 that are born before 1974, they didn’t have a currency,
0:29:00 it was barter, even up until 1974.
0:29:01 That’s crazy, right?
0:29:03 And the crazy thing was even though there was barter,
0:29:05 they still had to pay taxes.
0:29:06 And it was like, you could pay your tax
0:29:09 with like giving the government like a cow.
0:29:10 Or it was like, oh, you don’t have livestock,
0:29:12 all right, do labor then.
0:29:15 And so then they built these amazing buildings
0:29:17 because your taxes was basically community service.
0:29:20 It’s like, hey, I’ll go donate like 100 hours of labor
0:29:21 to pay my tax for the year.
0:29:22 And then because of that,
0:29:24 they built these really cool buildings.
0:29:27 Side weird note, our friend, Sheila,
0:29:30 friend of the pod, Sheila went to Potomac.
0:29:31 I think he posted this thread,
0:29:33 it’s a thread of him going there.
0:29:34 He like meets the king.
0:29:36 ‘Cause he’s like, it sounds crazy to meet the king,
0:29:38 but like, he’s like, I was at a bar
0:29:38 and I was talking to this guy
0:29:40 and that guy was the former, like whatever,
0:29:44 he was the former like prime minister or whatever.
0:29:45 He’s like, now he’s a surgeon
0:29:46 and he’s just drinking at this bar.
0:29:47 And he’s like, oh, you want to meet the king?
0:29:49 Yeah, I can introduce you.
0:29:51 And so he meets the king.
0:29:53 And so he’s like, he’s talking about his experience there.
0:29:55 One of the crazy things he points out is like,
0:29:58 a lot of the buildings have penises painted on them
0:29:59 in like artful ways.
0:30:02 So, you know, it’s a little bit of a super bad
0:30:04 mixed in there, I like that.
0:30:06 The other crazy thing is the Bitcoin stuff.
0:30:07 Did you see their Bitcoin stuff?
0:30:10 – I know they have, they own more Bitcoin
0:30:13 than the total market value of their stock market.
0:30:15 It’s like a billion dollars in Bitcoin.
0:30:18 – Yeah, they basically have made themselves wealthy for life.
0:30:21 They use their, like their vast nature.
0:30:24 So like, you know, they use hydroelectric mining
0:30:24 to mine Bitcoin.
0:30:28 And it’s believed that they have a billion dollars of Bitcoin.
0:30:32 – But that was like, I think that was reported
0:30:34 like, you know, eight months ago.
0:30:38 So it’s as if they have double that now.
0:30:39 You know what I mean?
0:30:40 Like it’s been, they’ve had a great run.
0:30:43 – The US has it because they seized the Silk Road, right?
0:30:46 So they have, you know, the US has 20 billion.
0:30:49 China has 20 billion.
0:30:50 UK has 6 billion.
0:30:53 El Salvador, which has been buying and holding Bitcoin
0:30:56 has 6,000.
0:30:58 – And the guy on that 60 minute show,
0:31:01 he did a great job of saying, he was like, we’re human.
0:31:04 We still want to be rich and we want stuff
0:31:05 and we want all this other stuff.
0:31:08 We also want to be happy.
0:31:09 And so, cause people were like, well,
0:31:11 so if you’re just about happiness,
0:31:13 buying Bitcoin and all this is like, wow,
0:31:15 I still want nice shit.
0:31:18 – Yeah, more prosperous we are, the happier we’ll be.
0:31:19 The other thing that I thought was cool, you know,
0:31:21 they do free education, free healthcare,
0:31:22 all that good stuff.
0:31:25 But they also were like, hey, 60% of the land
0:31:27 is going to be like dedicated to nature.
0:31:30 And but there’s no, I think they don’t allow mountain climbing.
0:31:31 They like have these amazing mountains
0:31:33 because they’re in the Himalayas.
0:31:35 But you’re not allowed to, and he said the great line.
0:31:39 He goes, he goes, nature is not meant to be conquered.
0:31:42 He’s like, man, that’s this thirst to just conquer everything.
0:31:43 Oh, there’s a mountain, I got a climate,
0:31:45 put my flag on the top.
0:31:46 And they just had a different attitude.
0:31:48 It’s like, nature is beautiful, it’s meant to be enjoyed,
0:31:49 meant to be, it’s sacred.
0:31:52 It’s meant to be sort of revered and not conquered.
0:31:53 And I just thought, man, these people roll
0:31:57 to a different beat and I respect it.
0:31:59 I’m glad that these little experiments live.
0:32:01 – I had the exact same feeling, which is I saw him talk
0:32:04 and they sort of fit a lot of the stereotypes
0:32:06 that you would have with like a,
0:32:09 Nepal, the Dalai Lama, like this like rise.
0:32:11 ‘Cause, and I think they’re like,
0:32:13 they have like a national outfit or something like that.
0:32:15 And it looks like the, and they are Buddhist,
0:32:18 but it looks like that, like whatever the Dalai Lama,
0:32:19 like the Shah or whatever he wears.
0:32:21 So they like, yeah.
0:32:24 – We love Jacob.
0:32:26 – Yeah, the national sport is grinding.
0:32:33 They had this like cool vibe of like wisdom and shit.
0:32:35 And it was very shocking to see that
0:32:37 because I’m like, just watching this on a Sunday night
0:32:39 as I’m gearing up to talk about money
0:32:42 and gearing up to get after a crush the week.
0:32:45 And then I see this guy who was like,
0:32:46 talk about happiness and shit.
0:32:49 And I was like, this is incredibly refreshing.
0:32:50 It was pretty cool.
0:32:52 It seems like it’s a great country.
0:32:53 I think, by the way, there’s all these like other downsides.
0:32:56 I think she’ll even said, he was like,
0:32:57 it’s a pain in the ass to get there.
0:32:59 Like I don’t even think they have an international airport.
0:33:00 – Like the roads are not very developed.
0:33:02 Like there’s, you know, there’s other things.
0:33:04 When you prioritize happiness above all,
0:33:06 maybe your roads kind of suck.
0:33:08 – Yeah, so like, it was pretty sick, dude.
0:33:09 I thought it was great.
0:33:10 I was very inspired.
0:33:11 So I wanted to bring up Bhutan.
0:33:12 – Well, there is one other piece to it,
0:33:14 which I guess a bunch of young people
0:33:16 are leaving the country.
0:33:17 Did you see that part?
0:33:18 I didn’t fully follow that,
0:33:22 but they were then gonna build a new city in Bhutan,
0:33:24 the mindfulness city.
0:33:25 And it was gonna be like,
0:33:28 they launched like a hundred million dollar bond.
0:33:30 And then they’re basically trying to make it a city
0:33:32 where it’s like walking and cycling
0:33:33 and green spaces for meditation
0:33:36 and mindfulness based education and ecotourism.
0:33:38 Like all the shit biology talks about
0:33:39 is like a network state
0:33:41 or like the practice guys are trying to do.
0:33:43 These got, you know, Bhutan is building a new city
0:33:46 with like its own cultural values,
0:33:48 trying to use that to attract people to the country.
0:33:52 – Well, you wanna hear a funny story is biology is,
0:33:54 and a lot of these crypto guys are in
0:33:56 on this new thing called American classes.
0:34:00 It’s that monument that they are proposing
0:34:01 that they build in the Bay Area.
0:34:04 I don’t know if it’s, it will never get built very likely,
0:34:07 but the same architect who’s on board with that
0:34:10 is doing their, that was the guy in the 60 minutes episode.
0:34:12 He’s the guy who’s building Bhutan’s new city.
0:34:16 And so there is just like weird crossover
0:34:19 of the crypto guys and these people who are like,
0:34:22 what would a new city look like and Bhutan?
0:34:23 – Yeah, it’s pretty inspiring.
0:34:24 Honestly, it makes you think bigger, right?
0:34:26 It makes you think about things
0:34:27 that you just take for granted.
0:34:28 They just seem set in stone.
0:34:29 They seem like they were just,
0:34:31 they were already here, they’ll always be here.
0:34:33 It always was this way, it’ll always be this way.
0:34:35 And then you hear about somebody, you know,
0:34:37 these people who are trying to like shake that
0:34:38 and you realize, oh wow, it’s all,
0:34:41 the whole world is more malleable than you thought.
0:34:43 – Yeah, and they also were approaching it
0:34:47 in an interesting way with their new city.
0:34:50 I forget the quotes, but he said something about how,
0:34:53 he’s like, we know that this is like a 50 year project.
0:34:55 Like we’re going to go slow
0:34:57 because we don’t want to hurt the environment.
0:34:58 And it was, and the guy was like,
0:35:00 but you’re going to be dead when they like do that.
0:35:02 And he was like, isn’t that awesome?
0:35:04 That’s something will like outlive me.
0:35:07 Like they had a very, so if you’re listening to this,
0:35:08 this is on YouTube for free.
0:35:10 So Google Bhutan, 60 minutes.
0:35:12 It was an awesome segment.
0:35:18 – Hey, Sean here.
0:35:20 I want to tell you a little story about Winston Churchill.
0:35:23 So Churchill once said, first we shape our buildings
0:35:25 and thereafter they shape us.
0:35:26 And I think this is true,
0:35:28 not just for the buildings we see in cities,
0:35:30 but also for the building blocks you choose in your company.
0:35:32 For any company that I start,
0:35:34 I use Mercury for all of my banking needs.
0:35:36 Why? Well, it was built by a YC founder.
0:35:38 And you could tell this is built by a founder
0:35:40 who understands the needs of other founders.
0:35:43 Second thing is this modern, it’s clean, easy to use.
0:35:44 The design is really nice.
0:35:46 You never have to drive somewhere, park,
0:35:47 put coins in the meter, get out,
0:35:49 just to do one simple task.
0:35:51 You could do everything in just a couple of clicks.
0:35:53 They got bill pay, checking account, savings account,
0:35:55 wire transfers, everything you need, they got it.
0:35:56 I use it for not one,
0:35:58 but actually six of my companies right now
0:36:00 and actually even have a personal account with them.
0:36:01 It’s kind of amazing.
0:36:02 So if you’re ready to operate in the future,
0:36:05 head over to mercury.com, apply in minutes.
0:36:07 Disclaimer, Mercury is a financial technology company
0:36:10 out of bank banking services provided by Choice Financial Group
0:36:12 and Evolve Bank and Trust members, FDIC.
0:36:15 Thank you to Winston Churchill for that little ad segment.
0:36:16 All right, back to this episode.
0:36:19 (upbeat music)
0:36:23 All right, now that we talked about Bhutan and happiness
0:36:24 and how there’s more life than money,
0:36:27 can I tell you about one of the most ruthless,
0:36:32 capitalist, bloodthirsty moves that I’ve seen in a while?
0:36:34 You know how the in boxing, they say steal the round
0:36:36 ’cause like in the last 10 seconds,
0:36:37 that’s what judges remember.
0:36:39 They don’t remember the first 100,
0:36:40 they don’t remember the first 120 seconds,
0:36:41 but they remember the last 10 seconds.
0:36:44 Yeah, but whatever you say last
0:36:45 is what I’m gonna be most inspired by.
0:36:49 So let’s, we skipped.
0:36:51 So sit down, Bhutan, you had your moment.
0:36:54 Yeah, now tell me how I can go cut some fuckers.
0:36:55 All right.
0:36:57 Private equity roll up in the education space
0:36:59 that I found pretty interesting.
0:37:00 All right, what does that mean?
0:37:05 So I went to high school in Texas for the first two years
0:37:07 and then my mom and dad came to me one day
0:37:09 and they were like, “Hey, check this out.
0:37:11 “Doesn’t this look like a cool house?”
0:37:12 I’m like, “Yeah, it looks pretty cool.”
0:37:13 And they’re like, “We’re gonna live there.”
0:37:14 And I was like, “Okay.”
0:37:16 And they’re like, “It’s in Beijing.”
0:37:19 And then my family moved me to Beijing in 10th grade.
0:37:19 And so-
0:37:21 They went to?
0:37:23 Yeah, yeah, it wasn’t just me.
0:37:26 That would have been super cool.
0:37:29 They moved me there and they moved themselves.
0:37:32 So they were like, “Hey, all those friends you’ve had,
0:37:33 “you’re not gonna see them anymore.”
0:37:36 And so they also lied to me and said my dog couldn’t come
0:37:39 and told me that China doesn’t allow dogs.
0:37:42 And later in life found out that was a huge lie.
0:37:45 So maybe that’ll be my revenge to her, dude, that’s it.
0:37:46 That’s the thing.
0:37:49 Wait, so they’ve leave the dog?
0:37:52 Yeah, we sold our dog ’cause dogs can’t go to China.
0:37:53 And I was like, “What?”
0:37:54 Oh my God.
0:37:56 They’re stupid, there’s no Google at the time.
0:37:58 They got to, this is pretty Google.
0:38:01 So I finished high school in China
0:38:02 and I went to this school called
0:38:03 the International School of Beijing.
0:38:04 And it was actually an awesome school
0:38:06 and it turned out to be great for me to move
0:38:08 and all these awesome things happened to me there.
0:38:09 But as one of these things again,
0:38:11 I go to the school, I just take it for granted.
0:38:12 There’s a school here.
0:38:14 I don’t know, schools are part of the government.
0:38:15 They’re just like from the land.
0:38:16 I don’t know, God put it here.
0:38:19 I don’t know what puts these international schools here.
0:38:21 And now I’m like in my 30s
0:38:24 and I’m reading up and I realized, oh shit,
0:38:25 these international schools
0:38:28 are an absolute juggernaut of a business.
0:38:31 And so I’d like to tell you about this rollup
0:38:34 that happened called Nord Anglia.
0:38:35 Have you ever heard of this?
0:38:40 Yeah, my friend Anand from CB Insights is obsessed with it.
0:38:41 And so here’s what these guys did.
0:38:45 So the founding story is back in the 70s,
0:38:46 things like 50 years old,
0:38:48 there was one school in the UK,
0:38:49 or there wasn’t even a school.
0:38:52 It was like making materials for other schools
0:38:54 to teach English as a foreign language
0:38:57 to people who are trying to learn English in the UK.
0:39:00 And then they expand that into Eastern Europe or whatever.
0:39:01 And then they start their own school.
0:39:02 They’re like, oh, we’ll do our own school
0:39:05 for teaching international people
0:39:07 and we’ll teach them in a sort of English,
0:39:08 second language kind of way.
0:39:10 And over time, the thing grows.
0:39:13 And it goes from one school to multiple schools.
0:39:16 And they create this like business
0:39:21 that eventually becomes a $14 billion
0:39:26 conglomerate of 80 plus international private schools.
0:39:28 Can you say the name one more time?
0:39:33 Nord Anglia, N-O-R-D, and then Anglia’s A-N-G-L-I-A.
0:39:36 So what do they do?
0:39:39 And by the way, remember when IMG sold IMG,
0:39:40 which is like the sports prep academy
0:39:42 and it sold for a billion dollars?
0:39:44 And we’re like, wow, Nord Anglia bought it.
0:39:46 So this bought IMG.
0:39:47 And the reason they bought IMG,
0:39:50 they’re like, IMG is a really cool sports focused brand,
0:39:51 but it’s all in the US.
0:39:55 We know how to basically create international schools
0:39:59 that the richest, wealthiest or expats living overseas
0:40:01 want their kids to go to,
0:40:05 to be able to get into maybe US colleges.
0:40:07 So they bought it for a billion dollars being like,
0:40:09 cool, we’re just gonna take the IMG brand
0:40:10 and we’re gonna pop it up in China and India
0:40:12 and all these different countries
0:40:15 in order to get those types of students
0:40:16 who are sports focused,
0:40:21 whereas their schools are more teaching the IB curriculum,
0:40:24 which is like the kind of international baccalaureate,
0:40:26 the equivalent of AP in the United States is IB.
0:40:28 So like I took the IB program.
0:40:31 And so, but the cool thing about this business
0:40:33 is actually for the first 10 years,
0:40:35 it was just a slow burn.
0:40:36 And these businesses fascinate me.
0:40:38 Like I don’t even really fully understand
0:40:41 how you can go from kind of like a consultant
0:40:42 selling teaching materials.
0:40:45 At one point they had a daycare, like a nursery built in.
0:40:47 It was like just this slow, sleepy business for like 10 years.
0:40:49 Was it like a family run thing?
0:40:51 Yeah, it was like privately owned.
0:40:53 And then they hired the CEO
0:40:53 and then they start to expand,
0:40:56 they start their own schools, they start expanding.
0:40:59 Then they start buying other school, school like chains.
0:41:01 So they bought like a six school chain
0:41:05 that had like a presence in let’s say France.
0:41:06 And then they buy another one
0:41:07 that has a presence in Latin America.
0:41:09 And they’re just rolling up
0:41:11 as many international schools as they can buy.
0:41:14 They buy five schools in India for $200 million.
0:41:17 And so now they got five international schools in India.
0:41:21 And basically this company ended up going public
0:41:26 and then had to take private offer
0:41:29 and now is valued at $14 billion, which is pretty wild.
0:41:31 And there’s one PE firm,
0:41:33 this Swedish private equity firm
0:41:35 that has just made an absolute killing.
0:41:40 It’s called EQT on this entire like 20 year run of this business.
0:41:43 So, you know, let’s say, here’s the timeline.
0:41:46 1970s, it’s teacher training and language programs, 1990s.
0:41:49 So now this is like, you know, 20 years into the business,
0:41:50 they pivot to owning and operating
0:41:52 their own international schools.
0:41:55 2008, now another 18 years goes by,
0:41:56 the Swedish PE firm comes in
0:41:57 and gives them a bunch of money
0:42:00 to rapidly go expand and acquire schools.
0:42:01 2014, they go public.
0:42:04 2017, they go private again for $4 billion.
0:42:08 2024, it’s acquired $14 and a half billion.
0:42:13 And 2008, when they did the private equity round,
0:42:15 they were at 40 million in EBITDA
0:42:18 and you know, about 200 million in revenue.
0:42:21 And so these things traded like eight and a half X EBITDA
0:42:24 basically and they only own like 10%
0:42:25 of the international school market.
0:42:27 Still 90% of the international school market
0:42:30 is fragmented and not owned by anybody.
0:42:33 – Well, now they do a billion in revenue, it said.
0:42:35 – Yeah, now they do a billion in revenue
0:42:37 with you know, hundreds of millions in EBITDA.
0:42:39 And actually it’s, I think it’s even,
0:42:41 I think it might even be even more than that.
0:42:42 But like, just to give you an example,
0:42:45 here’s a slide, but like this is like one of their schools.
0:42:48 So they show like the profitability of a school.
0:42:49 This is one of their case studies.
0:42:51 So it’s like Dubai.
0:42:53 They opened an international school in Dubai.
0:42:54 They opened it in 2014.
0:42:59 It took $7 and a half million to build it and open it.
0:43:02 And then basically they break even in year two
0:43:03 slash year three.
0:43:07 And then it’s basically making 55% net cash on cash.
0:43:09 Once it’s at that mature level,
0:43:13 once they get the enrollment up to like 1400, 1500 students.
0:43:16 And so you could see like the enrollment basically
0:43:18 by year three, they’re at almost 1400 students.
0:43:19 So almost at capacity.
0:43:22 – How do they convince parents that they’re worth it?
0:43:25 ‘Cause like with school, it’s tradition usually
0:43:28 is what like, you know, gets people to buy in.
0:43:30 – Yeah, so it’s kind of the same thing.
0:43:32 So if you go look at their pitch,
0:43:37 it’s basically that, you know, we have the best run schools,
0:43:40 our kids get into top tier colleges.
0:43:43 And you know, the X% of them, you know,
0:43:46 huge like 90 something percent of them graduate.
0:43:48 They do better than their peers on, you know,
0:43:51 the standardized testing, things like that.
0:43:53 – It’s basically like when Chick-fil-A
0:43:55 started expanding to New York
0:43:57 and all the New Yorkers were like, finally,
0:43:58 you know what I mean?
0:44:00 Like people like know this brand.
0:44:01 It’s amazing the school I went to, right?
0:44:04 Like we probably had like a hundred percent graduation rate.
0:44:06 Like there’s like no dropouts.
0:44:09 Everybody graduates and then like 98% went to college.
0:44:11 So it’s like, compared to like a normal school,
0:44:14 the whole school I was going to in Houston before that
0:44:16 probably was like 75% graduation
0:44:20 and less than 50% would enroll in college the next year.
0:44:22 And so, and then the school I went to, you know,
0:44:25 that’s like a first grade through 12th grade school.
0:44:27 And every year you’re basically paying college tuition.
0:44:29 It was like 40 grand a year to go there.
0:44:31 As a first grader and as a second grader
0:44:33 and as a third grader, as a fourth grader.
0:44:35 But like the way my parents afforded to go there
0:44:37 was the same way that many students did,
0:44:39 which is when companies bring you overseas,
0:44:41 ’cause you know, let’s say, you know,
0:44:42 my dad worked for a company,
0:44:43 they wanted him to relocate,
0:44:46 to like build up their business in China.
0:44:48 Then the company basically pays for your kids’ education
0:44:50 as part of the relocation package.
0:44:51 – And that’s like a really good perk.
0:44:52 That’s the perk.
0:44:54 And so, you know, and so these schools basically,
0:44:56 it’s kind of like US schools,
0:44:58 how they make their monies because the government
0:45:00 will give like student loans to anybody.
0:45:01 Like anybody can get a student loan.
0:45:03 So you get like, you know, $200,000 a debt
0:45:04 to go to the school,
0:45:06 whether you’re gonna be able to pay that off or not,
0:45:07 doesn’t matter.
0:45:08 So the schools are like, great.
0:45:09 That’s why tuition’s keep going up,
0:45:10 because they’re like, awesome.
0:45:12 The government will just keep paying for this.
0:45:13 This is amazing.
0:45:15 International schools work largely the same way,
0:45:17 which is it’s either very wealthy people there
0:45:19 who want their kids to go abroad.
0:45:21 Like if you’re very wealthy in Indonesia or China or India,
0:45:23 you want your kids to study in the United States.
0:45:26 And you’re probably, you know, like very, very rich.
0:45:29 And so you’re happy to pay, you know, 40K a year
0:45:33 for like elite education or the companies are paying for it.
0:45:34 So this is a beautiful business model
0:45:37 where you’re only catering to that top kind of 1%.
0:45:39 And interestingly, I think that there’s actually
0:45:40 a blue zone in America,
0:45:43 because when you think of a for-profit university,
0:45:45 I think of University of Phoenix.
0:45:47 Yeah, I think bad.
0:45:50 I think there are the ones who let everyone in
0:45:53 and they just buy all the Facebook ads and Google ads
0:45:54 and it’s slimy.
0:45:57 But for some reason, when I look at these schools,
0:45:59 I think prestige.
0:46:02 I think like it can be done well.
0:46:04 Do you know what I mean?
0:46:05 You know, the one I want to do
0:46:08 or like I’ve been very like tempted to do
0:46:10 is the modern day film school.
0:46:14 So like film schools exist in the States
0:46:16 and that you can go to USC or UCLA.
0:46:18 These are like the famous ones that you can go to.
0:46:23 But like media and content has changed dramatically
0:46:24 from when those schools were founded, right?
0:46:27 And credentials are less important, I would think.
0:46:29 And credentials are way less important.
0:46:32 And back then, you know, let’s say you were a student
0:46:35 in the 80s and you wanted to work in film someday.
0:46:37 Well, when you were in school, you really had no shot.
0:46:39 You could go be an intern somewhere, maybe hold up,
0:46:41 you know, you’re holding the lamp, you know,
0:46:43 in the back and you’re holding the light.
0:46:45 And that’s like all you would be qualified to do.
0:46:48 Today, let’s say you want to be good at creating films
0:46:49 or content or music or whatever.
0:46:51 You could literally be publishing on YouTube,
0:46:54 on TikTok, on Instagram, on Spotify.
0:46:55 You can be publishing everywhere
0:46:57 and actually like you could be in the market.
0:46:58 You can be a player.
0:46:59 The day you have the idea to do it,
0:47:01 you could be published that night.
0:47:02 You could be 14 years old
0:47:04 and maybe you could be the best in the world
0:47:07 at doing Twitch streams or whatever it is, right?
0:47:11 And so what, and the number one dream of young kids
0:47:12 is to be a content creator.
0:47:14 It’s the number one aspirational profession,
0:47:15 which you could judge and say that’s stupid
0:47:16 or whatever you want.
0:47:17 The dream is the dream.
0:47:18 That means there’s a lot of demand
0:47:20 for people who want to learn this.
0:47:21 Why don’t I go to Mr. Beast?
0:47:23 Why don’t I go to Jimmy and say, hey,
0:47:26 why don’t you create with your brand
0:47:29 a university that is the modern day
0:47:31 like content creation skill stack?
0:47:34 So it’s all the things you need to know, right?
0:47:37 Videography, photography, script writing,
0:47:41 editing, sound production, music production,
0:47:43 all the creative arts basically,
0:47:45 but do them in a way where it’s like a two year program.
0:47:46 It’s like a business school.
0:47:49 So it’s two years and it’s all project based.
0:47:52 So you go there and you have access to all the equipment
0:47:54 which you normally can’t afford as a young person
0:47:56 like the best camera is the best recording studios,
0:47:59 the best editors, terminals, all that stuff,
0:48:00 animators.
0:48:02 And then there’s people who have different disciplines.
0:48:03 One guy wants to be an animator,
0:48:04 one guy wants to be an editor,
0:48:06 the other person wants to be a talent, whatever it is.
0:48:09 And you work together on projects, you create content,
0:48:11 you actually put it out on the networks
0:48:13 and you get judged based on the number of projects
0:48:15 you create, the quality of the projects you create.
0:48:17 You’re getting real feedback along the way.
0:48:19 And then you have mentors or teachers
0:48:21 like a Mr. Beast or like others
0:48:23 who are gonna like drop in and basically teach you
0:48:25 some of the fundamentals of maybe storytelling
0:48:27 or different things that actually you need to do.
0:48:29 And I think if you did this, I mean,
0:48:30 just the math of this stuff is pretty crazy, right?
0:48:35 Like you get 5,000 or 10,000 people coming to your school
0:48:39 and it’s 25K a year for two years.
0:48:46 That one batch of kids, 10,000 people in a class,
0:48:50 if they’re paying 25K a year for two years,
0:48:52 that’s 500 million in revenue.
0:48:53 What stopped you from doing this?
0:48:54 You seem pretty hyped up on it
0:48:56 and it seems like a very logical thing.
0:48:59 Well, I had the idea for like four days ago.
0:49:00 So, you know, that’s probably-
0:49:03 No, you’ve been talking about-
0:49:05 No, specifically the media thing.
0:49:06 Like I’ve always been interested
0:49:07 like what would you do for your new school?
0:49:09 I always thought of it in terms of entrepreneurship,
0:49:12 but I actually think a more like trade school style school
0:49:13 is better. Yeah, for sure, for sure.
0:49:14 Because you can only, you know,
0:49:16 teaching entrepreneurship is hard
0:49:18 because A, there’s not a class for business really.
0:49:20 Business school doesn’t teach you business,
0:49:21 it teaches you management.
0:49:23 Like what you think of as Harvard Business School
0:49:26 is actually a, you know, middle management
0:49:29 to senior management training program, right?
0:49:30 That’s what that is.
0:49:33 So I think when you actually learn a skill
0:49:35 and learn a trade, that’s good.
0:49:37 The skill of business takes a lot of time
0:49:39 and it’s not one skill, it’s like 15,
0:49:40 it’s a bundle of like 15 skills.
0:49:42 You got to know a little bit about strategy
0:49:43 and negotiation and marketing and building
0:49:45 and managing all these things.
0:49:48 So I think this trade school style is much better.
0:49:50 There’s an interesting example of this, by the way.
0:49:51 Do you know what full sale university is?
0:49:54 Yes, so I’m looking up ITT Tech,
0:49:55 but I’m also looking at full sale.
0:49:57 I know a few people that went to full sale
0:49:59 and they had great things to say.
0:50:02 Yeah, so full sale is kind of, it’s at that scale.
0:50:06 So 25,000 undergrads, it’s $26,000 a year.
0:50:07 It’s a private for-profit college.
0:50:09 So you just do the math, by the way.
0:50:11 25,000 undergrads, 26,000 a year.
0:50:14 So that’s like the annual revenue.
0:50:16 Let’s do some public math
0:50:18 because big numbers are an exception.
0:50:20 That’s $600 million, $650 million a year
0:50:23 of revenue that they’re generating
0:50:25 from like a four year cohort.
0:50:30 My friend, Chris, have you heard of the company, Linode?
0:50:32 Yeah, yeah.
0:50:34 He bootstrapped and sold it for, I don’t know,
0:50:35 like $800 million.
0:50:37 He’s from Nashville and I knew him when I was younger
0:50:40 and he went to full sale and he’s,
0:50:41 that’s kind of how I learned about full sale.
0:50:43 But they have like, if you look at-
0:50:45 You know, Jason Citron, the founder of Discord,
0:50:47 he’s one of the alums.
0:50:48 Yeah.
0:50:51 And so I think they do more than just like,
0:50:55 I knew it as, that’s where you’d go to get like a,
0:50:57 if you want to become a music engineer.
0:50:59 Yeah, so it was like, game design was one.
0:51:00 That’s why Jason went there
0:51:03 ’cause he wanted to build video games.
0:51:04 They have music and then they have
0:51:07 the Dan Patrick School of Sports Broadcasting.
0:51:09 So he liked it that much.
0:51:10 A TV broadcaster.
0:51:12 They had their own little program,
0:51:14 a degree, a sportscaster degree program, just like-
0:51:15 But how does it work?
0:51:18 Since it’s not a normal, it’s a for-profit university,
0:51:20 does Dan Patrick actually get paid to use his name
0:51:22 or keyed in donating?
0:51:23 A licensing, a royalty, whatever.
0:51:24 That’s crazy.
0:51:25 That’s great.
0:51:26 That’s what I’m saying for like,
0:51:27 if you’re Jimmy, you’re Mr. Beast,
0:51:29 like why are you selling chocolate?
0:51:30 Like we should do this
0:51:32 and we just need to find like an operator
0:51:33 and do it with a physical campus
0:51:34 and like do the whole thing, right?
0:51:35 Make the whole thing happen.
0:51:39 And there’s like an enormous talent economy
0:51:40 that needs to be made,
0:51:41 not just for people who themselves
0:51:42 want to be a famous YouTuber,
0:51:45 but every single company has to create content.
0:51:47 Content is marketing.
0:51:49 And so any company that needs,
0:51:52 go look at every corporation from like Nestle
0:51:55 down to your nearby eyebrow waxing place.
0:51:56 They’re all got an Instagram.
0:51:58 They all got a TikTok.
0:51:59 They’re all posting content on there.
0:52:04 And so every company needs media creation talents.
0:52:07 And nobody teaches you that.
0:52:10 Today it’s something you learn on your own outside of school
0:52:12 using your own social media as a testing ground.
0:52:13 And I think that’s a little bit crazy
0:52:15 given the value of this thing.
0:52:17 And so I think, it’s the type of thing
0:52:22 that could be built and be a multi-billion dollar business
0:52:26 within three or four years easily,
0:52:29 getting 5,000 or 10,000 people to enroll
0:52:31 is not hard for something like this
0:52:32 ’cause it has tangible value too.
0:52:33 Like when you walk out,
0:52:36 not only will you have these hard skills
0:52:38 on actual content creation,
0:52:40 all the bucket of content creation skills,
0:52:41 but like you’re highly employable.
0:52:44 So whether you become a creator or you go get a job,
0:52:46 like you’re highly employable with a set of skills,
0:52:48 especially if you make it elite,
0:52:50 like don’t make it University of Phoenix,
0:52:51 make it more like Harvard,
0:52:53 where it’s like, oh, where do the talented people go?
0:52:55 Right, what’s it like, Juilliard?
0:52:56 It’s like make it more like Juilliard,
0:52:59 where this is where the most talented people go
0:53:00 and build that reputation.
0:53:02 I think that’s the key to get this right.
0:53:04 – This is an incredibly compelling pitch.
0:53:08 I wanna know what the downsides are,
0:53:10 which I don’t even know if you know at the moment
0:53:14 because you’re 72 hours into this career transition.
0:53:16 – Accreditation can matter.
0:53:18 So if you want accreditation, you can do that.
0:53:18 – Does that matter?
0:53:20 Does accreditation matter?
0:53:22 I guess it does for optics, right?
0:53:25 – No, it matters for funding.
0:53:27 So how do you get funding from the government?
0:53:29 How do your students get loans?
0:53:30 If you’re an unaccredited school,
0:53:31 students can’t get loans.
0:53:33 They gotta pay for it out of pocket.
0:53:34 And so you want accreditation
0:53:37 so that you’re eligible for loans,
0:53:39 which would let students go there,
0:53:40 who don’t already have the money,
0:53:43 plus it’s much easier to spend money
0:53:47 the government gives you when you’re 18, 20 years old.
0:53:48 So you wanna be eligible for that.
0:53:50 But you can get accredited
0:53:52 or you could buy a school with existing accreditation.
0:53:53 So that’s not a blocker.
0:53:56 It’s just like a thing you gotta do.
0:53:57 The hard part is actually running it
0:53:58 and like doing it well
0:53:59 and like actually providing quality education, right?
0:54:01 You don’t wanna be University of Phoenix.
0:54:02 So you gotta have some soul,
0:54:03 you gotta have some energy,
0:54:05 you gotta have the entrepreneurial energy.
0:54:06 So why am I not personally doing this?
0:54:09 Because I personally am not gonna be the guy running this.
0:54:10 I wanna kind of make it happen
0:54:13 and find an operator who wants to create something like this.
0:54:16 And I can connect all the dots of how do we get the capital?
0:54:18 ‘Cause it takes a lot of capital, you know, like,
0:54:21 Joe Lonsdale started a school in Austin.
0:54:22 I don’t know how much he, how much that costs,
0:54:24 but I think it’s like a…
0:54:26 I wouldn’t be surprised if that’s like a 50 million
0:54:28 to a $100 million project of like-
0:54:31 – What does it call the University of Austin?
0:54:33 Austin University?
0:54:34 That’s crazy.
0:54:36 I mean, yeah, that’s pretty wild.
0:54:37 And if you look at like-
0:54:40 – So billionaires have put 200 million into funding
0:54:41 that that’s cool.
0:54:45 So yeah, you know, it’s a big CapEx lift
0:54:47 to do it when you have a physical campus.
0:54:48 And I wouldn’t do it remote.
0:54:49 I would do it legit.
0:54:51 I would do it with a physical campus.
0:54:53 And I would just try to make it like awesome.
0:54:53 And it’s the same thing
0:54:54 like we talked about the bouton thing.
0:54:55 It’s a 50 year play.
0:54:58 Like you wanna build prestige and legacy
0:55:01 like a Harvard or a Stanford where it’s the reputation,
0:55:04 the reputation and the brand is the value.
0:55:06 You want the best people to pay top dollar
0:55:07 to come to this thing and get the best education.
0:55:09 Then you want all the companies who wanna hire
0:55:11 to value the label that you have.
0:55:14 So to do that, you have to assume you’re gonna be,
0:55:16 you wanna do something that peaks, you know,
0:55:19 like 50 years later in terms of brand prestige.
0:55:21 – Yeah, that’s like an interesting thing, by the way.
0:55:23 So there’s like been a lot of times
0:55:27 where people will sign up for a university.
0:55:30 And the goal is that after 10 or 15 years,
0:55:32 the brand name has elevated.
0:55:35 So you bought the price before it was full.
0:55:37 It’s just like investing in a stock.
0:55:40 And then there’s other times when a university will have-
0:55:41 – Or it’s 30 and a 30.
0:55:44 – Yeah, where a university will have a protest
0:55:47 or something will happen and it hurts the brand.
0:55:49 And you’re like, for example,
0:55:52 let’s say you graduated from Columbia,
0:55:56 you’re like, shit, like it’s a controversial place right now.
0:55:58 It’s my, I bought this brand.
0:56:01 Is that now worth less than why I was anticipating?
0:56:02 And so there’s this weird,
0:56:04 that is like an interesting way to look at
0:56:06 building a university brand.
0:56:10 I’m like, I have to increase the value for, you know,
0:56:12 so I can justify that the people buying,
0:56:14 they actually bought it when it was cheaper
0:56:17 as opposed to what it is worth in 20 years.
0:56:19 – Dude, did you see,
0:56:22 Bill Ackman did a presentation about Harvard?
0:56:23 Did you see this?
0:56:24 – No.
0:56:24 – What’d he say? – Oh my God.
0:56:26 All right, well, I know we’re supposed to wrap up,
0:56:27 but this is honestly incredible.
0:56:29 Jim Grant asked me to give a talk on Harvard,
0:56:30 buy, sell, or hold.
0:56:32 And the same way you would do with the stock,
0:56:36 I think the Harvard motto or slogan is veritas,
0:56:38 and the title is veritas, question mark,
0:56:40 ’cause you know he’s on this like anti-Harvard crusade
0:56:42 right now. – What’s veritas mean forever?
0:56:44 – Truth, I think. – Truth.
0:56:46 – And so he breaks it down like it’s a company, you know.
0:56:47 The business of Harvard College
0:56:48 is private education to students,
0:56:49 and then it has like a graph.
0:56:52 It’s like enrollment has been flat over the last 20 years.
0:56:55 Faculty growth has been modest, you know,
0:56:56 growing at half a percent,
0:57:00 but administration growth has grown by 40% in 20 years.
0:57:01 So he’s like, basically like,
0:57:02 oh, you’re not growing students,
0:57:03 but you’re growing your admin,
0:57:05 your op-ex on the backend, right?
0:57:06 And analyzing it like a business.
0:57:07 – This is amazing.
0:57:10 – And the cost has grown, basically the cost has doubled
0:57:10 in 20 years. – Well, he says,
0:57:13 he says you’re growing by increasing prices,
0:57:15 not by increasing the number of customers served.
0:57:16 – Exactly.
0:57:19 And then he breaks down the P&L,
0:57:21 he breaks down where’s the revenue stream,
0:57:24 so how much is coming from donations versus tuition,
0:57:26 how much of your faculty has diverse viewpoints.
0:57:27 I mean, really, obviously his agenda
0:57:29 and this whole thing was to basically be like,
0:57:31 Harvard has gone too woke
0:57:33 and the administration has gone like rogue
0:57:35 and you’re ruining the brand and the mission of Harvard.
0:57:39 – He says the operating margin would be a negative 40%
0:57:41 without distributions from its endowment.
0:57:42 – Yeah.
0:57:45 And he says in 1643, that’s how old Harvard is.
0:57:47 In 1643, Harvard’s first mission was set up
0:57:49 simply as veritas or truth.
0:57:51 And he’s got this old screenshot
0:57:54 of like a hand-drawn logo of the shield.
0:57:58 And then he reads like the laws, liberties
0:57:59 and orders of Harvard college.
0:58:03 And it’s like this handwritten document about,
0:58:06 the goal was to encourage Harvard students to seek wisdom.
0:58:08 And he’s basically saying like,
0:58:09 then he shows how the mission charter has changed.
0:58:13 So in 2020, it was instead of about seeking truth,
0:58:15 it was like, it removed a bunch of references
0:58:17 to the 1650 charter and basically left it
0:58:20 as more of like a DEI style mission.
0:58:22 And he’s like, paying attention to that.
0:58:25 So, he’s like, what happened to new ideas?
0:58:26 What happened to the truth?
0:58:28 And then he goes and he just breaks down like,
0:58:30 also like even in the faculty growth,
0:58:33 he’s like, cool, is it growth in computer science teachers?
0:58:37 Or is it growth in African-American studies?
0:58:38 Which, you know, he basically shows like,
0:58:40 African-American studies grew like crazy
0:58:42 compared to economics or computer science.
0:58:44 But then he’s looking at the number of degrees
0:58:46 that people are getting and that’s not growing.
0:58:47 So he’s like, you’re not meeting,
0:58:49 your supply is not meeting the demand of the consumer.
0:58:52 You’re just, your supply is growing arbitrarily,
0:58:55 not to match demand.
0:58:59 Like, I think there was only like,
0:59:01 there was one degree recipient in 2023
0:59:05 in African-American studies and 57 faculty.
0:59:06 – This is wild.
0:59:08 And do you know, and here,
0:59:10 if you go down all the way to the last slide, his verdict,
0:59:15 he says, is Harvard a buy, sell or hold?
0:59:18 And his verdict as of now is Harvard is a hold.
0:59:20 It still has many positive attributes.
0:59:23 It has a strong brand, 400 year operating history,
0:59:25 $51 billion endowment and huge real estate.
0:59:28 But it has many challenges.
0:59:30 The quality of the education has deteriorated.
0:59:33 There’s so many competitors, many talented people
0:59:35 aren’t going to traditional universities.
0:59:36 They’ve mis-allocated resources
0:59:39 and the endowment has been a chronic under performer.
0:59:41 This is a very interesting way to look at
0:59:43 many, many, many different decisions in life
0:59:45 that are beyond just money.
0:59:46 – How awesome is this?
0:59:50 – This is the greatest, this is a fantastic way to think.
0:59:52 – Yeah, this is so cool.
0:59:54 – Is this, all decisions, I think,
0:59:56 every big decision I have in life,
0:59:58 I need to put together a PowerPoint like this.
0:59:59 We did this with our child’s name, by the way,
1:00:01 we put three names in a PowerPoint
1:00:03 and like Sarah presented them and like,
1:00:05 aren’t you like in her favor,
1:00:06 which name we were going to choose?
1:00:07 – Okay, hold on, hold on, what is that?
1:00:09 What is even in the slide?
1:00:10 What do you say?
1:00:12 – So the way that we make decisions in our house,
1:00:17 oftentimes it’s like one person will present three options
1:00:19 and then the other person can select
1:00:21 the one option that they want.
1:00:23 And so if it’s like-
1:00:26 – Cheese cake factory, Chipotle, or frozen dinner.
1:00:28 – So it’s like, if I’m selecting the three,
1:00:31 I will select three that I’m at least okay with
1:00:33 and then she could select the one
1:00:35 that is of most interest to her.
1:00:38 For baby names, it was like, she was like,
1:00:42 you, I wanna select a three and then you could select the one.
1:00:44 And so she made a PowerPoint and it explained,
1:00:47 here’s the three names, here’s the background of the name.
1:00:50 And I had like parameters.
1:00:52 I was like, I want something somewhat traditional.
1:00:53 I prefer it be in the Bible
1:00:55 because everyone in my family was naming it
1:00:56 for someone in the Bible, whatever.
1:00:59 And she’s like, all right, here’s the three that I like.
1:01:00 I’m cool with all of them.
1:01:02 Here’s the background of each name.
1:01:03 Here’s what it means.
1:01:05 Here’s famous people named that.
1:01:08 Here’s where it ranks on the popularity list.
1:01:11 – Is she trying to persuade you towards one
1:01:15 or it’s a completely neutral like pros and cons of each?
1:01:17 – In that case, it was neutral.
1:01:22 But yeah, oftentimes there is an underlying persuasion bit,
1:01:25 but the, if you’re the person who selects the three,
1:01:28 you should select three things that you like.
1:01:30 You should, ’cause that’s like what you could do
1:01:32 is you could select three things that you like
1:01:34 and then I, as the final decision maker,
1:01:35 will select something and you’re happy no matter what.
1:01:37 It’s a great way to make decisions, I think.
1:01:39 And so she did this big presentation
1:01:42 on three different names and I selected the winner.
1:01:44 And that’s how we got our baby’s name.
1:01:48 – Last podcast you said, every month we sit down
1:01:51 at the end of the month at our table
1:01:54 and we review the month’s budget, financial decisions,
1:01:55 key financial decisions that were made.
1:01:59 We discuss unresolved issues that might be lingering.
1:02:01 I’m kind of into the PAR corporation.
1:02:05 PAR corp is probably one of my favorite corporations
1:02:05 to learn from.
1:02:08 And I think the way you run your marriage,
1:02:12 like a business partnership, is both effective and hilarious.
1:02:15 – We did a great combo.
1:02:17 – Before we got married, we did that by the way.
1:02:18 We said, “This is going great.
1:02:19 “We really love each other.
1:02:20 “We like each other.”
1:02:23 It appears as though marriage is in the cards.
1:02:25 We said it was six months into dating.
1:02:28 Write down where you wanna be in 10 years.
1:02:29 What do you wanna do?
1:02:30 How do you wanna raise a family?
1:02:31 Where do you wanna live?
1:02:33 And we made sure that are once in our interest,
1:02:35 we’re like, “All right, we disagree here,
1:02:38 “but that’s okay, I’m valuable there,
1:02:39 “but here’s like a deal breaker.
1:02:40 “What do you feel about that?”
1:02:41 So for hers, it was like,
1:02:43 “I wanna raise children in the New York area
1:02:44 “so I can be around my family.
1:02:45 “That’s a deal breaker.”
1:02:48 And I was like, “No, that’s cool, I can fuck with that.”
1:02:51 And so yeah, we do this type of stuff.
1:02:51 It feels cold.
1:02:52 I don’t even like talking about it
1:02:55 ’cause people think, ’cause like, it feels cold.
1:02:57 But dude, this shit works.
1:03:00 These type of like discussions where it’s like,
1:03:02 “All right, now’s the period to discuss this.
1:03:03 “You have the floor.”
1:03:06 That stuff is so effective, I think.
1:03:06 – Yeah, yeah.
1:03:08 – Okay, before you guys go to bed,
1:03:09 you just shake hands instead of kiss.
1:03:13 It’s just nice to just keep everything on the up and up
1:03:15 and as calculated as can be.
1:03:16 – That’s why I hate talking about it
1:03:18 ’cause people think that everything’s like systematic.
1:03:21 It’s like, no, like there’s like two hours a month
1:03:22 where like this is set aside
1:03:26 to like have these like relatively formal discussions.
1:03:27 But it’s freaking awesome.
1:03:30 I think if you like have a lot of kids,
1:03:32 don’t people do like family meetings?
1:03:34 I know I saw it in like TV shows growing up,
1:03:35 but it’s not a thing.
1:03:37 – Yeah, I think family meetings are a thing.
1:03:41 I think you guys just really take it to that next level.
1:03:42 You guys are the McKinsey of family meetings, right?
1:03:46 Like vows.pdf before your wedding.
1:03:47 You had it all set up.
1:03:48 It’s good, I like it.
1:03:49 – It works.
1:03:51 I suggest everyone at least try it.
1:03:52 It definitely works, I think.
1:03:59 – All right, I think that’s a killer episode to be honest.
1:04:01 – I feel hyped up.
1:04:01 I have energy.
1:04:03 – To be perfectly honest with a hard age,
1:04:05 that was a great episode.
1:04:07 – All right, that’s it, that’s the part.
1:04:09 ♪ I feel like I can rule the world ♪
1:04:12 ♪ I know I could be what I want to ♪
1:04:14 ♪ I put my all in it like no days off ♪
1:04:18 ♪ On the road let’s travel never looking back ♪
1:04:34 (upbeat music)
1:04:34 – Hey, Sean here.
1:04:36 A quick break to tell you an Ev Williams story.
1:04:38 So he started Twitter and before that,
1:04:40 he sold a company to Google for $100 million.
1:04:41 And somebody asked him, they said,
1:04:42 “Ev, what’s the secret, man?
1:04:44 “How do you create these huge businesses,
1:04:45 “billion-dollar businesses?”
1:04:47 And he says, “Well, I think the answer is
1:04:49 “that you take a human desire,
1:04:51 “preferably one that’s been around for thousands of years,
1:04:53 “and then you just use modern technology
1:04:55 “to take out steps.
1:04:57 “Just remove the friction that exists
1:04:58 “between people getting what they want.
1:05:00 “And that is what my partner, Mercury, does.
1:05:02 “They took one of the most basic needs
1:05:04 “any entrepreneur has, managing your money
1:05:05 “and being able to do your financial operations.
1:05:07 “So they’ve removed all the friction
1:05:08 “that has existed for decades.
1:05:10 “No more clunky interfaces,
1:05:12 “no more 10 tabs to get something done,
1:05:14 “no more having to drive to a bank,
1:05:16 “get out of your car just to send a wire transfer.
1:05:18 “They made it fast, they made it easy.
1:05:19 “You can actually just get back to running your business.
1:05:21 “You don’t have to worry about the rest of it.
1:05:22 “I use it for not one, not two,
1:05:24 “but six of my companies right now.
1:05:27 “And it’s used by also 200,000 other ambitious founders.
1:05:28 “So if you want to be like me,
1:05:31 “head to mercury.com, open them to account in minutes.
1:05:34 “And remember, Mercury is a financial technology company,
1:05:35 “not a bank.
1:05:37 “Banking service is provided by Choice Financial Group
1:05:39 “and Evolve Bank & Trust members, FDIC.”
1:05:41 All right, back to the episode.