David Segal: Building a $200m Business

From a single storefront to a $200M enterprise, David Segal reveals the sophisticated frameworks behind building a category-defining business. Learn the counterintuitive principles that separate exceptional operators from average founders, including the hidden challenges of success and the strategic tension between working in versus on your business. A look into the mind of a builder who has mastered both the science of operations and the art of scale. And watch in real-time as he does it again with Firebelly Tea. TKP listeners can receive a special 15 percent discount on Firebelly Tea products by visiting www.firebellytea.com and entering the code Shane15 at checkout. Newsletter - I share timeless insights and ideas you can use at work and home. Join over 700k others every Sunday and subscribe to Brain Food. Try it: https://fs.blog/newsletter/ My Book! Clear Thinking: Turning Ordinary Moments into Extraordinary Results is out now - https://fs.blog/clear/ Follow me: https://beacons.ai/shaneparrish Join our membership: https://fs.blog/membership/ (00:00) Intro (04:59) What entrepreneurship is (07:10) How to manage your psychology (10:40) Yearly planning, daily action (15:50) Avoiding "ivory-tower syndrome" (18:30) Segal's childhood and background (25:15) The history of DAVIDsTEA and Firebelly (36:40) The evolution of tea and business over the last twenty years (42:30) On failures (49:00) Dealing with depression (52:30) Lessons about money (56:55) Business and life lessons from Warren Buffett (1:00:00) On time management (1:04:50) What's missing in Segal's life (1:08:39) On success Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  There is no shortcut for the work. Period. There's no magic pill. There's no magic elixir. It's about habits. You have to do things even when you don't want to do them. You, you have to get up and go for that run even though you don't want to. I mean, it's really easy when you've had 10 hours of sleep and, and the sun is shining and it's, and it's warm outside. It's really easy to go for that run or, or, or put on that smile or whatever it is like, you know, that's, that's where it's easy. Where it's hard is it's when, you know, you had six hours of sleep and you're not feeling great and you're feeling sluggish and, and that's actually when you need to do it.

• 0:55Shane Parrish?

  Welcome to The Knowledge Project, a podcast about mastering the best of what other people have already figured out, so you can apply their insights to your life. I'm your host, Shane Parrish. A quick favor to ask before we start. Most people listening on Apple Podcasts or Spotify haven't yet hit the follow button. If you can hit the follow button now, I would appreciate it. The more people who follow the show, the better the guests we can get. Thank you and enjoy the conversation. If you'd like access to the episode before everyone else, my thoughts and reflections at the end of episodes, member-only episodes, hand-edited transcripts, or you just want to support the show you love, join at fs.blog/membership. Check out the show notes for a link. Today, my guest is David Segal.

• 1:40Shane Parrish?

  David started David's Tea and grew it to over 200 million in annual sales before stepping away. David and I first met in the summer of 2020 on a lake and quickly realized we had a lot in common. We started running together a few times a week, chatting about business and life. Those runs helped me during COVID more than he could doubt. Many people like to dream about what they would do if they didn't need the money. And for Dave, the answer was to start Firebelly Tea with his good friend Harley Finkelstein. However, as you'll hear, he's doing a few things differently than he did at David's Tea. We discuss the lowest point in his life and how he overcame it, starting and growing a business to 200 million.

• 2:20Shane Parrish?

  The emptiness he felt after walking away from David's Tea and then watching it flounder. Starting Firebelly Tea and what he's doing differently and so much more. Before I met Dave, I wasn't really a tea drinker. I mean, I dabbled occasionally with tea bags you find in grocery stores, but never really found it tasted that great. In fact, I remember telling him it always tasted a bit like there were some faint chemicals in it. And I remember where we were, we were right under a bridge and he stopped and he looked at me and he just sort of like grabbed my shoulder and stopped me from running. And he said, "You've been drinking the wrong tea, my friend." And it turns out what I was tasting was a combination of poor quality tea, preservatives and additives that are in most teas.

• 3:05Shane Parrish?

  The next day, there was a slew of tea on my doorstep and I've been drinking it ever since. In fact, my kids and I now make a pot of Firebelly's after dinner mint nearly every night as we wind down. Not only does it help them sleep better, but it's a great ritual for us to connect and chat a little bit about the day. You'll walk away from this conversation inspired by Dave's stories, learning a lot about the real messiness of running a business in the weeds and wanting to try some Firebelly. To that end, Dave was kind enough to offer all FS listeners 15% off all orders at Firebelly. Just go to firebellytea.com and use the discount code SHANE15. It's time to listen and learn.

• 3:56Shane Parrish?

  Some of my favorite brands are on Shopify, including Jim Shark, Allbirds, Outweigh Socks, and Aeropress. Shopify is the global commerce platform that helps you sell at every stage of your business. It doesn't matter if you just have an idea or already operate a multimillion dollar company. Shopify is there to help you grow every step of the way because businesses that grow, grow with Shopify. What I love about Shopify is that it's like you have a multi-billion dollar tech team working just for you from day one. If you're just starting, this means you can go from idea to store in a few minutes, but it also means if you're an existing company, you can save money and time. If you've ever checked out

• 4:38Shane Parrish?

  from a store and thought that was so easy, chances are it was Shop Pay, which is the internet's best converting checkout, up to 36% better compared to other leading commerce platforms. Go to Shopify.com/Shein now to grow your business no matter what stage you're in.

• 4:59Shane Parrish?

  I want to start with, what's the biggest lesson you've learned over the past year and why?

• 5:05Speaker 00

  Really, that entrepreneurship is in many ways, a personal journey disguised as a business pursuit. And what I mean by that is so much of it is managing your own psychology. You know, everybody talks about playing the long game, right? But it's easier said than done. There are so many swings to the game when you're building businesses. The lows are so low, the highs are so high as well. And it's learning how to be able to tolerate those lows. So I started this podcast with Harley Finkelstein, who's president of Shopify, a really good friend of both of ours. We interview these, we're both Jewish, we interview these old Jewish guys who don't have a social media presence. They're, all of them are over 70, and they've had these incredible careers and had enormous impact, not just

• 5:50Speaker 00

  building businesses and becoming incredibly successful, but also in giving back to their communities and their philanthropic efforts. And the podcast's called Big Shot. And they talk about the swings, the ups, the downs of their career, but it's in Montau... Right? Like it's it's like watching a Hollywood movie. You know, something that is actually two minutes is actually five to 10 years. And it's it feels like a lot longer when you're in it, living it. And so I really, over the past year, have really put a lot of emphasis in trying to manage my own psychology and get better. At when I have a crappy day or a crappy week or a crappy month.

• 6:28Speaker 00

  Not having an action bias or making big decisions or or just being able to kind of broaden my scope and my perspective. And look at it over the course of time. And really try and only make major evaluations when I'm in a good place mentally. And only on a a more a longer period of time, maybe once a year. To to sort of take stock of where I am versus where I would like to be. Yeah, and and be able to take a broader lens and not feel the lows as much as I I sometimes do. Or the highs. I mean, it's hard not to feel the highs, right? Because they feel so good. So. Uh, it's nice to celebrate, but you celebrate with the high five and then you go back to work.

• 7:08Shane Parrish?

  How do you learn how to do that, though? Like managing your psychology? That's such an important journey for every entrepreneur, for every person.

• 7:15Speaker 00

  Yeah.

• 7:16Shane Parrish?

  But nobody really teaches us how to go about doing that.

• 7:18Speaker 00

  No, we don't talk about that at all, certainly not in school, right? Look, I mean, it's really hard to do. I'd love to sit here and tell you that I've mastered it and I I'd like to think I've gotten better at it. I think taking care of yourself matters. One of the reasons I love tea so much is I think it plays into that lifestyle. It's, you know, in a world where there's. Where there's so many highlight reels and different products that will make you think you're going to walk through walls and and promise you the moon. Tea is this product that has been around as as old as the hills. I mean, it's been part of humanity for so long. It's drank in regions of the world where people live the longest. It's been studied for decades, not years, but decades by some of the top institutions in the world.

• 8:00Speaker 00

  Uh, and and I like the connection tea gives me to history. Uh, and not only the feeling that it gives me, you know, a great green tea or a great herbal tea in the evening. But I think that's part of being able to manage your psychology is is routines and. Rituals. I think another piece of it for me is mindfulness and meditation's played a big role in my life. I've been doing it now for well over five years. I do it consistently. And it really, it makes a huge difference. It calms my nervous system down. It allows me to get a bit of distance. I mean, it's remarkable what 10 minutes of breathing can do. Yeah, and I exercise a lot and I try and take care of myself and I try and have a good time, you know, life's short.

• 8:40Speaker 00

  And I think it's important to celebrate. Friday nights, I like to remind myself just how much I have and how lucky I am and really, really take in, really appreciate my life and take in all the good in my life. I think that's really important. You know, when Monday comes around, it's like, it's like war, right? You're in the trenches, you know, you're driving hard, you're driving with a sense of urgency. I'm trying to build, I'm trying to build companies. My wife will always say like, isn't there something good going on? And it's like, well, there is, it's just the good comes on Friday night. And when I'm in the moment and I'm trying to build, I need to focus on how to improve. And so I become hypercritical of myself. I sort of let that sense of urgency take over

• 9:25Speaker 00

  and let the feeling of we're not doing enough set in. And then within reason, try to temper that so that, you know, you don't come off too strong with your team around you. And you don't end up trying to move something forward that frankly just needs time in order to progress. Sometimes that's the case, right? Sometimes the best action is no action. But then Friday nights, it's really important, I think, to sit back, enjoy, smile, you know, give your kids a kiss. You know, think about how fortunate we are and really appreciate your life.

• 9:56Shane Parrish?

  You step back and step away. I have a saying that you sort of reminded me of when you were talking, which is a lack of patience changes the outcome. And sometimes when you try to get something faster than it naturally should happen, you actually end up in a worse place.

• 10:11Speaker 00

  Absolutely. I mean, certainly in businesses that I'm building, I like to truly measure progress on an annual basis. I think that's the time to do it. Did you get better this year versus last year? Did the business grow this year versus last year? You may not be at the place you want to be, but did you progress? And I've been in situations where I had to say, no, you didn't progress. And I was in a business early in my career where I had to, you know, wave the white flag and say, I failed.

• 10:39Shane Parrish?

  Talk to me about the annual thing versus daily. How do you use that? You do action daily. How do you set that and sort of measure progress and consistency while keeping your eye on the annual sort of timeframe?

• 10:54Speaker 02

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• 11:09Speaker 03

  How about a latte?

• 11:10Speaker 04

  Maybe dark roast?

• 11:12Speaker 03

  Vanilla?

• 11:12Speaker 04

  Caramel?

• 11:13Speaker 03

  Blueberry?

• 11:14Speaker 04

  You could get them to agree on one flavor or give everyone what they want. With Keurig, there's over 500 K-Cup pie varieties of fresh, flavorful coffee.

• 11:26Speaker 04

  No effort, no grind, no settling.

• 11:31Speaker 04

  Great coffee without the grind. Keurig.

• 11:36Speaker 00

  When you're building a business, the amount of decisions you have to make is coming at you a mile a minute. It can be like trying to drink through a fire hose. I think you develop an intuitive sense of it. I don't know that I consciously sit there and think of every decision and ask myself, is this a monthly decision, a daily decision, a weekly decision? I think I usually ask myself, without consciously doing this, two things. One, is this something that I can recover from easily? Meaning if I'm wrong about this, what's the impact of it? Two, what's the risk of doing nothing and waiting for more information?

• 12:17Speaker 00

  More often than not, the answer is wait and get more information. Certainly on big decisions like to go in a different direction with the product, to deviate in a big way from your marketing efforts. Usually there, it's try and get more information, try and get more information, try and get more information. Things like you're out of stock and you've got to pressure a supplier to ship it faster. That's where the sense of urgency comes in and you're really, you know, you start to pound the table and get people moving. And there's a lot of those, right? There's a lot of little decisions in a day where if we can Do a little bit more to, you know, ship that extra order, handle that, that last customer service request.

• 12:56Speaker 00

  Those add up. So those small things where a sense of urgency allows you to offer better service, better product, become better at what you do, those are the small things, right? And, and those things, I think you do want to have an incredible sense of urgency around. The bigger things like, you know, should we be selling this product or that product? Or presenting the brand this way or that way. I think those things you wanna, you wanna analyze more on, on, you know, a monthly basis or quarterly basis, or in some cases, an annual basis.

• 13:26Shane Parrish?

  So it's like daily, you wanna focus on the micro things that move the needle, but

• 13:30Speaker 00

  Totally.

• 13:30Shane Parrish?

  as you step back, you focus on the more macro stuff.

• 13:32Speaker 00

  A hundred percent, right? I mean, any, any successful entrepreneur will tell you this, like, you, you gotta be in the details. I mean, over time, as the business grows, you, you develop a team that you trust to be in the details, but even then, it's, it's trust but verify. Here's a great example, like, what is Air Canada or Delta Airlines or, or American Airlines? It's not the CEO. Nobody thinks about the CEO when they think of these airlines. And people say, oh, that airline's the worst, right? I mean, no one really likes airlines. Well, what are they really saying you? They're not saying, most of them couldn't even tell you who the CEO is or the management team are. They're saying that that individual person that I dealt with at the customer service counter is, it was, was not nice to me, or didn't leave me with a great feeling, or, or, or didn't, didn't help me with what I needed help in that moment.

• 14:16Speaker 00

  You know, the business happens at the transactional level, any business, that's where it happens, where the money is exchanged for the goods. And I think often the bigger the company gets, we kind of forget that. But really, that's what it is. I mean, it's, it's, it's a series of small transactions that add up. But you need to continually get good at those small transactions. And those small transactions often require urgency. You know, I used to sell running shoes in high school. I loved it. I worked at a company called Athletes World, which is the equivalent of Foot Locker, okay? And I just loved it. I loved the product knowledge. I loved learning about the shoes. But you know, my sense of urgency and making sure every customer was helped before they walk out of the store. Now, I got paid on commission. So, and I was 16 years old and I think I made

• 14:59Speaker 00

  12 bucks an hour at the time and minimum wage was like five. So, I thought I was rolling in the dough, right? But I operated with urgency. I, there was no customer that left the store without me talking to them. There was, I was all over it and I outsold everyone. I was more into it. I cared about it more. I spoke to more customers in a day than they would. But that's what a business is. It's, it's how do you get the people on the front lines operating with urgency to add value to the customer and do that over and over again. And I think that's where the urgency really plays in is, is sort of creating that culture where people care about their work and care about the customers that they're dealing with enough to service them quickly and efficiently.

• 15:41Shane Parrish?

  Can you make somebody care or do you hire people that naturally care?

• 15:45Speaker 00

  I had a mentor that used to talk about this. He called it will versus skill. Sometimes they have skill, but they don't have the will. And sometimes it's vice versa. You get people who really care and work really, really hard, but can't really move the needle because they just don't have the skill. You can teach skill more than you can will. I do, I do believe that you caring about your work is something that no one can teach you what to do. But I think sometimes you develop the, the bug for it, right? If you, you develop a love for what you do over time. So, sometimes I think it is about patience, you know? I don't know that anybody can, can teach you how to have a spark and a sense of urgency, but I do think you can cultivate someone's spark and their sense of urgency. But ultimately,

• 16:28Speaker 00

  it's on the person themselves to, to, to really tap into what makes them get up in the morning and want to achieve.

• 16:33Shane Parrish?

  You mentioned details. One of the commonalities I find between exceptional people who've done exceptional things is they're always in the weeds. And yet, there's this sort of cultural backlash against being in the details and everybody sort of wants to manage with abstraction.

• 16:51Speaker 00

  Right.

• 16:51Shane Parrish?

  Talk to me about learning about the details and being in the weeds and why that's important to you.

• 16:56Speaker 00

  Well, I mean, it goes back to what we were just talking about, which is, which is, you know, you don't, you never want to have ivory tower syndrome where, where you run a business and you're not connected to your customers, where you're sitting in an ivory tower somewhere issuing decrees. Having said that, it is a balance. One of the things I learned building David's T was the difference between running a militia versus running an army. When you have a small company and you're running them, it's like a militia, right? Like, you know, you've got five stores and you want to run a sale or you want to, you want to do some kind of marketing campaign or, or whatever it is that you're trying, whatever initiative that you're taking on. And you have a meeting and you say, okay, let's do it. And, and it's super easy because, you know, you say turn left and everyone hears you.

• 17:40Speaker 00

  The militia is, there's five of you, right? Or 10 of you or whatever, and everybody turns left. But when the company grows, you become like an army. And when you say turn left, you get broken telephone if you don't have the right processes and procedures. So I think what you stand for as a company should, should never change. But how you do things as a company should never stop changing. And I do think as a company scales, it's really important to understand how to put in place the right processes and procedures, not to stifle creativity or to stifle the people. You want to empower the people on the front lines and make sure that they can still make independent decisions. I mean, we've all experienced as a customer, there's nothing worse than hearing, I'm sorry, that's our policy.

• 18:21Speaker 00

  You know, when you, when you don't allow the people on the front to think for themselves and they become robotic about how they deal with people, that's oftentimes the beginning of the end. But you do want to have processes, procedures to be able to facilitate the flow of information to and from the front lines effectively. So that you are able to connect to the weeds without sort of jumping in and not allowing people to spread their wings and fly. And I think it's a delicate balance, right? You, as a leader, you want to be, have your finger on the pulse and, and understand what's going on at the, the lowest level of your company where customers are interacting with your team or your products. But you also don't want to micromanage to the point where the people who you've empowered to, to do the job

• 19:06Speaker 00

  aren't able to do it and be celebrated for their own successes or learn from their own failures.

• 19:12Shane Parrish?

  Where did your drive come from? Like, what were you like as a kid? It seems very abnormal that a 16-year-old at Foot Locker would be so driven and motivated.

• 19:22Speaker 00

  I loved it. I loved working from a very, very young age. I was a bit, my wife says this about my son, and I think I was the same way. I was a man of action with no plan. I remember I really wanted a skating rink in our backyard. We had like this tiny little backyard. And my parents are like, "No." So I was really stubborn. I'd go and I'd start taking little, you know, like the sour cream container. I'd wash it out and put water in it and start dumping it on the lawn, and dumping it on the lawn. And my parents are watching me do this, and they're thinking, "What is he doing?" But I kept doing it, and I kept doing it. And for hours on end, I'm dumping one little sour cream container worth of water on the back lawn. And finally, my father's like, "This is crazy. The kid's never gonna build a rink this way." And, you know, but then they started helping me.

• 20:05Speaker 00

  And then my brother started helping, and then here we are as this family with our hoses out there spraying the back lawn. Sure enough, we have a skating rink, you know, and I was a bit like that as a kid. I mean, I wanted to work before I was allowed to work. I had a paper route at a very young age. I went on and I worked at Wendy's. I was the fry guy. I think the breaking point for me was I had to take out the garbage, and I was a small, little 14-year-old. So you had to throw it over the fence, right, to get it into the bin? They had the guard for the animals, the sort of fence around the garbage bins. And I couldn't quite get it over the fence, and so it sort of teetered on the top of the wall and then kind of came down on my face. And I was like, "That's it. That's, I'm out of here." And I think I was probably the youngest person they hired at Athletes World, which is like the Foot Locker.

• 20:50Speaker 00

  I wrote my resumes. I banged on a lot of doors, and that was just who I was.

• 20:55Shane Parrish?

  What were you like in school?

• 20:57Speaker 00

  I didn't take school all that seriously until later on. I mean, I knew I had to do well enough to get into a good university. But for me, university, I was excited to go socialize and have a great time. It wasn't until I met my wife where I really got it together. I mean, I got into a great program. I went to McGill University. But she studied hard. I mean, she became a neuropsychologist, Harvard educated.

• 21:22Speaker 00

  And you know, she brought out the best in me. I on by my fourth year, I I became an honor student and and I started to work a lot harder.

• 21:28Shane Parrish?

  Is that because you wanted to impress her?

• 21:30Speaker 00

  I think if I wanted to hang out with her, I had to go to the library. So, you know, I mean, she was in the library. So, yeah, I mean, I wanted to see her. I wanted to be with her. So I kind of just just followed her and she she didn't, you know, she didn't. I used to go out a lot and and and probably party too much, but she wasn't into that. So you know, she mattered more to me than party. So I ended up hanging out with her more often and and she she brought out some better habits in me.

• 21:52Shane Parrish?

  What was your, what did your kitchen smell like on like Friday nights growing up?

• 21:56Speaker 00

  I mean, I had a very regular, upper middle class, middle class upbringing. My mom had a a few different jobs. She was a teacher. She taught deaf kids for a while. Then she became an artist. Uh, my dad was a psychologist and and uh, I started working at at the hospitals and then had his own private practice. He worked very, very hard. Uh, I I certainly learned my work ethic from my dad. He was up at at five forty five every day. First patient was at seven. Last patient was at six, uh, never took a lunch break. Um, we always had Friday nights weren't dramatically different than than Wednesday nights. We we, because my dad didn't really travel for business, we always had family dinners. Uh, and they're really nice growing up. I mean, I was very lucky. I had my grandparents in my life. They would, I guess, come over on Friday nights and

• 22:39Speaker 00

  and we'd often barbecue a lot, a lot of steak. And this is before red meat. We knew red meat was wasn't so great for you. And so big steak family. We do a lot of steak and I had a nice upbringing. I mean, I had a nice family around me, but entrepreneurship and business wasn't really that. You know, it was interesting. I had this extended family in Montreal who had been very successful in business. Uh, and I had this rich history, um, that I really wasn't in touch with at the time. Education was certainly strongly encouraged, but you know, I didn't have access to CEOs and to to uh, type A business people in my life, early in my life. I I started to meet them later in my life. Once I went to Montreal uh, I went to McGill and started to meet some of my extended family.

• 23:20Shane Parrish?

  Once you learn more about your extended family and its history of entrepreneurship and making fortunes, losing fortunes, remaking them.

• 23:29Speaker 00

  Yeah.

• 23:29Shane Parrish?

  Did you feel more like you fit in more?

• 23:32Speaker 00

  The way the stories, as I got older, the way the stories were told to me was like an episode of Succession. You know, my, my, my family built a business called Peerless Clothing and, you know, it was filled with this one being mad at that one, not talking to this one and feeling slighted. And it was basically three brothers, the oldest one started it with the dad, the middle one came in with the elder one and was kind of the inside guy. The elder one then, then, once he had made it, decided to go to Japan. And in those days, when you went to Japan, it was like bon voyage, right? Like there was no, we're talking, we're in the 40s and 50s right now. And so my, my grandfather got brought in. He was a tall salesman type guy and the business was not doing well at

• 24:15Speaker 00

  that time and, and they brought it back together. And Peerless Clothing, for, for people listening, was they, they manufactured, they're still around today. It's, it was quite a large business and they manufacture clothing for, you know, Pierre Cardin, Hugo Boss and Calvin Klein. And anyway, my grandfather ended up, the middle brother died and there was a fight over shares. And long story short, the son of, of, of my, my grandfather's eldest brother who was adopted, came in and ran the business and actually did an incredible job with it and, and took it to a whole new level. And he was quite a, a successful businessman and philanthropist. And then from that, another, a cousin of mine, my dad's first cousin, went off and started a company called Le Chateau, which for years, he basically brought

• 24:58Speaker 00

  the Carnaby Street look to Canada. So I became very close with him. Once I went to McGill, didn't really know him that well before that. And later in life, he ended up backing me in David's team. We built it together. But yeah, I, I sort of learnt about these stories and, and I would say in my late teens, sort of as I was getting ready to go to McGill. And then I would hear stories about my, my great grandparents who came over with nothing and were peddlers in the countryside of Quebec. And one of my grandmother's father built up a big Woolens business and then lost it all in the Great Depression, buying on margin like everybody else, and then made it back. My grandmother used to tell stories about going to school in a carriage and then having to quit school the next day and walk to the factory, you know,

• 25:43Speaker 00

  kind of thing. So I did grow up with these stories later in life, but my entrepreneur drive came in before that. I think those stories just validated it for me and had me even more excited for my entrepreneur career ahead.

• 25:57Shane Parrish?

  Talk to me about David's tea. So I'm guessing like after university, you followed Emily to Boston?

• 26:04Speaker 00

  No. So Emily didn't get into Boston until much later. We had a lot of ups and downs together. Emily didn't get into her PhD program at first and was going to go do something else and then decided to wait and reapply to McGill PhD and then got in. So we were in Montreal after we both graduated McGill. We were living together in a tiny basement apartment in Montreal and I started a concept called Fitting Room Central. While most of my friends went off to Goldman Sachs or Procter and Gamble, I developed... So because I had worked, I worked in the buying department in Le Chateau for a few summers and I sold, as I was telling you, running shoes and clothing a little bit as well. So I understood

• 26:45Speaker 00

  that business certainly at a base level. And I developed a concept called Fitting Room Central because when buyers would buy clothing, remember when you're in clothing or anything with inventory, your biggest risk is your inventory buy, right? You're deciding what to buy in a season, you're hoping it sells, but you're deciding in advance, you know, what you think people are going to like. So often what large clothing companies will do is they'll test. So they'll, if you have a hundred store company, let's say, you'll buy for five or 10 stores and see how it goes there before you take the inventory risk of buying for the rest of the stores. And we'd have these buying meetings where they're evaluating these tests and they'd evaluate whether something sold or it didn't sell. But they had no idea why it was selling or why it wasn't. Everybody would speculate

• 27:29Speaker 00

  on that. So I developed a system for the fitting rooms and the idea being when you try on, when you buy clothing, you actually do it in two steps. Evaluate the look of something on your, sorry, the look of something on the rack. Then you evaluate the fit of that item on your body, right? What we thought is, hey, if we can capture the conversion rate at the fitting room, we'll be able to tell you if something's being tried on a lot, but it's not converting out of the fitting room, you might want to check the fit. And vice versa, if something's not being tried on a lot, but when it does try, get tried on, it sells. Well, you know, the fit's great, but the look may be off. It was a little bit ahead of its time. We were talking 2005, right? But when you think about e-commerce businesses today, this is exactly what we do, right? We monitor traffic and conversion. And then we had ways of capturing the fitting room being this point of interaction with the customer. You can capture feedback.

• 28:14Speaker 00

  Interesting idea, right? Everybody you tell that to, and I'm sure many of your listeners are like, oh, it sounds interesting. Well, like, interesting is a great word in a classroom, but it's a terrible word in business. You know, you want to hear things like, when you, can you deliver? And we would, I was really good at getting these meetings with buyers at Macy's or Victoria's Secret or The Gap. I'd write these handwritten letters to Les Wexner of Limited Brands. And I'd get a response and we'd have all kinds of meetings. But it didn't progress enough. You know, it was a nice to have, not a must have. And it just wasn't going anywhere. And, you know, I'm sitting in this basement apartment while most of my friends are starting to accelerate their careers. And my wife, who was my girlfriend at the time, is like, okay, enough.

• 28:59Speaker 00

  Like, you know, you don't make any income. You need a job. So I decided to call it quits, which was with a heavy heart. And I approached my dad's cousin who had started Le Chateau, this clothing business that had become very big in Canada. And he was looking to take a step back from that business. He was in his seventies at the time. And he said, look, I'll start a little private equity shop and you'll come help me. And I said, great. And I think he paid me like $40,000, I mean, nominal salary. And I figured you sort of fake it till you make it. I bought a book. I bought what Warren Buffett looks for in investments. You know, if I'm going to be an investor, I should learn. The tea thing kind of clicked for me, you know, I always liked tea, certainly growing up.

• 29:44Speaker 00

  I was never a coffee guy. I remember being in a tea shop in Montreal off of Saint Denis, which is this really cool street, sort of Asian-inspired tea house. And we went in and I started to think to myself, I'm like, wow, you know, there's no size, no color like there is in fashion. It doesn't go bad like a turkey sandwich. It's leaves in a cup, so the margins are good. You can operate out of small spaces. And we call anything you put in hot and cold water that's not coffee, tea in North America. So it's like cooking, right? The combinations of what you can create are endless. This is a Warren Buffett business, we should do tea. And we sort of looked around for one to invest in. I got more and more into it. I started to develop a love for the product. Finally, I think either I turned to my cousin or he turned to me and I said, look,

• 30:30Speaker 00

  let's just do it ourselves. Like, well, I'll build it and you'll back me. And it was a great combination of youth and experience, right? Like, the way I like to describe it is without him, I probably would have 10, 15 stores today and without me, he'd have zero. So it really worked out well. And away we went. We opened a store on Queen Street. And it didn't work at first. I mean, it sort of worked, but it really took a bit of time. I remember the summer I got married, which is about a year. We had four stores. It was about eight months after we started, a year after we started. And it wasn't going that great. I mean, we weren't doing well enough that summer for the business to survive. And I was really worried about it. But then, you know, we just kept getting better and better at it. And it just, it finally caught and people started to get into it.

• 31:13Speaker 00

  And I think what we did that was very different is we took a commodity and we uncommoditized it. When you think about tea, you know, it's this incredible drink. It's the second biggest drink in the world next to water. It's just ironically, in North America, we're not that into it. But it's this timeless ritual that everyone has a tea story from when they were younger. Somewhere in their family, someone drank tea. And with David's Tea, we created this sensory experience in the store where you come in and you're smelling tea and you're tasting tea and you're talking about tea. And it became this very unique experience. And I think that's one of the reasons it worked. And, and yeah, it really grew from there. How many stores did you guys end up with?

• 31:56Speaker 00

  When I sold my stake in David's Tea in 2016, we had 200 stores, about 200 million in sales, about 30 million in EBITDA. It was a pretty nice business. How does it feel now to watch that flounder? Not great, and I've, I've, I actually tried to buy it back at one point with Bain Capital. I've moved on. I mean, I, I, I wish David's tea well, and I'm very excited about what we're doing with Firebelly Tea, which is my new tea company. You know, while I was developing David's tea, I always had a private stash, right? What sold at David's tea were these heavily flavored teas, and that's just what the market wanted. But my palate developed because I, I would drink it every day, all the time, right? And, and, and I would travel to these incredible tea regions, and I would, I would meet with our tea

• 32:40Speaker 00

  blenders, and, and I'd learn kind of how to create an amazing tea and the right combinations of different ingredients. And as, when I left, I started to realize, wow, you know, I love tea. I love creating teas, and I love creating the products that go around with it. And I would curate these tea collections for my friends. I mean, Harley, who's the president of Shopify and a close friend, I got him really into tea because when I first met him, he's like, you know, I'm drinking way too much coffee. I'm not sleeping well. I get the jitters. I get headaches. I'm like, well, why aren't you drinking green tea in the afternoon? He's like, I never thought of that. I'm like, oh, my God, green tea's amazing. He's like, wow, it's kind of bitter, right? I'm like, well, yeah, because most people drink the equivalent of Folgers for coffee, right? Coffee went through these phases where we went from first wave to second wave to third wave, and people got fancier and fancier in the

• 33:25Speaker 00

  types of coffee they drank. And tea, in many ways, hasn't, you know, David's tea made some headways, and certainly had, had slightly better product, but I think the really good stuff is still, is still new to most people. And that's what Firebelly has become about. You know, it's in curating these collections for Harley and other ones of my friends. I brought some to you and, and, and got you into it a little bit. You know, as, as we develop, getting people into these amazing teas, and, and, you know, all of a sudden Harley's drinking green tea in the afternoon, no more headaches, no more jitters. Because the caffeine in tea is very different, right? There's L-theanine in tea as well. So whereas with coffee, you get that big spike and crash, you don't really get that in the same way with tea.

• 34:08Speaker 00

  You get more of a sustained energy. L-theanine modulates the impact of the caffeine on your, in your bloodstream or on your body. And it really creates a, a nice calm energy and a nice Focus and then you have herbal teas in the evening that are fantastic. And whether it's you want help sleeping or with digestion, whether it's ginger or. And so the teas that we create with Firebelly, we don't use any of these flavorings, which is kind of the secret in the tea business. If you go label hunting at the grocery store, everything has either natural flavor, artificial flavor. And it's not that it'll kill you, but a natural flavor just means it was derived from a plant or animal source. But it ends up in a laboratory where about 90% of what goes into these flavors are preservatives and additives to go unlisted on the label.

• 34:50Speaker 00

  We have these all the time. They're not, they're not necessarily bad for you, but they create kind of a monotone flavor. It's like watermelon chewing gum, right?

• 34:58Shane Parrish?

  Right.

• 34:58Speaker 00

  You get that burst of flavor, but then it dissipates. It's very similar with flavored teas when they're using flavorings. Whereas, you know, instead of using vanilla flavoring at Firebelly, we use real Madagascar vanilla. We use really high quality ginger, really high quality turmeric and, and it makes a difference in the quality of the tea. And, and so I think Firebelly became sort of this brand where I got to create the teas I love and sort of share my private stash with the world. And then, you know, you can't put a Ferrari engine in a Winnebago, so we had to create the accessories to go with it. And so we, we created, you know, like a stop infusion travel mug. I mean, you think about accessories. It's all designed for coffee drinkers, but like I wanted to put tea drinkers first. So we created this, this travel mug where you can stop and start the infusion with really high quality loose leaf tea.

• 35:43Speaker 00

  You can make hotter iced tea. It's a hundred percent leak proof. It's powder coated metal. I mean, I, I get obsessive about all these small details. So I'm having a lot of fun with it and building up my, my sort of chapter two, act two in tea with Firebelly.

• 35:56Shane Parrish?

  I never really drank tea until I met you. And then now it's become like this nightly ritual with my kids, which is kind of weird. When you think about it, right? Like one of my kids' favorite tea is after dinner mint that you guys make.

• 36:10Speaker 00

  Yeah.

• 36:10Shane Parrish?

  And he just loves this.

• 36:12Speaker 00

  Yeah.

• 36:12Shane Parrish?

  Like he'll have four or five cups at night. You know, while he's doing homework and he's sort of like, he'll make a teapot.

• 36:18Speaker 00

  Yeah.

• 36:19Shane Parrish?

  And he's 13.

• 36:20Speaker 00

  My kids too, they get into it, right? Cause there's so many different caffeine free teas and, and so many different flavor profiles. Whether it's, it's a sweet ginger or a chocolate tea. Or a really nice peppermint eucalyptus tea, apple chamomile, right? There's so many different combinations. So kids can get into it too. That's what sort of drove me to create Firebelly is that everyone I would show really high quality loose leaf tea to and, and. Demonstrate how nice a tea ritual is, would would continue on with it. I mean, they'd get into it and I'm like, you know, I want to share this with everyone. I really want it to be something special. I mean, this isn't something you can find at the grocery store, right? It's it's it's much higher quality tea than people are used to. And I

• 37:02Speaker 00

  think, you know, why not? Tea should have its time. It's it's such a, it's so big in Europe and other places in the world. It's just North America that for some reason is a bit late to the party. And and I just think, once they realize how amazing high quality tea is, it has its place in our in our daily ritual.

• 37:22Shane Parrish?

  The world is completely different now than it was when you started David's Tea.

• 37:26Speaker 00

  Very much so. Yes.

• 37:27Shane Parrish?

  So what are the differences you see in the tea space? What lessons can you take from David's Tea? And where's it like harder now and different?

• 37:37Speaker 00

  To contrast it, when I started David's Tea, there was no Instagram. There was no Shopify. You had server rooms. And if you want to build a website, you know, you called a website guy, like, right? That's how we used to build websites. You found a friend of a friend who was usually a kid who knew how to build a website in HTML. The store, a physical retail store was much more about distribution than it was discovery. I mean, it was about both. But nowadays, you don't need a store to distribute, right? E-commerce was a tiny, tiny percentage of the business back then. It's exploded on the scenes now. So it was it was very different. I think the the space is much more competitive now. There's a lot of products out there that claim lots and lots of benefits. But

• 38:21Speaker 00

  I think some of the fundamentals of building a business haven't changed. So, you know, everybody loves to to talk about what's changing and disrupting. But I think it's also important to look at what doesn't change. And having a great quality product doesn't change. And I like to put my energy into that. And one of the things I love about tea is that it's so timeless. Tea has been around for hundreds and hundreds of years and and drank in cultures all over the world for different reasons. It has proven benefits versus some of these other products that come on the market that That make claims that have not been studied. It's obviously harder to compete with the fad de jour. But I want to build a hundred year company.

• 39:04Speaker 00

  I want to, I want to build something that people can trust and that isn't going to waver in some of the principles that, that it stands for. And so what we love about Loose Leaf Tea is it's, it's higher quality product. You get the whole leaf, you get to watch it expand, you get the full health benefits. It becomes this pause in your day. And I think that's just, that's what we're about. We're about, we're, we're, we tend to attract people who are type A. I mean, they're not necessarily entrepreneurs, but they're entrepreneurial in what they do. I think it's for people who are on the go, who need a moment to themselves or, or a social moment with friends. I mean, it's Tuesday night. You don't always want to have alcohol, right? Like sometimes you just want to have a, can I make you a tea?

• 39:48Speaker 00

  Like we'll have a great tea and a great conversation. So I don't think those principles change in terms of David's tea. I mean, David's tea was a fashion brand. It was about smell, like people were discovering, wow, you can have tea with vanilla and you can have tea with almond and it turns pink in your cup. And there's one that's strawberry and, and this was very new, right? And, and it was all about, about, you know, smelling it. And it was just such a new phenomenon. We went from Earl Grey and mint and chamomile into all these plethora of flavors. And I think with Firebelly, it's a little bit different. We're saying, look, we don't do things that you can only do with flavoring. Like we don't do peach tea because you can't make a peach tea without flavoring. But we do really high quality freeze dried berries.

• 40:31Speaker 00

  And what has changed about business is there's more of an opportunity to take a niche and really get a thousand true fans with it.

• 40:38Speaker 05

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• 41:09Speaker 03

  How about a latte?

• 41:10Speaker 04

  Maybe dark roast?

• 41:11Speaker 03

  Vanilla?

• 41:12Speaker 04

  Caramel?

• 41:13Speaker 03

  Blueberry?

• 41:14Speaker 04

  You could get them to agree on one flavor or give everyone what they want. With Keurig, there's over 500 K-Cup Pod varieties of fresh, flavorful coffee.

• 41:26Speaker 04

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• 41:36Speaker 00

  I think it's easier with modern day media to talk to niche audiences. And so we want to be really good at servicing a customer base who really cares about having an incredible tea ritual, really high quality product, and really just focus on what we do best. And I think that's a little bit different than how it used to be. I think it's easier to find your audience at scale than it was. You weren't able to do that in 2007, right? In the same way. And I think that really changes how you think about the business. And you're in physical locations, Macy's and Erawan? We're in Erawan, which is a really hot grocery store right now in LA. We don't want to be in some of the more mainstream grocers, but Erawan really is a special place.

• 42:21Speaker 00

  Yeah, we're in Bloomingdale's. We do some of our gift assortment in Crate and Barrel. Yeah, and it's mostly direct to consumer. So why those places? Tea makes the perfect gift, right? So we tend to perform well in... We took our best sellers and put it in Erawan. I think Erawan has a more discerning customer and appreciates really high quality loose leaf tea. So I think Erawan works for us and we've been one of the top performers in our category so far. And I think Bloomingdale's and Crate, their gift, you go there for Christmas to buy Christmas gifts and tea makes a great Christmas gift. And so we'll do these great gift boxes with our accessories and our teas together and it sort of works really well there in November, December.

• 43:05Speaker 00

  When you think about it, you can give tea to anyone. You can give it to your mother, you can give it romantically, you can give it to a coworker. It really does make a great gift. I mean, the message you're sending the person is here's something that's good for your health and wellbeing, here's something that can be a break from your day, or it can be social with your family, your friends, your colleagues. It's a funny thing, everyone has tea in their cupboard, but it just sort of sits at the back and gathers dust. And that was one of the things with Firebelly, we wanted to make sure that it was well designed. We originally put it in these boxes. Boxes that they're like books on a bookshelf and we did that. We want it to be on your counter, front and center and it should look good, too. And so we've approached it from that angle. But we haven't approached it as a fashion product.

• 43:48Speaker 00

  I mean, you know, with David's tea, that was a big thing, right? Like it's spring, summer, winter, fall. It's like our new fall collection, our new spring collection. It's pumpkin this, it's well, no, like we don't really think about tea that way. Like real tea drinkers drink tea every day. Like it's fantastic. Like Firebelly is a brand for tea drinkers, for people that really love it. And that's what we're servicing.

• 44:09Shane Parrish?

  What failures have you had that you cherish the most up until this point?

• 44:13Speaker 00

  It's funny, you know, I don't often think about my failures. They just become part of who I am as I go forward. But, you know, if you're afraid to fail, forget it, go get a job. Failure takes on many forms, right? There's failure in that it just like I failed. It didn't work. I was a failure and that happened to me when I started that fitting room company right out of college. And it straight up did not work. I had to hang my head down and lick my wounds and move on. And, and, you know, as is often the case in life, you have to go down in order to go up a lot of the time. And, and I had to do that in that case and I had to, it humbles you, I think.

• 44:54Speaker 00

  And I wore that one in a big way, you know, especially at a time in life where everybody's trying to flex in their advancement in their career, right? As young professionals, here I was with this major failure right out of the gate. And failure can also be in the form of it's taking too long. I think we often don't think of that as failure, but like Mad Radish, which is a healthy fast food concept I have in Canada. You know, we were, we had figured it out for the lunch market and we were accelerating in five day a week office stores. And then the pandemic came and we almost went out of business and we were failing in a big way. And I had invested way more money than I thought I would have to. And it had taken far longer than I thought it would.

• 45:39Speaker 00

  But it wasn't working and I almost stopped and we almost said, you know what? Let's sell it for 10 cents on the dollar and move on. But We didn't and we stuck with it and now it's in a much better place and and we got better at at the dinner menu. We developed a two day part menu. So we got we got really good at the nuances of that business, right? And we did that through failures. I mean, we just we kept failing. We failed on menu development. We failed on real estate. We took bad stores. We we figured out what not to do to the point where here we are today. And I'm I'm very fortunate. I have a a couple of partners in that business, one of whom is the CEO of the company is doing an incredible job. I was the CEO of the business. And then when I started Firebelly and and I realized tea is really where I wanted to to go back to.

• 46:22Speaker 00

  He took over. He was our head of operations. And he's done incredible job. And now the business is starting to grow again. And we've become, I think, the number one player in Canada for healthy fast food. And and I'm really excited about the growth there. But we I mean, we failed. I mean, there was, you know, we we failed, and we failed, and we failed, and we failed until finally, we started to succeed. I mean, it's a great expression, a story told by one of our guests on Big Shot. His name is Peter Mays, an activist investor. He was Nelson Peltz's partner. He tells a story about going around and trying to market his first company and and getting a valuation that was far below what they wanted. And they're yelling at the investment bankers. And we just did this whole roadshow. What do you mean it's not worth X? You know, we and the guy goes, kid, you can't make chicken

• 47:05Speaker 00

  salad out of chicken shit. And sometimes that's actually what you have to do. You have to make chicken salad out of chicken shit. And that takes time. And you have to fail. You have to be honest about the fact that you have chicken shit right now and and really work on on somehow turning it into chicken salad. And so I've had to do that a lot. I mean, and even David's tea, you know, it was a success, but a big success. But then it it faltered several times along the way. And then and then when I left, I mean, it fell apart. You know, I mean, I sold my my stake in it in 2016. And, you know, today, it's it's worth a fraction of what it was. And the market moved on and the company missed it. And and it's not easy. Business is really hard. And that's why, you

• 47:49Speaker 00

  know, you have to be ready to keep showing up. And you really have to love the journey of it more than the end result. Because if if all you want is that moment where you you you make the big score or you spike, you know, that that moment you think you're gonna have where you spike the ball and you have that big score. Well, I actually went through one of the biggest depressions in my life after I sold my my stake in David's tea. I thought that's what I was playing for. I thought I was playing for this big success where, you know, the other side of the rainbow. And it was great. I mean, I had financial independence for the first time in my life. But I lost I lost my sense of purpose and I had no plan. I didn't think about the day after David's tea. I was so busy trying to build it. And we actually don't talk about this a lot in entrepreneurship, which is,

• 48:33Speaker 00

  you know, the struggle is so difficult to get to a place where you're successful. What happens once you're successful? And what if you do sell your company? And now what? Right? And what? How do you derive meaning in your life? And and you I mean, you're not just gonna go play shuffleboard when you're, you know, thirty five years old. I went to a dark place in my life and and and I didn't know what to do with myself. And and and it took me a while to reinvent myself and and sort of tap back into the kid I was that, you know, that loved entrepreneurship and building businesses. And I did I did tap back into that. And that was a a journey on its own. And in many ways, not preparing for life after David's tea was a failure.

• 49:08Shane Parrish?

  Did you recognize that you were depressed? How?

• 49:12Speaker 00

  Oh, yeah, I was really depressed. Like, like I went through, you know, I don't I don't talk about this often. But I was I was in a really bad spot. And it was a weird thing. Like, I felt guilty about it because like, wow, what right do I have to be depressed? I just I lived, I just had the dream that everybody plays for, which is an exit in in a major company and financial independence. But I I was I was very upset. I I had some health issues and it's hard to know whether the health issues were from the from the depression or or the stress of building it, or or just, you know, what came first, the health issues or the depression. But no, I had to I had to develop better habits in my lifestyle. I had to develop a better perspective on life. There was a lot of stress. There was a fair amount of internal fighting in the company

• 49:56Speaker 00

  between my original partners, the private equity group. It wasn't an environment where everyone was just focused on the customer and adding value for the customer. And there's there was a bit too much. Internal conflict, which is one of the reasons I felt it was time for me to move on. And I think I never had a chance to process all that and deal with that. And I had to really understand when it no longer becomes about the money. You really have to think about what you're doing and why you're doing it. You take away that factor that it allows you to drown out all the other things in life that are that are really important, like meaning and and being able to to really appreciate the journey. And I didn't really understand those pieces of my life early on. And it just became a singular focus where how can I build this and make money?

• 50:41Shane Parrish?

  What would you say to somebody who's depressed right now?

• 50:45Speaker 00

  There is no shortcut for the work, period. There's no magic pill. There's no magic elixir. It's about habits. You have to do things even when you don't want to do them. I don't know where I heard this story, but I think it was a guy who had survived the internment camps during the war and where they were being tortured. And he said that it was the people who lost hope that that didn't make it. It was the people that had hope, but not expectations that did, right? So they knew they'd get out of there, but they didn't have an expectation on when. And I think depression is is like that as well. You you have to get up and go for that run, even though you don't want to.

• 51:28Speaker 00

  Do that 20 minutes sit, you know, breathing exercise, even though you don't want to. Work on your eating habits or your, you know, your, your rituals, whatever they may be. I mean, and it's all kinds of different rituals in your life. It's important to develop. I'm using the word ritual loosely here, routines, habits, whatever you want to call them. When you're in a dark place, they're even more important. I mean, it's really easy when you've had 10 hours of sleep and and the sun is shining and it's and it's warm outside. It's really easy to go for that run or or put on that smile or whatever it is like, you know, that's that's where it's easy. Where it's hard is it's when, you know, you had six hours of sleep and you're not feeling great and you're feeling sluggish and and that's actually when you need to do it.

• 52:12Speaker 00

  The doing is what matters and it's like life, life just is like that. And I learned that from my father, you know, I mean, he he got up early and stayed late and put in the work and there is no substitute for the work. I don't know how smart you are, you have to put in the work.

• 52:29Shane Parrish?

  It's so interesting because the parallels between sort of depression and being successful at your job, your career, life, they map each other, right? Which is like you have to do it when you don't feel like it.

• 52:40Speaker 00

  Yes.

• 52:40Shane Parrish?

  And that's when it matters the most.

• 52:42Speaker 00

  Yes.

• 52:42Shane Parrish?

  And you sort of have to have that will because everybody loses the battle with willpower. So the routines, the rituals, they carry you through when you don't feel like doing it. It's like, I don't feel like going on the Peloton today, but I do it every day. So I have to get on and go.

• 52:56Speaker 00

  And make every day day one. You know, we have a habit of beating ourselves up, right? Like, the idea of being compassionate with yourself is really important. You miss a day, so what? Like, in meditation, it's, you know, come back to the breath, come back to the breath. And we call it rabbit holes. You go down a rabbit hole where you have these almost like blackout moments where your mind just carries you in a thought. And when you first start meditating, most people, when they first start meditating, they do the same thing. They sit down for 20 minutes, but don't do that. Sit down for like three minutes or four minutes or five minutes. Like, build up, right? You're building a muscle. You're building that focus muscle. But when we have these sort of blackout moments in meditation where our mind wanders and we don't even know where it goes, and then all of a sudden we come back and we're like, oh yeah, I wasn't focused on my breathing or whatever visceral exercise I had. We have a tendency to beat ourselves up.

• 53:41Speaker 00

  You're like, ah, I can't believe I could. You know, you do it mentally and we're human. You're gonna make mistakes. Like, you don't have to always get it right. You're allowed to slip up, but just keep restarting. There is no moment in life where everything's just perfect. Like, life is dynamic. It's not static, right? It's, you're always renegotiating with yourself and it is an ever-changing thing. And I think it's just, how do you work on, on bringing the right attitudes into it each and every day?

• 54:10Shane Parrish?

  I want to go back to 2016. You get this fairly big payday.

• 54:14Speaker 00

  Yeah.

• 54:14Shane Parrish?

  What are the lessons that you wish you knew then about money that you know now?

• 54:21Speaker 00

  First of all, money doesn't buy meaning. Number one, you have to, money can help facilitate a lot of things. But you, you have to know who you are and what you want. That's really, really important and that has nothing to do with money. Buying nice things is, is going to be fleeting. I think we all know this intuitively. And yet so many people do this. And I'm not saying don't buy nice things. It's always nice to buy nice things. But it's important to understand that in and of itself is not going to give you meaning. A really nice car, a nice watch, or a nice house, or whatever. It's going to be cool for, for a minute, but eventually it's going to go away. I think, I once heard this from a friend, you know, the secret to life is something to do, someone to love, and something to look forward to.

• 55:06Speaker 00

  Money can help facilitate parts of that, especially the something to look forward to. But, but you have to tap into deeper meaning on, on what it is, what gets you excited on an ongoing basis. For me, it's building businesses. But I wish, coming out of that experience of, of making money and becoming financially independent, I wish I'd taken a little bit more time to think about how I wanted to do that and where I wanted to do that. I think I was a bit too, I felt I needed to get back in the game very quickly. I, I think I, I set an artificial timeline. Like, I think sometimes we set these artificial timelines with ourselves. And it's, at least in my case, it was my ego. I felt I had to be back in or, or I was going to be a one-hit wonder. You know, and, and, I mean, all that's BS.

• 55:50Speaker 00

  I mean, there is no one way, there is no one story. I, I'm now in my, my early 40s and I, we, we love telling ourselves the stories of people that validate our narratives, right? Like, so I'm like, oh, Sam Walton didn't start till he was in his 40s. Or like, you know, Warren Buffett made most of his money after 55. I mean, all of these things are, are just ways of telling ourselves that we have more life ahead of us. And the truth is, we do. And there is no one way. You can always find a story that validates your narrative. I think in some ways that's kind of healthy, now that I think about it now. You know, I think, you know, you want to continue to reinvent yourself and not think of yourself as too old or, you know, now I have these two businesses that are growing and I'm like,

• 56:32Speaker 00

  oh, I need to grow them fast because I only have this many good years. I'm entering my prime and it's like, well, are you? I mean, what, you know, who's to say? I mean, there are endless stories of people that do it in their 50s, 60s, 70s. I mean, some in their 80s, right? So I, I think all of that, everybody's unique and I think it's really important to forget about, you know, if you're playing for validation from others or you're playing for external success, you're never gonna have the full fulfillment that you get from your achievements in life. And I don't know that I've entirely overcome that external validation. I don't think I have, but I certainly worked towards it and really focused a lot

• 57:15Speaker 00

  more on internal validation. I think coming out of David's tea, I wish I had, coming out of a big financial score, but having not done a lot of the work to understand myself and what I really wanted out of life, I wish, I wish I had been more prepared for that. First thing I would have done, I would have gotten a nice office. You know, I, I didn't have that. I, I stopped and I, I didn't have any, I had nowhere to go in the mornings, right? I went from having this big office with a hundred plus people who, who, you know, with my name on the door and I'd walk in and I was important, right? Like, and then I, and then the next day I'm out and, and, you know, I'm waking up and, and now what? And no one's running up to me anymore and, and I'm not in this nice office. And so I think the first thing I would have done, I would have gotten a really nice office.

• 57:58Speaker 00

  I would have, I would, I think I would have consulted with a lot more people that had been through that experience of having sold their company. I wasn't very thoughtful about that and, and I, I, in retrospect, I mean, I became, it took me a little longer and I became more thoughtful about it over time, but by the time I became more thoughtful about it, I'd already jumped into other things. And those, of course, take up your entire focus because once you're, you're in the game of building a business again, you know, you're, you're trying to manage the swings of the game and you're trying to go on a, a run where you grow. And, and so you, you go right back into it, into the doing versus the reflecting.

• 58:32Shane Parrish?

  You mentioned Warren Buffett. I know you're a fan. What are some of the lessons you've taken away from him over the years?

• 58:38Speaker 00

  The first one is, I wish I had this, this superpower. Here's a guy who can make very few decisions, but make them with so much conviction and then live in Omaha, Nebraska, and like go sit in a fishing boat while the world goes on around him. I mean, you know, talk about being able to overcome the action bias. Yeah, I just think that's incredible. I mean, a lot of things we're talking about here today where how do you get to a place where you have internal validation and you, you kind of don't care what others think? I mean, very few of us can say that, that we don't care about what others think. I think he's one of them. He really is one of them. I first read about Warren Buffett at the start of David's tea. I was telling you the story. I think it was Buffettology,

• 59:23Speaker 00

  actually. I think his, his, his daughter-in-law wrote it. So that was, I mean, we're going back now 20 years, right? And since that time, I've, I've seen him go through waves where the world thought he was a dinosaur, right? Like when he bought Kraft and, and when the tech was really booming, everybody's like, or Bitcoin was, was super hot, right? Everyone's like, oh, this guy's a dinosaur. He's out. He doesn't know anything. Well, turns out he's not. Then he turns around. He buys the Japanese trading houses at 10 cents on the dollar. He makes another brilliant move. And, and you're just like, wow, he's done it again. I mean, I think before 2008, he was another period in, you know, 2006, 2007, leading up to it where he looked like a dinosaur. And then bang, he's saving the financial world in America and making these investments in golden sacks. And, you know,

• 1:00:07Speaker 00

  so I think, I think what I admire about the guy is, is, you know, we have all these sayings in life, like play the long game, or learn how to, how to sit with something. And it's really hard to do those things, right? Like, it's all easier said than done. And I think he's managed to be able to do them. And, and I also, the other thing I admire about Warren Buffett is being able to express complex things in simple terms. It's like the Mark Twain saying, you know, I'm sorry, I wrote you such a long letter. I didn't have the time to write you a short one. When I was going to McGill, I, I went into management and I realized very early on that I didn't know how to write. I was a terrible writer. It's a sort of a lost art form. And I wanted to learn how to write. So I went into English Lit at McGill and I ended up minoring in English Lit. It was serendipitous because I met my wife in English Lit.

• 1:00:52Speaker 00

  And but I also learned how to write. I wrote for the McGill Daily Newspaper. And I really wanted to turn what was a weakness for me into a strength. And I became, you know, an above average writer. I'm, you know, I'm no Mark Twain. And but I'd like to think I can, I can write a decently persuasive email or letter. And I think that's a really important skill set. And where that comes in particularly helpful is how do you express a complex idea in simple terms? And no one does this better than Warren Buffett. I mean, you read his annual shareholder letters. And he does such a good job taking, I mean, something as complicated as the energy industry or the railroad business and distilling it into a few timeless principles. And he does this with investing as a whole, right?

• 1:01:36Speaker 00

  He teaches us how to have a perspective on investment and on investing that that will sustain you through a lifetime. I wish I had his patience. I never will. It's just not who I am. I think one of the differentiating factors for him is how, how rarely he actually moves on something and makes decisions. He sits on things longer than most. And I think, I think that's a rare quality.

• 1:01:59Shane Parrish?

  How do you fit everything in? I mean, you have an incredible wife, you have three kids, two businesses that you're running.

• 1:02:05Speaker 00

  Yeah, and a podcast that's.

• 1:02:07Shane Parrish?

  A podcast that's growing.

• 1:02:08Speaker 00

  Yeah, I think, I think a couple of things, you know, I think getting up early is really important. I don't really know many extremely successful people who don't get up early. I like to work out in the mornings. I like to turn my phone off at a certain point in the evening. And I know this is going to sound really weird, but I actually, I bought this thing that I can put my phone in that locks it. It's like a little cubby for my phone. And I put it in now around nine, nine thirty and it's locked. And of course, at first I was like, wow, what if my, my, you know, my parents are a bit older? What if something happens or I need it? And I said, well, you know, my wife has a phone. I have my computer. It's not like there's other ways I can check if I need to. But this allows me from sort of, I used to go on, on social and just sort of numb out. And a half hour would go by and I'm like, what am I doing?

• 1:02:51Speaker 00

  I just wasted a half hour of my life numbing out on social. With my kids, can I be present reading my son Harry Potter, who's seven years old? And just starting to get into that, you know? Can I take one of my daughters? out to to for for a tea and and be able to just listen to them talk about their science fair or or their gymnastics or whatever it is they're into. It doesn't take much. You know, I'm not religious at all, but I think there's some there's enormous wisdom in the concept of the Sabbath. I think it's just an incredible concept, right? Like, What is that? So the Sabbath is is a Jewish, is, you know, it's called Shabbat. It's it's it's in Judaism. It's this idea of from Friday night sundown to Saturday night sundown. You don't work.

• 1:03:36Speaker 00

  Now, what does that mean today? I've I've sort of evolved it to my own personal, like I say, I'm not religious. But I I think there are principles in there that are very that have helped me a lot. So I I still will work on a Saturday morning sometimes, but I won't. I won't. I I like to come out with a different mindset. I for some reason, I've I've found a way to to take the edge off on the Friday night to Saturday night, and I think of that as my relaxed time. Yeah. And if I'm working, it'll be more reading or taking notes or reflective emails on my laptop. I don't, you know, there's working in the business and working on the business. I like to take my weekends, if I'm going to work, to work on the business and not in the business. I really make I really make sure I take time for my kids and my wife on the weekends. I mean, I make a point to

• 1:04:20Speaker 00

  go out with my wife for a date night at least once a week, usually on the weekends. We go for dinner together. We take a fair amount of trips. I think that's also really important. I like to get away. But yeah, I sort of have have started to bring a different mindset from my Friday night to Saturday night. And then Sunday, you start to ramp up again, right? Like you Yeah. sort of gear up for the battle. But Monday to to to Friday, it's intense. Like, I I'm I'm an intense guy. I just am. There's no way to to for better for worse is who I am. And I go at it hard, and I I wear my heart on my sleeve, and I I work very, very hard. I'm present with my my family during the week, but for very short periods of time, and I'm certainly more present on the weekends and on holidays. You know, like I was saying, there's no substitute for the work. You

• 1:05:03Speaker 00

  you you have to operate with a certain level of intensity in order to get things done. And I I work late into the night. You know, I work up until about eight or nine o'clock. I'll usually either read a bit or watch a bit of TV with with my wife and read to one of my kids before bed and and go to bed and try and get as much sleep so I can get up and do it all over again.

• 1:05:21Shane Parrish?

  Do you think that's sort of the biggest missed opportunity that that people have is like when they stay up late because you go to bed early, you wake up early, but it's that like, you know, I don't know, nine thirty to eleven thirty.

• 1:05:32Speaker 00

  Yes.

• 1:05:33Shane Parrish?

  You don't really get anything done.

• 1:05:34Speaker 00

  No.

• 1:05:34Shane Parrish?

  You end up scrolling, watching TV. But if you get up, if you go to bed at nine thirty and you get up at five, you're like ready to go, you're in ten.

• 1:05:42Speaker 00

  Thousand percent.

• 1:05:43Shane Parrish?

  Yeah.

• 1:05:43Speaker 00

  I think, I think that's the biggest, uh, least productive, most dangerous time for our, for our mental state of the day. And usually I find it's, it's, it's also the time of day where I'm the most worried about my future.

• 1:05:58Shane Parrish?

  Yeah.

• 1:05:58Speaker 00

  About the business. I'm usually the most down on, you know, I'm in, I'm in a depressive state and I'm sort of like, ah, it's not working, things aren't going my well, I wish this, I wish that, you know, and I'm sort of down on myself. And it's important to be like, yeah, more and more I try and distance myself and be able to be the observer rather than the participant in that and be like, okay, well, like, you're just tired. Like, you're just tired. You know, with like, with kids, when you're like, okay, you're tired.

• 1:06:24Shane Parrish?

  Yeah.

• 1:06:25Speaker 00

  It's no different with adults, right? Like, you're just tired, like, go to bed, call it, it's over, day's over. You know, tomorrow's another day, go to bed.

• 1:06:31Shane Parrish?

  I feel that. What's missing most in life right now?

• 1:06:36Speaker 00

  That's a tough question. I cheated before this interview and looked at your notes and, and I saw that question and I wasn't sure how to answer it. And I, I'm, I'm still not, I think it's a really difficult question to answer. I think the answer is nothing. There are lots of things that I want, but there are few things that I truly need that I don't have right now. I think what's missing is just more, more life, more embracing the journey, more being able to take it all in without feeling less than like a, you know, like a failure, more being able to just appreciate all the good that's in life versus constantly perseverating on, on, on what's difficult or missing or, or bad.

• 1:07:21Speaker 00

  Life is short and, and it's, it should be celebrated. It should be, it should be elevated. And I think there are lots of things I want to do and accomplish. I mean, I definitely sit down once a year and I write out goals and I write out one year goals and three year goals and 10 year goals and. But then I kind of like to say to myself, and, and, and let's say I achieve none of them, right? Because you always have that sort of fear, like, what if it doesn't work? What if I can't, what if I'm not that good at this? And what if I can't, right? And, and so what? I got three healthy kids, I, I, I got a, a, a great marriage. I've, I've made enough money. I've, I've, you know, and so what? And, and I know that, that sitting here, it's easy for me to say that a lot, you know, but it's all relative, right?

• 1:08:06Speaker 00

  And you have to remember that it's all relative. Like, there's always somebody who has more and there's always somebody who has less. And that's true no matter where you are. You know, but the truth is, like, I was just as happy in that base room apartment in Montreal as I am now. You know, so much has changed in my life, but at the same time, the real changes, the real things that brought true happiness were the personal developments, were my ability to connect with my wife on a deeper level, were my ability to truly enjoy and appreciate my kids. I think we're all kind of playing for that no regret, old age rocking chair moment.

• 1:08:41Shane Parrish?

  Yeah.

• 1:08:42Speaker 00

  At, at least I, I sort of use that as a, a yardstick. Be like, well, is this going to matter in my rocking chair? And of course, life has many twists and turns and, and who's to say you'll ever be in a rocking chair? I mean, it's, it's, it's, I think it's just more the, the sentiment than the reality. But I think, I think that, that thinking about the question, what's missing in your life? You know, the answer is always perspective. You have to decide what narrative you want to live, right? Like, you, you don't get to choose. A lot of things in life are completely out of your control. But, but how you think about things and the narrative that you go through life with is in your control. You know, everybody could say, well, your pain's not as big as my pain or your hardships aren't as big as my, my hardships. But it's all relative. I mean, pain is pain and hardship is hardship.

• 1:09:24Speaker 00

  And yes, some are worse than others, but by and large, we all have things that we need to overcome. And, and I just think that, that really it's, it's doing the hard work to try and how can you continue to sharpen your perspective and your narratives that you can celebrate life and get the most out of it?

• 1:09:40Shane Parrish?

  I like that because you're choosing where to focus, right?

• 1:09:42Speaker 00

  You choose your focus. You really do. And that's something, it needs to be practiced. It's not something you can't just tomorrow. I think it's hard to walk up, wake up tomorrow and be like, I'm gonna have a positive mindset about everything. Well, you're not like, you know, if you've gone through your life having a negative mindset about everything, you're not going to be able to do that in one day. And probably not in one year and probably not in five years, frankly. But, but how do you take one step forward in that journey towards having a better perspective and, and being able to enjoy life more and celebrate all the good that's in your life and not just focus on all the things that are not what you want to be?

• 1:10:16Shane Parrish?

  We always end with the same question, I guess. Well, it's think of it as the rocking chair question.

• 1:10:20Speaker 00

  The rocking chair question?

• 1:10:21Shane Parrish?

  Which is, what is success for you? What do you want to be sitting there looking back on and you'd be like, that's, that's success?

• 1:10:28Speaker 00

  When I was a little boy, my father used to say to me, he'd say, David, you're like an eight cylinder engine operating on two cylinders. And I didn't really know what he meant by that. I didn't know the world. I didn't, I didn't know what was out there. I didn't know all the possibilities. But, but the more I go through life, the more I realize that, that for me is, is very important. I don't want to ever look back and feel like I didn't use all eight cylinders. And I think that applies to everybody, you know? I, I don't wanna feel that I didn't tap into my full potential. I don't know what that is right now. I can't tell you. We all have a certain level that we're gonna reach, you know? Not everyone's Michael Jordan and not everyone's gonna be the, the Warren Buffett or the CEO or the president or whatever, right? And, and I don't think that matters.

• 1:11:11Speaker 00

  I actually think what's far more important is, did I self-actualize all eight cylinders? That I was able to, to self-actualize? Did I, did I tap into my full engine? Hopefully one day on my rocking chair, that's the rocking chair question. I'm able to say, I did that. I didn't, I didn't shortchange myself. I didn't, I didn't not show up for myself.

• 1:11:36Shane Parrish?

  Thank you so much. This has been awesome.

• 1:11:37Speaker 00

  Thanks, Shane. This is great. Appreciate it. Thanks for having me.

• 1:11:40Shane Parrish?

  Recently, I've started to record my reflections and thoughts about the interview after the interview. I sit down, highlight the key moments that stood out for me, and I also talk about other connections to episodes and sort of what's got me pondering that I maybe haven't quite figured out. This is available to supporting members of The Knowledge Project. You can go to fs.blog/membership, check out the show notes for a link, and you can sign up today. And my reflections will just be available in your private podcast feed. You'll also skip all the ads at the front of the episode.

• 1:12:24Shane Parrish?

  Thanks for listening and learning with us. For a complete list of episodes, show notes, transcripts, and more, go to fs.blog/podcast, or just Google The Knowledge Project. The Farnham Street blog is also where you can learn more about my new book, Clear Thinking: Turning Ordinary Moments Into Extraordinary Results. It's a transformative guide that hands you the tools to master your fate, sharpen your decision-making, and set yourself up for unparalleled success. Learn more at fs.blog/clear. Until next time.