#75 with Randy Hetrick - Navy SEAL To $50M TRX

** The audio recording in the episode had some stuff ups. Sam is not interrupting Randy, it's just the audio delaying in recording. Very sorry for the listening experience, will be fixed in future episodes. ** Today's ep is possible because of Superside! Head to www.superside.com/mfm to hire a dedicated team of designers for your project! Joined our private FB group yet? It's a page where people share each others million dollar ideas or what they're already working on: https://www.facebook.com/groups/ourfirstmillion. Sam (@thesamparr) talks to Randy Hetrick (@randyhetrick) who is the CEO of TRX training (inventor of TRX Suspension Trainer), a leading global brand in physical training and the industry leader in functional fitness. Built the company from a bootstrap start up to a high growth consumer brand with 130 employees and approximately $50M in annual revenues. Today's topic include: Why angel investors are better to receive money from than VC's (6:20), Starting a physical goods business and being omnichannel (13:08), Difference between being chairman and CEO (29:08), Why institutional MBA type CEO's suck (33:07), What industries he's interested in investing in (39:32), Sam's MMA weight cut (43:34), Navy Seal and business leadership (46:25) and Randy's angel investing, selling secondary and building his personal brand (55:33). See acast.com/privacy for privacy and opt-out information.

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

• 0:00Speaker 00

  This episode is brought to you by Superside. They're an always on design company that delivers great design at scale, fast, affordably, and within 24 hours. Go to superside.com/mfm, MFM as in my first million. So superside.com/mfm to check them out.

• 0:24Sam Parr?

  This is very casual, so I don't even care. We can record right now. It's recording now and we'll put that up. So this is very casual and I'm gonna ask you a lot of questions. And if you don't want to answer something, just say it. But uh

• 0:34Speaker 02

  Oh, I will.

• 0:36Sam Parr?

  Yeah, this is very casual. What's going on? You're Randy, right?

• 0:40Speaker 02

  Yeah, that's me.

• 0:42Sam Parr?

  So I am a fan of your guys' product and typically I own it. I have my own gym downstairs. I do research on the businesses that we talk to and the people we talk to. But in this case, I didn't do too much research on purpose because I only have the product as a fan of the product's perspective and I wanted to come from that point of view. But do you know, do you know what this podcast is and who we are or anything like that?

• 1:05Speaker 02

  Well, give me a little more background because I mean, I've been doing a fair number of these since this crazy making period took off and it's hard to keep up with them. It was funny because, and I love to support, right? Because I do so much in the entrepreneurial community. I love to support young entrepreneurs. So I'm, I'm basically, you know, taking pods that I normally wouldn't take just because it's, you know, we're here, we're home. And if I can support other guys that are getting stuff going, then I'm all about it.

• 1:36Sam Parr?

  And what you said, you've been doing a lot since the making. What are you talking about?

• 1:40Speaker 02

  No, I said, since this mayhem, right?

• 1:43Sam Parr?

  Oh, Corona thing.

• 1:45Speaker 02

  Yeah, I mean, I do quite a lot of stuff in the press normally just to promote, you know, to promote my brand. But since we've all been locked at home, there's a massive proliferation of digital content in the form, you know, sometimes in the form of, of video blogs and podcasts. And so I, in fact, I just got off another, another one with a, with a investment bank, an industry panel. Basically, but it was just a call. So I, I, I didn't have to be as pretty as I am now for you, Sam.

• 2:15Sam Parr?

  Good. Well, you look great. So let me, we're gonna, I'm gonna give you a, the 20 second or the two minute background and then we're gonna make this all about you. But so I'm Sam Parr. I own this company called The Hustle. And what we do is I started it, we just turned four years, like a, like a two weeks ago. So typically we have these conferences that where we host trade shows, conferences where we host tens of thousands of people each year. But we also have The Hustle and The Hustle is our daily email that goes out to millions of people. So millions of people log in and they get our news from us in their email inbox each morning. And it's a great business. It's a eight figure wonderful business that we've bootstrapped. And then we also have Trends and trends.co. It's our subscription product. So we, it's this premium content community, which is also a great business. So.

• 2:59Speaker 02

  Awesome.

• 3:00Sam Parr?

  And, and we do this podcast as a, that I think, I forget how many listeners we have, but we've had millions, millions of listens, over a million listens. And what this podcast kind of started as was me and Sean, my co-host, who isn't here right now. But we both have started companies and we always had these interesting brainstorms with people like you who were our friends. And we would just riff on interesting ideas and on cool insights. And most people don't have access to those types of people. And so we just do this publicly. And so that's what we're gonna do today. And so what I want to do right now is I want to learn a little bit about your background and kind of how you came to be where you are now and where you are now.

• 3:40Speaker 02

  Well, where I am right now is in my house in Mill Valley. I'm sort of like, I, I feel like Rapunzel. I spend all my time up in the tower above my garage, right? It's a become my sort of everything from the sports marketing department or sponsorship marketing department of TRX to the, you know, production studio for every one of our sort of, you know, blog interactions and that kind of thing. But, you know, I, I, so I'm the founder of TRX. I, I live in, in, you know, Marin County, prior to.

• 4:18Speaker 02

  TRX, I was a Navy SEAL for 14 years and actually created the first harness while I was at the Special Missions Unit and then just decided, you know, after I left SEAL Teams, I went to business school at Stanford and decided while I was there that this was a viable business concept, you know, which I think at the time I massively overestimated how easy it would be because the product was so great, but I used Stanford as basically an incubator, second year as an incubator for this concept and TRX is, I guess this is our 15th year in the market and you know, we're doing pretty well. We're one of the only truly global fitness

• 5:03Speaker 02

  brands and we, you know, we've, we've put close to 350,000 training pros through our, our TRX Coach qualification courses and we're in about, I don't know, somewhere between 50 and 70,000 gyms and studios around the world, most of which are closed right now, which is an interesting, you know, experience. But fortunately for TRX, we, we were for 10 years, all B2B, just serving athletes, training centers, clubs, trainers and boutique studios. And then about four or five years ago now, we decided, all right, we're ready to start

• 5:44Speaker 02

  to expand into the consumer, the true B2C consumer space. And, you know, it's good that we did that because obviously that side of our business in the COVID-19 environment is absolutely off the charts. The commercial side of our business is really struggling because all the, all the gyms and all the trainers are all out of work. So it's been a little bit of a tale of two cities over the last couple of months, but that's basically the snapshot of, you know, what TRX is and I'm, today I'm co-chairman and really promoter in chief of the, of the brand.

• 6:20Sam Parr?

  Do you own the company or have you guys been acquired or anything like that?

• 6:23Speaker 02

  Well, the, the company is, we have, you know, I raised a long time ago. Raised a bunch of rounds of of angel money when I started and then and then took on private equity back in 2012 and then recently recapped the business to exit those initial partners and bring in some new partners because that's one of the, you know, the dirty little secrets about institutional capital is once you take it it's very difficult to get rid of. So so it's a, you know, it's a private company but it's co-owned by by a bunch of us, including the capital partners that that came in in

• 6:59Sam Parr?

  Got it.

• 7:00Speaker 02

  twenty, at the end of 2018, beginning of 2019.

• 7:02Sam Parr?

  How much did you raise from the angel folks?

• 7:05Speaker 02

  Well, in the way back, I think I raised about, oh, I have to think back to my, around five million bucks from, you know, in several rounds of of angel money.

• 7:18Speaker 02

  And and that's great capital, right? For, I don't know, I don't know what the complexion of your viewership is, but you know, for folks that think about raising.

• 7:27Sam Parr?

  Yeah, don't use, you can use jargon. It's a very, it's a very highly intelligent, not beginner audience. So go ahead.

• 7:34Speaker 02

  Yeah, well, I mean, the by far the highest, I mean, look, the cheapest source of of money to grow a business is always what they call non-dilutive capital, right? And and that mostly in the form of sales. But if you're gonna take on dilutive capital, the, I think by far, the best source is angel investors for a couple of reasons. I mean, if presuming you pick your angels the right way. Because what you get in an angel investor, if you've chosen well, is you get somebody who has a lot of domain, relevant domain expertise, because angels tend to invest in things that they know and think that one way or another, they can contribute value to.

• 8:17Speaker 02

  If you pick the right angel, you'll get somebody who not only has domain expertise, but super passionate about your venture. Generally, angels are willing to to invest on a common stock basis, which, you know, I strongly recommend to entrepreneurs that they stay away from preferred structures up until they're ready to. To sell a significant piece of their equity or exit altogether. Because once you bring in a preferred layer of equity into the cap stack, everything's different in terms of the solidarity that you once had, across the team and the investors, because that changes.

• 8:57Speaker 02

  And it's a tough change in the experience of most people that I know to manage. So I'm a big fan of angel investors in which you get not only capital, but you end up getting pro bono experts effectively, who are excited to be involved in your venture.

• 9:19Sam Parr?

  How big was the company when you sold it to PE or sold parts to PE?

• 9:24Speaker 02

  Well, it's been two rounds of that now. So the first money we took, and I think we were around, I don't know, 30 million, something like that.

• 9:34Sam Parr?

  And annual revenue?

• 9:36Speaker 02

  And annual revenue, yeah. And who knows? We'll be north of, probably north of 60, somewhere. Who knows how far? Because COVID is an interesting experience. And we don't really get into specifics because we're privately held company. So if you're heading that way, we'll just redirect you.

• 9:56Sam Parr?

  Well, so you already said it's the ballpark is 60 million. It could be way higher, but that's a number that's been said. A company like TRX, you guys, so we talked to a lot of these direct to consumer folks, which you didn't start out as, but you are, definitely are now. But when I think of TRX, I think that you guys are in the same category as a CrossFit. Or, and this isn't an insult, but like Tony Horton, you guys are like a brand, right? Like you're not just some Amazon. You don't rank on Amazon and that's how you win. TRX is something that people know and it's a brand. Do you think that your valuation is significant? Like, would your multiples be significantly higher because of that, you think?

• 10:39Sam Parr?

  Or is it still rough to get a high valuation on products like this?

• 10:43Speaker 02

  Well, I mean, so for starters, I mean, we are, we are in it. We're the number one selling fitness item on Amazon.

• 10:49Sam Parr?

  Yeah, but I, but I didn't mean like your way, your path of success has not been like, well, we're just going to rank higher. Like it was just like people want to know us.

• 10:56Speaker 02

  No, yeah, we built, I mean, look, from day one, uh, this was never intended to, to be a get, get rich quick scheme, right? It wasn't a, wasn't a trend. I mean, I, it's funny because when I first started the business, there were no predecessors to the product that I brought to market, right? Our initial hero product, which was the suspension trainer. Uh, the, the idea there seemed kind of crazy to bring this strap into the club landscape full of machines and think that you were going to be successful. Um, but one of the things that we did that was, that was a really great choice, and I made plenty of less than great choices, but the one, one of them that was a great choice was really finding this sweet

• 11:38Speaker 02

  spot in helping training pros of all kinds, right? From, from chiropractors and physical therapists on one end out to, to MMA coaches and powerlifting coaches on the other end. And then obviously, you know, and under the, under the bell curve, you know, tons of personal trainers and group fitness instructors. Um, we decided we were going to become the part, the business partner of them and that we were going to give them this great tool that had, it's like I was described the suspension trainer like a magic wand, right? If, if you, if you know the magic, you can become a magician to your, to your clients and your athletes and deliver them unbelievable results that always, you know, you look at

• 12:19Speaker 02

  a 12 feet of nylon webbing and go, yeah, what can that do with the right pro and the right knowledge in that pro's head, you end up going, oh my God, this thing, I've never seen anything like this, right? And that's, that's a unique characteristic that not many products or services ever have, which is you have people that come in with a very low expectation and leave with a very high level of astonishment. Um, and so that's been a, a powerful, um, benefit to us. And then we diversified the, the, the company's scope of operations. We became, you know, the Largest provider of professional education to trainers. And then we broadened the product line significantly. All the while focusing on this premium brand that you alluded to.

• 13:05Speaker 02

  Which I do believe brings, you know, an enhanced multiple. The reality, though, is that long term, if all a company wants to be is a product company, but that delivers durable goods because our stuff lasts for fricking ever. You know, way too long.

• 13:23Sam Parr?

  Yeah, no, I've had the same one. I've had the same one for four years. I got, it was gifted on Christmas and I've had the same one for four years now.

• 13:31Speaker 02

  Yeah, I mean, and that's, and you're, and four years is nothing for a one on one, right? I, I talk to people that are, that are still traveling around using our like first gen strap from 2005 in their bag. You know, and, and it's, I mean, on one hand, it's a compliment. On another, it's a nightmare, right?

• 13:47Sam Parr?

  You need, uh, what's it called? Plan, planned obso-

• 13:49Speaker 02

  And obsolescence, yeah.

• 13:51Sam Parr?

  Yeah, it is a break after like, you know, 5,000 pushups.

• 13:55Speaker 02

  We never, we never planned that because I, I really wanted to be, and I, look, I, I came at this whole thing, you know, I started my entrepreneurial career at 39. So after a career as a, as a Navy, I, you know, I had a set of values that focused on premium level delivery. And if I was going to be associated with this brand, then that's what we were going to do. So we built everything that way. The unintended consequences, the one that you and I are beating around right now is that your stuff lasts forever. And that, which means that, you know, you either have to create more products to serve your existing customers, which is expensive, right? Cause R and D is not cheap.

• 14:38Speaker 02

  Or you have to constantly be in search of new customers, which is not cheap. And so, you know, it's, it's, I think that's why pure product codes get, uh, what I would say, you know, unfair valuations relevant or relative to some of these faker, more fake companies that are, you know, tech based, uh, companies that have the potential, not the promise. But the potential to scale infinitely, right? And so those kinds of companies tend to get higher valuations than gear companies. And that's, that's just one of those realities. And it's part of what, you know, we've never planned to be just a gear company. We, we have always planned to, to expand our services into subscription services and content. And, and that's what we've done.

• 15:23Sam Parr?

  Right now, you guys make, what are your revenue streams? Your revenue streams are coming straight from, your revenue streams are purchases from coaches and things like that, or not, um, well, coaches and chiropractors and who, like, you know, B to B people servicing clients, right?

• 15:39Speaker 02

  We make, well, we're an omni-channel distributor. So, you know, on the, on the commercial side of the business, uh, which is the B to B side, yeah, we sell the gym, we sell gear to gyms.

• 15:49Sam Parr?

  Yeah, but that's what I'm gonna ask about. What is education?

• 15:51Speaker 02

  Education to gyms and trainers. Well, yeah, so we do, so we, we became early on, I mean, if you think back, nobody knew how to use a strap that didn't stretch and didn't have any weight attached to it. So if I was with you or one-on-one, I had almost a hundred percent close rate in the, in the earliest days. Problem was, I can't be everywhere, right? So, and if I wasn't with you and you were just looking at a picture of it, say on a website, the conversion would drop to, you know, five percent. So that was something that I realized very early. All right. Well, I have to be able to scale my knowledge on how to use this thing. And so I brought in a guy who was introduced to me very, very

• 16:32Speaker 02

  early in the company's history, a guy named Fraser Quelch, who had been a career trainer and had written a lot of education in the form of courses for other pros, right? To teach other pros the various skills. I mean, how's a trainer or a coach learn his or her craft? They usually get a basic certification from a entry level certification body like American Council on Exercise or, or NASM or NSCA. And then they go out into practice and they start developing practical skills. And along the way, they want to learn more about, you know, a particular tool or a methodology or, and so they, they do, they have continuing education requirements, right? Just like a doctor or a lawyer, they have

• 17:16Speaker 02

  to, they have to do so many, uh, continuing education units per year to maintain their basic certification. We became one of the leading providers of those CEC courses that, that helped, helped a new trainer or coach move toward mastery.

• 17:32Sam Parr?

  And that costs money?

• 17:33Speaker 02

  Yeah, yeah, our, our normal, our normal, we have about 10 courses of different kinds.

• 17:38Sam Parr?

  Oh, cheap, not $89?

• 17:39Speaker 02

  All B2B. And the, well, no, traditionally, they were 295, right? So 295 bucks for a one day qualification course. And it was eight hours live in person. What you're probably seeing now is we've done some, some pretty incredible pivots with COVID-19 hitting and changing the landscape. And so one of the things we did early on was try to figure out, hey, all right, number one, we're not going to be able to provide education, right? As long as this thing lasts, because you can't get people together. Number two, most of the people who come to our courses are out of work. And so what, what, what can we do to support them was sort of idea number one. And then number two was, how do we take this moment, which is really a bunch of lemons being thrown at us and make lemonade out of it?

• 18:24Speaker 02

  And we decided that, well, we can take our courses, we can make them free, figure out how to, how to deliver them through Zoom instead of live. And we'll do that as long as, as this, you know, crisis continues. And we'll just try to fill our bucket with a whole bunch of new pros of all kinds of stripes, right? Who on the other side of this will then appreciate that, that we helped them out when they were down. And also

• 18:50Sam Parr?

  So then you guys have revenue from selling the, the, the The main product, the TR, the main TRX, which it looks like you have a few varieties, but I imagine most is from the main one. And then you make revenue from these 100 to 200, 100 to $300 B2B digital products. What, what's the breakdown? Is, is, is like, is, is the actual product 80% of sales?

• 19:12Speaker 02

  Oh, it's, you know, it's falling pretty, pretty fast as our, as the education. And now the, what, what's the big epiphany and the big unlock that's gone on over the last two months is that we massively accelerated our, what already was a migration toward digital delivery and subscription models. And so, you know, we've also got an app that, that we make money off of that's a $4.95 a month app that supports the End user and and we we have turned off the paywall on that during COVID, but that will go back on once everybody gets back to work. You know, we're really using COVID 19 as an opportunity to develop new,

• 19:57Speaker 02

  to solidify the relationships with our existing customers and and bring new customers into the tribe through a free door that eventually, obviously, everybody knows that no business can keep their services free forever. But in the meantime, we're using it as as a big opportunity to, you know, to build new relationships. So the the mix is is really changing.

• 20:17Sam Parr?

  What was the mix pre COVID?

• 20:19Speaker 02

  That I think, you know, you're not, you know, I mean, it's probably probably 70 30 between, you know, uh, equipment, but you're defining equipment way too narrowly, right? You're looking at our hero products, which are the suspension trainers. We do the entire ecosystem of functional training. So from we have, you know, steel ecosystems that you built the infrastructure that, you know, that not only you hang straps on, but you fill with kettlebells, bands, balls.

• 20:48Sam Parr?

  Yeah, which I, which I have used.

• 20:50Speaker 02

  Everything you would see in a gym.

• 20:51Sam Parr?

  Do you have a sales team to handle that? Like, have, did you have to do like hand to hand combat for that? Or is is a lot of it inbound and you're just fulfilling orders?

• 20:59Speaker 02

  Um, it's some of both, right? I mean, no, I don't think any business, it certainly doesn't exist for very long as as all inbound flow, right? Generally, you have to be out there.

• 21:09Sam Parr?

  Well, I guess, I mean, but are you like running paid ads to them? Or do you actually have to have a sales force?

• 21:13Speaker 02

  So, yeah.

• 21:13Sam Parr?

  Hitting the phones and and making it happen.

• 21:16Speaker 02

  Oh, both, yeah, both. We advertise into the commercial landscape through the traditional, you know, means to reach gym owners and trainers, but then we also have a pretty significant direct sales force inside and outside that does.

• 21:32Sam Parr?

  I'm looking at, um, I use this tool that guesses website traffic. I, if I, looking at this tool, I would imagine that your sales are like 4X in April, what they were in February. Um, it looks like you guys are just like, like you, your web traffic has gone through the roof.

• 21:48Speaker 02

  Yeah, well, it certainly has. And the reason is, I think, less to do. With anything we've changed in our marketing than with the reality that, you know, as a 10 year B2B business, we we've put, you know, we we serve tens of millions of people around the world who identify themselves as TRXers, but ironically had never bought a product for their home, right? Because they use us in the gym. And I run into people constantly, some of my best friends, you know, will tell me like, oh, I've never bought, you know, they'll call me and be like, hey, can you give me a friends and family, you know, discount? And I'll be like, you don't have one of our straps? These are people that I know are diehard TRXers. And then they'll be like, well, no, man, I do it three times a week in the gym, you know?

• 22:33Speaker 02

  And so that that was that was a reality that comes with being a B2B business for 10 years. But what happened with the virus was when all the gym doors got shut, all of a sudden, all of those installed, that installed base of TRXers went, well, how the hell am I going to do my do my workouts? And so they turned to our Amazon site and our website. And, you know, that's that's been, I believe, the the big source of

• 23:00Sam Parr?

  You have the unique advantage of seeing like consumer goods or well, hard hard goods and digital products. So you're able to see how they both work. And my, from my perspective, and I've been an investor and I have friends who sell direct to consumer hard goods. And then I also have a digital company and I've invested in them as well. What my perspective is that the D to C guys can grow their revenue from zero to not zero very quickly, but there's massive supply chain headaches, whereas digital, it's often the opposite, where it's maybe a little more challenging to get started, but the margins are way better. You never have a supply chain issue. What, knowing both sides of the business, which do you prefer?

• 23:46Speaker 02

  Well, I mean, I, I think that which one's easier and makes more money. You know, I think, yeah, well, the reality is that I think, I think creating a digital company, pure digital, is, is hard because it's a very cluttered field, right? It's a, it's, there's, especially now, I mean, this, this virus has unleashed the digital universe, right? And so now, just like any other marketplace, there's going to be this explosion of, of would be, you know, participants, and then there will be a consolidation. And, and some of the, you know, they'll separate sort of the wheat from the chaff. And I think that we're in a really unique position because we started as a physical products company.

• 24:31Speaker 02

  Then we became an education company, education and content, right? Because we made, I mean, hell, we probably did thirty-five DVDs prior to DVDs becoming just intermediated by digital delivery. We've obviously taken all that content and repurposed it into our digital ecosystems. But then we, we became a brand, like a, a really significant premium brand in the space. And then we stretched that brand around the world. So now, we're in a really unique position because we have the best of both worlds, right? We have a, a large customer base that bought our physical gear and that then came to group classes in clubs around the world that we helped develop and, and educate the instructors who were delivering those.

• 25:16Speaker 02

  So they got comfortable and identified with our brand. And then, as we've done more and more consumer branding, we've extended that brand from the, the pro space, which is great from a credibility standpoint, because if trainers and physical therapists love you, the consumer at home tends to go, oh, well, these guys must be, you know, a quality operation. And so now, we're in a really unique position. Now, we're turning on some new digital engines, some subscription engines, that give us the best of it all, right? We're, we will have our products, which you're right, you stock out of, I mean, we're, you know, we've stocked out over and over and over during this thing, because...

• 25:55Speaker 02

  No one plans for a, you know, multi-time step function change in the demand curve. Right. And you, you, you scramble to try to catch up to it. And I think a lot of us will find ourselves just about the time we're, we're caught up and we've got this, you know, a whole new, uh, stockyard full of products.

• 26:13Sam Parr?

  Yeah, it's scary.

• 26:13Speaker 02

  Maybe the demand will settle down a little bit and we'll end up with more product. Yeah. And it's, but that's just, that's part of being a physical product.

• 26:21Sam Parr?

  Well, that's my question. Which, which one do you find?

• 26:23Speaker 02

  Supplier.

• 26:24Sam Parr?

  Which one do you personally enjoy more, both in terms of working on and the results?

• 26:30Speaker 02

  I'm a, uh, I mean, I'm an inventor, you know, so, so that is part of my, like, it's, it's a, it's probably what made me want to go into the Navy SEAL teams. I, I had a MacGyver bent to me and I came up with an old man that can fix literally anything with almost nothing. And so I, I sort of grew up, you know, out in the garage until, you know, the middle of the night, holding a flashlight for my old man while he was, you know, jerry rigging some kind.

• 26:58Speaker 00

  All right. This episode is brought to you by Superside. All right. So here's the deal. I'm incredibly impatient, like horribly, horribly impatient. And if I get an idea at midnight, by 8:00 AM the next day, I want it done. Um, you know, but that's really hard because if something needs to be designed, where am I going to find a designer at midnight to try to make this thing, bring it to life? Um, so, you know, I don't think I'm alone. Other startups, even huge companies need design help fast and they just don't have the internal resources or expertise to get it done. So how do you get reliable design done without dealing with expensive agencies and lots of freelancers? You use Superside. That's our sponsor for this week. Just go to superside.com/mfm and tell them what you want. They have a team of designers that can get it done fast. You know, they are 20

• 27:40Speaker 00

  times faster than hiring, you know, hiring a designer and 50% more affordable than a traditional agency. So if you need high quality design done fast, try Superside. Lots of fast growing teams that are stretched are using them already. Check them out superside.com/mfm. I've used them before. I love them. Check it out.

• 27:57Speaker 02

  Kind of a fix to an old motor or to whatever, it could be anything. So I really enjoy the process of product creation. And I spend a lot of time and energy at TRX developing our next products. I also, though, appreciate and enjoy creating great content, whether it's in the form of pro education or whether it's in the form of end user content, you know, workout content. And so I would say I like both. I like the economics of the digital side of the equation for the reasons that you've pointed out, right? You don't stock out of it and you don't, it scales infinitely.

• 28:40Speaker 02

  But I don't think that it's an easy business to just say, oh, I'm going to become a digital content publisher and I'm going to, you know, make a billion dollars. Yeah, like you and the other billion would be digital content producers that are out there all right on the same path. And so, so I like them both. I like the multiples-

• 29:00Sam Parr?

  So I'm going to ask you about some-

• 29:02Speaker 02

  On digital content and subscriptions.

• 29:03Sam Parr?

  And I'm going to ask you about interesting ideas that you're seeing in new opportunities. But first, you said something that you're the chairman, right? So does that mean you're not the CEO?

• 29:12Speaker 02

  Yeah, I'm, well, we brought in a president. You know, I've tried a number of times to get out of the day, day in, day out, management of the organization because a couple of reasons. One, at this point, you know, I mean, number one, there's one founder, right? And so you've got a certain amount of founder cachet that is really valuable in working with the press, in working with key accounts, right? In generating love around the brand that there aren't others who can do that. There are others who can manage the steady state, sort of linear growth of a, you know, of a midsize and growing company. In fact, there's those that can do that better than me

• 29:57Speaker 02

  because I'm more of a startup guy. So I've tried, you know, several times over the last, call it six years, to get more out in- Into the market and less in the conference room. And, you know, we hired a president about eight months ago, who he and I have been doing a transition where I can, you know, basically hand most of the day in, day out over to him and to, you know, to the, to the team. And then with our new partners, they're very good at the financial engineering side of the equation. So I'm not right. That ain't, I mean, that is just not something that turns me on.

• 30:37Speaker 02

  I, I like the outcome, but the process is just not something that, you know, floats my boat. And everybody's, everybody's cut a different cloth. So what I'm really focusing my energy on is promoting the brand, developing new products and, and looking at new initiatives, right? That's something that I'm, I'm very good at and passionate about is sort of trying to see.

• 31:01Sam Parr?

  We're very similar. So I've done the same thing.

• 31:03Speaker 02

  And what, what the next opportunity is going to be.

• 31:05Sam Parr?

  Who handles a lot of stuff and I do the exact same thing where I can lead vision, but I also come at the very bottom and I could just change pixels and, and invent. I do it digitally, but the same exact crap where I'm just, I have my computer up late at night and I'm just making stuff and most of it sucks, but every once in a while I'll show it to someone and they're like, oh yeah, let's go make that.

• 31:26Speaker 02

  That's the product creation dilemma, right? Most of it, most of it goes nowhere, but, but about every 10, you know, every, every 10th effort, you go, ah, wait a minute, there's something to this one, right? And that's, you know, and that's, you, you gotta be wired to not get frustrated by that. Just like, you know, just like folks who like to manage at that mid level. They don't like the, the scariness and the ambiguity and the, you know, the vagaries of, of the startup or creator. They like the, the consistent predictability of, you know, weekly staff meetings and a checklist and all the things that make me sort of.

• 32:04Sam Parr?

  Well, this is, and this is a consistent pattern that we see. I don't know if you know this woman named Sophia Moroso, but she had this company called Nasty Gal. And it scaled to, I forget the exact number, one or 200 million a year in sales and had multiple offers around half a billion and. It they they she screwed it up for a bunch of reasons. One of the biggest ones is she was like, I'm a I'm brilliant at creating. I'm horrible at operating. And I I too am like that where I'm brilliant at creating, but operating, I just don't find it to be exciting. And I think that most people who start stuff are the same way. But I think there's actually a huge issue in your in Silicon Valley, although you may or may not run in the Silicon Valley crew,

• 32:46Sam Parr?

  particularly amongst that group of people. I've noticed there's a huge problem of people starting stuff who are afraid to hire people to actually run the thing. And what I've really embraced, and it took years to learn this, is that there's actually people who like creating the car from scratch and designing it. And then there's people who love modding it out and making it better. And in having both is really important. How did you hire your president? And what was that like going through that process? And also, how many mistakes have you made in hiring the wrong people? Because that sucks, too.

• 33:16Speaker 02

  Plenty. Yeah, plenty. I mean, I mean, look, first of all, so I I operated the company, you know, every single day for its first 10 years. That's a long time, right? And at that point, when you're when the the engine of both creation.

• 33:31Sam Parr?

  Well, why didn't you do that earlier?

• 33:32Speaker 02

  And management, that's like dogs years, right? Well, I think I think that a couple reasons. One, I did try a couple of times, right? Starting around year, maybe around year eight to to bring in, you know, a president. The idea my idea was always I'll bring in a president. And I never had I never took a CEO title for years because I just thought it was sort of ostentatious for a little company to have a CEO. That was my personal opinion. So I was the president. So when I brought in a president, and the first one that I brought in, it really aligned with bringing in private.

• 34:10Sam Parr?

  Oh, why did you wait eight years? Like, why not in year three?

• 34:13Speaker 02

  About year 10. Well, because we were still very much evolving, right? And I think that one of the challenges with bringing in somebody to take over the the daily management is you have to be pretty well defined about where you're headed as an entrepreneur before you can now hand the wheel to somebody, right? If you're wheeling right, wheeling left, that's not exactly the moment to be like, hey buddy, here, take this, right? Because then the guy's like, where do I drive, man? So, so I think that's the answer. The short answer is I wasn't ready yet in terms of our definition to and and the enough certainty to the general direction of our course to want to hand that over.

• 34:56Speaker 02

  But at about year eight, I was, and I said, okay. So I handed it over the first, probably the first two presidents that I hired, which were both great guys. But the mistake that that I made largely from being, from listening to my then private equity partners that, you know, had had sort of their, their business school one-on-one playbook they were trying to run, which is go hire

• 35:19Sam Parr?

  Kill me, kill me.

• 35:21Speaker 02

  A quote unquote best practice president.

• 35:22Sam Parr?

  Kill me.

• 35:23Speaker 02

  Well, okay. Yeah, so you're gonna, yeah, I'm sure, I was just gonna say, I'm sure you're gonna, you're gonna be hearing something familiar here, right? Which is that a lot of the institutional capital investors, they, they, they haven't run businesses themselves, so they want to execute what they learned in business school, which is, you know, the idea of best practice. Well, what is best practice? That's the problem, right? And, and generally, they will say, oh, it's someone from the upper mid levels of a great big, successful company that we've all heard of. What I've learned, and it took me two, two go rounds to learn this, by the way,

• 35:56Sam Parr?

  Totally.

• 35:57Speaker 02

  Is that that is almost a disqualify.

• 35:59Sam Parr?

  I need a guy with an MBA telling me what to do. Like, I need a fucking hole in the head. I don't like, like, what, like, oh, my God. I, so I, I've had a, I got lucky. I've had a lot of great success. We have a guy, Adam Ryan, who's our president, and I've known him since high school. I'm from Missouri, so I'm not from like this fancy San Francisco stuff like I live now. And that was awesome because Adam has wonderful at being scrappy and things like this, but he also can be like a big company suit if you wanted to. And what I found is, and I've hired some MBAs and it didn't work out. What I found is these gray hair, they're not actually gray hair, but it's more figurative. These best practices, this bullshit, they just, these people can't roll with the punches. And I, I've never had success with that type of,

• 36:40Sam Parr?

  I've, I've hired, I have a few businesses on this, like little investments I've made, and we've hired CEOs who were like this. And it just, man, it never works. And you, but you think that it should.

• 36:50Speaker 02

  Yeah. Well, it's, it's a little bit akin to trying to get a cat to bark. Cats meow, dogs bark. So saying that, well, you know, either one of them should be able to, to do this thing is just not right. And you wouldn't do it because it would be preposterous. And yet, what people do all the time, especially institutional investors make this mistake. They assume that because somebody operated at a scale, right? And at a successful brand, that, well, that person clearly can, this will be easy for that person. And it's, it's almost the reciprocal because what, what they don't realize or haven't thought through is those people are, are playing a different game. Like

• 37:32Speaker 02

  Michael Jordan was, you know, arguably the best basketball player in history. When he went over to the major league baseball, right? He hit with a thud. Why? He's a great athlete. We've played a different sport. So, so what worked for him in, on the basketball court, you know, doesn't work when you're on the mound of a baseball diamond. And, and so I think it's a very similar thing. Big company, big company leaders have large staffs, generally a lot of certainty in the direction that they're heading, you know, uh, kind of single digit, uh, management objectives, right? Up or down. It's, it's,

• 38:08Sam Parr?

  Yeah. You're almost more like a politician. You're a politician a little bit.

• 38:11Speaker 02

  Decision-making process.

• 38:12Sam Parr?

  So it's like,

• 38:14Speaker 02

  Yeah. And that's the emphasis of a small company, right? A small company. And by that, I mean, anything south of a hundred million bucks. Is it's constantly pivoting and and the the the windows to make those pivots are not, you know, years, they're not even quarters, you know, you're lucky if they're months. And so though I think the difference in the operating cadence and style is profound. And just going to a big company, a successful big company manager and thinking they're going to be successful as a small company.

• 38:44Sam Parr?

  Yeah, I think that look.

• 38:45Speaker 02

  President.

• 38:45Sam Parr?

  Once my business.

• 38:47Speaker 02

  Almost never works.

• 38:47Sam Parr?

  Financial arbitrage machine and I need someone to figure out how to milk out 3% off the bottom line by using less materials, then I'm going to get one of those nerds. But until then, I need innovative people who understand how to be, it's a perfect balance of art and science, who understand like financial analysis and things like that, but who also can understand what motivates buyers and who can think of widgets that, you know, make people feel good and want to purchase and be, it's just, I've been through this, so I empathize. You are you investing in anything at the moment or is 100% of your time on this or like on Saturdays and Sundays, are you tinkering with anything totally outside

• 39:30Sam Parr?

  of this field? What interests you right now?

• 39:34Speaker 02

  Perpetually. Yes. Yeah, I'm, well, I mean, there's a lot of different things that interest me. I'm, you know, I I'm an angel investor in a bunch of different enterprises, both inside and outside of health and fitness. And I, because I'm a super, you know, I'm a startup nerd. So I I live and breathe, you know, that and I teach, I teach classes at both my alma maters at at the Marshall School at USC.

• 40:03Sam Parr?

  Dude, you're badass. So you're a fitness guy.

• 40:06Speaker 02

  Stanford. So I get to see a ton of young.

• 40:08Sam Parr?

  You're pretty.

• 40:09Speaker 02

  Well, I'd have to put that in quotes.

• 40:11Sam Parr?

  Technically, I'm right, though.

• 40:12Speaker 02

  I'm not sure that I would, that I would put academic.

• 40:14Sam Parr?

  So.

• 40:16Speaker 02

  Yeah, but I'm a, but I'm a lecturer, right? Not a professor. So so that means that all you had to do, all you had to do was have gone there and then have done something that didn't suck subsequently, right?

• 40:26Sam Parr?

  You can kick someone's ass, but then also like, you know, talk to them about Aristotle and like Britain's economic policy and how it impacted imperialism in the 1960s.

• 40:34Speaker 02

  I'm an eclectic dude. You got that part right, right? I'm an eclectic dude and I'm a super geeky inventor, you know, which, which I love. I mean, I've got like 40 patents that I didn't, I care less about the patents. What I cared about was the thing, right? Like bringing the thing to life. And then once you do, particularly in today's digital economy, but you got to protect it because if you don't, you'll be knocked off and blown out of, you know, blown into oblivion, uh, almost immediately with factory direct stores out of China that have FBA shops on Amazon now. So, you know, so that's why I became, you know, like I, I joke about having a minor PhD in intellectual property law that I never wanted, um, but I had to learn.

• 41:17Speaker 02

  And so all of that, like all the nuts and bolts of creating and then, you know, articulating a vision and, and wrangling a team to, to, to share that vision and then moving that thing forward. That's the stuff that, that makes my, my heart pound. Well, I mean, I, I suppose we'll wait and see until they, uh, until they, they pan out. But, you know, I've got, uh, no, not yet. I've, I'm sort of a equity investor, right? I'm, I'm, you know, I, I make a good living now and, and, uh, so I'm not, you know, I'm not, I'm not in any of these for a quick turn, but I think that they all will. Um, and, you know, most of them are in areas that I, that

• 42:00Speaker 02

  I, I tend to, to both invest and advise only in things that I think I can make a difference in. I've taken a couple of, of different flyers on, on things that, you know, buddies that I trust and are domain experts in other areas have said, hey, man, you should get in on this, you know, but I'm a, and, and also let's just qualify this. I'm a small, you know, investor. All, I'm not, I'm not placing six-figure investments one after another, but I, but I, I tend to invest, um, in things where I can help the, the operating team based on my own experience, right? And, and really experience is just the sum of all your mistakes as much as anything else. And so I, you know, I can help.

• 42:44Speaker 02

  Early stage businesses set up their their partnership arrangements, right? Figure out what makes a good partner, figure out what capital sources that make the most sense for them are. Because I know both the pros and the cons of all of them at this point. And then, you know, team selection, that's, I mean, I've been leading teams since I was, you know, twenty two year old frogman. And led all the way up to, you know, the national level. And so I've I've got a lot of experience, whether I've done it all right, I certainly haven't, but haven't done all wrong either. But I've got a lot of experience in in helping, you know, build culture, create team dynamics that are that are durable and

• 43:26Speaker 02

  and performance oriented and build brands. So if it's in those categories, that's kind of my wheelhouse.

• 43:34Sam Parr?

  Are you an MMA fan? So I'm a huge MMA fan and I, this quarantine thing.

• 43:41Speaker 02

  Yeah, big time.

• 43:41Sam Parr?

  I've gotten very healthy, much like I've done Ironman and things like that, but I've like actually started using my TRX, by the way, and lifting weights and I've gotten strong, but I I have a weight loss challenge and I have five hundred dollars on the line and I have to hit it by Saturday and I have, I'm gonna crush it just through diet and exercise. But I've began just, I'm drinking like crazy amounts of water because I want to do like a MMA weight cut and just like destroy the the the the benchmark that I've got a, yeah. And so I'm I'm currently drinking three gallons of water a day and then tomorrow and the next day I'm gonna taper down. I just, my goal is just to crush everyone. What a.

• 44:22Speaker 02

  That's great, that's great. Yeah, well, yeah, I've been an MMA fan since before there was MMA. Because, you know, coming up in the SEAL teams, right, you do a, it was very eclectic in terms of the the the coaches that we would bring in. So I I was a, you know, I've been the the full gamut. I was I was an MMA guy before MMA was termed, right? Everybody was still purists in their arts, but because I had this Bedouin lifestyle of constantly deploying and coming back, I didn't have that luxury, so I. Came, you know, I'd been a kickboxer and a wrestler in high school, kickboxer through college. Then, uh, then I got into jiu jitsu at the end of college and, and leaned into that, you know,

• 45:04Speaker 02

  hard in as a SEAL, but it was never, I never had the luxury of being in one place for more than a couple of years at a time. And, um, and so, but I've been a huge fan of, of, uh, we did a ton of sponsorship actually of the fighters in the UFC prior to Reebok buying the, you know, the global rights, uh, to, to, uh, the sponsorship placements. Um, so yeah, I, I, in fact, Mike Dolce could help you with your, with your weight cut, right?

• 45:35Sam Parr?

  Do you know who Ben Askren is?

• 45:36Speaker 02

  He's a freaking master at that stuff.

• 45:37Sam Parr?

  I've become friends with Ben through this podcast and media. And so he's been helping me out and I'm name dropping a little, but I'm, I was a huge fan of his. And then I started talking to him. I'm like, that's awesome. I'm friends with someone I looked up to. And then I think we're having Michael Bisping come on and do a podcast as well.

• 45:52Speaker 02

  Yeah, both of those guys are great, man. I mean, Askren's a stud wrestler and Bisping's just, you know, you talk about one of the veterans of the, of the sport. I was so happy when, you know, he finally got to the mountaintop after all those years of grinding, fighting everybody that, you know, that was, that was there to be fought. And he just kept sort of somehow falling just short, but he finally got there before retirement. So I was stoked for him.

• 46:17Sam Parr?

  Sometimes whenever I talk about like MMA and UFC, I'm like, I think I'm being too niche right now. No one cares. I think it's way bigger than I actually realize. Um, but when you were in the SEALs, this, the SEAL thing interests me for two reasons. One, Jaco Will, is it Willock? Willock? That guy's everywhere right now. So, and he's always fun. He's got good clips that are fun to watch. And then I'm also reading David Goggins' book, Can't Hurt Me. Um, it randomly came up on my audible thing and, uh, I started listening to it. It's, it's emotional. It's sad. It's hard to listen to. Have you, have you heard it or read it?

• 46:49Speaker 02

  I haven't. No, I mean, I know, I know David, um, he and I did never work together, but I, you know, you cross paths. Same thing with Jaco. Those guys are, those guys are both way behind me in terms of age, but the, and so in the SEAL teams, you know, if If somebody is more than a couple of years ahead or behind you, the the likelihood of you knowing him is possible, but not high unless you worked at the same places, right? In which case then you then you transcend the age barriers because you're all, you know, at a at a command together and you you you work together. And I never worked with either one of those guys. In fact, I think as I was getting out, they were both coming in. But I certainly know, you know, of both of them, and I I like what what they've

• 47:34Speaker 02

  both done with their brands and, you know, Jaco's done some really, really cool stuff with his podcast and and his other appearances.

• 47:42Sam Parr?

  Oh, I haven't watched the other day on.

• 47:43Speaker 02

  On Billions, which I I was laughing about. He he, yeah, so this new, the new season, he's he popped up in that. And I I was like, yeah, man, that's what I I love it when I see other frogs doing doing good stuff versus stupid shit where they're out there, you know, telling and selling secrets that are gonna, you know, put other guys at risk, which I do not admire. But I but I really love when I see guys out there doing great things post career because that's what the whole country is supposed to be predicated on, right? It's the citizen soldier. You come in, you serve for however long, you try to serve as well as you can, and then you go on to do something, something else cool out in the civilian community and be able to share some of the things you learn. I love that Jaco does that. I love that David does do that as well.

• 48:25Sam Parr?

  Like you, where I'm just like, I like to invent things and I like selling them and I like making money. What I didn't was what I I always did track and field and running and weightlifting and swimming, and those are all individual sports. And what I really struggled with early on was how to be a leader. It's super hard because you like, for a lot of people, they start stuff because it's, like I said, it's fun and it makes money and it's cool. They don't. But then they like, if it was successful, then they're like, oh, I gotta be like a leader of men and women, not necessarily a creator of products. What do you think, do you think that, I mean, I know the answer. The answer is definitely yes, but what specifically helped being in the SEALs in terms of business leadership and managing a team? And by the way, how many people do you have?

• 49:06Speaker 02

  Oh, we've got about 100 full timers and then we, we, you know, we use another 350 master instructors to deliver our education courses. So they're 1099s. But, you know, so it 100 full time, plus or minus.

• 49:24Sam Parr?

  Do you think people would say you're a good manager?

• 49:26Speaker 02

  Several hundred that we employ as contractors. I think they'd probably say I'm a better leader than I am a manager, right? That's, that would be my guess because it maps to, I mean, I can manage and I, the distinction between that to me is quite a wide gap, right? There are, there are people I think who can do both at a very high level, but not many because the, the, I believe that most of the characteristics that make someone really good at one or the other almost prevent you from being good at both. I mean, there are some extraordinary people I think out there that can do both, but, but management requires just a, a different level of, you know, attention

• 50:07Speaker 02

  to, to, to minutia. I want to say detail because I'm very detail oriented, but ongoing minutia, which is important in making a business go. You know, I don't have the patience for it. And I also, you know, I never, I, I never really liked corporate management. I, I like leadership a lot and leadership's about storytelling, being authentic.

• 50:31Sam Parr?

  You think you're good at that? I mean, you seem very charismatic. Do you think you're a good leader?

• 50:36Speaker 02

  Yeah, I, I think that's one of the strengths that I have developed largely as a result of my experience in SEAL teams.

• 50:43Sam Parr?

  And that our listeners can learn, you think?

• 50:45Speaker 02

  Well, I mean, we do, you know, so I do, I do a key, I do a keynote that is pretty massively oversubscribed frankly, called Lessons of a Frogman. And it's leadership lessons, I, business leadership lessons that I learned as a SEAL, which turns out almost all of the key lessons that I know, I actually learned as a SEAL, the leadership lessons. Not necessarily the tactical business lessons, but um and and you know, you would think, and I actually had one of the assistant deans at Stanford Business School. When I was out interviewing for to to to be accepted there, you know, give me this sort of patronizing, put his shoulder, hand on my shoulder and basically said, well, that you know, why do you want it? Why do you think we should take you, Randy? And I talked about, you know, my leadership experience.

• 51:29Speaker 02

  You know, I was at that point, I was at the Special Missions Unit as a as a troop commander and had been in the SEAL teams for, you know, I don't know, 10 years or so. And, you know, then he put his hand on my shoulder and said, well, then, uh, it's it's a bit different. Leading in the real world than it is in the military. Don't, don't, don't you think? Because out here, you can't just One idiot. On your collar device and have everyone snap to and do what you say. And I'll never, I was so astonished, man. I was like, is this guy for real right now? Or is he baiting me? And and I basically said to him, you know, uh, Dean, if that's your view on military leadership, then I think it says a lot

• 52:11Speaker 02

  more about how little you know than it does about the subject of leadership. And, you know, not surprisingly, I didn't get in that time, but uh, but but, you know, I think that if you're talking about people and groups of people, there are many, many more commonalities to how to lead and motivate the group. Then there are differences depending on, you know, like irrespective of domain, because you're talking about anthropological behavior. And that changes very slowly over millennia, you know, and whether you're a, you know, a baker or a fricking frontline soldier or a software developer, if you're dealing with other people, humans behave, you know, largely the same way.

• 52:54Speaker 02

  They have different microcultures, but but we're all part of the Homo sapien species and we we've evolved our behaviors uh, over, you know, hundreds of thousands, if not millions of years. So the commonalities are that people want to be inspired. They want to be, they want to associate with something they believe in and other people who share that belief system. They want to feel important, right? Like they're contributing. Everyone wants approval and and reinforcement that what we're doing is is good.

• 53:24Speaker 02

  And so figuring out how in a context to provide those basic human needs is what leadership's all about. And I think that it's not actually very domain specific, whereas management arguably is much more domain specific, right? Depending on the industry. And I think that requires, you know, a different set of skills. And very often, the things that make someone a good manager prevent them from wanting to be on the podium, prevent them from wanting to take risks, right? And those are things that, you know, you can't lead anybody if you're not willing to get on point. And

• 54:00Sam Parr?

  Is this lessons from Frogman?

• 54:02Speaker 02

  Leading and managing are related.

• 54:03Sam Parr?

  Can I Google that? Can I watch it?

• 54:05Speaker 02

  I hope not, because it's one of the, it's one of the, you know, the side hustles that I enjoy doing. I actually, it's, you know, obviously I haven't been doing them during COVID-19. But, but I'm, I'm working on a couple of books in the early stages. One of them is, is going to be that. It's going to be the, a deeper look into the substance of my, you know, keynotes that I do for corporations. The other is, is going to be an entrepreneur's survival guide, because what I discovered, right, is that the gap between what I learned at Stanford Business School and the stuff I actually needed the day I launched this scrappy little strap startup couldn't have been

• 54:46Speaker 02

  wider, right? And, and that's at one of the best business schools in the world. But what it, what those business schools really prepare you to do is enter as a mid-level manager into a large organization. Very few of them prepare you to be a boot scrape entrepreneur, right, that needs to walk out and figure out how to, how to find some space, how to get pesky little things like insurance, you know, when you, when you start thinking about somebody you're going to partner with, what's that all about? You know, how do you go about the, the nuts and bolts of raising money without screwing yourself, you know, there and ever after? All that stuff, you don't really get in business school.

• 55:26Sam Parr?

  No, I agree. And we're going to be wrapping up soon. So I want to ask you, just, I wanted to wrap up the questions on angel investing. Any companies that you've written checks to that we would know about?

• 55:37Speaker 02

  Well, I mean, I can tell you a couple of ones that I'm super excited about right now. There's, there's one of my, ironically, one of my board members. Start a company called Basil Street Cafe, which is a really cool automated pizza kitchen concept that I think COVID-19 has has actually now made more viable even than before. But it's a really sophisticated combination of technology, branding and distribution to create a nationwide initially and then global automated pizza kitchen. And and that produces some of the most kick ass pizza that I've ever had in my life,

• 56:20Speaker 02

  which is really astonishing because your expectations out of a machine are very low. And it turns out it's every bit is good or better than Blaze or any restaurant quality pizza. So that's one that

• 56:31Sam Parr?

  A better run at it than those guys.

• 56:33Speaker 02

  I think sometimes, you know, like there were things that that, you know, were a great idea, but were ahead of their time. And I think some of the some of the plays that have attempted to do this before had an interesting idea, but the technology they didn't get right. And, you know, and it's largely a distribution business as well because you have to make great, great pizza and be able to, you know, keep the, keep the machine stocked with it. And so it's a, but I'm excited about that one. You know, I've got another buddy that that I'm helping that has a company called Everance, which I think is a really cool, you know, opposite end of the spectrum in a lot of, in a lot of respects. It's, it's basically a very unique way to, to collect, capture and then encapsulate can be anything,

• 57:18Speaker 02

  but the idea is hair, ash, could be any kind of material, you know, from a flower from, you know, the mountaintop where you got married or buried your grandmother or whatever. And then enables that to then be put into either jewelry, right, that that you now have, for instance, I'm having some stuff done right now that I'll have my boys, you know, locks of their hair encapsulated and put into a bracelet.

• 57:43Sam Parr?

  It's like when Billy Bob Corning and William Jolie had filed the blood.

• 57:47Speaker 02

  And then

• 57:47Sam Parr?

  Did you ever read about that? They're fucking weirdos, but they Yeah.

• 57:52Speaker 02

  Yeah, that's a little creepier than I, than I, you know, than I'm into it. But the other thing they do that's really interesting, you either choose to put it into jewelry or into tattoos. So for everybody who has tattoos and wants to prescribe a little more meaning to them, right? It's, it's kind of a cool thing to be able to, to cut a lock of, you know, everything from your dog's hair to your kid's hair or a cheek swab. And you send it off to them and they've got this patented, unique process of putting it into what, you know, a keepsake, basically a permanent keepsake, whether it's jewelry or a tattoo. Everest, E V E R E N C E. And their, their website is everest.life. But yeah, there's a couple, you know, and, and then I'm, I'm involved in a, in a technology

• 58:35Speaker 02

  company and LiDAR radar called Luminar, which is a cool, a cool company. And that's one of the example of one of those that, all right, not exactly in my wheelhouse, right? Not an area that I can necessarily add value to, but, uh, you know, very exciting. And another friend who pays a lot closer attention to that space, you know, put it in front of me and it, it just made sense. It's, it's, uh, you know, one of the companies that's out there vying for supremacy in the self-driven automobile.

• 59:05Sam Parr?

  That category and that you're starting a company in there. I would just invest in there just because it's like, nah, probably, maybe.

• 59:12Speaker 02

  Right. It's kind of in that category. And then you look at the, you look at the, you know, the leaders and go, well, those people are really smart people. This is a, this is a sector. Someone's going to win in probably more than one. So, you know, reasonable. And again, as I said, you know, I'm, I'm a, I'm a, you know, 20 to 50K investor in any given one thing. I'm not taking huge exposed positions. Usually I like to invest in things where, you know, I can help based on my experience as a brand or as an entrepreneur, you know, some government stuff that I've got involved with, because obviously I spent a long time in, you know, in the, in the government space. But, uh, and then just some cool companies, right? There's cool companies that I'm trying to help right now, like indie.com is an awesome

• 59:56Speaker 02

  new platform to help influencers monetize their followings, right?

• 1:00:01Speaker 02

  With content and I'm a big believer in that space and it's and it's an area where I can help them by exposing them to our large installed base of trainers. Um, who all of whom are influencers in their own right and trying to figure out how to scale themselves. Right. And create new sort of passive streams of income. So, you know, it's a smattering, right? And, and there's. Were you able to? A handful of others that are kind of in the same. From the first. Same category. Event in order to make these investments? The first one, no, I, I should have, right? And that's one of the, I mean, one of the big lessons for anybody who's listening. And I really believe this. Unfortunately, I didn't, I didn't hear it or, or if I heard it, I didn't listen the first time I heard it.

• 1:00:43Speaker 02

  Um, but I really think for entrepreneurs, you, you really should not with, I'm speaking generally because there are exceptions to every. You know, every generality, but in general, I don't think entrepreneurs should take institutional capital without pulling a significant. Uh, piece off the table. It just, you know, from the time that you do and you introduce a preferred class of shares. What was your, what would be your definition of significant? Things change. Five million, five hundred thousand? Well, I think it depends on the venture. I, I, I would view, um, I would view it from where I sit now as, you know, if, if you were.

• 1:01:20Speaker 02

  Building and then running a successful company that, and you thought that the only option for financing was to go raise it from institutions. I'd sell at least a third, you know, of, of my holding, um, to, to bring those people in enough, basically enough to be. Okay. If things go differently than you expected, that, that would be. You had to wait, but you had to wait for the second round to make that happen. So that, yeah, yeah. And, and, um, you know, I probably could have sold more at the first stop, but I. I was very bullish and very, um, you know, as entrepreneurs need to be.

• 1:02:00Speaker 02

  And I thought, hey, this is, you know, I'm not selling anything right now. Um, and that, you know, that was a big mistake. That when I look back on it later on, you don't realize, hey, you could be locked up with these. Guys for a long time, right? And once they're in front of you, then getting any kind of liquidity becomes really problematic. So, you know, that's just something that entrepreneurs need to keep in mind. And, you know, you could, you could lose control, obviously, if you sell control, but there are other ways where, you know, through the preferences that institutional investors tend to get into term sheets, where your autonomy and your ability to drive the bus.

• 1:02:39Sam Parr?

  And you didn't have the ability, and we'll wrap this up in a second, where you didn't have the ability to take a couple million bucks, take a million dollars off the profit each year to pay yourself. I mean, so like you were just strictly earning a low salary as the company grew? Or were you able to like, because if you raised five million bucks right out the gate, I would imagine you wouldn't even have had the ability to say like, well, this year we made three million in profit. I'm going to write myself a $700,000 check.

• 1:03:03Speaker 02

  No, of course not. And, and you don't, you know, and that's not frankly, that's, I mean, that's, that's a tough way for an early stage entrepreneur to even think, because if you're starting to think about trying to extract stuff out of an early stage business, chances are you're going to impair that business's growth. And so my, my view was never of that. I mean, I wanted to start making money, right? Because the first, if you count, you know, two years of business school where I was, where I was working on this idea, I went the first, that those two years plus the next three without any pay, right? So I was five years.

• 1:03:36Sam Parr?

  And that's why I'm saying like, but you were like 10 years in before you raised the first round, right? Basically. So it's like by that point, like, all right, we're doing okay.

• 1:03:43Speaker 02

  Maybe we're nine years in.

• 1:03:45Sam Parr?

  I can definitely treat myself a little.

• 1:03:47Speaker 02

  And I should, I should have taken money off the table then. That was one of the mistakes, right? Because what, what I focused on instead was, hey, I want, you know, to up my, up my, my salary, right? And my bonus structure to a point at which I can start making, you know, a, a good living on an annual basis. But I should have, I should have done both, right? Because that, that was possible. And I chose to just focus on, all right, let's get my cash comp up to a, up to a level that feels right for, you know, what I've built in the 100 hours a week that I'm working and not worry so.

• 1:04:21Sam Parr?

  You're saying you should have it just

• 1:04:22Speaker 02

  You know, extracting value right now.

• 1:04:24Sam Parr?

  Right, and that I should have done both is what I said. I did increase my salary and bonus structure. What were you paying yourself?

• 1:04:30Speaker 02

  I did not pour money out of business.

• 1:04:31Sam Parr?

  I mean, we pay fifty grand a year.

• 1:04:32Speaker 02

  And that was a mistake. Well, I mean, no, probably more than that by then. But early on, yeah, I mean, should for the first three years I was paying myself nothing. Then I think I started paying myself fifty grand, you know, and it just sort of if you if you dollar cost averaged back, you know, it would have been a very bad financial decision, right, on an hourly basis. But, you know, you get there and I make, you know, a good living today. That's plenty. So, you know, it all evens out. But if you dollar cost average the first 10 years, I probably made fifty grand a year, you know, which, which after 14 years as a Navy SEAL with a Stanford MBA, right, ain't killing.

• 1:05:15Speaker 02

  And living in San Francisco at the time, I fled the Mill Valley like everyone does eventually, or to Marin, you know, but, but, yeah.

• 1:05:23Sam Parr?

  Oh, no shit. I'm in Glen Park.

• 1:05:24Speaker 02

  City, paying a mortgage up on Twin Peaks and.

• 1:05:28Sam Parr?

  Awesome.

• 1:05:28Speaker 02

  Oh, well, that's where I was. So I was right behind Tower Market. Glen Park was my Glen Park was my regular, you know, the Channery Restaurant. I was still down there. That was my my regular jam down the hill. And, you know, I used to run Glen Canyon every day.

• 1:05:42Sam Parr?

  Yep, I live in downtown Glen Park. I ran Glen Canyon today, and I have a house here with like a garage and a gym with my TRX. This is awesome, man. You're cool as shit. I appreciate you taking the time.

• 1:05:54Speaker 02

  Right on.

• 1:05:55Sam Parr?

  What's your preferred method of, what's your preferred method of chatting with people? Twitter?

• 1:06:00Speaker 02

  Well, my, so my social handles at Randy Hetrick, right, Instagram, Instagram and Facebook, at TRX Training is the brand. And TRX Training dot com is obviously our website. I'm working on a Randy Hetrick dot com website right now where some of my stuff that, you know, my next big, big vision is to to take a page out of Richard Branson's handbook and basically.

• 1:06:27Speaker 02

  Figure out ways to grow my, my brand that can help the brand that I gave birth to do things that maybe it can't do and vice versa, right? You ladder yourselves up just like he's done with Virgin and the Richard Branson brand. That's, that's, you know, sort of a goal that I have. Maybe, you know, I'd be wildly fortunate to get to his scale, but I could, I could be happy with a lot less than that scale as long as I'm still contributing value to the mothership.

• 1:06:51Sam Parr?

  You have the story, you have the luck, you have the charisma, Navy SEAL who's fit and also went to Stanford. I mean, you're, you, you, you have it, man. You got the it factor. So I

• 1:07:05Speaker 02

  Yeah, well, thank you. There are days when it feels like that and then there are the other days.

• 1:07:09Sam Parr?

  Sick. Thank you.