We asked a $18.9B Investor how to survive the AI bubble

Run your life like a $100M business. Get Sam's personal system here: https://clickhubspot.com/emtd Episode 812: Sam Parr ( https://x.com/theSamParr ) and Shaan Puri ( https://x.com/ShaanVP ) talk to Graham Weaver ( https://x.com/GrahamCWeaver ) about how which moats will win in AI and how he runs a ruthless PE strategy. — Show Notes: (0:00) Intro (7:06) The buy and build strategy (10:43) Mowing lawns (14:48) What’s the overhype with AI (23:00) Where’s the opportunity (25:17) Ruthless PE (28:17) Hero deal: $8M to $500M (31:24) White hot will to win (34:17) The blank page (44:02) Graham’s first million (46:03) the biggest wealth mistake (53:39) second-hand therapy from graham — Links: • Alpine - https://alpineinvestors.com/ — Check Out Sam's Stuff: • Hampton (joinhampton.com): My community for founders. Average member does $25m/year. Many of the guests are members. Get after it...apply: http://joinhampton.com/mfm — Check Out Shaan's Stuff: • Shaan's weekly email - https://www.shaanpuri.com • Visit https://www.somewhere.com/mfm to hire worldwide talent like Shaan and get $500 off for being an MFM listener. Hire developers, assistants, marketing pros, sales teams and more for 80% less than US equivalents. • Mercury - Need a bank for your company? Go check out Mercury (mercury.com). Shaan uses it for all of his companies! Mercury is a financial technology company, not an FDIC-insured bank. Banking services provided by Choice Financial Group, Column, N. A., and Evolve Bank & Trust, Members FDIC • I run all my newsletters on Beehiiv and you should too + we're giving away $10k to our favorite newsletter, check it out: beehiiv.com/mfm-challenge My First Million is a HubSpot Original Podcast // Brought to you by HubSpot Media // Production by Arie Desormeaux // Editing by Ezra Bakker Trupiano /

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

• 0:00Speaker 00

  15 years ago, we set an objective to become the number one performing private equity. Since we set that goal to four funds, we invested after that have all done 5X or better.

• 0:09Shaan Puri?

  How do you do 5X in six years? Well, you go get Navy SEALs to run plumbing companies. That makes perfect sense to me.

• 0:17Speaker 00

  It works pretty well.

• 0:19Shaan Puri?

  In your world, there's a bunch of like AI rollouts. We're gonna buy a company, we're gonna throw AI in it, and it's gonna be awesome. Is that a good strategy?

• 0:26Speaker 00

  These venture backed apps, they'll have 2 million of revenue and a $500 million valuation, and they're gonna go to zero.

• 0:32Shaan Puri?

  How do you see the world and the market? Where do you see opportunity? Where do you see destruction? And where do you see overhype?

• 0:38Speaker 00

  Okay, I'll start with overhype. How about that?

• 0:50Shaan Puri?

  All right, well, listen, we have Graham Weaver here today. You've seen this guy all over YouTube, TikTok, wherever you've seen. What I'm interested in is I would have always loved to go to Stanford and go to Stanford Business School. There's probably a lot of people listening to this that kind of wonder, what would it be like? And, you know, that would be cool to be able to go learn from the best at one of the best schools. Well, we get to kind of do that today. We have somebody who not only is out in the field, you've got a private equity fund that has almost like 20 billion in assets under management, but you also teach at Stanford. And I think today it'll be fun if we get to hang out and pick your brain and be students like we're in your class.

• 1:25Speaker 00

  Love it. Looking forward to it.

• 1:28Sam Parr?

  You know, what's funny is like you, I've watched your talks for a long time and they're amazing. How to Live an Asymmetric Life was a really good one. How to Live Your Full Life, I think that wasn't the exact title of one, but that was my takeaway from another talk. And I was doing research on you and I'm like, I didn't even realize this guy had a PE fund. And I think that's great that your ideas are actually what you're known for more than your work. So are you, besides the talks, can you explain with your fund, how successful are you beyond just the talks?

• 2:00Speaker 00

  About 15 years ago, we set an objective to become the number one performing private equity fund in the world as measured by net MOIC, you know, the return on capital. And our last, since we set that goal, the four funds we invested after that have all done 5X or better, or the fourth one's on track to do that. So it's been, it's been great. Like it's all the, all the content that I try to bring to my talks or to the students at Stanford, you know, I, I like to think they're really based in stuff that really works. There's a lot of, a lot of amazing people that are, have a lot of really good motivational content. I, I like to try mine out in the real world a lot and see what actually, what actually works. And I've, and I think that,

• 2:45Speaker 00

  you know, the stuff that I, I try to talk about is, is exactly what we, what we do at Alpine. But yeah, we've had a really great run and I'm really proud of how we've done it too. We've done it, you know, with people, treating people really well. We build our entire business around the people at Alpine and the people, the entrepreneurs in our portfolio and, um, you know, try to be a force for good. The three goals are be the top performing fund, be a force for good and be a place where the best people want to come and works and spend their careers. And I think hopefully we've done it that way.

• 3:14Shaan Puri?

  So you, um, you just said, you set a goal to be the number one performing private equity fund in the world. Um, no big deal. So, and, and you said 5X MOIC, which is multiple uninvested capital. So, and that's over like 10 years or what's the timeframe we're talking here?

• 3:32Speaker 00

  I mean, from the day the first dollar comes into the last dollar goes out, yeah, maybe it might be, it, it's probably easier to talk about, probably average is about six years of the average investment is probably about six years.

• 3:43Shaan Puri?

  That's pretty remarkable. So, um, you're normally, you know, sort of rule of 72, you put your money in the S and P 500. In the seven years, you should double your money. So you should get 2X if you're there and you're, you're basically in roughly the same timeframe trying to get a 5X, right? So you, you're really trying to outperform. Can you, in plain English, because Sam knows this, I spent the last two days having, I had 40 private equity meetings and, you know, I'm, half the time I'm just like, they're like, yeah, we're a small fund, a billion and a half. Under management. And I'm like, that was the story all day. I was like, how much money do you guys have? And what the hell do you guys actually do? So can you give me the simple? What the hell do you guys actually do? Are you guys buying like HVAC companies? Are you buying software companies?

• 4:24Speaker 00

  So, um, I mean, private equity is a very broad classification. There's lots of different strategies. So I'll tell you specifically what we do. I know, um, there's a lot of talk around AI buy and builds. If we can dive into it a little bit, but we do primarily buy and build. So we'll, we'll take a, we'll find a really amazing CEO that a lot of times has worked with us in a smaller capacity. Maybe they were the CFO of a company we had, or they came through our training program and then we'll back them. We'll go find an industry that we think is really interesting. We like the prosaic industries, like the ones you mentioned, plumbing HVAC. We also do software too, because, uh, there's a number of strategies where rollups in software can be really attractive. So we, it's a small part of what we do though, smaller than the services stuff.

• 5:06Speaker 00

  And, but a lot of these really prosaic industries are massive, you know, the plumbing and HVAC industry you mentioned is like, it's like a hundred and seventy billion dollar industry. So it's, so if you get it right and you actually figure it out, you know, you can, you can grow, you know, almost forever because you just don't run out of, run out of TAM, which is why we like the buy and builds because we'll get it right once. And then we'll stamp it out a number of times. The other thing that's really cool about buying bills is it really is, plays to our core competence, which is just talent, you know, so we're, the buy and build strategy, the way we do it really is a talent strategy. You know, we're in a lot of cases, we're putting high attribute, like military veterans in to go run these, uh, plumbing business.

• 5:49Speaker 00

  And they're just incredible leaders. And so our, our secret superpower is really training these awesome leaders and giving them an opportunity to do something they might not have had the opportunity to do otherwise.

• 6:00Shaan Puri?

  Sam, isn't that hilarious? Sam, you could be like, how do you, how do you do five X in six years? It's like, well, you go get Navy SEALs to run plumbing companies. That makes perfect sense to me.

• 6:11Speaker 00

  That's actually right. That's a, that's a simplified expression. Yeah. Navy SEALs run plumbing companies.

• 6:18Speaker 00

  It works pretty well.

• 6:20Shaan Puri?

  The deck is only one slide. I like it.

• 6:23Speaker 00

  The Navy SEAL is actually a very common background of our leaders in these businesses.

• 6:30Sam Parr?

  And how big a companies are you buying?

• 6:33Speaker 00

  So the add-on acquisitions, which is primarily what we do, I mean, I think the average deal we did is like $30 million. So the company might have 15 to 20 million of revenue, something like that.

• 6:44Sam Parr?

  Oh, it's pretty small. Do you, and do you borrow money to, and do you borrow money to buy it?

• 6:49Speaker 00

  Yeah, we do. So well, once we get it going, we can usually finance all the acquisitions with cash flow and debt. So we don't have to put in any more equity. That's important. Obviously, if you're, if you're trying to have a high MOIC, the not putting money in part is, is a big part of that.

• 7:05Shaan Puri?

  The main part of your model that's, I would say, kind of differentiated is, is you kind of, I don't know if, it's not a search fund exactly, but you basically start with a, an operator or a CEO in-house, which most private equity guys don't do, right? They're mostly like, we buy you, we hope the management team really stays on, that's really important. Or we're going to later install and do a search for an executive to run the company. But what you guys are doing is you start with the person, you kind of run a search with them, it seems like. Tell me what I get wrong. Is it not like, what's different about it than a search fund? They come in-house, basically, is the difference?

• 7:36Speaker 00

  No, Sean, you nailed it. It's like a search fund where we try to improve on the search fund model. Like, if you think about a search fund, and for those who may not know, you know, a search fund is you're backing a young person to go buy a business, and then they're going to go run it. But the thing where it kind of falls down is the first part, which is someone has to go source and buy a business. They have to go build an entire private equity firm to buy one company. So we do all that ourselves because we are obviously doing this repeated, on a repeated basis. But the general part about having a really high-attribute person betting their career on a business is a great formula. It's probably a lot of what you talk about on this podcast. I mean, it's, it's the greatest formula there is. So we love that part of the DNA of a search fund model.

• 8:20Speaker 00

  We're hiring very similar, kind of high-attribute people, maybe a little bit older than the search fund, a little more experienced, bigger businesses. But generally, it is what you just said, Sean. It is, it is kind of like a superpowered search fund model.

• 8:32Speaker 03

  All right, so this episode is all about excellence. A while back, I shared my personal framework for building excellence in my own life, and the team at HubSpot turned it into a 30-day operating system you can check out right now. It breaks down the systems it took me 10 years to figure out, and shows how I actually use them day to day. These are systems that genuinely changed my life. So if you want to build a good life, scan the QR code or click the link in the description. Now, let's get back to the show.

• 9:03Shaan Puri?

  So the simplified way of thinking about this is you find a really high-attribute person, we'll call them the Navy SEAL for now, just so you know, somebody who's clearly a go-getter, a winner, organized, effective individual, who's willing to work really hard for five, six years to create like life-changing wealth for themselves and own their own business without having to come up with a great idea from scratch. You're already looking at, whatever, hundreds of deals. You have thesis around stuff. You go and you buy the best deal you can find there, and then you do add-ons. So you go buy the plumbing company. It's already a good business. That person should operate it maybe to be a better business, growing organically. And then you're gonna buy maybe more tuck-in plumbing businesses to grow the thing, using the cash flow from the first business.

• 9:43Speaker 00

  Exactly, and then the other thing is, once you've bought 10 plumbing companies, you know what it looks like to run the best in the world. Because this one company might do really well on training. This other company does great on customer acquisition. This other company has a purchasing advantage. This other one has a training advantage.

• 9:58Shaan Puri?

  So you steal the superpowers of each.

• 10:00Speaker 00

  Exactly, you grab, and usually that's true. Usually, each company has a superpower. But after, let's just say, 10 deals, you've got all the superpowers, you know, and now your next deal, your 11th deal, has 10 superpowers. Often, you can improve that business dramatically, really fast, just because you take that playbook. And the reason you can make that playbook consistent is because you're putting your own people in to run it. This took me 10 years to figure out. But we would back founders and then say, "Hey, we have all these great ideas." And the founders would just smile and write stuff down and never do anything, you know? And that's not that we don't love founders, but you're not gonna buy a guy who's run a plumbing company for 35 years and then come in and tell them how to run it. Business that doesn't work.

• 10:43Shaan Puri?

  So Sam, should we do Graham a favor and make him likable? Because you're too hateable. You're happy. You're good looking. You're super successful. You're like, we just got this model that prints. This is amazing. And I'm going to do you a favor here because that's the end point, but it wasn't where you started. Like the start of your story is you're mowing lawns in Ohio, listening to self-help tapes on, you know, in your earbuds while you mow lawns to try to figure out what the hell you're going to do. And then I, my, my understanding, you tell the fun part of the story, but my understanding is you kind of in college bootstrap this with credit cards and went through the financial crisis and a bunch of stuff like that. So can you, can you bring it down a notch and go to the, the part that makes us root for you?

• 11:23Speaker 00

  Like what's, what's hard about this? Yeah, well, uh, first of all, thanks for the kind words. I appreciate them. But, uh, I grew up in a small town in Ohio, went to a public school and it was a blue collar town outside of Toledo called Perrysburg. Nothing special about it. And, um, I, I was, I was probably just average in just about everything athletics, school. And this isn't false humility. I mean, this is actually, I didn't make the basketball team. I got cut, you know, from the wrestling team. I mean, I, I just wasn't really, and I was, I was okay at grades, not nothing special. And just as you said, Sean, you know, I, I was mowing lawns. And I started, the Sony Walkman came out and I started listening to

• 12:09Speaker 00

  tapes by guys like Brian Tracy and Tony Robbins and, um, Earl Nightingale and, and guys like that. And so you're imagine you're like a 14 year old kid and you're literally and figuratively brain, I'm brainwashing myself with this content because I listened to so many hours of it and walking back and forth. And, uh, the two big concept, the first concept they, that they said was you're either going to be your own best friend or you're going to be your own worst enemy. So you figure out you first, you know, like you think that the world's happening. Like, for example, you, you think you got cut from the basketball team and you, all this stuff happened externally, but really. It's it's you, you know? And and that was a very hard message to hear. Cause I was like, wait, what do you mean?

• 12:55Speaker 00

  Uh, I I had all these excuses lined up like I wasn't tall enough and I hadn't started playing early enough and my parents didn't get me in wrestling early enough and all this stuff. It's like, nope, you don't get to have any of that stuff. You gotta, it's like, let, you gotta, you gotta get rid of all that and just, you gotta accept total accountability for your life. And that was absolutely brutal. And I realized they were talking about me and I wasn't doing that. And I was, I was exactly who they were talking about. So if the first thing is kind of get out of your own way, the second one was like, figure out what you really want. And I give Brian Tracy the most credit for this about like how to set goals. And I think he maybe the best, you know, at least back then was the best in the world at setting goals.

• 13:35Speaker 00

  And so I literally would write down my goals every single day, multiple times a day in in high school. And it was just incredible. The combination of those two things, it's like pretty undefeated formula, you know? Get out of your own way. Don't allow yourself to make excuses and then write down what you want. Be super clear and then, and obviously you gotta go do the stuff you write down. But that that formula was like really powerful. And there was just something in me, I guess, that wanted more than what I had. And so I, so I just kept plowing through and then, and then the story is definitely not even close to linear. I mean, everything you could imagine goes wrong, you know? I mean, I, I wasn't great at wrestling. I, I cut a ton of weight in wrestling.

• 14:20Speaker 00

  I mean, I was 125 pounds at six feet tall. I mean, do, do that math? And then, and then with Alpine, I mean, our first fund lost money, drained my savings account. Uh, then we started clawing our way back, got smacked by the great recession, drained my savings account again. You know, it was, so it's, it's definitely not been a linear story at all. But I think that this story is just one of like being clear about what you want. And then just this crazy amount of like persistence.

• 14:47Shaan Puri?

  I love that. Um, I wanted to switch gears and ask about AI. So. What the hell? What are we supposed to do? You know, like five years ago, if I was advising my cousin on what to do, I'd be like, go study computer science. I mean, like the technology curve is only going this way. Learn to code, you'll be, you'll be set. Now they're graduating and they're probably like, you know, um, yeah, hate their uncle now because Uncle Sean told him to go learn to code and maybe that, maybe that's irrelevant. Maybe it's super harmful. We can't tell what either way yet. And so there's all these kind of, there's all this uncertainty. I want to hear from you kind of like, how do you see the world and the market? Like, where do you see opportunity? Where do you see destruction? And where do you see overhype? I want those three categories from you. Opportunity, destruction and overhype.

• 15:30Speaker 00

  Okay, I'll start with overhype. How about that? You know, I, I was, I graduated from business school in 99, which was like, it felt like this exact time right now, but it was the dot com era. That was the time when you had like petfood.com and Webvan and all this nonsense. I think the, I think there were 400 companies that went public and the only one that I'm aware of that survived was Amazon, maybe eBay. But it was like, it was a bloodbath. And, and so people were right that the internet's going to transform the world. And look at us right now, we're on a podcast having, you know, over wifi.

• 16:07Shaan Puri?

  And by the way, I can order DoorDash, uh, just like Webvan might've wanted to do, Instacart, right? Even the ideas might've not have been terrible, but the way they were burning money and, and you know, that wasn't.

• 16:17Speaker 00

  And you know, you think about today, I mean, your, your mobile phone and you think about like, imagine just your wifi doesn't work for a week. Good luck, you know, like that. So it transformed the world more than people could even imagine back then. But there was a lot of like false starts and hype that people didn't really know where to place it and they kind of misplaced it. I think that's kind of where we are in AI. And my example of, I'll just, just to back up, I think there's kind of four places you could play in AI. You could be in the infrastructure layer, which is really, you know, all the chips and data centers and energy. And, you know, that's a very exciting area. That's going to have growth for as long as we can see. Then the next is the large language models. There's really not a lot of those. So, you know, I don't know that you can really.

• 17:01Speaker 00

  Play there unless you're a big business and even investing in those like you're already paying a price that assumes success for those. So I don't think that's really that interesting. Then there's the app layer, which is where kind of all the most of the venture money is going. And then there's the use case layer, which is your customer, you know, like a HVAC company and you're going to use AI. And I think and that's, you know, that's why I think a lot of these venture firms are jumping into these AI rollups because they're realizing that the first three layers are kind of tough and they're going to play in that fourth one. But where the hype is, is the third one, which is the apps. You know, I'm going to be an app that I'm going to help law firms settle their cases faster. I'm going to make call center

• 17:42Speaker 00

  software that's going to allow you to not use humans or I'm going to whatever. I mean, there's a million of those applications. I think that's where a lot of the hype is. We, we see all these companies as vendors to our businesses. So we, they're, they're pitching us all the time, these venture backed apps. And they'll have 2 million of revenue and a $500 million valuation. And they're going to go to zero, like they're going to be worth absolutely zero.

• 18:07Sam Parr?

  But a lot of them are, a lot of them are getting like huge revenue fast. Are you saying that you think some of those guys are going to also go to like, is it, is the churn going to be so high? They're going to go to zero?

• 18:15Speaker 00

  I think that you have to say like, ultimately what's the barrier? And what's the moat that they're going to be able to build? There are, there will be apps that will be successful, just like there were dot coms that were successful, but they're going to get attacked by above and below, you know, they're getting attacked below from the companies that can have now, they can build their own stuff. They're going to get attacked also from the L L M's who are introducing interfaces and new products that, that are like literally just taking the business of some of these apps. So there's going to be this constant pressure on them. I think if you can build proprietary data sets, which is harder than it sounds. Or you can build really deep interfaces with your customers, which is also harder than it sounds. Those are, those are moats you can build.

• 18:58Speaker 00

  But really, I think sometimes what you're really, you know, you might be six months ahead of where the L L M's are going to ultimately go and that you can make a lot of revenue for a short period of time. Again, going back to the internet, there was a ton of businesses in the, in the, you know, nineties where it was like, Get your marriage license online and those businesses made a fortune and they grew really fast. Hundreds, I mean, they were growing at 100% plus a year. They were, until Google just absorbed all those rents, you know, it's like that. And that's a little bit of like the analogy of the L L M's, I think, absorbing a lot of the rent. So I'm not making a blanket statement that all apps are going to fail. I just think that's, you ask where I think things are overhyped. I think that's where they're overhyped.

• 19:43Shaan Puri?

  Today's episode is brought to you by HubSpot. Did you know that most businesses only use 20% of their data? That's like reading a book, but then tearing out four fifths of the pages. Point is you miss a lot. And unless you're using HubSpot, the customer platform that gives you access to the data you need to grow your business, the insights that are trapped in emails, call logs, transcripts, all that unstructured data makes all the difference. Because when you know more, you grow more. And so if you want to read the whole book, instead of just reading part of it, visit hubspot.com.

• 20:10Shaan Puri?

  And what about in your world, there's a bunch of like AI roll up. So it's like, oh, let's go buy these service businesses, smash in some AI, baby. Let's put some AI in the front door. Is there a back? Let's put some AI back there. Let's lift, shove some AI under there. Right? It's like, it's like me with a Thanksgiving plate. I'm just trying to put mac and cheese everywhere. There's like, we're going to buy a company, we're going to throw AI in it. It's going to be awesome. Is that a good strategy?

• 20:36Speaker 00

  I think the reason that people are approaching the strategy is because they're probably seeing a little bit of what I was describing about the app layer and saying, gosh, I'd rather be the person using the AI than someone jet, you know, developing it. So I think that's why they land in these AI rollups. I think you gotta be careful. I mean, we've been doing rollups for 15 years and AI is a huge thing. It's important, depends on the industry, of course. Some industries are, AI is a much bigger factor than others. But the other basics of like getting the talent right, getting the companies right, integrating, doing the transition management, having your workforce stay on, you know, doing training, recruiting, those are really the core elements. The technology, I mean, here's probably a

• 21:19Speaker 00

  hot take. I think the technology in many, many industries is going to be, is going to be commoditized, you know, like, like, I'll give you an example. I'll give you a real example. In property management, we happen to be in property management. I know there's been a bunch of AI native rollups launched by venture firms in property management. What techno like what's their real advantage like are they going to have technology that's better than anyone else I I would say the answer is no.

• 21:45Shaan Puri?

  So what's the what's the moat then?

• 21:47Speaker 00

  Exactly like the moat in property management is all the stuff I was mentioning before, you know, hiring well, building, you know, good good cultures, retaining, recruiting. But but the technology, at least in that particular segment, is going to come through the I think the software companies are going to and and so we're we're all going to have access. And this is this is my take, you know, if this isn't, I mean, there there can be other opinions on this, but I think ultimately, I think most people are going to have access to the same technology. So it'll be a tool and it'll help everybody, but it's not going to be the thing, you know, it's not going to be like the real differentiator. And so you so like, I I still would go back to say, if you want to win in AI rollups,

• 22:31Speaker 00

  you got to win in all that other stuff I was saying.

• 22:33Shaan Puri?

  Yeah, that makes sense. I I think what some people are doing, which is not really the roll up part of it, but you know, you go buy a property management company that does six million a year in EBITDA. And then you use AI to make the business more efficient and now it's doing eight and a half million in EBITDA and you're priced at a five X difference. You've created 10 million to 15 million of value just by like running it more efficiently. And even though another property manager might be able to do the same exact thing, doesn't really matter. Plus, most property managers are going to be slower to adopt AI than like you might be if you're really bullish on this.

• 23:09Speaker 00

  I I think that's the thesis, like what you just described is the thesis and we'll, you know, we'll see how it plays out. We'll see like, I'm I'm sure there will be some people that execute really well and have some version of what you said, it probably won't be as dramatic. And then it's just like where the rents go and do the, you know, just how much that rents ultimately get passed down to the consumer. I don't know that you necessarily win on technology per se.

• 23:31Shaan Puri?

  So you must get this all the time. If you're teaching at Stanford, I'm sure somebody's raising their hand and saying, hey, I graduate, you know, next semester, what should I go do? Like, where should I go? I'm a smart, hungry person who wants to be successful. You see the landscape and you know what's going on. Where should I be going? What should I do? What's the opportunity?

• 23:49Speaker 00

  I would say if I were graduating right now, I mean, knowing everything I know now. I would go do a services roll up because I know how to do that. It works really well. I think it, I think AI is a tailwind. I do that in an industry where you can build real moats and stickiness with the customers. Not all industries allow that.

• 24:12Shaan Puri?

  What does that mean? Like services, you're talking about like pest control? What are we talking about here?

• 24:16Speaker 00

  Like take wealth management, for example, you know, if you go into that business and you're like, okay, well, I'm helping people buy stocks or whatever. But what if you were helping people buy stocks and you were doing their trust and you were doing their taxes? And you were helping them with all their estate planning and, and, and, and, and that's your mode against AI. It's old fashioned stuff. It's, it's your mode against AI is like the deep, deep relationships with your customers. So I would say go into something where you can really build those kind of customer moats. And then AI is nothing but a tailwind for you because your customer doesn't care how you're doing your backend, you know? But I would just be playing around with that. I think it's like, it's going to be a language that I would advise anyone, anyone, no matter what age you are.

• 25:01Speaker 00

  But it's certainly if you're a young student graduating, like you want to know that language extremely well. You want to speak that language because that'll also allow you to look at an opportunity and say, okay, I know I could do this with it because I'm so facile in these tools.

• 25:17Sam Parr?

  So I think, so Sean and I have both started companies and without sounding too like grandiose, I think that sometimes we view ourselves a little bit artisty and creative more so than like good or even interested in like financial models and things like that. And, and because of that, I think it's partially because I was jealous and partially because it's true that I thought that PE was kind of nonsense, not in the, I thought it was very effective, but I thought like, well, buying a company and firing a bunch of people, that's not, the only value creation is that is for like the, the owners of the PE firm, not necessarily like the betterment of the world. Which there's a million examples of why that's totally wrong. But I think what's interesting about you is you're sort of the antithesis of that where you're putting out this content

• 26:01Sam Parr?

  that's quite soulful. And when I talk to you and, and when I see your talks, I'm like, this guy's got it. He makes me feel good. And yet he's in like the most soulless industry.

• 26:11Shaan Puri?

  Cause you gotta be good at both, right? You must be great at the ruthless analysis of business and finding the levers, cranking out that gross margin and doing, doing all of that stuff. While still like clearly not getting not not becoming what the caricature that Sam's painting. Yeah.

• 26:27Speaker 00

  You know, like, if I had to keep it really simple, I would, I would say, like, let's pretend for a second that I wasn't interested at all in being a force for good and I was just interested in generating returns. I'd run my business exactly the same way. A lot of it is for me is like, it's, it's having the confidence in building something that's going to be durable and enduring. So like, I'll, I'll use a real example. Let's say that I have this strategy, I won't use any names, but let's say I'm a, I'm a software buyout firm. And my strategy is I go into a business, I buy a software company, I fire people and I double price. I'll make money in the short term, but you look at a time like now where AI is coming.

• 27:12Speaker 00

  Like you really want, the, the companies that are going to win in software have incredible teams that are on top. They're, they're making, you know, agentic products on top of their software. And they're going to, they're going to, they're going to have AIB, this incredible tailwind for them. And, you know, if you, if you just destroyed your, your, your team and your cost structure, you're going to get attacked from, from both sides, from your customer side and from, you know, the LLM. So we found that building things is a lot more durable than ripping things apart. Cause you can make like one and a half times your money, or maybe, maybe even two times your money ripping stuff apart. If you're lucky, if you time the exit just right.

• 27:52Speaker 00

  But if you actually build something, times your friend and it could be, I mean, you can make a hundred times your money. And so like, I, I do think a lot of it is time horizon. I think underneath that is even deeper. Like, why are you in this business in the first place? Like, if, if your goal to be in the business is to make money and you want to do it as fast as possible, then, then maybe that behavior does flow from that. But, but in terms of just being good at private equity, I don't think ripping things apart, I don't think you're going to be the best in the world, you know, doing that.

• 28:24Shaan Puri?

  What's the best deal you guys have ever done? What's the hero deal?

• 28:28Speaker 00

  You know, we've had, we've had a few really, really good ones that rhyme with what I'll describe. But you know, you picked the plumbing and HVAC example at the beginning. That's one of our best deals. I mean, we, we backed two people that we, we hired right out of business school. They, they joined our CEO and training program. They went through that program. They became the, eventually the co CEOs of the business. We bought a small plumbing and HVAC business that had like $8 million of earnings. This year, that business will do 500 million of earnings.

• 29:00Sam Parr?

  How long, how many years did that take?

• 29:02Speaker 00

  It took six years.

• 29:04Sam Parr?

  Six years to $500 million. You, you have to break that down.

• 29:07Shaan Puri?

  $500 million of earnings, not earnings.

• 29:09Speaker 00

  Yeah, 3 billion of, 3 billion of revenue, 500 million of earnings. And, and we, I think importantly, that, that happened without us putting in any additional money.

• 29:18Shaan Puri?

  Wow. So, so an initial buy of like, what, 30 million or something like that? How much was the initial buy?

• 29:22Speaker 00

  We put in a total of 50 in the first deal. We might've put in like that first year, like another, maybe nine or so that first year. And then that was it. Then we never put in anymore.

• 29:34Shaan Puri?

  What was going on? Was it that you just, you guys just went on an acquisition spree and picked up all the mom and pops? Or was it that they weren't doing any sales? They didn't know, they didn't have a good website? Like what was, what was missing that you guys added?

• 29:46Speaker 00

  We got, we got fortunate that the third deal that we bought, we partnered with this guy. So the CEOs are named AJ Brown and Will Madison. And then the, the third deal we did, we partnered with this guy named Ira Pruitt, who was like the, the grizzled HVAC veteran and just this wonderful guy. He had seven of his kids in the business and like, and he gave us a lot of the playbook levers. And then the next deals after that, we were adding to that playbook. So eventually we just ended up with this amazing playbook about how to run those businesses. And then we began that talent program we were talking about earlier, where we started attracting a lot of incredible leaders, a lot of, not all of them, but a lot of them veterans. And, and then that allows us to go buy businesses that other people can't buy.

• 30:28Speaker 00

  Because like, really the line of people that wants to go buy a $12 million revenue plumbing business in the middle of Louisiana, that requires a management change is short. It's a short line.

• 30:41Sam Parr?

  You have to address this. So you just, you described one of the guys, I forget his name, as a grizzled HVAC guy, which in my head, I have a. I have a picture in my head of what that is. So I googled, so I looked up, the company you're talking about is called Apex Service Partners, I assume.

• 30:56Speaker 00

  Yeah.

• 30:57Sam Parr?

  And I looked up Will Matson. Sean, go ahead and look up Will Matson and.

• 31:01Speaker 00

  Yeah, he probably looks like the opposite of a grizzled.

• 31:03Sam Parr?

  Will is a baby faced guy. Honestly, he, he looks and he might actually be 28 years old. I think he, he looks very young. And he worked at JP Morgan and went to Wharton and worked at McKinsey.

• 31:16Speaker 00

  So the grizzled guy is named Ira Pruitt and, and the combination of AJ, Will and, and Ira is like amazing. So.

• 31:24Sam Parr?

  That's what I want to ask about. I want to ask about what makes this such a high functioning team to go from eight million to 500 million in profit? Teach me what makes such a powerful team and what attributes are needed in order to grow a business that fast? Because these guys look like the fairly odd couple.

• 31:40Speaker 00

  They are, they are an odd couple. So the combo in this, in this, in this particular instance, the combo is AJ is incredibly focused on the talent. And he's the one that rallies the Navy veterans and flies around and gets them excited. Will does, does the finance and the M and A and a lot of the hold co-functions. And then Ira is the one that's like, hey, this is, this is how you actually run a plumbing business. Here's the playbook we got to implement. So that, that's what, how the combination works. What they all have in common, and then to answer your question, like what we look for in these leaders. Number one is just this white hot will to win. And that's more important for us. We found that to be way more highly correlated than like,

• 32:24Speaker 00

  you know, any other factor, IQ or background or experience. But like each one of these three in some version of their life has just demonstrated this crazy will to win. We learned this from a book called WHO, which was the sequel to the book called Top Grading. And it's about basically how to hire. And so we do like a three hour interview and you start with the person in literally like in high school and you go through yesterday. And you're just walking through their background. It's kind of a conversation just like this. It's not, it's not super formal, but you're, you're collecting data on this person. And you're, you're in, in AJ and Will's case, you know, you'll, or, or Ira, or really any, anyone that had gone through our program, you know, you're just going to see

• 33:07Speaker 00

  example after example of like, hey, this thing went really wrong. And it was a bummer. And here's how I handled it. I got, I got up, you know, I plowed through, you know, I put my shoes, boots back on and I kept marching forward and you're going to see that again and again and again. We always say like, if it'll leap out of that interview, like, and if it doesn't, then they probably don't have it.

• 33:29Sam Parr?

  So, speaking of deciding what to do, and a bunch of your talks, it's basically like, I call it my rich life. It's like how to live a rich life. You call it an asymmetric life, and you've done a bunch of different talks on similar topics. You have this cool thing called the genie question, which I forget exactly how you phrase it, but it's basically like, what would you do if you couldn't fail? And it's an exercise to basically get people to decide truly what they want, because a lot of people listening to this, Sean and I included, were ambitious people and sometimes will be, we only listen to where's the money, or where can I fit into some traditional sense of success, along with a lot of your Stanford guys, they all think the same thing, like where-

• 34:09Shaan Puri?

  Or fear talks us out of something.

• 34:10Sam Parr?

  Yeah, like, I can't do that. Like, I was supposed to, like, go to business school, I gotta go to McKinsey, and then I gotta do this. I can't do this other thing. So you have this question of like, what would I do if I couldn't fail? What would you say is the most common reason why people are really bad at answering that question?

• 34:26Speaker 00

  So there's a few, a few things I'd say. First is, I think people don't ask the question. So that's, that's probably 90% of people. It sounds crazy, but they never ask themselves, what do I really want, you know? And they haven't given themselves like, the permission to even think about that, or, or like, I think it's almost like the highest form of self-love is to trust yourself enough to say, I'm going to be on the path that excites me. You're asking why people fail and say, so I'd start with, people haven't given themselves the permission to even think like that. So let's, let's assume now you have done that. But I would say for your audience, like, give yourself that permission, you know, to, you matter, like, what you, what

• 35:10Speaker 00

  you get excited about in this world matters.

• 35:13Shaan Puri?

  What are some example answers to that question? You've obviously helped a lot of people go through this process, I assume, at your, when you teach at Stanford.

• 35:20Speaker 00

  I'll give you a couple, just from my class in the last couple of years. Last year, I had a student who's building a theme park in Dallas.

• 35:31Speaker 00

  In Texas, like literally a theme park.

• 35:33Sam Parr?

  Let's give him a shout out. What's that called?

• 35:35Speaker 00

  Yeah. I think it's called Texas land. I'm not sure, maybe they haven't finalized that as the name, but, but that was her thing and she's going and doing it. I have a student this year who is, he is brilliant. He could go to any consulting or finance firm. He's going to India where his, his family's from to help them build three hospitals. And like, that is his thing, like it's super clear. That's, that's his answer to the question. I give him so much credit that he has the courage and commitment to go do that. And it's going to be very hard, but that's his answer. You know, what you guys are doing, I mean, you guys are building a podcast that's like really helping people.

• 36:20Speaker 00

  And you can just tell from being on this podcast, you guys love it. You're having a blast, like you're doing it, right? I mean, you're, you're doing the thing that you follow that energy and gave yourselves permission to be like, hey, that's a good place.

• 36:32Sam Parr?

  And But I, but I almost hate saying it that way because I don't want people to think that there aren't doubts yelling at us or anyone who's successful all the time. Because I think in another talk, maybe the same talk, you were like, I do this exercise and Alpine is a $20 billion fund. And I think you said for the first 14 years, you thought it was going to fail or you weren't confident that, or I forget the phrasing, but you, you weren't confident that it was going to be a home run.

• 36:55Speaker 00

  Yeah. I think all of us have these like crazy limiting beliefs, like that run through our minds all the time that are like beating us up with like, I shouldn't do this. I have to do this. I should do that. I might fail. Oh no. And the thing about that is that's very normal, like having that fear and those doubts is a hundred percent normal. Everyone has it. It's just what, like, what do you do with that? And, and I think one of the things I try to help my students do is like, we have an exercise where literally we like spend an entire class writing all that down. Like we like, like empty your mind of all the limiting beliefs that are getting in your mind. Just let them flow out. Okay. I might fail. I might run out of money. This, no one might watch my podcast, you know, Alpine might not make it.

• 37:40Speaker 00

  AI might not work, whatever it is, write all that stuff down. And then, and then, once it's down on paper, you've removed it like it does the most damage to you when it's in your subconscious and you don't even realize you have it. So if you're, if you're walking around with some fear and you don't even know you have that fear, it just looks like inaction and paralysis and I'm not going to go forward and I'm going to stay stuck. But once you have it down on paper, let's say one of your things is I want to start a company, but I don't know how I'd pay myself or pay my loans or whatever. Okay. So fine. You for if, if that's in your head, you're just not going to start a company. But if you write it down, you're like, you can rephrase it and say, how would I start this business in a way that I could service my business school loans and still pay my rent, you know?

• 38:23Speaker 00

  And now that's a problem to be solved as opposed to a fear that is creating complete paralysis. And so I like the act of just going right at your fears, doubts and limiting beliefs.

• 38:39Shaan Puri?

  It's a, it's a great exercise. I highly recommend that. I also just think like the, the, you know, you have the blank page and like, there's a lot of things you could do with the blank page because I think you said it right. I think 90 is low, probably 99% of people don't really take the time to examine their life or think about what they really want and actually go answer that hard question because it's a lot easier to scroll. It's a lot, it's a lot easier to worry about what's going on in Iran and then what's going on in the market and what's going on everywhere else besides, you know, here, because those are, those are arms length away, whereas it's very, very personal to be here. Today's podcast is brought to you by my friends at Mercury. They make the world's best banking product. I think you know this already. I use Mercury for all of my businesses.

• 39:24Shaan Puri?

  I think I have like maybe seven or eight businesses. We use Mercury as our business banking across all of them. And now they actually just launched a personal banking account. So I have my personal account there. I moved off of Wells Fargo and Chase. I'm just all in on Mercury. Why? I like products that are easy to use. I like products that get me and the problems that I have. So like very easy to make a joint account with my wife, very easy to spin up virtual cards, one click and I get savings yield. It just has all the stuff that I need in one place. So if you're looking for the best banking product on the market, it's definitely Mercury. I will fist fight anybody who disagrees with me on that. Go to mercury.com slash personal and learn more. Mercury is a fintech, not an FDIC insured bank. Banking services provided through Choice Financial Group and Callum NA, members FDIC.

• 40:07Shaan Puri?

  For the person who's like, I want to build the theme park in Texas. Awesome. I want to build the hospital in India. Sounds great. I've been in that position before where it's like, I'm ready to have that answer, but I have no idea. And I'm kind of saying one out loud. It doesn't even feel right. I'm just making it up. And I had to, I've taught myself to basically go through this process of sort of dabbling. Like, you know, just take this mentality of a dabbler. Like, how do I go and run either lightweight experiments or brainstorm or just not feel like I needed to commit right away? But like, go try to see where the energy is. How do you advise people to, if they don't have the answer of, oh, this is the thing that would light me up? Like, maybe you don't even know. Where do you go to figure that out?

• 40:48Speaker 00

  Yeah, I love that. Well, here's an, here's one idea is maybe don't have one thing. Make a list of like nine things that would light you up, you know? Okay, I think I'd like to go to India. I also think I'd like to start a podcast. Maybe I really want to, I don't know, become a DJ. You know, I don't know. Write down your things and then, like you said, you know, keep your day job and devote X number of hours a week to testing those things out. Maybe you're going to do some work on it, take some classes. You're going to start hanging out with people that do it. Maybe you're going to get trained. Maybe you're going to do podcasts in nights and weekends and see if it's as fun as you thought it was. And you're not looking there for, this is what I think is really important.

• 41:29Speaker 00

  You gotta, you've got to be careful that you're not going to get a false negative on the outcome. So like, a student says, okay, I want to start a company, so I'm going to spend five hours a week this quarter, and if I get traction, I'm going to do it. Like, no, no, no, no, no. You're going to get no traction. Like, five hours a week, if you could build a business in five hours a week, like, it wouldn't be worth building, you know? So it's not that. You're looking for like, does it light you up? It, like, in that five hours a week, was that the five hours you were looking forward to that all week? Or was that five hours where you were like, kind of like, oh, man, I gotta do five hours on this thing? You know, like, that's what I think you're looking for in those, like, experiments. Because by and large, if you are lit up...

• 42:12Speaker 00

  And you, I mean, you plus being lit up plus a long timeframe. There's very few things that won't yield to that. And that was me at Alpine. You mentioned, you know, it took 14 years for us to know it was going to succeed. Yeah, but I was fired up. I was willing to do it for a long time and I was in, I was excited and like, most things will yield to that formula with enough time.

• 42:33Shaan Puri?

  Was that right? In year 14, were you still like, eh, TBD if this is going to work? And, and what were the numbers? Can you say what your numbers were then? Cause I would think you would, you were financially successful at that point, no?

• 42:45Speaker 00

  Well, we lost money on our first fund. Um, so fund one was 2001. We lost money. That means that-

• 42:52Shaan Puri?

  How'd you get a second fund?

• 42:53Speaker 00

  Yeah.

• 42:54Shaan Puri?

  When you lose money on the first?

• 42:55Speaker 00

  Well, we were, we were very transparent with our investors about what was going badly, what we were fixing, what we were learning. So they were very like, they were like, okay, we see you're on the right trajectory. You're transparent, you know? At one point that fund was marked at 40 cents. We ended up returning like 95 cents. So they appreciated that and they gave us another shot. Thank God, you know? And, um, but, but what I was going to say is so we had fund one. Was it, you know, we had that anchor for more than a decade. Cause these, you have to go in, you buy the companies, you run the companies, you sell the companies. It takes probably 10 years and then fund two comes along. And so it was kind of another 10 years after that, after fund two,

• 43:37Speaker 00

  where we actually had some success, you know, where, where we could have the outcome of that fund, you know, proving out that it was working. And so that, that's the 14 years I talked about. But to give you the numbers, we were 14 years in. I want to say managing maybe two or three, three or $400 million, something like that.

• 43:57Shaan Puri?

  That sounds successful, right?

• 43:58Speaker 00

  It might sound like a lot, but we're trying to run an entire team and we have all these portfolio companies and-

• 44:02Shaan Puri?

  Well, let's ask the question. So we called the podcast My First Million and we started, there's a tradition. We would always ask every guest, when and, you know, when and how did you make your first million? And we, we like to really put that reference because a lot of times the answer was longer than people think. You try to get, you know, when you're 20 years old, you think it's going to be when you're 20 and a half, you know? You think it's right there and it takes a lot longer. It took me, I was 30 when it happened. It took Sam, I think same thing, 30, 31. And so it takes a little longer. And also we talked about, how did it feel? Like, well, do you know, what, did anything change and what changed?

• 44:32Speaker 00

  So I love to hear that. That's such a great question. All those are such awesome questions because it's so not what I thought it was going to be. So a couple of different ways to answer the question. One thing to be a millionaire on paper, it's another thing to have a million dollars in the bank.

• 44:47Sam Parr?

  Yeah.

• 44:48Speaker 00

  They're different. They're different feelings, as you, as you guys probably know.

• 44:50Sam Parr?

  Yeah. One pays the rent, one doesn't.

• 44:53Speaker 00

  Yeah. So I'll say a million dollars in the bank, because I think that's the, that's when I actually felt like I had a million dollars.

• 45:01Sam Parr?

  Yeah.

• 45:01Speaker 00

  And that was the, that was year 14. That was one week.

• 45:04Sam Parr?

  No shit.

• 45:05Speaker 00

  That was year 14 of start. So I'm, I was 29 plus four. So yeah, I'm in my 40s, I guess, when I, when I made my, actually had a million dollars in the bank.

• 45:16Sam Parr?

  But to put that in context, by the way, that is pretty slow, love. Like having a, having like a PE firm, your job is to get good returns and to not having like that.

• 45:29Speaker 00

  Well, yeah, I want to, I want to say what, we had what's called a European waterfall, which means we have to return all the money in the fund plus an 8% return before we take any profit. And so we had, we had to, first of all, fund one generated no carry at all. And then fund two, we needed to sell, it was really the very last business in that fund that we sold until, until we got paid. So it was, that's what I was saying, like the part about pay on paper versus in the bank. You know, I was, I was a millionaire on paper before that, but actually in the bank, it was, it was 14 years. But I want to, I want to talk about wealth for just one second. The interesting thing is like, I felt wealthy way before that because

• 46:13Speaker 00

  my denominator is, has always been small. So, you know, like there's two parts of, of wealth. There's the numerator, which is what you make in your denominator and what you spend. The biggest mistake, and this is something everyone who listens to this podcast can benefit from, the biggest mistake people make is the denominator. And they, so they, they go, like, here's a perfect example. I really want to start a business. I'm going to go take this other job first. And then I'm going to make some money and then I'm going to, and then I'm going to start my business. Okay. That's what they say. Never happens. Because they go take that job, then they get a new house, then they get a new car, then they move to this other city, then they have kids,

• 46:58Speaker 00

  then they have kids' schools, then blah, blah, blah, blah. And their denominator is keeping pace or even surpassing their numerator. And they're never, they're never actually feeling wealthy. And ironically, They're creating less freedom every year, you know, because there's fewer and fewer things they could do to maintain the lifestyle. And there's no way they could, they could start that business. And so probably like, one of the most underrated things that happened in my life is my wife, I married my wife, who was an elementary school teacher and made eighteen thousand dollars a year pre-tax and like, our first apartment that I think was like nine hundred a month, you know, she thought it was the Tasma Hall, you know, and like, so we never, I never.

• 47:38Shaan Puri?

  Does the IRS just send you money if you're making eighteen thousand pre-tax? Do you actually just get a bunch of money every April? That's awesome.

• 47:43Speaker 00

  They literally should, they, they should. Uh, I mean, she would drive around for like thirty minutes to save, you know, two dollars on parking. I was like, okay, well, we gotta not do that, but, but, but that, so they had the denominator. So I felt wealthy way before that because I, I just had a big cushion between my, what I earned in my expenses, so.

• 48:02Sam Parr?

  There's this story, uh, and I don't think at this point that this is true, but it's Ruben Carter. Have you guys heard that song, uh, The Hurricane by Bob Dylan?

• 48:10Shaan Puri?

  Yeah.

• 48:10Sam Parr?

  It's basically about a boxer who, um.

• 48:12Shaan Puri?

  Great movie, too.

• 48:13Sam Parr?

  Yeah, it's a, basically a black boxer who is incorrectly imprisoned for triple murder. And he didn't actually do it, but it was like a racist thing. And, um, there's a story that's part of this that I, at this point, I think it's fake, where he was like, I don't belong in prison. And I'm gonna take cold showers every day, just to remind myself that this ain't home. I'm only here for a minute, but I'm gonna get out eventually. And like I said, I don't think it's real anymore, but I heard about that story when I was like fifteen years old. And so when I moved to San Francisco to like start things, and like, I remember making a little bit of money sometimes. And then I would go for long droughts where I wouldn't make any money because I was trying to start something. And I was like, when I, when the money comes in, I still gotta take, take cold showers because I can't get used to this. I'm not out of it yet. And so I was always reminding myself, like, take cold showers. We're not home yet, do not get used to this.

• 48:58Sam Parr?

  But I remember there was freedom in that.

• 49:00Speaker 00

  I love that, I love that. And the freedom part is so true, Sam, you know, like, the steepest curve of utility with money was going from like, the first one was having peace of mind of like, not having to worry if I had to fix my car or whatever, you know, some, some unexpected expense happened, but I've got money saved away. And I don't have to stress. That was, that was actually very steep. Cause that wasn't always true for me, you know, like my car would break, I'd be like, oh no. You know, and, and then the next, the next curve that was really steep was. I have enough money to do what I really want to do with my life. I mean, how magical is that? Like, that's really where the utility, it's flattened out after that, you know? So that's really where the utility of money comes for me.

• 49:43Sam Parr?

  But when you're giving advice to your students, what do you tell them that number is? For example, some people say that like financial freedom is 25 times your annual spending. Some people have like, some people will say like, as long as you have six months of savings, like that you're good. Like, is there like a, like a threshold that you?

• 49:58Speaker 00

  Yeah, there is. I would say having three to six months of savings is level one, which is like the peace of mind. Because then, you know, like I said, you have some unexpected expense and you're, you're fine. You don't, you don't lose sleep over that, you know? You don't have to decide if you're going to pay your rent or fix your car. That's like three to six months of savings. That doesn't sound like much. It's dramatic. It makes a hu- huge difference in your life. And then the next one, I think it's lower than that. Like, when I say freedom, I don't mean like the like, okay, I'm going to live off the interest of my money I have in treasury. You know, that, that, okay, sure, that, that's nice if you get there, but, but I'm not even talking about that level. I'm talking about I'm spending, I'm still working, but I'm spending my day doing something

• 50:43Speaker 00

  that I enjoy, that is the job that I want to have. I think that's probably nine to 12 months of savings. It's not, it's not that. So I, I think both of those are really within people's grasp. People who are like, oh, I really want to get to the like, you money where I never have to work or anything. And then what? You know, like, then what are you gonna, like, then what are you gonna do? And, and I want to go back to the other question you asked. Did it feel the same that you thought it was going to feel? No, it did not. So when I actually had wealth and I'd worked and I go back, all the way back to the lawn mowing and the, all the sacrifices I made and getting good grades and getting into the right school and then getting the job and then suffering through fun one and then finally getting on the other side and then finally getting this big liquidity event.

• 51:28Speaker 00

  It was, it was like the most.

• 51:32Speaker 00

  Disappointing and like it, it, it cause I, cause I thought it was going to change everything. It didn't really change hardly anything and, and like what was still there was like the, maybe the thing I'd been running from, which is like, I'm not enough, you know, like.

• 51:49Sam Parr?

  Well, so what, what like, what career milestone, since everyone listening to this is interested in business, but it could, and family is too easy to answer, uh, but like what career milestone actually did move the needle on happiness. If it wasn't like a financial thing, is there anything else? Like, for example, you probably have hundreds or thousands. I don't know how many employees you have, whatever it is, like you've created like an institution. Has that made you feel good? What, what, what teaching at Stanford? What career milestone have you had that a listener can like, be like, okay, that's like a cool idea on how he actually got happy via career?

• 52:21Speaker 00

  Good question. The two ways to answer it. First is you could, one answer is you're not going to solve an internal problem with the external outcome. So like if, if I feel like I'm, I'm going to be enough when, like whatever you answer that with is going to be disappointing to you, you know? So that on, on that answer, it's, you can't kind of get there with the career and, and you, you have to, at least for me, I had to do a lot of internal work, therapy, coaching, journaling, um, meditation and, and start to just like let go of this, you know, I'm not enough part. And that, that's, that's probably created more happiness and peace of mind than the, than the career, probably the career achievement

• 53:06Speaker 00

  that I remember the most. It wasn't even really an achievement. It'd be like my three partners and I up in Napa, you know, together, working through something where I would just have the self-awareness to look around and just be like, wow, this is, this is really special. You know, these are people I really love. We're doing something we love and we created this together. And it, so it wasn't like a big wire came through or something. It was more just like these little moments.

• 53:39Shaan Puri?

  Can we get some secondhand smoke therapy from you? So, you know, you just talked about like doing the work, kind of like internal work, therapy, coaching, reflection, introspection, all that good stuff. You know, a lot of people either haven't had the time or don't have the sort of guts, they don't make enough time to do that sort of thing. But I think, you know, if they're listening right now, we can kind of benefit them. I remember we had Daniel Negroni, one of the great poker players, come on the pod, and he told us nothing about poker. I don't remember anything about poker, but I do remember he said, "The most impactful thing in my life was a mentor, a lawyer guy who I really liked. I thought he lived life well. He told me I should go to this event, and I went to the self-help event. I hated every minute of it, but they made us do this one exercise about like total

• 54:22Shaan Puri?

  radical accountability, where you write the worst thing that ever happened to you, and you rewrite the story where you are the cause of all of that thing, and you own the entire thing yourself. You don't blame anybody. Rewrite the story." And he's like, "That changed my life." And so like, you know, I almost secondhand got the benefit of going to that seminar, just understanding that principle, then, you know, then taking it and doing it myself. I'm curious, were there any kind of breakthrough, really important kind of realizations or exercises or questions or conversations you had anywhere along the way that we would benefit from?

• 54:54Speaker 00

  Yeah, 100%. And I'll give you a couple things that I learned. So one is, almost all your battles that you have are you against you. It's true. It seems like this whole thing is happening out there, and you're, you know, you're winning this, or you're doing this, and like, but you're, remember, all that stuff that happens goes through this filter, which is called like the story you're writing about it, then it goes internal. And like, you can, you can, the easiest part of changing your life is to change that filter, you know? It's way easier than changing what's going on out there. It's a lot easier to change how you're interpreting it. And so you can either...

• 55:38Speaker 00

  Be your own worst enemy, or you can actually be your own best friend. And I can tell you that I was my own worst enemy. Like, it did, it almost didn't matter what was going on out there. I would look for what was wrong. I would have a bad story about it. I would beat the crap out of myself and then I would tell myself another story, which is me beating the crap out of myself is why I'm successful. Total bullshit. It was just what made me miserable. It's like running through life with your foot on the brakes. So one is just that awareness, like that, wow, I'm, I'm having more to do with my peace of mind, meaning success, happiness than anything that's happening external. I think if you really think about it, you'll realize that's true.

• 56:21Speaker 00

  And then, and then the formula for like, actually programming, actually changing that. I finally understood like, in a simple way, why to meditate and how to be, how to be, how to make it work and how to have it actually impact your life. So you go to the gym and you work your bicep and your bicep, you break it down, it gets stronger. And then, you know, it regrows and is bigger. So meditating is very similar, except the muscle you're working is your, basically your mind and your self-awareness, your presence. So you pick your meditation, you're counting your breath, you know, that's a simple one, right? You just close your eyes, you count your breath. And then your mind starts going off and talking about, thinking about whatever, you know,

• 57:04Speaker 00

  I messed up this conversation or I should do this, or I've got tomorrow, I gotta do this, whatever. And then you notice that and you, it might take you a while, but you, you notice that your mind just took off and you bring it back to your breath and you do that again. And then it happens again, you notice that, you bring it back. You're basically building this muscle. You're building a muscle. The muscle is like, I'm going to two things. One, I'm separating from my thoughts. I'm realizing those thoughts that are happening aren't me. I'm creating this muscle of observing my thoughts versus just, you know, succumbing to them. And second, and even more powerfully, I'm building the muscle of being present. Like if you want to have a great life, like be present. Like if, if, if everyone in the world was present and here, right here, all the time and not in their head.

• 57:50Speaker 00

  Like people would be like in this great state of joy, like, and so building that muscle of, of watching your thoughts coming back and being present. Is the same muscle of being your own best friend because you're, because you, you're, you're, you're seeing like, oh, wait, I see that this thing happened and I, you know, maybe I didn't answer this question really well. Or I could let that thought go and just be here, you know, and like doing that over and over.

• 58:18Shaan Puri?

  Well, it's a great reframe, right? Because normally if you meditate and then you're, you're sucking at it, you know, your mind is drifting, you're not doing it, you're not having fun with it. You're like, I'm, I'm bad at this, this is not working. It's like going to the gym and you know, you pick up a weight that those last three reps are hard. But you're at the gym, you know, oh, that's great. I did exactly the thing I was supposed to do. I was building the muscle. If I, if I just went and I did curls with a three pound dumbbell, like I wasn't doing anything then I shouldn't have even been here. And so reframing the meditation, the failure in meditation as more of, great, I'm building them, I'm building this practice, this muscle, I'm getting better at doing that. And how do I get better by failing at it?

• 58:58Sam Parr?

  Hey, can I ask you really quick before we wrap up about parenting? I saw that you've got three kids, you blogged about how one of your kids went to college. Do you put, do any of these exercises with your children? And at what age did you start doing that? Or were they like, you're my dad, I ain't listening to you no matter what?

• 59:17Speaker 00

  All of the above. My kids are definitely like, you're my dad. You know, it's funny because in most circle, like worlds, I'm, I'm, you know, I'm a professor or I'm running a firm or whatever at home. I'm, I get, you know, I have teenagers, like they're ruthless, right? They make fun of everything I do. And I, I do it in a, in a way that's not maybe as obvious. But you know, I'll give you a real example, it's easier. You know, my son was like trying to decide his, he had a really tough year, his freshman year. And he was deciding if he was going to play lacrosse the next year because he had a tough season. It didn't go how he wanted and it was brutal. And so, you know, we, I did an exercise with him and we

• 59:59Speaker 00

  said, I said, okay, Blake, like, let's go through and talk about like, I want you to play out your next. Three years as though you didn't play lacrosse. Like, let's go through it. Like, I want you to really like, think through, okay, we get home from school, here's what you do. You know, here, here's lacrosse season comes along, your friends are playing, you're doing this. Now I want you to go through and you go through the season, but it's hard, you do this. And after that, he's like, I, I definitely want to play lacrosse. Like, I know for a fact that's what I want. Like, by the end, you know, when I get done with my, my four years, like, I want to have gone through that. And so, yes, I use these tools, but it's, it's more letting them kind of,

• 1:00:42Speaker 00

  it, it's in service of their, their lives and, and it comes up more like, as when they ask, almost when they ask for it versus me saying, okay, it's Tuesday, we're gonna sit down and do this. Having said that, my kids also watch, you know, your kids watch what you do more than they listen to what you say. And so, you know, my kids have goals, they work hard, they write down their goals, they, um, they try their best, I like to think. But I think a lot of that just comes from osmosis.

• 1:01:13Sam Parr?

  What, what about your employees? Because when I listen to your stuff, I listen to your stuff because I'm looking to change my behavior. Most people don't change their behavior, though. And you talked about hiring these, um, these operators, these like people who have these wonderful backgrounds and who, um, have a track record to where they have this will, white hot will to win. Are you able to change any of their behaviors ever when you hire someone? Or are you looking for someone who already has? Uh, it.

• 1:01:39Speaker 00

  So, I'm definitely not looking to teach someone how to be motivated or to care or to run through walls. Like, I can't teach that. However, um, we've bought 800 companies. I've been doing, I've been in private equity 31 years. We built some incredible businesses. So we have incredible frameworks and tools and playbooks that we use that have been battle tested. And they're, if, one of the things we're screening for is, are they, uh, do they have a growth mindset? Are they open to learning? And so, are, if, if you look at our companies that we have in our portfolio,

• 1:02:18Speaker 00

  There is a pretty much a 100% correlation between how much of the playbooks they're running and how successful their businesses are. So they're coming into Alpine wanting to say, hey, look, I'm 32 years old. I want to run through walls, but I don't know how to run a business. Can you help me do that? And, and that's a great partnership because we have so many great tools. Now, now they will take our playbooks and they'll make them their own. So five years from now, they've added to it. They've, they've, you know, changed it. They've, they've, they've made them better and they've made them work for them. But, but we're definitely providing a lot of the foundation of like, here's some amazing tools, you know, like we have Kaizen

• 1:03:01Speaker 00

  projects we run, we have process mapping, we have a one-page planning, planning tool we use.

• 1:03:06Sam Parr?

  Have you ever published this? And can I have it? Is this like Colonel Sanders' chicken recipe?

• 1:03:12Speaker 00

  Yeah, I'd be, I'd be happy to share with you. It's probably come through in some of my materials, but, um, but yeah, we've, I mean, we've, we've, we've definitely codified a lot of this and over the years. And yeah, I'm happy to, happy to share with you.

• 1:03:28Sam Parr?

  That's awesome, man. You're, you're wonderful. You know, I don't want to compliment you too much because I've, I don't want to make you uncomfortable, but Sean and I have this, we have this joke where we, we call it the total man. We're like, you know, we interview all these amazing people. We've interviewed people who are deck of billionaires. We've interviewed people who whatever. And like, we're always 19-year-old who just sold his company, you know, the whole spectrum. The whole spectrum. And we're always looking for someone who's like this combination of a good parent, a good husband, a good business person is interesting, looks like, seems like they have fun in life and is kind to one another. And I think you've checked a lot of the boxes. Um, and, uh, it's really cool talking with you because you, you, I think you're a good inspiration of what like a person should aspire to be.

• 1:04:08Speaker 00

  Oh, thanks, Sam. That, that really means a lot. I, I really appreciate that. And, um, I really admire you guys a lot. And I've, I really enjoy your podcasts and, and this has felt to me just how you said it would, which is just hanging out and talking about fun stuff that we all really are excited about. And I'm really grateful you had me on. Happy to come back anytime. It was really fun.

• 1:04:29Shaan Puri?

  Awesome. Thank you so much for doing it. Where should people, where do you want people to follow? Is YouTube kind of your main spot or Instagram or TikTok?

• 1:04:35Speaker 00

  Um, yeah, probably, uh, probably Instagram. Uh, and I mean, I'm on all the platforms, but, um, I'm Graham C. Weaver, uh, at, I think that's my, that's all of them. I think I'm the same per, same username at all of them. So, yeah.

• 1:04:51Shaan Puri?

  Well badass brother, we appreciate you coming on. That's it. That's the pod.

• 1:05:07Sam Parr?

  If you made it this far, then you're going to love what I'm about to tell you. So there's this amazing entrepreneur, his name's Neil Patel. He's been on MFM. He's one of our favorite guests and he has a podcast. It's called Marketing School and it's brought to you by the HubSpot Podcast Network. Marketing School brings you daily actionable digital marketing lessons learned from years and years of being in the trenches. They have over a hundred million downloads and over 2,500 episodes. Marketing School gives you bite sized marketing wisdom that you can implement immediately, whether you have a new website or you already have this huge established business. You're going to learn about the latest SEO, content marketing, social media, email marketing, conversion optimization, and general online marketing strategies that work today. You can get Marketing School wherever you get your podcasts.