Rapid Response: Stop creating businesses. Buy one instead, with Codie Sanchez

Own or be owned. That's Codie Sanchez's ultimatum for anyone serious about their financial future. The founder of Contrarian Thinking and author of the new book Own or Be Owned returns to Rapid Response to make her most impassioned case yet for why buying a small business is the most reliable path to wealth that most people are too scared to take. She breaks down what "cowboying" your business is costing you, and why AI isn’t a shortcut for everyone, but instead an accelerator for what's already inside you. Plus, the industries she'd invest in right now, and why most small business owners are solving the wrong problems. Visit the Rapid Response website here: https://www.rapidresponseshow.com/ See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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

• 0:01Speaker 00

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• 0:48Speaker 00

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• 1:32Speaker 00

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• 1:41Speaker 01

  AI is full of possibilities. Enterprises run on realities. That's why Pega combines the world's most powerful AI with the governance, transparency, and control enterprises demand. So you can move faster, adapt faster, and scale AI with confidence. All the power of AI, none of the uncertainty. Learn more at Pega.com/AI.

• 2:07Speaker 02

  Unless we're telling somebody to go dive with great white sharks, in which case they might get eaten. Let's like, nobody's going to die from trying to start a business or buy a business and it not working out. You're going to learn, you're going to go through difficulty. It might be really hard, you might fail. But you probably won't stand at your grave at the end of the day and say, "Thank God I took no risk. I stayed in a job I hated, and I never actually went and stood out at the front of anything."

• 2:35Bob Safian?

  That's Cody Sanchez, founder and CEO of finance and media company Contrarian Thinking. With stock market valuations high and the job market tight, Cody argues in her new book, Own or Be Owned, that taking control of your financial future right now requires investing in yourself. Her impassioned plea for building or buying your own small business includes hardcore data about what turns risk into opportunity. And her advice translates, even if you do work for someone else, decrying what she calls "cowboying" in business as a key pitfall. So let's get to it. I'm Bob Safian, and this is Rapid Response.

• 3:22Bob Safian?

  Hey, listeners, Bob Safian here. Before we get into today's episode, I want to introduce you to Eli Wallen, founder and CEO of Engine. Engine is a sponsor of the show, which is something we're very grateful for. Welcome, Eli.

• 3:36Speaker 04

  Thanks so much for having me, Bob.

• 3:37Bob Safian?

  How is AI impacting how people book, manage, and finance travel today? And how far along the progress curve are we?

• 3:46Speaker 04

  It's still very, very early. The larger corporations, the bigger businesses, they really have not had a lot of opportunity to adopt AI yet in a meaningful way, kind of primarily because of the legacy systems that are still trying to catch up. I would say on the consumer side, you've seen more. You've seen people at least book trips, but for the most part, it's still quite nascent. A lot of times, these are big-ticket items. And relying on just an LLM to do that blindly and just kind of take your hands off and just let the agent run and book, I think there's too much nuance. There's too much change potentially that can come up.

• 4:20Bob Safian?

  As you're building Engine and the Engine experience, do you assume your customers will be AI agents? Like, is a service for AI agents different than one for humans? How do you navigate that?

• 4:34Speaker 04

  Our customers can connect and start to glean insights and understand what's going on with their travel program from their LLM directly. But I don't think the industry has quite yet caught up to maybe the expectations of what buyers have to where the capabilities of the technology is today.

• 4:51Bob Safian?

  So what makes Engine distinctive among the tech tools that people could use for their travel planning?

• 4:57Speaker 04

  You know, we were not cut from the travel cloth, so to speak. So I think the way that we built this, for the last eight years, we've been working on the infrastructure and kind of the underlying network of suppliers and content and rates and all of these things that put us in a very strong position today, which is a modern infrastructure platform that AI can sit on top of. Travel management, travel policies, approvals. This was all kind of what makes the most sense versus what was done before. And I think it's given us the ability to create something more modern that people are looking for versus trying to repeat kind of the past structure of some of those more legacy platforms.

• 5:35Bob Safian?

  Eli, thank you so much for joining me today and sharing more about what makes Engine unique.

• 5:40Speaker 04

  It was a pleasure. Really appreciate it.

• 5:42Bob Safian?

  And now, on to today's show.

• 5:46Bob Safian?

  I'm Bob Safian. I'm here with Codie Sanchez, founder and CEO of finance and media company Contrarian Thinking. Cody, welcome back to the show.

• 5:55Speaker 02

  Thank you for having me. Thrilled to be here.

• 5:57Bob Safian?

  You were last a guest in 2024, talking about your book, Main Street Millionaire. You've now got a new book coming with a more aggressive title, Own or Be Owned? It sounds like an ultimatum. Is that the choice we face today?

• 6:14Speaker 02

  Yeah, you know, we actually thought a lot about this title because it is aggressive. It's really aggressive to say that if you don't own things, then somebody else is in charge of you, you know? There are many connotations to that. But what I've realized as an owner is, first of all, you can own things and be owned by it. I think we have now worked with somewhere around 15,000 small business owners. Most of them are owned by those businesses. Most of them do not have an exit, and most small businesses are not profitable. So the last book I did, the whole point was go and buy a profitable small business so we don't get owned by Wall Street and everything looks like Walmart. And then, once we realized this, wow, we had taught thousands of people how to buy a business, and I always say, "Congratulations."

• 6:58Speaker 02

  And I'm sorry, because this part kind of sucks. So now it was like, how do we get them to run profitable businesses that you don't hate, that don't make you miserable every day?

• 7:08Bob Safian?

  And just to be clear, can you work for someone else and not be owned?

• 7:13Speaker 02

  Oh, yeah. I mean, the cool part about this book is I don't think everybody should be an owner. I think everybody should own some parts of companies. Sure, you can do it through equities, but I think as an employee in a company, you can get shares of the company. You can do rev share splits, you can do profit sharing. If you understand how businesses make money, you can figure out how to negotiate your cut of it. So, no, I think there's many days. You catch me on the wrong day, Bob, I might say, "I'll come work for you," you know?

• 7:43Bob Safian?

  I mean, the last time we talked, you said that our country might be less of a tragedy if we all owned a piece of it, that we would care more about making it better. And so owning a piece, it could be owning your own business. It could be owning shares in the stock market. It could be owning a home. Like, is all ownership equally, what's the right word, motivational?

• 8:06Speaker 02

  Yeah, well, I mean, I don't have any data to support this. So that would be, I'm not sure exactly quantifiably. But the difference with owning part of a business that you are a part of is you have some control over the outcome. You know, if you own a stock, you're making a bet on somebody else's ability to continue to build. If you own a house, you're betting on the housing market. And then you have to move if you want to realize any of those gains. When you own part of the business that you work in or part of businesses that you work alongside, you can actually affect the outcome. And that is really inspiring because it makes you want to work harder. Just because I own Apple, my day to day has no impact on what Apple is going to do. If you own part of your business that you're integrating, well, you're not going to burn down the house that you were trying to build.

• 8:51Speaker 02

  And so I think about that sort of all around our world. And can we just get little parts of these businesses, too, if we don't want to take on the big risk of owning the whole thing?

• 9:00Bob Safian?

  And when you're, I don't know, when you're deciding where to invest your money, I guess, and your time, but really your money, like, you would prioritize a business over, say, owning your own home? Over individual stocks, although people have made a ton of money on stocks lately?

• 9:18Speaker 02

  Yeah, you know, you have to have a lot of money to make money in the stock market. It's an incredible wealth accelerator. Once you have capital to invest, ownership in a business is one of the very few things where you can actually trade your time for long-term dollars. I have a bias that I think more people should bet on themselves. They'll figure out what they're capable of and then also be able to make more because of it. It's also the only investment that even if you lose, you win, because you can take some experience from it, you know? If you YOLO into Robinhood, okay, maybe you learn to not buy at the top or to not buy in market hype cycles. But what is your real learning experience? And I think in businesses, you get that.

• 10:02Speaker 02

  As far as owning a home or not, I think that's usually an emotional purchase, which I totally understand, like, it feels special.

• 10:09Bob Safian?

  Because it's such a core part of like, the American dream. You sort of feel like, doesn't really need to be.

• 10:15Speaker 02

  Yeah, it's really just another liability that you have to pay for every single month and that holds you to a job, maybe that you don't like or something that you are not sure you want to do. And so when you have a lot of money, great, own houses. And I know that sounds elitist. But when you don't have a lot of money, I would bet on yourself all day and increase your cash flow so nobody can own you.

• 10:36Bob Safian?

  You alluded to this when you talked about sort of the motivation for this book versus the first book. Like, owning a business can trap you as easily as it frees you. And I know the founders I talked to, I'm sure you hear this all the time, too. Like, if I'd known how hard it was, I never would have started this, you know? Is it better sometimes not to know how hard it is?

• 10:59Speaker 02

  Well, one, I think that we have all gotten sort of trauma bonded over entrepreneurship. It doesn't sound very fun if I come on here and say, actually, business is going pretty good. We're making a lot of money. I'm having a good time. Things are going well. It's kind of gross. And so it's almost like the reverse of the casino. In the casino, they only tell you when they win. In business, they only really like talking about the difficulty or hardships, or when they've raised a bunch of outside venture capital. And so I think for most small business owners, yes, it's hard, but they kind of love the game. Like, it's an addictive game to play. The problem is that they aren't profitable. Everything's more fun when you're making money. And so if the average small business owner makes

• 11:41Speaker 02

  $65,000 a year, well, that's less than minimum wage in California and less than even the median income in the US. And so we've got to figure out how to have profitable businesses because then the pain and difficulty is a lot easier to manage.

• 11:56Bob Safian?

  What are the, I don't know, the mistakes or the traps that folks who are, you know, running their own businesses are running themselves into? It's not that they're not working hard. They're not working on the right things?

• 12:08Speaker 02

  Yeah. If you look at the, you know, dispersion of returns, basically the top 10% to 20% of companies, they're like 30x more profitable than the lower companies. What we've seen is that most business owners, they don't run on systems. And even I see it in my business. I mean, I just had to let go of two employees. And the reason why, these are execs, serious people making hundreds of thousands of dollars a year, because I couldn't get them to use a system. They wanted to cowboy it because cowboying it as a business owner feels good.

• 12:40Bob Safian?

  By cowboy it, you mean sort of just like wing it? You just make the decision based on what you're feeling like?

• 12:45Speaker 02

  Exactly. Like, if you don't run on a system, you are not going to consistently be profitable. You won't have the data to back it. You won't know why your decisions worked or didn't. And that's why private equity companies eat a lot of normal businesses' lunch, what we call the 12 profit levers. The system that we've run for years goes all the way from what you price, to the people you sell to, to the people you hire, to the products you sell, to how you pitch, to how you promote. Every single aspect of your business needs to be systematized. It's not that hard, actually. The only hard part is, is that it's more fun to wing it and riff on things. And that's probably what made you an entrepreneur to start with. But do you want to make money? Or, you know, do you want to riff?

• 13:29Bob Safian?

  And I guess in this environment where so much feels like it's changing, I can see some of the resistance to systematizing being, well, that makes me rigid. I'm not going to be creative enough. I'm not going to be agile enough. Having a system doesn't necessarily mean not being agile and changing things.

• 13:50Speaker 02

  It's really important you say that. You know how you go to business books and you're like, well, I guess if I was Elon Musk, and then I read his biography and I did exactly what Elon did, I would win. But sadly, I'm not as smart as the guy. I'm not as rich as the guy.

• 14:01Bob Safian?

  Or as lucky, too, right?

• 14:03Speaker 02

  Yeah. Or as like prone to misery. Like, I don't want to sleep on factory floors for weeks. I'm glad he does. That's great. I don't want to. And so what we realized in this book, you have to have three things to have a system that works. One, we have something called the owner score. It tells you what kind of owner you are, what your proclivities are. For instance, artists or founders, they price like 30% to 40% lower than an archetype that is a closer or a ball hog. And so your first input is what are you? What kind of owner are you? Your second input is, in your business today, how do you score versus the market on your 12 Ps? We have like a data set of 30,000 businesses. And then the third input is, once you have all that data, how are you looking at it

• 14:47Speaker 02

  every 90 days to make sure you're addressing the system again and again? And none of this is new. These are all theories that have existed forever in private equity. We're just applying it to small business owners in a way that they never got access to it before.

• 15:00Bob Safian?

  Yeah, I mean, it sounds like the kinds of rigor that more established, bigger businesses have used for a while. Like, it doesn't seem like rocket science. It was just too complicated to do before? Like, it's cheaper now?

• 15:14Speaker 02

  Yeah, well, it was really complicated. It was expensive. You know, if you wanted to go before and get advisory services on how to run your business more profitably, you could go to McKinsey or Bain, but you're going to have to pay $500,000 for an advisory thing. And they're basically just going to tell you the stuff to cut costs and that you want to hear, even though they're really smart guys. No shame to their game. And so what we realized is, we're like, well, what about for the small businesses? They don't have, you know, the HVAC or the roofing company or the ad agency. They don't need to come up with some crazy new innovation. They need to respond to their customers faster. They need to incentivize their employees correctly. They need to price more intelligently and probably higher. Like, it actually is not rocket science. But when you're in your business,

• 15:59Speaker 02

  there's so much on your to-do list. And so every day, you're just treading water as a business owner. And I'm hoping to try to stop that.

• 16:07Bob Safian?

  And do you find in your data that like our small business owners, like, are they going to AI bots and asking them advice about what should I do or where the next market is? And like, is that useful? Or is that a different kind of trap?

• 16:22Speaker 02

  Gosh, if you had asked me 12 months ago, I would have said, this is incredible. This is going to be a game changer. Now, what we've realized is most of the advice is so generative and aggregate, it's not actually helpful. And then it will usually tend to tell you things that you want to hear about your business. It doesn't tell you the difficulties. And so you really have to stress test it. So I actually have started to say, don't give me aggregate data. I want only data on home services businesses located in the Southwest. And what do they price at? And where's that data set from?

• 16:57Bob Safian?

  And so if my search is that, if my prompt is that specific, I can get more valuable information?

• 17:05Speaker 02

  You can, but the problem is they don't have access to that data, usually.

• 17:09Bob Safian?

  And they'll, and they'll make it up, and you won't know that they've made it up.

• 17:12Speaker 02

  That's the problem.

• 17:12Bob Safian?

  Because they always give you an answer. They never say, I don't know.

• 17:16Speaker 02

  Exactly. And a lot of it, and the vice is super problematic because you really have, you know, you'll say, well, should I be spending more on advertising or marketing? Okay, well, it's really hard for you to feed it enough data for it to give you a smart response on that. But if you talk to a business owner who's been doing this for 10 years in your industry, and you have the data set on everybody else, you can just say, well, we do something called a P and L review. You look at the P and L and you're like, hey, guy, you're spending 2% of your revenue on advertising and marketing. The industry average is 15%. You actually have a positive return on ad spend here. Let's up this. This is a very easy thing to do. But AI isn't going to get there because you won't even know the answers to ask it, or the questions to ask it.

• 17:59Bob Safian?

  And, and for your business, like, the McKinsey's of the world make money because they can charge so much for their advice. How do you make money? Because you have to charge a lot less to much smaller businesses.

• 18:13Speaker 02

  It's way harder. I think, I think about this daily. We're a mission-driven company. We always have been. Our belief is that you should be able to learn how to buy small businesses and build them, and that we want to do that at scale for everyone. You know, if I was even advising my business, our issues are always, we should increase our prices, but we don't. So that means we have to be super effective. And we also have to find other ways to make money, which means we've got to invest in businesses and have those businesses ROI to us on top of it. And if we didn't do that, I don't think we could do this at scale at this price point, because the market just naturally is going to move you to more expensive options.

• 18:55Bob Safian?

  Right. It's, it's a better business to go to the bigger companies that you can charge more for, but then it's moving you away from your mission.

• 19:02Speaker 02

  Yeah, exactly. There's three types of businesses I talk about in the book, lifestyle, scale, and exit. Most small business owners, they really do, they just want a $10 million a year roofing business, which is an incredible business. This is a scale business. I don't make a ton of money from this personally. Most of the money goes back in the business. It's not an exit business where we're preparing for profits. If you know who you are, you know what you want, you know what your business scores, and you know how to run a system on top of it, you're probably more likely to succeed.

• 19:28Bob Safian?

  Opposed to trying to do everything.

• 19:30Speaker 02

  Exactly. Most of them want to do all three. That doesn't work.

• 19:33Bob Safian?

  Or sometimes you do one, and sometimes you do the other, and that's being a cowboy.

• 19:37Speaker 02

  Right. Yeah, exactly. And then I have to fire you, which is not fun.

• 19:43Bob Safian?

  If you want to work for Cody, don't be a cowboy. And don't try to do everything, which is a trap a lot of entrepreneurs and business leaders fall into. So is it better to start your own business or buy an existing one? And are hands-on trades really worth considering in an AI world? We'll talk about that and more after the break. Stay with us.

• 20:11Bob Safian?

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• 20:47Bob Safian?

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• 21:30Bob Safian?

  When you've built substantial wealth through your business, it's often tied up in a single equity position. The upside is real, but so is the risk, and knowing when to act isn't always obvious. Creative Planning works with business owners to build a strategy around concentrated equity, when to diversify, how to manage tax risk, and how to protect what you've spent years building. Creative Planning: where wealth works together. Learn more at creativeplanning.com/mastersofscale.

• 22:02Bob Safian?

  Before the break, Cody Sanchez of Contrarian Thinking talked about why owning your own business should be everyone's goal. Now she talks about the advantages of buying an existing business over starting your own, the trap of thinking AI can make a business better, and which fields offer the best opportunity right now. Let's jump back in.

• 22:25Bob Safian?

  You launched a business earlier this year, BizScout, to help people buy existing small businesses rather than creating ones from scratch. So how do you know if that kind of option is a good option for you?

• 22:42Speaker 02

  You can go to BizScout, and you can go to our calculators page, and they'll give you a valuation analysis. And talk to one of our representatives, and they'll tell you, yeah, your business is like totally sellable, or here's how you should prep to sell it.

• 22:55Bob Safian?

  Because a lot of small businesses don't know how to value what they have.

• 22:59Speaker 02

  Well, yeah, I didn't. I mean, before I was in finance, I would have had no idea. And also, how are you going to get the reps of that? You're only going to sell your business once, probably. So there's no reason to become an expert at that. But then the second is, how do you know if a business is good to buy or not? It's kind of cool. On BizScout now, we have something called Scout Sites. Do you remember like, well, like Zestimate, Zestimate about like what a house is worth? So Scout Sites is the same thing. It's trained on the, you know, tens of thousands of businesses. It's never really existed for small businesses at scale. Obviously, you have to do more due diligence on top of that. But there's, for the first time ever, you can be like, whoa, these guys are crazy. This is totally out of market. It's only rated, you know, a 30, which would be an F as opposed to an 87, AKA B+.

• 23:40Bob Safian?

  But if I'm, you know, I want to have a roofing business, or I want to open a bakery, like, how do I decide whether maybe I should go on here and see if there's a small business for me, like, for me to buy versus me starting one of my own? Is that, is that about how much money I have to begin with, or where I am in my career? Like, how do I make that decision?

• 24:02Speaker 02

  I don't think, unless you have a burning demand to like start a business, you can't sleep for the want of starting a business. The data says, don't do it just for the money. It, you know, it'll take three to four years to be profitable. You have a 90% failure rate inside of 10 years. And most small business owners only make 46 to $65-ish thousand a year.

• 24:23Bob Safian?

  Yeah, boy, that sounds like, why would I do this at all?

• 24:25Speaker 02

  Well, that's my point. I wouldn't do that. I think if you're crazy enough to want to start a business, you won't ask for advice. You'll just go do it. And then if you really want the profits for it, go buy one, because you have a higher likelihood of knowing if it's going to succeed or not. And I'm not saying there's not risk to acquisitions. Obviously, you have to take a loan out typically, or do seller financing. But the SBA's failure rate right now is like less than 13%. So you go get a loan on a small business, it gets SBA-approved. You have a 13% failure rate over a 10-year period, as opposed to in startups, a 90% failure rate. So I just kind of go back to the math. And that's why I talk to so many people about buying a business, even though people don't always like that I talk

• 25:10Speaker 02

  about that.

• 25:13Bob Safian?

  Why is that?

• 25:15Speaker 02

  Well, one, people are always going to dislike you for succeeding at the thing that they were not able to succeed at. People will hate you for having less and doing more with it. And so if somebody has gone through something incredibly traumatizing, like buying a business and failing at it, all they see are other people that will fail too. And I'm not sure how that is helpful at all. Like, unless we're telling somebody to go dive with great white sharks, in which case they might get eaten, let's, like, nobody's going to die from trying to start a business or buy a business and it not working out. You're going to learn. You're going to go through difficulty. It might be really hard. You might fail. But you probably won't stand at your grave at the end of the day and say,

• 25:59Speaker 02

  thank God I took no risk. I stayed in a job I hated, and I never actually went and stood out at the front of anything. I think that's totally irrational. So it won't be easy, but I do think often it's worth it. And then I always like to say to people, oh, yeah, okay, it was so hard and so terrible, and I shouldn't tell people that they could buy a business. Do you work for yourself still? Oh, you do? Okay. They can't do it, but you can? Come on. We're not, I'm not that special. So I think that's why, sadly.

• 26:29Bob Safian?

  Now, there's this risk, of course, of putting so much of yourself into it. And so there's this trend about fractional ownership, sort of co-owning a business. Are you in favor of that, or wary of the, like, the complications of having, you know, having to share that way?

• 26:46Speaker 02

  Well, I mean, it's how I started, so I can't be too out of it. I didn't have the balls, quite honestly, to go jump into full-on acquisition. I was a little too freaked out to take a full-on risk. So I wanted to own part of a business. I did it with partners in the beginning, and then again, and again, and again. And so we actually created something at the Contrarian Academy, where you can get partnered up with other people. So if you want to be an operator of a business, but you need investors or capital, you can come together. If you want to be an operator of a business and bring cash, and you want another operator and bring cash to the business, you can come together. There's a lot of best practices we share about how to not totally regret the person that you do this with, and how to make sure the terms are useful. And you're going to make mistakes, and you probably

• 27:29Speaker 02

  will have some regrets. But anytime you diversify risk, there's just less likelihood for you to go bankrupt, which I kind of like for the first deal. Like, Bob owned part of a donut shop down the street. Get, get a little rev share from it. See how you like that before you dive into the whole thing. I'm totally fine with it.

• 27:48Bob Safian?

  You know, I asked you about AI a little bit earlier, and I'm curious how new tech affects new business owners. I mean, we've seen sort of Sam Altman saying he expects, like, a solo unicorn to emerge, you know, one person building a billion-dollar enterprise using AI. Do you feel like we're going to see a boom in sort of one-person businesses in that way? Or does that fall into like, the scaling versus the, you know, the different categories that you have, the scaling versus the lifestyle, or?

• 28:22Speaker 02

  Yeah, I think there will be some crazy outliers. Those people probably would have built really big businesses without AI, too. And so I don't think it turns a normal person into a superhero. That'd be cool. I think it is an accelerator for what is already inside of you, one way or the other, which is actually a pretty dangerous game. In my mind, one, I don't want to compete with the Elon Musks, or the Sam Altman's, or the Bill Gates. Those guys are super technical. They've got billions of dollars in funding. I think the better play is, let's go compete with the handyman down the street who's 65. And then I can add just a little bit of AI on top of it. I can add a little bit of tech on top of it, and maybe some cool branding, and I can win. That is just a better game to play,

• 29:06Speaker 02

  in my opinion, than trying to play Russian roulette with a bunch of tech nerds that are really smart, obsessed with this, probably don't do anything else. I don't think that's the game I want to try to play.

• 29:16Bob Safian?

  It's interesting, as I'm, as I'm listening to you, like, your book will outline for me the steps and the questions that I should ask to be able to, you know, to identify and get my business to run better. But it also, a lot of it is emotional about yourself, is sort of being clear about what you want and what your goals are, because that dictates your business strategy.

• 29:41Speaker 02

  Yeah. Isn't it crazy, though, that there are so few business books that do that? I can give somebody advice and tell I am blue in the face. But if that is not their unique skill set, it's not going to work for their business. And then the secondary level that's kind of cool is, let's say you're an employee, you're not an owner. I would make my boss take this. I'd be like, I want to know what your weakness or strength is. I want to know what mine is, because if I know how to hire, and I know how to work around these other types of people, I'm going to get more equity and upside in this business. And so at the end of each chapter, there's basically a portion where it's like, okay, owner, you do this. And then, you know, hustler, you do this.

• 30:22Bob Safian?

  You make it sound like it's so simple, like, it's basic, it's all out there. You just have to put it together. But I guess discipline is never simple.

• 30:30Speaker 02

  There's always a shiny new object to chase. You know, what we found, when we bring our owners in, we do these events once a month, and we bring business owners in, they're like, well, what am I doing with AI? I mean, Bob, perfect example. There's this, it's an HVAC company, and commercial, and based in Florida. And the guy is like, well, you know, I'm working on this AI integration, and it's going here, and it's been pretty incredible. And I just said, can I have your phone number for your business?

• 31:00Speaker 02

  I called the business. It's Friday. It's like 10:15 in the morning. I called the business. Nobody answers. There is, I kid you not, an AI special jingle the guy made. It's really cute. And then it goes to a voicemail. And I'm like, guy, fuck the AI. Go. And, and, and what does this voicemail get? An answering service? Like, you just lost a commercial client potentially. What are we doing? And so sometimes when you're the business owner, you have too many things. You need somebody to go like, that right there is where the money is. Just do that. And then you can layer the cute stuff on top of it later, you know? So our methodology overall is like, you're, you're kind of over complicating it. And that's okay. We all do it. Let's go back to boring. It actually works really well.

• 31:45Bob Safian?

  You personally have had a lot of success within the creator economy of millions of followers across platforms. Is building a personal brand now sort of an economic necessity for everyone, for every business?

• 32:00Speaker 02

  No, I do not think most small businesses should build a personal brand at all. I did it by accident during COVID because I was stuck at home and I started with a newsletter and I liked writing. And then I had fun creating. And I was like, this is fun. If I just wanted to optimize for making money, I would not do this, you know? And, and there's cool parts to it. Like, don't get me wrong. There's very cool parts. I get to have lovely conversations with you. You know, I get to go on Good Morning America. That's very like ego satisfying, for sure. But most small businesses don't make money off of their personal brands. I mean, if you knew what most of the YouTubers actually make, you know, the sprinkler guy

• 32:41Speaker 02

  down the road makes like 5X. They don't make that much money. And it's really hard to stay relevant forever. Like, it won't be too far in the future where people won't care at all about me anymore. And that's okay, because I have these other businesses. But you don't want to create a business of you.

• 32:56Bob Safian?

  Yeah, no, relevance is an exhausting and difficult track to stay on.

• 33:00Speaker 02

  And you got to have a thick skin, too.

• 33:02Bob Safian?

  We've seen growing media coverage around hands-on jobs that can't be displaced by AI. When you're considering a small business right now, are those the kind of industries you should be leaning towards?

• 33:15Speaker 02

  If I had to look at the top industries right now, I would say, first of all, anything in manufacturing, there's a ton of grants and a ton of opportunity to reshore back to the US right now. Home services, a massive shortage. Then I would go to more of the skilled trades. You do have to go, you know, to some sort of trade school, but the pay is actually quite high. People will say, well, oh, but, but a plumber, you know, he's never going to make $300,000 a year. He might make $125,000 a year. But that misses the point. As a skilled tradesman, your ability to then go buy a plumbing business is so much higher than anybody else's.

• 33:56Bob Safian?

  The world seems pretty chaotic right now. Political uncertainty, trade war with Canada, oil prices. I mean, it might make people feel like now is not the time to take on new risks, that we need to just focus on what we control right in front of us and sort of stay here and not change anything. What do you say to that impulse?

• 34:18Speaker 02

  That the world has actually never been better in most ways. I always go like, is it a feeling? Or is that the math? And the math says writ large, we live longer, we're wealthier on average than we've ever been before. We have more opportunities than we've ever had before. And if you live in a developed country, even though in some ways it is harder, AKA, you know, houses are more expensive, groceries might be more expensive, some of those not so small things are harder. It's also never been simpler in a lot of ways to get wealthy. And so I would say, don't ever let market economics or somebody else labeling you a victim, or the time as not being right now, stop you from making it your time right now. Because people will win in every market. It's just,

• 35:03Speaker 02

  are you going to decide to be one of them or not?

• 35:06Bob Safian?

  Yeah. And time is the one thing we don't have an unlimited amount of, right?

• 35:11Speaker 02

  Why would you ever let somebody tell you that you can't just because it is hard right now, or it is chaotic? You know, yes, and you're probably more capable than you've given yourself credit for. And you're not going to listen to the people who tell you that it's possible for somebody else, but not for you. No, I don't believe, I don't believe that.

• 35:30Bob Safian?

  Well, Cody, this was great. Thanks so much for doing it.

• 35:33Speaker 02

  Thank you guys for taking the time and covering it. I really appreciate it.

• 35:37Bob Safian?

  I love Cody's optimism amidst all the tumult in today's world. I'll confess, I can get distracted by all the troubling headlines. And it's good to be reminded of the positives. It's also good to remember that the only time given to us is right now. So why not make the most of it? I do think a sense of ownership changes how you view the world and how you view your work. For me, I don't necessarily need to be the quote unquote owner of a business to have that feeling. But I appreciate that everyone is different. As for buying a business, starting a business, Cody's underlying message is to craft your ownership, your career, based on your own proclivities and goals. Are you looking

• 36:22Bob Safian?

  for a lifestyle, an exit, a scale journey? Are you a cowboy? Success starts by being honest with ourselves. I'm Bob Safian. Thanks for listening.

• 36:43Speaker 00

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• 37:22Speaker 05

  Humans will never be more intelligent than AI.

• 37:26Speaker 06

  There's going to be two types of companies. Those are great at AI, and those that went out of business because they weren't.

• 37:31Speaker 07

  How do we build a future that is human centered?

• 37:36Speaker 08

  I'm Rana Elkhauyubi. And on my podcast, Pioneers of AI, we answer that question and so many more. As an AI scientist, entrepreneur, and investor, I know what it takes to build AI that works for everyone. Every week, I sit down with the pioneers shaping our future. And we take you behind the scenes of the AI that's transforming our lives. Find Pioneers of AI wherever you tune in.

• 38:05Bob Safian?

  Hey, listeners, Bob here. If you listen to Rapid Response on Masters of Scale, you may be missing half the show. Because every Friday, we release a second Rapid Response exclusively in the Rapid Response feed. The guests and topics are just as compelling and timely, from Ford CEO to NASA's administrator, to the lessons from the devil wears Prada. It takes about 10 seconds to find. Just search Rapid Response wherever you listen to podcasts and hit follow to make sure you never miss an episode. I hope to see you there.

• 38:43Bob Safian?

  Rapid Response is a Wait What original. I'm Bob Safian. Our executive producer is Eve Trow. Our senior producer is Alex Morris, and our associate producer is Masha Makutonina. Mixing and mastering by Aaron Bastinelli and Brian Pugh. Our theme music is by Ryan Holiday. For more, visit rapidresponseshow.com.