#101 with Ryan Begelman - How to Succeed Applying Private Equity Structure to Startups

Sam Parr (@theSamParr) and Shaan Puri (@ShaanVP) bring back Ryan Begelman (@ryanbegelman) for round two on the podcast. In today’s episode you’ll hear: Ryan explains his idea on how high-end cooking classes could make you a million dollars a year (3:00), Ryan talks about some of the very first big name celebrities to join Summit Series (8:15), Shaan asks Ryan if Adam Neumann from WeWork took entity structure too far (11:20), Ryan gives his thesis on how you structure a business following “The Virgin Model” (14:10), Shaan asks Ryan to expand on how to create wealth while still having a great life (25:10), Ryan pulls the curtain back on what it’s like to work in big banking and private equity (33:00), Shaan explains his “sell your byproduct” framework (45:12), Ryan outlines how to grow your business without venture capital (48:05), the guys talk about the psychology behind selling a high-ticket item (52:35) Companies and people mentioned: - Ryan Begelman’s website: https://www.ryanbegelman.com/ - Ryan’s companies: https://summit.co/ and https://www.bisnow.com/ - https://websummit.com/ was founded by Paddy Cosgrave (https://en.wikipedia.org/wiki/Paddy_Cosgrave) - Adam Nuemann, WeWork founder: https://en.wikipedia.org/wiki/Adam_Neumann - https://harvesthosts.com/ founded by Joe Holland - Barry Sternlicht (https://en.wikipedia.org/wiki/Barry_Sternlicht) founder of Starwood Capital, and https://en.wikipedia.org/wiki/Baccarat_(company), the company bought. This episode is presented by Tempo! Check them out at tempo.fit and use code "TempoHustle" for $100 off. Joined our private FB group yet? It's a page where people share each others million dollar ideas or what they're already working on: https://www.facebook.com/groups/ourfirstmillion. See acast.com/privacy for privacy and opt-out information.

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

• 0:08Shaan Puri?

  Okay, what's up? We got Ryan back. Dude, back-to-back episodes, pretty much. This is great.

• 0:14Speaker 01

  Yeah, I'm excited about it. It's been amazing how much feedback I've gotten. I got buried in all kinds of emails. And it was interesting to see what people wanted to know.

• 0:24Shaan Puri?

  What was the best and worst email you got?

• 0:30Speaker 01

  Well, there was a handful of people trying to sell me their company. But they were usually too small. But there was a couple of interesting ones. Yeah, if people out there want to email me, they can just go to RyanDeagleman.com. And if they have a company with 300,000 or more profit, I'm interested in buying it. Or if they just want to jam out or ask me a question, I'm happy to help. And a lot of people asking me about the concept of like, how to structure your business to minimize risk and upside, which we talked about, you know, like joint venture waterfalls and structuring separate LLCs. And some interesting invites to some other podcasts. So you guys are kind of like kingmakers, I guess.

• 1:09Shaan Puri?

  Wow.

• 1:10Sam Parr?

  What podcasts?

• 1:11Shaan Puri?

  Music to my ears.

• 1:14Speaker 01

  You know, to be honest, I only listened to like three podcasts and didn't listen to them for a while. So I didn't recognize the podcast. But you know, I don't know, one of them had like Gary Vee and some other interesting people. It looked pretty legit.

• 1:26Shaan Puri?

  Nice.

• 1:28Sam Parr?

  Ryan, when I was, I don't know if you guys happen to see this. When I tweeted about how I thought buying a home was a horrible idea, I pissed off so many people.

• 1:39Speaker 01

  I agree with you, by the way. I mean, historically, I think historically, like home values have grown like 2% or 3%. And obviously, in some areas, if you bought at the right time, they've done better. But yeah, I mean, I was a renter for a super long time because I felt I could do better with my capital.

• 1:57Shaan Puri?

  Yeah, I'm about to eat a huge loss on my San Francisco condo, so I'll never buy again. As far as I'm concerned, this taste will take seven years to wash out of my mouth.

• 2:07Sam Parr?

  How much will you have lost, a significant amount?

• 2:10Shaan Puri?

  Yeah, I think I'm gonna lose like, I think it's gonna sell for 200,000 less than I bought it for. So that's just straight out of my down payment. And then, you know, it's a, the agents, the agent fee is like 5%, right? So I went with like a real agent, not like a discount broker, because I was like, shit, it's gonna be hard to sell. I think I actually need somebody who's good and will hustle for this. But 5% of a $2 million house is like, you know, that's 100, 100 grand right there. So, so on top of the loss, I'm then gonna pay the 100,000 fee for, for my, for the pleasure of, of, of losing money on my house. But whatever, it's okay. Win, win some other places. I lost on this one. That's okay.

• 2:48Speaker 01

  Well, one, one of the ideas I brought today is how to make money on your house.

• 2:52Shaan Puri?

  Oh, okay. Yeah, let's start with that then, because I need that.

• 2:56Speaker 01

  Well, it was, you know, it was, it was along the concept I was talking about on the last show about holistic entrepreneurship and how you can live better lives through entrepreneurship. And, and so like one idea that I love noodling on is, okay, you buy a house outside of a major city and a destination people want to go, like Hudson Valley, New York. And then you, you turn, you renovate the kitchen, you make it a chef's kitchen, and you, you give high-end cooking class experiences. I've, I've done a bunch of these myself, but, you know, I was doing the math on it. And if you do two classes a day, 500 bucks a person, and you have 10 people per class, and you, and you do that five days a week, 50 weeks a year, it's about $2.5 million of revenue.

• 3:41Speaker 01

  And you could generate probably at least 30% margin, that's 750 grand a year. And all while you're just like tending your garden, teaching cooking classes. And frankly, I, at 30%, I think you could actually hire a couple of people to teach the class for you.

• 3:54Sam Parr?

  You'd want those people in your home?

• 3:57Shaan Puri?

  The home, you could build like a- Kitchen for him, basically. It's not even a home.

• 4:02Speaker 01

  Okay, well, fine. You build, you build one of those little pop-up, like, you know, manufactured modular homes in the backyard. You do it there.

• 4:10Shaan Puri?

  Who's paying? You pay 500 bucks for cooking classes? Is that a thing people do?

• 4:14Speaker 01

  Yeah, I mean, well, you could turn it into, yeah, if you could turn it into like a half day experience, I've paid that much. And frankly, I think for you could have a higher end offering that's like a couple grand. And we actually do this at Summit, so we've hosted all kinds of weekends. We've, you know, about 150 people come out to a weekend and they cost about two grand. And we experimented with a culinary weekend where it was like all different kinds of chefs and, you know, tasting different kinds of things and, you know, making things and people love it.

• 4:43Shaan Puri?

  I feel like with Summit, you have this both an amazing perspective because you sort of did the impossible and have this like really unique, unique set of experiences. On the other hand, you have this really skewed view of reality because it's like, the people who go to Summit are people who are of a certain, you know, level of success. And then they, they, they basically get wrapped up in the Summit like world, I feel. And it's like a casino in the cloud and like, they're like, yeah, okay, take me on this helicopter ride. All right, cool. You want me to buy this, a piece of this, a patch of this mountain that doesn't, isn't undeveloped right now for a million bucks? Okay, take my money, you know? I think you get people into this, so it's so immersive that the sales on, you know, the on-premise sales are like, you know, bar none.

• 5:27Shaan Puri?

  It's uncomparable to like what I think most people are ever going to be able to, to deliver. Because you've built equity with people and you get them in the moment where they're like, I do need to live my life. Yeah, like I do want to be around these people more. I do need to be out of the city and out in nature and like, I think people make great decisions when they're in that state.

• 5:46Sam Parr?

  Before we even get into that, should we remind people who you are?

• 5:50Shaan Puri?

  Yeah.

• 5:50Speaker 01

  Sure, sure.

• 5:52Sam Parr?

  So Ryan, I'll do it for you because that's what I do. Ryan started or helped start Biz Now Media, a company that did a newsletter and events business, did 20 million in sales and about 6 million in profit, sold it for 50 million bucks. Then what Sean's referring to is Summit. He and four other guys, I believe, bought a mountain for 50 or 40 million dollars and then turned it into a resort and they do Summit Series, which is this. A bunch of a series of events for, I don't know, who do you say, industry leaders, artists?

• 6:24Speaker 01

  Yeah, artists, academics, scientists, and all kinds of entrepreneurs, nonprofit leaders, etc.

• 6:30Shaan Puri?

  I think you said it right on the last podcast, Sam, where you were like, it's like Ted, but cool again. Like maybe how Ted used to be. It's like Ted if Ted was done by like, you know, 27 year olds who like wanted to have a lot of fun. And Ryan, you don't know this, but I've used you as an example so many times. I've never, I've never even been to Summit, but I heard your story. I read it up. I read about it because I was like, who's behind this? And it validated this theory I have, which is you get no rewards pretty much for attending the party, or very little rewards for attending the party, but you get all the rewards if you host the party. And Sam, you did the same thing with HustleCon where if you do the sweat to organize and you can convince just that first couple people of legit players to come in, there becomes this domino of legit people who will come in.

• 7:15Shaan Puri?

  You know, even though you have no track record, no nothing, no, no claim to fame in that regard. And by being the one who invited everybody, you get this like amazing rush of goodwill and opportunity and relationships with people. And I've seen Sam do this with HustleCon. I saw you do this with Summit Series. And then the other example I always give is Patty who created Web Summit and F. dot Ounders or whatever. I don't know if you, you probably know Patty because you guys are kind of in that world.

• 7:43Speaker 01

  Yeah, no, Patty did an amazing job of Web Summit. And no, you're absolutely right. Summit started with just 19 people. You know, we cold called them and those 19 then invited their friends and then they invited their friends. And, and it just snowballed and still was, you know, a few thousand people getting together.

• 7:59Shaan Puri?

  Who was the most interesting first like domino to fall of like legit person who was going to attract other people? But they had to be the first one onto the dance floor, like, you know, with Twitter, Ashton Kutcher or whoever. Who was the first celebrity to really come on the platform and legitimize it? Who was y'all's first in that?

• 8:16Sam Parr?

  Was it like the Tom Shoes guy or something?

• 8:18Speaker 01

  Yeah, I mean Blake Mikowski from TOMS, definitely. And I would think Tony Hsieh was instrumental from Zappos. Tony was not only one of the first summiters, but we hosted this event at the White House, where we were introducing basically the White House Cabinet to Silicon Valley and entrepreneurs. And Tony came to that event and at dinner after the meeting with the White House, he came up to us and he said, is there anyone here who like you wouldn't invite over to your house, like meet your parents? And we were like, yeah, of course, like there's some really incredible venture capitalists and people here that we think are kind of dicks, but you know, they're here because everyone wants to meet them. And he was like, nope, they can't come back. He's like, if you want to build serious culture and you want to have people that, you know,

• 9:04Speaker 01

  like hold the values of this, then you need to only have, you know, the certain kind, like you need to have kind-hearted participatory people. And that became then, you know, our second, you know, kind of criteria for who comes.

• 9:16Sam Parr?

  Who's the most interesting entrepreneur you guys have met? Or a couple of the most interesting, where you're like, this person is going, this person is, is all they're cracked up to be?

• 9:26Speaker 01

  Well, I mean, look, it's controversial to say, but I told you this when we were together, Sam, I think Adam Neumann is someone that I spent a tremendous amount of time with at certain key points in WeWork's run-up. And although, you know, obviously he may have his shortcomings and, and, but it was incredible to see how quickly he could learn, how good he was at negotiation, at real estate, at design, designing the space, designing the website. I just think he's been now underrated in how dynamic he is in many respects, just like in terms of just like pure execution.

• 10:03Sam Parr?

  Can you tell Sean and the listeners any of the stories that you told me?

• 10:08Speaker 01

  Yeah, an example would be I would go into his office and I was just always impressed by, he'd have this huge screen up with all his KPIs. And he was on top of like, how many people were asking for the air conditioning to be turned down in their WeWork? And, you know, how many tours happened that day? Which frankly, like as someone who prides himself on building his businesses around KPIs, like I had a hard time building that level of transparency into my business. And I had been doing it for even longer than him at that point. So, I don't know, there were lots of little nuances like that that I was impressed by.

• 10:42Shaan Puri?

  So I got a question for you. So last time you were talking about structure and you were talking about like having a hold co that licenses the brand to the to the individual like kind of operating entities. And this is kind of controversial because this is what the like Sam, when I was listening to it, I was like, Sam, you got to ask about WeWork. WeWork did this. And it was super controversial, right? Because like,

• 11:01Sam Parr?

  Well, I know that Ryan and Adam had a relationship and Ryan and I were shooting the shit about it. And I just didn't know where I was going to let Ryan decide if he wanted to get there.

• 11:12Shaan Puri?

  Okay, so I'm gonna, I'm gonna ask you more directly. So that structure made a lot of sense to me. And I think there's a ton of merit to it. But then WeWork was kind of an example where from the outside, it seemed like maybe that had gone too far where he was licensing back the WeWork name for like 7 million bucks. And he was the master owner of the leases and then they would lease from him. And so it kind of seemed like a double dip for the founder in a way that was not well received by the like kind of startup community and investor community. What do you think? Is that an example of no, that was legit? Or yeah, maybe he took it too far? Or that's this is completely misunderstood? Here's actually how to think about it.

• 11:52Speaker 01

  So I think in some ways, it was misunderstood. And in some ways, it was not executed quite right. And I can't speak to why. But this is very common in hotels. So Marriott and Hilton originally developed their own buildings, owned the buildings with investors. Each building would have different investors. Maybe one set of investors doesn't want to invest in their Dallas hotel, but they do want to invest in the Houston one. So and then they would have a holding company that owned the license to, you know, to own the brand and had and actually employed the people that are on the ground in each hotel managing those. And for that, they would earn like 7% of revenue. So they'd have economics in the building, and they'd have economics in the service that's being provided from the holding company.

• 12:35Speaker 01

  So this is, and then over time Marriott decided that it was not advantageous to own the real estate because real estate is a slow burn business because it's very capital intensive. You can only open up so many hotels in a year if you have to go about it that way. So they sold off the real estate and they said, look, let's just double down on the flag or on the management company. And that way they were able to open thousands of hotels very quickly. So, you know, I think Adam was dabbling in both, right? He was owning real estate with like joint venture partners and private equity and other sources of capital. And then he had WeWork that was venture backed by another group of investors, some of whom might be the same investors in the real estate. And they were then, you know, doing these deals where they were leasing the properties that they owned.

• 13:16Speaker 01

  And, you know, one way to solve that so that everyone's aligned is you raise capital from the same investors for both LLCs. So you say, you know, one entity is going to buy buildings and develop them and redevelop them and lease them to WeWork and the other entity is going to be WeWork and it's going to own, you know, the technology and the brand and the, and the know-how of how to actually operate these, these on the ground and it's going to lease them from them. So I think that that's one way you could do it. The challenge though, is that most, th- those are two kinds of different investors. The kinds of people who invest in real estate and the kinds who invest in venture are rarely the same people. And so I'm guessing that's one reason he was struggling with that is that the investment community didn't really understand like the profile of these, of

• 14:00Speaker 01

  how these two things could be synergistic.

• 14:02Sam Parr?

  But how do you do that with like a software company or a media company? I mean, like with more traditional internet based stuff?

• 14:10Speaker 01

  So like, you know, an example for a media company would be to follow the Virgin model where you build up a media brand, you develop the brand, and then you, you license that brand. So take like Barstool, you know, instead of them, you know, being bought by Penn Gaming, I think it was, they could have licensed their brand to Penn. Penn could have spun up, you know, an app for sports betting and Barstool maybe takes seven percent of it. And in addition to that, Barstool maybe gets paid for advertising so that they advertise, uh, you know, the new app. And, and in addition to that, if they want to take it a step further, they could even raise like a venture fund and invest in the new

• 14:51Speaker 01

  joint venture. So that they're basically taking a piece of the pie on every, on every leg. And a great example of somebody who does this really, really well is Barry Sternlicht, who created the Starwood Property Group, which is a publicly traded company that owns, you know, Starwood and lots of other brands like St. Regis. But he also, you know, I think a lot of people don't realize this, he also owns Starwood Capital, right? So he also is a private equity fund and he also owns the One Hotel and he also owns the Baccarat. Like, okay, here's a great example of this.

• 15:22Sam Parr?

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• 16:04Sam Parr?

  leaderboard because it measures how many reps you're doing and how much volume you're doing and you can compete with other people who have taken the same class. So it's made me want to work harder, lift more weight or have more endurance. It's just pretty freaking fun and the whole point of working hard is to have money so you can spend it on stuff that will make you live longer and this product Tempo, it checks that box for me. So they're our sponsor today. If you use the code TEMPOHUSTLE, you'll get a hundred dollars off. So Tempo.fit is the URL and TEMPOHUSTLE, one word, you'll get a hundred dollars off. So check it out. I use it. If you look me up on Twitter, you'll see I'm always filming videos where I'm talking to that company, saying I'm trying to crush their employees on the leaderboard because I actually love this thing and I use it all the time. So check it out.

• 16:46Speaker 01

  This is genius. He buys the Baccarat Crystal Company. It's been around forever. He then takes that brand and he creates a hotel company off of it and he licenses the hotel brand to a development company that builds a skyscraper in Midtown Manhattan called the Baccarat, you know, Hotel. He fills the hotel with Baccarat Crystal, which he buys from his own factory. And then, you know, his private equity fund is like, is the equity behind all these operations. And, you know, he's playing in like so many different facets of this business.

• 17:18Sam Parr?

  Why would the skyscraper want the brand of the, that diamond factory if there's no brand? Yeah, I mean, it's just a name.

• 17:26Speaker 01

  Well, Baccarat Crystal has been around for, you know, whatever, a long time and is really famous. And the target audience that's buying like $30 million condos that are buying from Russia, China, Latin America, or I've been buying Baccarat Crystal for, you know, generations. And so he uses this brand, like everyone knows Baccarat means, you know, it means luxury. So it's like, it's just a really smart way. And then on top of it, he owns the Baccarat company, which is, you know, hopefully just a decent investment in its own right.

• 17:54Shaan Puri?

  So this makes total sense to me because whenever you're doing a new venture, if you can, I always think about hijacking trust. So like I did this with the podcast in a way where I was like, okay, cool. I can start this podcast on my own and build my own brand and build my own distribution, build all this, but like, hey, maybe there's a win-win here, right? Sam has the hustle, the hustle has a big audience, they have no audio content. I'm willing to do all the work. I think I can do, pull off a great operation on the podcast. But if they put their name behind it and they put some distribution behind it, we'll get, we'll both get there faster. And for them, they got basically a very low cost, free option to build a whole new vertical of their business and capture some of the value. And so like Sam, what you should be doing, what I'm

• 18:37Shaan Puri?

  hearing from Ryan is what Sam should be doing is saying, is the hustle a good brand? If you've put three, four years into building the hustle, which has some level of equity with millennial business oriented people, and then you hear me talking about, cool, I want to build basically a new education company. I'm going to do courses, I'm going to do all this stuff. What you should be doing is say, cool, this is now Hustle University. I'll give you the brand, you give me 6%, you go do all the work. And, you know, that, and as long as sort of like your brand is not being diluted by the efforts, right? So if you're partnering with a good operator, or in Baccarat's case, like a high-end developer that's going to make a good quality hotel, then you're getting free expansion of using, you know, equity that you already have that you're currently not tapping

• 19:19Shaan Puri?

  into. Because right now, I'm just going to go do it on my own, right? And so you capture no value and I have to build trust in a slower fashion because I have less of a brand than, you know, the hustle is kind of like a tiny, tiny, tiny version of Virgin.

• 19:32Sam Parr?

  So that that sounds great. So when it works out, it works out. Let's talk about the downsides of that. Because I don't want people to think like, oh, this is obviously the answer. Let's talk about the downsides of that. I mean, like, the other, the other, the other side is that is you go do it on your own. The other side of that is that you do it and it sucks. So that would, if Barry didn't. So, uh, what's his name? Barry, Barry Sterlich? He's, he's pretty amazing.

• 19:54Speaker 01

  Barry Sterlich. Yeah, he's amazing.

• 19:56Sam Parr?

  Yeah, he's that guy's, I've, I've heard him talk. He's pretty amazing. I mean, Ryan, what's, what are the downsides of this?

• 20:02Speaker 01

  Yeah, I mean, you mentioned it, like Oprah decided to be vertically integrated and own her own magazine and own her own network. And Martha Stewart went the other direction. Martha Stewart said, I'm going to license out and, and you know, there's going to be my clothing is going to be sitting on racks at Target. And someone else is going to manufacture that. And the pro, the challenge you can run at that, of course, like you mentioned, is someone dilutes your brand, they damage the brand. Or, you know, you, you kind of dilute your efforts because you're probably spending some amount of time and energy on, on spinning these up. And, you know, I don't know. I think you, you, you probably also have like trademark and legal costs because like Virgin has a whole team of people that are just fighting like trademark issues globally for them.

• 20:42Speaker 01

  It's, it's, it's an amazing story and company. And also, by the way, for Virgin, there's, I think they have launched 200 companies and 60 of them are, I think are around today. So like, just like a venture studio, you're going to have failures. So, yeah, there's definitely, there's definitely challenges. Now, one way to manage those challenges is through your license and through control. So you either want to control the brand as best you can through your license. So making your license up like, maybe they have a brand committee that has to approve, like, you know, marketing collateral and things like that for the licensee. Another way to manage that is, is to either raise a fund or have the money to own a majority of the company as well.

• 21:23Speaker 01

  So you're not just getting 7%, you're also controlling the company. Maybe you're three out of five seats on the board. And so if the CEO of the, of the new company is doing kind of shady stuff or, you know, isn't running it well, you terminate them and replace them.

• 21:35Sam Parr?

  Everyone talks about Virgin and few people I think understand how it works. I think I don't understand entirely. I think you do though, right?

• 21:44Speaker 01

  Yeah, I'm really into Virgin and I think in general, people don't under I think so here's what I've observed. Private equity people don't understand startups and startups don't understand private equity. Totally. If you understand both both sides of this of these coins, then you become like it just you become infinitely more flexible and creative at how you can go about creating value for, you know, customers and shareholders. And so, yeah, Virgin is one of the few companies at scale that clearly understands both of these things. And they have a group in London, I think it's like 300 employees. And basically what they are is they're like a startup studio meets a private equity fund. You know, they they spin up companies from scratch, or they

• 22:28Speaker 01

  join venture with existing entrepreneurs who are going to build companies underneath their brand. Or they buy companies and put their brand on it. Like, they have a lot of different ways of skinning the cat, but ultimately, it's a brand. It's like a branded Berkshire Hathaway.

• 22:40Shaan Puri?

  They actually have four sides, right? They have innovation like a startup, they have private equity style business operations as well. So they understand both those. But then they have a brand like Coca-Cola and Nike. And then they have operations, like in a way that those those companies, you know, do so they have these like sort of four, four dimensions that they got to world-class level at. And then you get sort of outsized returns.

• 23:05Sam Parr?

  But where did the cash come for all this? So Virgin originally was a record store, and then a studio, and then like 15 years in, it was an airline. So like, where's the financing for all this come? Did it come from? They sold their record label for $800 million. Is was that the the huge seed funding?

• 23:24Speaker 01

  Yeah, so originally, it was a magazine when he was a teenager. And then in the back of the magazine, he put like, oh, like a mail order for records. And then he became a record label. And you're right, he made a fortune on the record label. I mean, he also even created a gaming company, they made video games. So he made a bunch of money. So in his case, you know, it's the family office that's doing this. But my point is, you don't have to be rich to do this. You could create a fund, or bootstrap a company, and then use the cash from that business, like Andrew, you know, Wilkinson has been on your show, use the cash from his own operation to start buying other companies. And and of course, you could also then, as Tiny has now done, raise a fund. And so

• 24:07Speaker 01

  Yeah, you need, you need like, you need the right, you know, kind of components. You need operations. You need a fund. That, those two things alone will allow you to do this. And the third thing that will allow you to go a step further is to have a brand. And, uh, you know, like obviously the hustle is a brand, Virgin is a brand, Summon is a brand. Um, and then you can start to do really interesting things. I mean, in the case of Stern, like he didn't even have a brand. He bought the Baccarat brand. And then, and then he also proved that he could do it by starting a brand. He created the One Hotel, for example, from scratch. And so he's done it, you know, in both ways. It's, it's just, it's really interesting.

• 24:42Shaan Puri?

  That's awesome. And Ryan, when we were, so we talked on the phone last night and, uh, it was a great first date. Uh, you know, I was blown away. You had a bunch of interesting thoughts. And the thing that I thought was kind of unique about you, because I talked to a bunch of people who know a lot about business and they have a cool success story, but I thought you had a very good, I don't know, point of view or set of wisdom around a, a style of entrepreneurship that most people don't, don't talk too much about. I know you, you, you were talking about a little bit on the last podcast, but I thought you might, you might have some thoughts or wisdom around, you know, creating wealth while still having sort of, uh, a great life and not just this like extreme Olympics level commitment and sacrifice all other areas of your life approach to business.

• 25:26Speaker 01

  Yeah, yes. I've been, I've been trying to think about how to best describe this. And, you know, I, I was talking last, the last episode about holistic entrepreneurship. And, um, you know, maybe another way of putting it, I was thinking is, you know, instead of thinking about disruptive companies, you know, lead disruptive lives. And so, you know, I left like the, the, the kind of the traditional path of working at the Carlyle Group and being in private equity for this kind of entrepreneurial journey that took us on this crazy adventure. And the idea was to like disrupt the norms and, and, and to get to a place where we could, you know, kind of zoom out and broaden our focus from just achievement of status and money. And instead like broaden our, our focus to creating real wealth. And I think real wealth is about freedom.

• 26:08Speaker 01

  And it's about the freedom to fully express yourself, to be creative, to use your imagination, to, to, you know, to avoid commuting to work if you don't want to commute to work. And, um, and so of course, you know, making enough money to support your livelihood. And I think along those lines, You know, I have, I've learned a few things that, you know, I'm happy to share.

• 26:29Shaan Puri?

  Yeah, let's, let's do it.

• 26:30Speaker 01

  Yeah, one thought was, you know, build skills that will allow you to make money around your passion. So, you know, learn, all, you know, learn sales, learn marketing, learn digital, not, not just to get rich, but so that when you have a passion idea, like you know exactly how to execute on it. And so I'm always trying to, to master these skills, which, which happens, I'm listening to shows like yours, watching YouTube channels and like learning, you know, just taking online training, taking, taking U2B classes, taking online courses, calling founders, which is a lot easier to do than, than you might imagine. I'm constantly cold calling founders.

• 27:05Sam Parr?

  Have you heard of Ikigai?

• 27:07Speaker 01

  I have, yeah, yeah.

• 27:09Sam Parr?

  Yeah, so basically, is it Japanese? Uh, it's a philosophy or I don't know what, how you categorize it, but I think it's Japanese. And it's like, there's, it's like four circles that kind of look like the Olympic rings. And it's like, basically, what does the world want? What do you want to work on? What can make money? And what are you great at? And it's like, the, the whole premise is find out something right in the middle of all four of those things. I, I think that's what it is.

• 27:36Shaan Puri?

  Yeah, you can even eliminate one of those, because if you, if you do something the world wants, the money will come. And, um, and so I think you, you could simplify, because that diagram makes it look like you have to become a flower. Or it's like, is it confusing what that is? But it, it, the real simple version is just, you know, what do people want? What do you enjoy doing? And what are you actually good at? And if you find the intersection of those three, that's the zone of genius you want to like operate from.

• 28:02Shaan Puri?

  And it sounds like, Ryan, what you're saying is like, there are some master skills to pick up. Master skills like communication, like sales, like persuasion, like, um, you know, digital literacy, some, some things like that, that if you have sharp at your disposal, then if your hobby is Ferrari, you'll know that you can spin up a free newsletter and create a paid membership on top of it. And you could be those guys who do $2 million a year on their Ferrari newsletter, talking to other Ferrari nuts.

• 28:32Speaker 01

  Yeah, exactly. Like, right? Like, I, you know, I've mastered, you know, events and info products and experiential. And so boom, like, if I get into cooking, I could create a culinary school. Uh, and, and so, you know, and my other thought was, think small. Uh, you know, venture, I think like the world is dominated by this like kind of venture, you know, big, you know, total adjustable market sort of thinking. And I really like this thought of like minimum viable market. Like, what's the smallest market that you need to generate the income that you're trying to generate? And, uh, and often, you know, part of one way of thinking about that is think expensive, think cheap. So like, I could offer my cooking class for $5,000 and make it extremely high touch.

• 29:14Speaker 01

  And then I might only need, you know, whatever, 10 people a month to make, to make a small fortune. Or I could charge, you know, $50. And then, you know, I've got to build like a much bigger scale to kind of venture company.

• 29:26Sam Parr?

  Well, okay, but sounds good. I am interested in that. But let's play the other side of this, which is two points. The first is, if you're only making $500 classes, like, that's not fantastic for the average Joe. And like, there needs to be Walmart. And the biggest thing in the world is, or, I don't, I mean, it doesn't matter what's the biggest. A big thing is, is Louis Vuitton. A big thing is Walmart. Um, the second thing is the people who you're saying you admire, Barry Sterlich, and you also said you admire Adam Neumann. Do you think they thought that way?

• 30:00Speaker 01

  Well, first of all, I'm saying I admire their skill set. I'm not saying that I admire their well-being. So they're two different things. And I'm not saying, you know, I don't, I don't know them intimately enough to know their well-being. But what I'm suggesting is that we don't all have to build like billion dollar companies. They're, you know, good, good for the Sam Waltons out there and the Adam Neumann, like, let's let them go solve that. Luckily, there's 7 billion people on the planet, and someone's going to step up and sacrifice their whole lives and their family and their hobbies and their well-being to make these insane, incredible billion dollar companies. I, I, I'll be happy just to build something that, you know, makes me a nice income and is meaningful. So I just.

• 30:39Sam Parr?

  I just, I just hate when we, we, we get into these discussions, me and Sean do with a lot of people, and they say things like that. And I always want to make it clear because to the audience, it's like. What our guess and what we are saying is that this is just one way to get it done. And I think that far too often, people say like, you have to raise money, you have to raise money, you have to do this. That's cool. And then other times, like Andrew and you and me and Sean talk about this too, like, no, no, no, fuck that. You could live this other life. And in reality, we have to understand that there's so many ways to get it done.

• 31:13Shaan Puri?

  But that's the point of a podcast, right? We're going to have people on who are like, yo, this is the way because they believe it, they live it, they've had success with it. And then if you listen to 10 episodes, you're going to be like, wait, I heard this is the way 10 times. Oh, what that really tells me is that there's 10 ways. And I should pick and choose the one that resonated the most with me.

• 31:31Sam Parr?

  Totally.

• 31:31Shaan Puri?

  And maybe it changes in my twenties versus my thirties versus my forties. And, you know, I'm cool to be flexible with that over time.

• 31:38Sam Parr?

  I completely agree. And I'm not criticizing criticizing at all what Ryan's saying. I'm just want to make it, I always, I hate when people like, I always do this and I hate when I do it is when I say like, this is the answer. And then I always was like, no, I got to make it clear that there are many ways to get it done.

• 31:54Shaan Puri?

  And so I want to know more about Ryan, about your way. So who's somebody you admire that actually has blended, let's say, their entrepreneurial, their ambition with, without letting it overcome them and overtake their life where they're, you know, you're Elon Musk, you got seven kids, three wives, and you know, you sleep in the factory 200 days out of the year. So who's blended it well? Well, give us an example.

• 32:19Speaker 01

  Well, I started talking about this last time, but you know, like one friend I mentioned is Joel Holland, who owns Harvest Hosts.

• 32:24Shaan Puri?

  Yep.

• 32:25Speaker 01

  He lives in Belle, Colorado. He's got this great company and makes plenty of money for him and his wife. And he loves RVing. He likes to go around and RV. It's actually his job is in part is to go around. He loves drones and RVs to go around and film himself enjoying wineries in his RV, which actually becomes his Facebook advertising to promote the membership for joining the RV membership that he sells. So I really like it. That's like one of my favorite examples lately.

• 32:51Shaan Puri?

  So let me ask you a different question. Let's talk money for a second. So you made a good amount of money off BizNow. Before that, had you done something that you were well off with? Or you just had a good paying job or something? Where were you at before that?

• 33:05Speaker 01

  Well, I had a, I had a well-paying job in banking and then at the Carlyle Group in private equity. But, uh, but it was like, you know, I worried.

• 33:13Shaan Puri?

  What is that? What do you make when you're in private equity at a, if you're, what's a well-paying job? Is that like a hundred fifty K a year? Is it a hundred K? Is it three hundred K? What, what does that mean?

• 33:21Speaker 01

  Like, at the level I was at, you'd make like three to four hundred grand and you'd be quickly on the path to making over a million a year.

• 33:28Shaan Puri?

  Okay. And so you walked away from that.

• 33:30Sam Parr?

  Is that the ceiling? Is that the ceiling on those guys?

• 33:33Speaker 01

  No, the ceiling is making like hundreds of millions of dollars, uh, like, like per fund. Um, I mean, so here's the math, right? Like, we had a three billion dollar real estate fund that I was in. There's like ten people in the acquisitions group, a bunch of people in asset management. Three billion, if we return two times, which is like kind of the bare minimum for success over five years, then we, we keep twenty percent of the upside. So we basically, we turn three billion into six, that's three billion of profit. So twenty percent of that is six hundred million. We split six hundred million.

• 34:06Shaan Puri?

  Amongst the ten partners of the, of the fund?

• 34:10Speaker 01

  Yeah, I mean, I don't know exactly how many partners there were, but yeah, something like, like there's probably ten partners, but there's also then the holding company at Carlyle, which probably takes like, you know, half or more of that.

• 34:19Shaan Puri?

  Right. Okay. So you had, you had a good job and then you had a path and then you do BizNow and that's great. That has a good exit. Uh, Summit, um, has done well, like culturally, I don't know. Financially, which one's better for you personally? Was it BizNow or was it Summit?

• 34:33Speaker 01

  Well, this kind of gets, so BizNow was, was more financially successful than Summit by, by, by a lot. Uh, Summit was never really meant to be like a financial success, or at least hasn't been thus far. It was, it was more about building something really enjoyable and, and awesome for the world and for the community that we were building. Which gets to, by the way, my solution for Sam, because Sam and I have been debating this idea. Sam loves, Sam is, is partially driven by doing epic shit, right? And like, he wants to go and do really cool creative projects that, you know, have a cool impact on the world and make him excited and make him want to wake up every morning and work on them. But he also, you know, I, I, I, I'm speaking for you, Sam, but he also wants to make a few dollars, right? So one thought is have your fun company and then have your serious company.

• 35:18Speaker 01

  And I think that, you know, I'm somewhat living proof of this. I don't know that we've done it perfectly. And I, and really my partners were running some of it mostly day to day. So I can't say that I was as much involved day to day for many of the years, but you basically spin up a company, you get, you get it to like making a million a year or half a million or whatever you need to, to, to make enough. And then you, you know, you, you launch your moonshot company in a separate LLC or a separate C court.

• 35:45Sam Parr?

  That's what a lot of

• 35:47Speaker 01

  Yeah, go ahead.

• 35:48Sam Parr?

  A lot of, a lot of people do that and it's got great results. I mean, a lot of people get wins early in their career. Um, or even mid in their career. And once you get that win, you, you can get after it. That, that's quite common.

• 35:59Shaan Puri?

  But there's a difference of, uh, parallel versus in series, right? So like, are you doing them at the same time versus you get your win? Or you, you put the first five years in where you're, you don't even thinking about your side projects. You're just making your main thing actually work. And then as it starts to work, you either hire your CEO replacement or you sell the company or something. And then you now have a cushion and you have a buffer and you have a whole bunch of experience and sharpened up skills that you could apply to more ambitious projects or more fun projects. So.

• 36:28Sam Parr?

  My personal take is that it's nearly impossible to do that in parallel. I don't know if you agree, Ryan.

• 36:32Shaan Puri?

  I, I would also, I don't know if it's, I don't think it's possible because definitely there's examples of people doing it.

• 36:36Sam Parr?

  Low odds.

• 36:38Shaan Puri?

  I know that if I tried that shit, I would get smacked by the market. I know that, that reality would smack me and say, oh, you thought you could do both? Like, you know, at the same time, like that's not how the world works. But Ryan, you're, it sounds like you're kind of saying you can, you, you believe you can do them sort of at the same time.

• 36:55Speaker 01

  Not, not, so look, we, we started Summit in 2008 and I, and I basically bought into BizNow in 2008 and we scaled them at the same time. But part of the way that we did that was, as I focused on BizNow and my business partners focused on Summit. For the first three years, I, I worked till like two, three in the morning, working on both. Um, every day, like seven days a week. So it wasn't, it was like, you know, I was working kind of like, like I was accustomed to doing in banking. So it was pretty brutal. However, what another way to do it is, uh, about, I think, five years into business now, I had replaced myself with another CEO. Who I had groomed, who I hired out of college, who was still there running the company. And at that point, I was able, I had a lot more freedom.

• 37:36Speaker 01

  Now, one thing that I was doing, however, was I was trading growth in that company for doing other things at, at that, at that juncture. So like, I could have doubled down. I could have been me and my CEO spinning up lots of new things. Or I could have like slowed growth a little bit, which is what, which is essentially what we did, so that I could spend a little more time doing other things.

• 37:58Sam Parr?

  And we hear that, uh, this advice a lot. And this is something that Silicon Valley doesn't actually talk about a lot, which is hiring, replacing yourself as a leader. I kind of did that. What I noticed is that there is very little discussion on this out in the world. And it's so hard to learn. It's so hard.

• 38:20Speaker 01

  Yeah, we, we've done it now a few times and it's, it is extremely difficult. We've, I've definitely done it. I've definitely failed and succeeded at it. I mean, for me, I had this guy, Will Friend, come live with me for nine months. I slept on an air mattress. I gave him my bedroom. And I, it was right out of college and I trained him on literally, like he was an apprentice. I, I, you know, you, everything I did, we, we, I used to call it like knee to knee training. Like, you're not going to learn this if you don't like literally see my computer screen and see exactly how I'm building my spreadsheet. Like I taught him not to use any key, not to use his mouse, only use his keyboard, you know, like I taught him like every nuance of everything, the way I think, the way I make decisions.

• 38:59Speaker 01

  And so over time, he learned the way I did things. Now, look, the way I did it though, is I had like five people that I was doing this with. And one of them emerged as the obvious leader. It wasn't, it wasn't so clear initially. Some people were really good at project management, but then sucked at managing people. Some people were really good at sales, but then couldn't manage the sales team. And, and you know, some people could do one thing, but they couldn't innovate. So it, it's definitely challenging. I mean, one thing is, if you're really good at being innovative and being like the zero to one guy, you know, you can just be like a very active advisor to someone else who's a stronger integrator and operator. Or if you're a really good operator, like maybe go find yourself more of a visionary zero to one sort of person. So. Um, you know, I that was that was kind of part of my my approach there.

• 39:45Shaan Puri?

  And you text us before this, you go, I got a bunch of frameworks around getting rich and having fun slash happiness, which I think is what everybody wants. So so so rattle off a few of those before I know Sam has to jet soon. So I want to I want to get to some of these goodies while Sam's here.

• 40:02Speaker 01

  Before just starting a business, think about the the exit multiples of that business. I wish I had done this when we start when we got involved in business now. I if I had known that trade associate like trade expos sell for 12 times, but newsletters, you know, sell for less and conferences sell for somewhere in the middle. Um, unless you, you know, I caveat there newsletters at scale, you know, can can sell for more. But the I I just didn't realize that. And so and and it's not so much that you're trying to sell your company. It's that high exit multiples mean something. They mean that the company is probably more enduring, has higher barriers to entry, is has more diversity of of suppliers, more diversity of customers. And so you want to replicate businesses that have higher multiples.

• 40:45Speaker 01

  If you're going to put five years of the like spending night and day building a startup, build a startup that's that's that's hard to to disrupt that that that'll adore. And the way to do that is to look at a high exit multiple sales, which you can generally find through just like reading stories and talking to founders and figuring out the end for every industry. There's like below multiple business and all the way up. There's a continuum up to the high multiple. And so I would try to understand where you are in that industry as you're thinking about your ideas. So that's my first point.

• 41:15Shaan Puri?

  You just saved a thousand thousand entrepreneurs listening to this like you do. You just saved them like an aggregate of $100 billion easily, uh, because somebody's going to do that. Somebody's going to say like, actually, that makes a lot of sense to me. Should I be building a SaaS company or should I be building information product or whatever, right? Like, and each one of these has a different return profile. And look, if you're looking for what's going to be the most successful and what's going to get you the most value. Then that's a good thing to work backwards from. What else you got?

• 41:43Speaker 01

  Yeah. Okay. Second one, take multiple shots on goal because most ideas don't succeed. But you don't want to take multiple shots on goal that are very different because now you're having the stress and you're spreading yourself too thin. So like, I'm not saying start the boring company and start, you know, Tesla at the same time. What I'm saying is with BizNow, we launched a newsletter business and we tried 12 different flavors of that business. We tried a newsletter for lawyers and another one for real estate entrepreneurs. It was the same editor, different writers, but same processes, same best practices, same learnings. You know, I've seen Agora do a good job of this. I've seen Golden Hippo, who you interviewed Craig Clemens, do a great, a good job of this and direct to consumer.

• 42:28Speaker 01

  You're basically using the same infrastructure, the same learnings, the same systems, but you're trying different permutations of a similar concept. And then whichever one works, you got to know when to cut the other ones and then double down on the one that's working, which is kind of, that's actually part of the hard part.

• 42:44Sam Parr?

  How long did it take you to test each one and what was your process?

• 42:49Speaker 01

  We took way too long and we're not very good at it at the time. I, if I was doing it again, but basically we would spin them up. They were very quick and easy to run. You know, you'd hire one writer, you'd build an audience up to 10, 15,000 subscribers. You would start producing the newsletter and then you would launch your first conference and then maybe you'd launch like a job board and you would play around with that. You'd sell your first ads and then once it was got up to like, you know, I know it's hire a salesperson, get it up to like a hundred grand of revenue. Some of them scaled to a million of revenues, some of them scaled to 500 grand. And then we figured out, oh, wow, commercial real estate. For all kinds of reasons, I had no idea going into it is way better than the other verticals and that went up to like 20 million revenue.

• 43:28Speaker 01

  So I think you just really quickly want to get a sense of like the audience, the profitability.

• 43:35Sam Parr?

  How long was that for you?

• 43:38Speaker 01

  I mean, this was over the course of like four years that we tried a bunch of different verticals. We didn't start them all at once. Um, and you know, some of them we would spin up and cut in like, you know, three to six months. And some of them, we had a hard time deciding, like we had one for federal technology that was doing like over a million in sales. And was profitable and we kept that going for probably like four or five years before we got it.

• 44:01Sam Parr?

  Uh, Craig, on our last, or a few, a while ago, Craig, this guy runs this multi hundred million dollar company, Golden Hippo. He said that the most expensive thing is a mediocre, uh, a mediocre success when they're spinning stuff up.

• 44:16Speaker 01

  Yes, yes. Yeah, yeah. I was, I was smiling when I was listening to that one because he's so dead on. That, that was like the hardest one to cut. It was just so, such a tough call. Um, yeah, I, I, I also really like, um, you know, I've been thinking about this idea that I, I, I'm building a portfolio of, of activities is another way to go about it. Instead of becoming like the, you know, night and day CEO of your company, you could build up a portfolio of consulting and coaching and maybe you do an online course, maybe you speak, maybe you author a book. Um, and you could basically piece together, I've, I've seen a number of my friends do this, uh, you know, where they piece together, you know, uh, anywhere from three hundred thousand to a million dollars or even more a year.

• 44:59Speaker 01

  Um, doing some combination of those things, you know, the, the downside of that is you're not building like an asset that creates money in your sleep. Um, but the upside is, you know, you freed yourself from working for an employer and you're not like up all night worrying about your, your startup as, as much perhaps.

• 45:17Shaan Puri?

  Yeah, that's, that's a good one. I have a different way of phrasing that same thing, which is sell your byproduct. This is an example from the thirty seven signals guys in Chicago who, that, you know, they, they, they made a company that made base camp. And then they worked a certain way and then they started selling books just explaining how they worked to the, basically their business, what, you know, served a bunch of small businesses, small business owners. And so then they sold the book to those business owners about like, hey, here's how we run our business. And just selling their byproduct generated millions of dollars and even more and new customers who like to hear how they worked. I'm, I'm, I'm dabbling with this too now and I'm seeing very interesting, uh, interesting results.

• 45:58Sam Parr?

  Do you want to know my favorite byproduct? Kingford, uh, coal or charcoal? Kingford, or is that what it's called? Kingford? What's the famous charcoal brand?

• 46:07Shaan Puri?

  Yeah, I think it is Kingford or something similar.

• 46:09Sam Parr?

  Yeah, that was started using the leftovers of making a Ford car.

• 46:15Shaan Puri?

  That's amazing. Yeah, literally, sometimes it's literally that. It's like orange juice was like leftovers, right? Like, and then sometimes it's more leftovers of like your time or your expertise or your, you know, just giving people access to what you're doing. You know, there's different other ways to sell your byproduct.

• 46:33Speaker 01

  Yeah, Tony Hsieh did a great job of this, you know, he, he became famous for company culture at his company. And then he created a separate, I don't know how many of you will realize this, but he actually created a company that teaches other companies how to build happy cultures. And he did that by spinning up a book and going on a book tour. And I think he even bought like Dave Matthews Bus for the tour, which was like fun little side note. And, and then he actually, you know, he hired a woman who runs it. And they actually sell this to companies. And yeah, it's like, it's an amazing little, you know, side project.

• 47:09Shaan Puri?

  Barstool does a good job of this too, where they, they just film their, their office and they film like, hey, we're hiring an intern. Cool. Put a camera up and this is going to become like, you know, content that's worth X dollars. And we're just, we're hiring this person anyways. Let's just make it entertaining. It'll be more fun for us. And it'll generate attention and revenue. So like, why not? We're doing the product anyways.

• 47:31Speaker 01

  Yeah, I love how Barstool does that. It's so, it's so brilliant. I wish I had real, had thought about years ago.

• 47:37Shaan Puri?

  All right, Ryan. So I want to leave it open to you because I think you were one of the rare guests who thought about what you wanted to say and was like, hey, I got like some gold I want to give out. And so I'll let you kind of jump around. You said there's a couple of areas. One was, you know, these idea frameworks. Some was, you know, wisdom on, on kind of the health, wealth balance. You talked about ways to finance without venture capital, three ways. And you said you had a couple of ideas. So I'll let you go where you think there's the most gold and then we can, we can always have you back.

• 48:07Speaker 01

  All right, I'll dive into one more. I, I, I, one is financing, you know, I, again, like, I think too many people raise venture that they don't need to raise. Like, I was talking to an entrepreneur just recently who was starting a new company and he was about to go out and raise a million. I was like, why, why, why are you gonna raise a million? There's, there's, let me give you like all these ways. So I started thinking of these ways. So one is you can, if you're, if you're building a subscription product, let's say, you can build a lifetime membership to this product, which the airlines used to do in the early days of their rewards programs. And, you know, maybe you don't make it a lifetime, maybe you make it 10 years, but you say to somebody, look, I'm gonna give you my, a lifetime access to this thing that's soon gonna cost, you know, I don't know, a thousand a year, I'm gonna give it to you for $5,000 a year now.

• 48:51Speaker 01

  You'll never have to pay for it again. And on top of it, I'm gonna give you all these extra benefits. You're gonna have like, you know, an inside look on everything first, or whatever it's gonna be. You'll have kind of like the backstage pass to this, to this community, this product, whatever it is. And, and then that, you, you sell, you know, whatever, 50 of those at five grand, you bring in a quarter million dollars and boom, you're, you're started. And I, I think another thing that, that Elliot, my, my business partner, used to say to me that I always thought was interesting was when we would hire a writer, I'd be like, man, this writer's like, you know, 100 grand a year. And he'd be like, no, no, no, this writer is like 100 grand divided by 12.

• 49:28Speaker 01

  We just need to get started. Like, if we can sell ads in month two, then we might be able to pay for the writer, you know, in months three, four, and five. And so he kind of like would look at it kind of month to month, which I always thought was kind of clever. And helped me think through things, kind of like eating an elephant bite by bite. So, yeah, one is selling a lifetime membership. A second idea is if, if you have more of a service business, then you can sell the first clients before launching. So like with BizNow, whenever I would launch a new market, like say I was gonna launch Chicago's newsletter for commercial real estate. I would fly to that market two or three times, or now we could use Zoom. And I would sell, I'd say to law firms, hey, we're only gonna have

• 50:10Speaker 01

  one law firm, I'm gonna give you all the inventory, all the ad inventory for the first six to 12 months. And it's 30 grand. And I'm only gonna have one accounting firm, and I'm gonna have one of this, one of that. I would go to five competitors and be like, only one of you is gonna get this for the first year. And then I would bring in about, you know, a couple hundred grand upfront. I would charge them about a quarter of that, just gets going. And then that would fund the first writer and the first salesperson, and then they would start to fill in all the sales for, for year two. Um, so I love pre-sales, obviously, you know, Kickstarter is kind of like, you know, turned that into a more popular idea. And I was saying, yeah, third is you can do that, of course, for manufactured products, you look at Kickstarter, right? You, you, you just launch kind of the concept of the idea, you get a fan base around it. You get them to commit, put down a deposit,

• 50:54Speaker 01

  or even pay for the whole thing, and they get access when it, when it comes out first. Uh, and then finally, my fourth way is if you can't do any of those things, start a consulting company, and then use the consulting company, uh, and use the revenues from that to kind of keep the lights on while you're building, you know, the real product that you're excited about.

• 51:12Sam Parr?

  Yeah, I love those.

• 51:14Speaker 01

  And also, you know, at BizNow, we launched an event called Escape, which was basically like summit for, it was like a 5,000 ticketed item for people that are the CEOs of real estate companies. And I went to the first 40 people and said, if I do this, will you come? And it's $5,000, by the way. And I went to those first three, I went to the most impressive first three people that I could get a meeting with. And I got them to say yes. But they'd only say, they said only yes if the other people on my list came, I actually handed them a spreadsheet. I was like, here's, here's 40 crazy names, if I can get, you know, half of these people to come, will you come? And they said yes, contingent on that. Then I went to those crazy people and I said, hey, these amazing people said they would come, if you'll come, will you come if they come?

• 52:00Speaker 01

  And then they all said yes. And then I went back to all them and said, okay, all right, I, I got 40 of you to say yes, you all said good to four, five grand. And then before I locked in the hotel, I took deposit on, on a portion of five grand. And then I contracted the hotel, and then I put down my deposit on the hotel, so there's, there's ways to do this where you don't have to raise capital and, um, And if you do have to raise capital, I have thoughts on that too, but, but I just think that it's, it's, it's fun to, and it can lead you to a more meaningful life if you don't have the, the, the stress and pressure of, of venture.

• 52:34Shaan Puri?

  And let's end on this because a lot of people I know understand, they understand this. And when I advise them, hey, this is what you should be doing. They get gun shy around either A, selling or B, specifically selling a high ticket item. Because I think what often happens for people is they're like, well, we haven't made anything yet, or this is just my time. Why would somebody pay me $5,000, $10,000 for, for this? You know, like, I think people are really afraid to sell high ticket items. Have you experienced this? Or what's your advice to the person who's afraid to go ask for $7,000 when there's nothing made yet?

• 53:08Speaker 01

  So one is that people value their time, especially people who have means or running a business, especially corporations. Their time is more valuable than, than a few bucks. Um, and, and if you, especially when you're thinking B to B, you know, corporations obviously have bigger budgets than individuals generally. And so if you can create something, you know, sell on value, not on price, right? It's like a, it's like a typical kind of sales one-on-one best practice and, and be willing to endure awkwardness. Like there are awkward moments in phone calls that I would have where I'd be like, people hate to talk about price. I managed to sell you a couple of different sales teams and they kind of like, they shy away. They want to, they want to talk about it like the last second,

• 53:48Speaker 01

  or they don't talk about it at all, or they want to just send it in the proposal because it's too icky to talk about like, oh, I'm just gonna, well, I'll just put it on page three of my proposal. And I'm like, never, first off, never do that. Never email a proposal. Always schedule the next call and walk the person through the proposal. And, and walk them through price and be proud of your price. If you think you really have, you know, real value to offer, then, you know, lean into that and, and, and be willing to ask. And, and one thing I'll do is before I ask that, I will ask people, how, what is valuable to them? If I, if, if I could do this, would this be of great value to you? And get to know like what their problems are and where, or what they're trying to solve and what value those problems have. So like for the real estate conference.

• 54:32Speaker 01

  People were trying to do like multi hundred million dollar real estate deals. So for them to source a deal and meet other people that could help them find a good deal was worth a lot of money to them. Once I understood that, it was it was clear to me that a $5,000 ticket was was was like kind of a rounding error.

• 54:48Shaan Puri?

  Great, this is this is, I think that that last bit, I think is going to help a lot of people who um, I'm thinking about my friend who I've been telling this, you know, to for a long time and he's just like, has all the symptoms you just mentioned, uh, he has and I I hope that he, I hope that he listens to that. I'm gonna send him this clip at the end and have him listen to it. Dude, Brian, this is great. Uh, I think we're gonna have you back again, probably, which we're trying to do where, when we find people who are good at jamming out on new ideas or kind of high level frameworks that can apply to a lot of ideas, we're trying to create this like sort of friend of the house vibe where, you know, me and Sam, we only know so much, but like, you know, we we want to have really great people coming in. And it's surprising how many successful people don't have the ability to hang in conversations

• 55:32Shaan Puri?

  like these because they're just like, they they know their thing, but they don't know how to sort of generally teach and talk to a whole bunch of people. But you definitely have it. And so, you know, I'd love to get you kind of in in the friend of the house loop where you're coming on with some regularity, maybe once a month or every couple of months.

• 55:48Speaker 01

  Yeah, I I love that. I even like the idea of coming in and just like arguing with people on your show. So sometimes, sometimes I'm listening, I'm like, I'm like, oh, no, there's a counterpoint here.

• 55:57Shaan Puri?

  Right, let's bring in the devil's argument, the devil's argument.

• 56:02Speaker 01

  Yeah, yeah, definitely.

• 56:04Shaan Puri?

  All right, we're we're out of here. I hope everyone has a good one.

• 56:06Speaker 01

  Wait a minute.