A Masterclass On Flipping DTC Brands For Millions With Mehtab Bhogal

Episode 439: Sam Parr (@TheSamParr) and Shaan Puri (@ShaanVP) talk to Mehtab Bhogal (@MehtabKarta) about how to flip direct to consumer brands to earn millions of dollars, underrated companies, Oprah, and more. Want to see more MFM? Subscribe to the MFM YouTube channel here. Check Out Sam's Stuff: * Hampton * Ideation Bootcamp * Copy That Check Out Shaan's Stuff: * Power Writing Course * Daily Newsletter ----- Links: * Sola Wood Flowers * Josh's Frogs * Fast Growing Trees * Schlep Blindness * Corporate Turnaround Artistry * The Messy Middle: Finding Your Way Through The Hardest and Most Crucial Part of Any Bold Venture * Do you love MFM and want to see Sam and Shaan's smiling faces? Subscribe to our Youtube channel. ------ Show Notes: (00:00) - Introduction to Mehtab (11:20) - How old were you when you made your first million? (18:50) - Josh's Frogs (23:50) - Fast Growing Trees (28:40) - What is your differentiator? (30:50) - Hiring Agencies (01:00:00) - Oprah ----- Past guests on My First Million include Rob Dyrdek, Hasan Minhaj, Balaji Srinivasan, Jake Paul, Dr. Andrew Huberman, Gary Vee, Lance Armstrong, Sophia Amoruso, Ariel Helwani, Ramit Sethi, Stanley Druckenmiller, Peter Diamandis, Dharmesh Shah, Brian Halligan, Marc Lore, Jason Calacanis, Andrew Wilkinson, Julian Shapiro, Kat Cole, Codie Sanchez, Nader Al-Naji, Steph Smith, Trung Phan, Nick Huber, Anthony Pompliano, Ben Askren, Ramon Van Meer, Brianne Kimmel, Andrew Gazdecki, Scott Belsky, Moiz Ali, Dan Held, Elaine Zelby, Michael Saylor, Ryan Begelman, Jack Butcher, Reed Duchscher, Tai Lopez, Harley Finkelstein, Alexa von Tobel, Noah Kagan, Nick Bare, Greg Isenberg, James Altucher, Randy Hetrick and more. ----- Additional episodes you might enjoy: • #224 Rob Dyrdek - How Tracking Every Second of His Life Took Rob Drydek from 0 to $405M in Exits • #209 Gary Vaynerchuk - Why NFTS Are the Future • #178 Balaji Srinivasan - Balaji on How to Fix the Media, Cloud Cities & Crypto * #169 - How One Man Started 5, Billion Dollar Companies, Dan Gilbert's Empire, & Talking With Warren Buffett • ​​​​#218 - Why You Should Take a Think Week Like Bill Gates • Dave Portnoy vs The World, Extreme Body Monitoring, The Future of Apparel Retail, "How Much is Anthony Pompliano Worth?", and More • How Mr Beast Got 100M Views in Less Than 4 Days, The $25M Chrome Extension, and More

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

• 0:00Shaan Puri?

  It will go down as one of the best private equity deals ever. Over the 19 years, they put 226 million in to Weight Watchers and got 5.37 billion out, 4.7 billion of realized profits.

• 0:20Shaan Puri?

  All right. What's up? We are back and we got another episode. We got a guest here today. May Tab is here. He's a, he's a friend of mine who most people I think probably, probably haven't heard of unless you're in the D to C world or you're on Twitter or you know what's going on in that, in that area. But I want to introduce you because you're somebody who A has helped me a bunch with my D to C brand. You like know a bunch of tips and tricks and hacks and shit like that. So I'm like, I basically have a little scoreboard in my head and everybody's attributes are there. And then yours, it was like business hacks was like filled up. And then the other thing was that you, I don't know if you listen to the show regularly, but you would send me little nuggets of like, oh, you should talk

• 1:02Shaan Puri?

  about this. You should talk about this. And so I kind of got confidence. I was like, oh, I think he's just got his back pocket full of interesting stories that are off the beaten path. And so I kind of like that. Do you listen to the show first? Let's start there.

• 1:15Speaker 01

  Yeah, all the time, almost religiously. So my go to shower podcast.

• 1:20Shaan Puri?

  Oh, that's, that's perfect. We are the number one rated shower podcast in the country, actually. Millions of men lather to us. So Sam, I sent him a picture of the Vancouver show where like the stadium or like the, all the theater was filled up. And he goes, wow, that's a lot of virgins.

• 1:42Sam Parr?

  That's hilarious. That's a good point.

• 1:44Speaker 01

  My fiance listens to the show religiously too. And she wouldn't use chat GPT when I told her about it, maybe a month or two ago. And you guys mentioned it the other day and she was sending me screenshots. So you guys caught her using that.

• 1:55Sam Parr?

  Dude, the Darmesh pod, I think you're referring to the Darmesh pod. I've been using it all weekend after talking to him. I implemented a lot of the stuff that he was talking about. Man, he got me hyped up. Also, what a lot of people don't realize this is Darmesh pods always get tons of views on YouTube. And finally Sean like texted Darmesh in a group chat and was like, hey, Darmesh, what are you, what are you doing? And he goes, oh, nothing really. And I go, really? And he goes, well, I'm just saying a few things. And he like. Gave this like very detailed list of like internet marketing, not hacks, but he was like, I'm just like testing, like buying ads, like $500 here, just to test this. And then I'm like responding to comments, just like the small stuff that you wouldn't expect someone who runs a $20 billion company to like be doing. And

• 2:41Speaker 01

  He's very tactical.

• 2:42Shaan Puri?

  We don't even do it with, it's our own podcast. We don't do any of this stuff. Like people are like, oh, the thumbnail, the, the title. People don't realize we don't see those. We don't approve those. We don't know about those. We're not involved in it. Uh, we don't do a lot of the stuff that we probably should, but uh, you know, can't be bothered to do all that stuff.

• 3:01Sam Parr?

  But he did. He did do it.

• 3:02Shaan Puri?

  They said, they say the devil's in the details and I ain't trying to hang out with him.

• 3:07Sam Parr?

  He's the man. Like, he was like, oh, I'm not doing anything. And then he had this like really long list, actually.

• 3:13Shaan Puri?

  Mate, have you said a phrase to me the other day? I called you and you said a phrase that I've stole and I've just been saying all around town. I've just been saying it everywhere, even when it's not really appropriate because I thought it was so funny. Sam, I was talking to him and I was like, oh, you lived in like, or like you're living in Utah? Why Utah? Like you're, aren't you like Canadian? You're like Indian? Like what's going on here? And he was like, uh, he's like, oh yeah, my wife, something, something. And I go, I asked you something about your wife. He goes, yeah, you know, he goes, yeah, you know, uh, I, I looked like I got beat with the ugly stick, but somehow I ended up with an awesome looking wife. And I

• 3:49Speaker 01

  It happens. It happens.

• 3:51Shaan Puri?

  Beat with the ugly stick was so funny. I've been using that everywhere.

• 3:56Speaker 01

  I use it to refer to my business partner all the time. So.

• 4:00Shaan Puri?

  Oh, you take him down with you?

• 4:01Speaker 01

  Oh, always. Yeah. He's my go-to.

• 4:03Sam Parr?

  I don't know. I Googled him. He's pretty handsome. How, um, how, how old are you?

• 4:08Speaker 01

  Uh, I'm 29.

• 4:09Sam Parr?

  Wow. I'm looking at

• 4:11Shaan Puri?

  Interesting because he does stuff that like, you say words that, um, most people don't say. So I, I pay attention to vocabulary. So for example, in the tech world, me and Sam used to live in San Francisco and, uh, you couldn't go outside, you couldn't poke your ear out the window. You wouldn't hear the word EBITDA. Nobody says EBITDA in San Francisco. Nobody knows about it. Nobody talks about it. It's not a thing. But then when you get into like the cash flow business kind of world, that's all you're gonna hear. A bunch of, a bunch of different people talking about words that have to do with profits. You say a bunch of other words like dividend recap, distressed buyout. And he talks about all these things that I frankly, don't know what they mean, what they do, how it works. But I know that you come from a little different world.

• 4:54Shaan Puri?

  So I'm excited because I want to talk about some ideas from your, your neck of the woods, your part of the business world. That is less of stuff I'm less familiar with personally. And so I think I'm gonna, I'm gonna learn a little bit. Where, where do you want to start? What, what, what topics should we start on? You said to Doc with some things, I wanna, I wanna look at some of these. Let's start with one that we had.

• 5:15Sam Parr?

  Hold on Sean, I need a little bit of background here. So you, you basically, I like, I read your Medium post. So if I understand this correctly, the name of your holding company, you guys buy into or you buy entirely outright distressed or the only okay performing D to C brands and you make them great. Is, is that the summary?

• 5:36Speaker 01

  Yeah, that's the gist of it. And we're less of a hold co and more of a, an independent sponsor, if that makes sense. And that just means you do everything on a deal by deal basis. So the equity that you're working with might be very different on a deal by deal basis.

• 5:47Sam Parr?

  That doesn't make sense. I don't understand. What's, what do you mean when you say sponsor?

• 5:51Speaker 01

  So it just means that we're the ones making the investment. And say on one deal, Sean's a co investor with us. And then on the next deal, only Sam's on the cap table with us.

• 6:01Sam Parr?

  And you run it or you hire CEOs or what?

• 6:05Speaker 01

  It depends on the portfolio company. Right now I am day to day with one of our portfolio companies.

• 6:10Sam Parr?

  And how many do you have? Like seven, I think?

• 6:13Speaker 01

  No, there, there's three platform companies and then there's another eight to 10 kind of minority equity and debt positions that we have.

• 6:18Sam Parr?

  And the whole thing is roughly of what size? So me and listeners understand.

• 6:24Speaker 01

  The core platform companies, which is what I would count as part of the revenue, because we own the majority of those companies is well in the eight figures, kind of that, that mid eight figure range.

• 6:33Shaan Puri?

  And is the biggest one, the, the flowers company?

• 6:37Speaker 01

  No, that one's slightly smaller than the succulent company, but the flower company is the one I'm most bullish on. That one's solo woodflowers.com and that's just because there's a lot of room for margin expansion yet. So.

• 6:47Shaan Puri?

  What's that called? That's the one you talk about the most. So, so let's give, let's, let's give, you said three platform companies. So you said a succulent company. Uh, solo wood flowers. So it's a, like a wood or fake flower company, correct?

• 7:00Speaker 01

  Made in our motherland, Sean.

• 7:01Shaan Puri?

  That, yeah, me exactly. So made in India, people buy them for like weddings and things like that, right? Cause flowers are super, super expensive at weddings. And so these look really good, but they don't cost as much as fresh flowers or whatever. What's the, what's the third like majority owned company?

• 7:19Speaker 01

  That one's an apparel company.

• 7:21Shaan Puri?

  An apparel company. Okay.

• 7:21Speaker 01

  Yeah.

• 7:22Shaan Puri?

  And so, um, you own these three. Let's talk before we go into the details about each of these. I want to know the origin story because you've told, you've told me some interesting things like, I think you met your co-founder on Reddit, like in a subreddit. And so take us back, uh, go all the way to, I see here, something about, about, about getting sick at 17. Start there and then tell us the story of how, how you got to this, this spot now when you're 29 years old.

• 7:48Speaker 01

  Yeah. So the quick and dirty version is essentially diagnosed with spinal stenosis and degenerative disc disease when I was 17. So that meant, you know, obviously doing anything physical for work was kind of out of, out of the picture.

• 8:02Speaker 01

  So I decided to learn more about e-commerce and entrepreneurship and just kind of stumbled.

• 8:08Speaker 01

  I, I started a Facebook page called guitar porn and this is back when organic reach was awesome. You know, you post something, people would actually see it. Facebook blessed us with so much free organic reach. It was the greatest time ever. Almost like Tik Tok is now, right? And then, um, I transitioned, I started doing basically guitar runs, like semi-custom guitar runs with big brands. And we'd partner with a retailer dealer. This is before brands would work with you directly, right? And we would sell out these preorder runs and basically take a cut. Eventually, we cut out the retailer and became the retailer ourselves. That got to kind of low seven figures. That was nice because there was no capex. So we didn't have to have much cash, right? It's all pre-orders. After that, I started a mentee product company, which is really ironic. Some I'm Sikh, so I don't cut my hair and I have a turban.

• 8:53Speaker 01

  And so did that with one of my best friends. That also scaled to kind of low seven figures along with a guitar pedal company that scaled to low seven figures. And then after that, I decided, you know, these are all fairly small, like TAMs really small for niche guitar pedals. So I decided to start investing, realized, hey, you know, no one's going to come to me.

• 9:14Shaan Puri?

  You weren't even doing guitars. You were doing guitar pedals specifically.

• 9:19Speaker 01

  So the first company was a guitar retailer, like actual full blown guitars. And then, yeah, the one that was really profitable was guitar pedals, just because the margin was insane. And I partnered with a guy who I'd met flipping guitars, like just trading guitars with. And he was a Grammy nominated guitarist, right? He is, he plays to a band called Peripri for any metal nerds. And so that went well, like those were both flowing well in terms of cash. They're just such small opportunities.

• 9:42Sam Parr?

  Were your products any good or were they kind of, you're just good at the marketing? Cause that's my, that's my kind of rub with a lot of DTC companies is they have pretty shitty products, but slick marketing.

• 9:54Speaker 01

  No, the products are awesome. I mean, I have like 30 or 40,000 posts in guitar forums by the time I was 18. So I really was into guitar. I used to play six to 10 hours a day. So I definitely knew what it took to make a good product.

• 10:06Sam Parr?

  Okay, cool. Yeah, I mean, like a lot of these companies, like I'll see, I'm like, dude, these are shit. Or like, this is some Alibaba crap that just wrapped up in something a little bit nicer, but it's still pretty crap. Like there's no R and D, like made it a superior product. You know what I'm saying? Especially with like a lot of the cosmetic stuff, like lotions and stuff. I'm like, I don't know, man, this is kind of crappy.

• 10:24Shaan Puri?

  So did you go to college? Cause it sounds like you were doing these when you were like 18, 19, 20, 21. Is that right?

• 10:30Speaker 01

  Yeah. So I was in school and then I dropped out. Um, it just didn't make sense to stay in school. What did your Indian parents think about that? Uh, they were not, they were not big fans of it. That was, yeah.

• 10:40Shaan Puri?

  What was your like dropout point? Was it like, I'm making X dollars and the X was just like too big for, or you just didn't have the time to go to school? What, why did you drop out?

• 10:49Speaker 01

  Um, it just didn't seem like the value was there relative to who I was, had the opportunity to interact with on the business end. And, um, it just seemed like there was more opportunity there, if that makes sense. Then obviously I was doing okay in terms of cash flow. So.

• 11:03Shaan Puri?

  So how old were you when you made, you know, this podcast called my first million? How old were you when you ended up making your first million?

• 11:09Speaker 01

  Um, in cash or, or equity? Cash. Uh, I don't know. I'd probably put it like mid twenties, early twenties, like 24, 25.

• 11:18Shaan Puri?

  And so you, you did that through these kind of like smaller e-comm things. And then how'd you get into this kind of like private equity style thing where you go and you buy these distressed companies? And you turn them around. So how did that happen?

• 11:32Speaker 01

  Yeah. So in the great recession, when I was a kid reading about it, I always thought it was interesting reading about the private equity firms that made money no matter what. Like if the company did well or it failed. And I thought, hey, that sounds great. Uh, I hate being an entrepreneur because obviously if the company doesn't do well, you fail, right? And that's still the case. It's not like, you know, um, it's just not as black and white anymore. So I started, um, I just realized the term.

• 11:54Shaan Puri?

  Explain that. Why would a, why would it make, but why would it work? Whether the company does well or not, does well? Explain how that works.

• 12:00Speaker 01

  Yeah, we can jump into that a little later, but part of our thesis is essentially investing on how much liquidity or cash the company can generate in a short-term basis. Um, so if you could invest today and pull most of your cash out within two or three months, there's a lot less risk, right? Um, versus say you bootstrap something new, you're always putting more and more cash, um, on the working capital side. You need to fuel growth, right? If, if you're doing a traditional agency or brand, that's less of an issue for something asset light, like SaaS, right? Um, but, but that's the case, then you, you don't actually end up pulling cash out of it for so long.

• 12:32Shaan Puri?

  So where most people focus on equity appreciation, you guys focus on liquidity. You guys focus on how quickly can we pull cash out? Whereas most business people just think, how do I make this worth more, which often results in putting more cash in? Is that correct?

• 12:47Speaker 01

  Right. And that's just one facet of it. We're okay with holding to the long term or being more long-term focused if it makes sense. And sometimes we're just more of a short-term partner.

• 12:55Sam Parr?

  And like, it's not uncommon for a software company to sell on the low end for three times revenue. On the high end, if it's fast-growing, 10 times revenue. What you just said was you're gonna buy a company for basically one-sixth times, because you said you want to get your cash in, I can't do that math, but you want to get your cash back in two or three months. So you're buying it one-sixth times profit or cash flow. I mean, like, like, nothing, right?

• 13:23Shaan Puri?

  Give us, give us a sample deal economics. So, in a situation where that happened.

• 13:28Speaker 01

  Yeah. So we invested in an adult health and wellness retailer, which is a nice way of saying sex toys. That's, I'm in Utah, so, you know.

• 13:36Sam Parr?

  But why don't you ever say the name of the brands? Because you don't want to, you don't want to talk about it?

• 13:41Speaker 01

  Well, if they're distressed, it's just kind of.

• 13:44Sam Parr?

  Got it, okay.

• 13:45Speaker 01

  Yeah, just culturally kind of mean to them. So, I'm not like that. But the, and I can send them over. I think I shot them over to Sean. But, yeah, so we invested essentially at, I'd say, a fairly far below market valuation, just because others were unwilling to invest in that kind of company. And this was 2018, back when it was a little bit more taboo than it is now. Now, there's a few publicly venture-funded brands, like Dame, etc., in that space. So it's become more socially acceptable. But we got in far below kind of market valuation.

• 14:16Shaan Puri?

  Well, give us a, give us a sense. So, revenue was about X, and then what was the distress? Well, why was it distressed? They had too much inventory? They had a debt problem? What was the problem?

• 14:26Speaker 01

  I would say it was more of a case of really bad margins. And there was a clear case to improve those margins. They were, so just originally a drop shipper. They're doing like six million a year. This is one of our first deals. So they're very small. They're only doing six million a year. And. I'd say market for that for valuation like the growth equity side would have been like 10, 15 million. As far as valuation back then, we got in at like one and then the company paid us a royalty until we were paid back in full on that initial cash investment. And then there's a few other kind of structural things going in, but we got involved and we helped boot up their initial ops.

• 15:01Shaan Puri?

  Why would a company like that sell for $1 million? I think that's, if I'm listening, that's my question, right? Like, yeah, he said they're doing 6 million and normally that's like 10 million of value, but they bought it for one.

• 15:12Speaker 01

  And how you, how they found it.

• 15:14Shaan Puri?

  Mr. Charming or what? Why were you able to buy it for that, that price?

• 15:18Speaker 01

  So that one was a minority equity investment and we got involved like really hands on operationally. So my co-founder, he jumped in and he helped them boot up their their physical operations and transition from a drop shipper to holding their own inventory and booting up ops here in Utah. He helped them launch that facility, make their first few hires, GMs, et cetera. And then I helped them raise debt to fuel growth and that kind of took them from that six to 12 ish mark.

• 15:42Shaan Puri?

  Gotcha. Gotcha. Okay.

• 15:43Speaker 01

  And then we sold our equity just via secondaries to a VC firm that invested later. Once that value been created.

• 15:50Shaan Puri?

  Okay, gotcha. So, so continue on. So you, you, uh, you've done some of these. So you see, so I want to go back to, to sort of, how did you get this idea? So you, you read about this, you're like, all right. Private equity has this trait where they can buy stuff at a certain price or on certain terms. So that they get their money back quickly, whether they, you know, their equity portion is small. They have a lot of debt and they get the money back quickly. You read about that, but still you've never done that. So how'd you decide to actually go do it? And how'd you figure out how to do it?

• 16:23Speaker 01

  Yeah. So I just started posting on Reddit to try and find initial deal flow. And then I met

• 16:27Shaan Puri?

  Which subreddit?

• 16:28Speaker 01

  One guy, just the entrepreneurship one. So I met my co-founder, who I still work with now, Alex, through that subreddit. And then I met a lady who was one of the first few engineering hires at Uber Eats. And she actually ended up retiring like eight months after we started working together when Uber IPO'd. And then the other one was someone with a very traditional background in private equity. And he's the one who kind of taught me a lot about private equity.

• 16:53Shaan Puri?

  And you're just, what, building a relationship through Reddit DMs? Or like, how are you like, I don't meet anyone on Reddit. What is actually happening here? So I think you met some pretty high quality people and actually trusted them enough to partner with them.

• 17:06Speaker 01

  Yeah, it's the same way you meet people through Twitter, I guess, right? Just posting, getting to know people. I'd say that the community there is very low quality on Reddit versus Twitter. And some other private forums like EO, IPO, what Sam has going on, right?

• 17:21Speaker 01

  So there was a lot of filtering to be done, but we did sorts of deal through that.

• 17:26Speaker 01

  That's how the succulent company was was found.

• 17:28Shaan Puri?

  Okay, gotcha.

• 17:31Shaan Puri?

  Okay, so Sam, what do you want to do for here? You want to talk a little bit about this like flower company thing? Or you want to talk about other brands that that he's got on this list?

• 17:38Sam Parr?

  I want to talk, you have, you have three, whoa, whoa, shit. You have five categories or four, three categories. You have frameworks, you have interesting ideas and opportunities. And then you have under the radar companies. I would like to start at number one, under the radar companies. I read those, I read that reverse order. Number one, under the radar companies. You have things that I've never heard of. And I like, I'm pretty good at finding these unheard of things.

• 18:05Shaan Puri?

  Yeah, so let's start with a simple one. So tell us about Josh's Frogs. And like, what are these types of companies?

• 18:12Speaker 01

  This is one of my favorite companies. There's all the characteristics of a company we'd love to invest in. And I've been trying to invest in it since 2018, but he says no. So it's okay, though, I still love him. So basically Josh's Frogs does exactly what it sounds like. They I don't know if you call it farming, breeding, they breed their own frogs and their exotics. And they also grow the bugs that they eat and they sell the food. But they do all of that in-house in Michigan and they ship it to customers. So if Sam wants a frog tomorrow, he could order one from Josh's Frogs. And they've scaled really cleanly, totally bootstrapped. Josh is awesome. I called him on a Sunday and the guy was catching frogs with his kids. I couldn't believe it. You know, I think he's been doing this for 15, 20 years. And he's still loves frogs.

• 18:54Shaan Puri?

  And frogs, basically. Do you know the price of a frog? You know what frogs you're going for?

• 18:58Sam Parr?

  Dude, I'm looking at it. I'm looking at it now. I would have thought like, so you could buy a chicken at Tractor, Tractor Supply for like five bucks, like a chick? Or frogs are way more expensive.

• 19:09Speaker 01

  And they're delicious.

• 19:11Sam Parr?

  Yeah, I mean, the frogs here range, the most expensive one is $400. It looks like the average one is like 60 to 100 bucks for a frog.

• 19:18Shaan Puri?

  These are people.

• 19:19Sam Parr?

  They're beautiful, but like, you know, I don't.

• 19:21Shaan Puri?

  These are for pets? Like people want a pet frog, so they go buy this $60 black poisonous dark frog, right? Fair enough.

• 19:28Speaker 01

  Later on, you guys should watch the tour of his facilities. It's really cool.

• 19:32Shaan Puri?

  And so you like this business because what?

• 19:36Speaker 01

  So what I, what I really like is the steep ops mode. So no one else, your typical e-commerce guy is not going to go out and boot up a frog operation, right? It's just too intense for them. They don't really like physical things. We have to show up. A lot of guys just use three PLs. And it requires a lot of specialized knowledge. At the same time, you know that someone overseas is not going to undercut you. And it doesn't become a race to the bottom with demonetized products. Because you can't really ship a live frog from China or directly overseas to the US. It's just not viable.

• 20:04Shaan Puri?

  Thank God.

• 20:05Speaker 01

  So with that, there's a very strong operating mode and you're only really competing against other companies in the US, right?

• 20:12Speaker 01

  So your, your cost per acquisition stays the same.

• 20:14Shaan Puri?

  Competing against like only people weirder than himself, which is

• 20:17Speaker 01

  Yeah, exactly.

• 20:18Shaan Puri?

  Only going to be like three other dudes in the country.

• 20:19Speaker 01

  Yeah, your CPA, your, your cost per acquisition of customers stays consistent, doesn't really spike the way you see it spike in other spaces.

• 20:27Shaan Puri?

  Josh's frogs, Jack's frogs, Sam's frogs and you know, Herbert's frogs. Those are the, that's the, the big four in the frog industry.

• 20:36Sam Parr?

  If you're Josh, if you're Josh, if you're Josh from Josh's Frogs, what, what would you sell this business for? Or like, what would be the threshold of, okay, this is interesting. I'll take the offer or I'll maybe take the offer.

• 20:49Speaker 01

  Yeah, I obviously I can't say what his EBITDA is. And if I gave you a multiple, I would kind of tell you what his EBITDA is. But I would say there's probably, let's say your average D to C business, his size might sell, and I'll just use a range for eight to 10x. He would get a premium of a few turns on top of that because of that operations boat. And it's not something anyone can just knock off, right?

• 21:10Shaan Puri?

  Yeah, it's this super, super defensible.

• 21:12Speaker 01

  Yeah.

• 21:13Shaan Puri?

  Okay, so and how did you even find this? You know, this guy personally, or you found?

• 21:17Speaker 01

  I met him. I I met him through I did a podcast on e-commerce fuel. And then he reached out and we just got along. And I always stay in touch with him. We like to nerd out. We have similar problems with their businesses. So it's fun to discuss them with him, like implementing lean, etc.

• 21:32Sam Parr?

  By the way, I just read I just Googled Josh's frog revenue. So that looks like they're on the Inc. 5000. So you can find it there. But according to some articles, they're in the range of like $15 million a year in terms of frogs. I don't know if that's accurate. And I haven't actually researched it. But that's like just some top searches that are showing that that's pretty wild.

• 21:48Speaker 01

  Yeah, I think they're they're bigger than that now.

• 21:50Shaan Puri?

  That's wild. There's a picture of him on the about page, and he just looks so happy. This guy looks like he's in frog heaven right now. I'm so happy for this guy. Just this one picture just like I I hope to be as happy as this man right here. This is a good one. I like this. And I think what's cool when you so invent in in the sort of like tech world.

• 22:11Speaker 01

  Right.

• 22:12Shaan Puri?

  All the discussion is always just about like, the future dream, like the dream end state. It's like, what could this be if everything goes great? And what I've learned as I talked to guys like Andrew Wilkinson, or the guys from enduring ventures, or you with people who are buying, who want to buy, you know, solid, stable, cash flowing businesses that are profitable. That's not that, you know, it's not the pie in the sky sort of thinking that you get in Silicon Valley. And instead, It's basically what could go wrong. So instead of what could go right, it's what could go wrong if I bought this company. And that's why people love businesses like this that are that have this like, you know, defensibility, this moat. So it's like, no one's going to compete with me, not internationally, because you literally can't ship the frog.

• 22:57Shaan Puri?

  Locally, you know, the average e-commerce bro is not going to want to like, take this on. So who am I competing against? I'm competing against basically nobody, which will let me, which means my business is extremely defensible. And so it's just a different way of thinking that is less common when it comes to tech, which is sort of like, how fast can you grow? You know, can this become huge? Can this become a unicorn? It's a different sort of like mindset altogether. What's another example of an under the radar business that that's worth talking about?

• 23:24Sam Parr?

  Talk about this fast growing trees one.

• 23:27Speaker 01

  I think that one's a great example. So similar, similar, similar operations about where obviously they're kind of growing the trees. Again, no one wants to be a tree farmer, right? It's just not sexy. No one's going to go out and raise capital to become a tree farmer.

• 23:38Sam Parr?

  Oh, no, that sounds all right. That sounds kind of neat to me.

• 23:41Shaan Puri?

  Wait, so, so literally, what, what, what is it? They sell seeds or they sell the actual tree? What's going on?

• 23:46Speaker 01

  Both. And the company, I, I first stumbled across the SIM when the company was being sold six or seven years ago. And I think it went for between a hundred million to a hundred and twenty million. And it looks like they've grown quite a bit since then. I wouldn't be surprised if their worth closer to double that now, just with their website, rehaul, et cetera. They had a very like

• 24:04Shaan Puri?

  Dude, their traffic estimate shows it went from, it's like at almost three million uniques a month. That's pretty crazy for a tree website.

• 24:12Sam Parr?

  Their website says, uh, flower. So here's their H1. Flowering trees are it. You'd hate to miss out on the hottest trees of the season, wouldn't you? Shop now. Over 1.5 million happy customers. And so what you see is, I don't know what type of tree this is, but it's like a grown tree that's purple. It does look beautiful. It looks, it's a beautiful tree. And I just think it's hilarious. You'd, you'd hate to miss out on the hottest.

• 24:39Shaan Puri?

  Flowering trees are it. That's like, you know, like the, like Gen Z people are like, he is him. She is her. Have you seen this? Like this trend?

• 24:49Shaan Puri?

  Flowers, trees are it.

• 24:51Sam Parr?

  This is awesome.

• 24:51Speaker 01

  Yeah, I mean, it's a really defensible business. It's cool. It kind of, no one would really expect something like that to be that large, right?

• 24:58Sam Parr?

  And so what do you buy? You buy a tree that's mostly grown already and then they come and plant it?

• 25:03Speaker 01

  I think you plant it. I think it shows up and then you plant it.

• 25:06Sam Parr?

  Oh, my God.

• 25:06Speaker 01

  In your property. So if you want, if you want a tree to like, for more privacy, say, privacy hedges or something similar, or just trees in general, this is where you go.

• 25:14Sam Parr?

  How much revenue do you think they do?

• 25:15Speaker 01

  Get your fix.

• 25:18Speaker 01

  I have no clue now. Again, I'd be really surprised if it was less than a hundred million.

• 25:21Sam Parr?

  And revenue?

• 25:22Speaker 01

  Yeah, I'd say probably closer to like 150.

• 25:25Sam Parr?

  And what, what about net margins would this be or net income or EBITDA?

• 25:30Speaker 01

  I'd be really surprised if it was below 20%, probably closer to 20, 25.

• 25:36Sam Parr?

  This is crazy. And they probably don't, they probably aren't buying too many ads. I, they had a couple of Google ads, but like, it seems, I bet you this is a type of company that they, I mean, they called their company Fast Growing Trees for a reason. I imagine that was a search thing.

• 25:49Speaker 01

  Yeah, yeah, it's an older company. It's been around for a while. Under a few different owners. I think a private equity firm owns it now.

• 25:56Shaan Puri?

  Ben, who would have thought that, like, you know, when the internet came out? It's like, yeah, people are going to be able to like buy things online. It's like, there's some guy out there who's like, they'll buy trees online. It's like, no, no, no way, no way. Why would I buy a tree online? That sounds like the most far-fetched thing. And then here we are, a hundred million dollars selling fast-growing trees online. You could buy this, by the way. Look at this Italian cypress. It's like this.

• 26:21Speaker 01

  That'd be perfect for the Airbnb stuff.

• 26:23Sam Parr?

  Yeah, I am, I'm looking at this and I think this is pretty awesome. Like I, like, they have some beautiful hedges. There's like fruit trees. I mean, this is pretty amazing. I understand this. I'm getting to the age now to where I appreciate a good tree.

• 26:42Shaan Puri?

  Yeah, this is, this is pretty crazy. Okay, I like this one. Give us another under the radar business.

• 26:48Speaker 01

  Yeah. What seems more appealing to you?

• 26:50Shaan Puri?

  The first. Well, let's do the Betties one. And then we've talked about this CSC generation thing and we should, but you have more info on it than than we do. So let's do Betties and then do the CSC.

• 27:01Speaker 01

  Yeah. So Betties is really interesting business. What I love about it is strong IP mode. So if you go to their website.

• 27:08Shaan Puri?

  Well, explain what they do. What do they do?

• 27:10Speaker 01

  It's like a bed cover thing for kids. I actually don't know how to explain it very well. But it may, it's so your kids can basically change their bedding really easily, but they have it. It's patented and they have proper IP mode. And when you go to their website, you can tell it's not very optimized, but they've been crushing it totally bootstrapped, great people, a very healthy EBITDA margin. And, um, you know, that IP mode.

• 27:33Sam Parr?

  It's a duvet cover. It's a duvet cover that's easy to zip, which I have a zip duvet cover as well. The duvet covers are a pain in the butt to, to, to do.

• 27:43Shaan Puri?

  It's meant for little boys, so that makes sense.

• 27:48Shaan Puri?

  So this, uh, they bootstrap this to 40 million. That's pretty impressive.

• 27:52Speaker 01

  Yeah, I'm pretty sure it's right around there.

• 27:55Shaan Puri?

  Yeah, that's pretty good.

• 27:56Speaker 01

  And you can tell it's all PMF, like killer product market fit, killer product, killer IP mode. And, uh, they've done a really good job with that end of the business.

• 28:04Sam Parr?

  What do you think are some of the, like, uh, I, I don't think this is like, uh, everything can perfectly do this, but I think that when you like, look at like a software company, you think, all right, so what are the attributes of like a great software company that gets scale? You think like, well, they have to have good net retention, meaning most people come back constantly. Ideally, you can, it's a expensive enough product that you could afford to hire a sales team. Uh, like things like this, like there's like a handful of checklist and then there's lots of examples of things that don't check the checklist that still succeed. But what are the handful of, of checkboxes that you have when looking at, uh, or building a D to C company? Particularly things that people don't think are true. Like, for example, like in the cool kid circle, I mean, you're 22, you want to create like,

• 28:47Sam Parr?

  you know, cool shit that Gen Z buys. You're none of, nothing that you've mentioned fits in that category.

• 28:54Speaker 01

  Right. For us, what we found is the most consistent mode and some people are different, right? This is just the mode that's worked for us is that operating mode. So anything that requires physical manufacturing, it has a good reason for the manufacturing to be in the US or Mexico is great. And we found that like, I'm not sure if you guys are familiar with lean manufacturing. It's just like a philosophy behind, I guess, running a manufacturing operation.

• 29:16Sam Parr?

  Toyota thing, right?

• 29:17Speaker 01

  Yeah, exactly. It ports over very cleanly from company to company, but marketing does not, right? What worked with your paid ads for a company with, let's say, low AOV, but really fast consideration period. So, you know, something like clothing, I see clothing, I buy it. It's very simple compared to the marketing side for something with a long consideration period. That's very different, different teams, totally different strategy. Nothing will really carry over cleanly, but on the manufacturing end, it carries over cleanly, company to company to company. So for us, that's our favorite mode.

• 29:46Sam Parr?

  So to summarize, you want a low consideration period and you want something that can be made in America because it has some type of manufacturing mode. Anything else?

• 29:56Speaker 01

  Well, we don't actually care about the consideration period. I think it's just like a natural challenge in any vertical that you get into, right? If that's there, but for us, we only really care about the manufacturing end now. And then obviously the way we enter the deal is really important too. And that just, you know, if you pay next to nothing for something, the odds of making it work and making money on it are much, much higher than if you overpay on entry.

• 30:19Sam Parr?

  I want to talk about this agency stuff because, you know, the interesting thing about, you know, people like you and the D to C world is they're oftentimes really, really good at acquiring customers because it's kind of like, like the D to C folks oftentimes are pretty good now. Before it was the gaming companies. So like if you met someone from a gaming company or from the ad tech world, like that meant that their internet marketing chops were like pretty good. Now that D to C or now that Facebook is harder to buy ads on, the people who are succeeding oftentimes are quite good at that. And Sean and I have a bunch of friends who are starting recruiting companies and which is really interesting because recruiting companies isn't new, outsourcing isn't new, but people are putting sexy new

• 31:04Sam Parr?

  packaging on it. And I guess from what I'm guessing, because you have it on here, is they're doing a really good job or historically have done a poor job of acquiring customers and you want to apply that to that space. Is that right?

• 31:16Speaker 01

  Yeah, I just think it's a really interesting space in general, but I think some of these agencies are really heavily focused on, say, the Philippines or other countries in Southeast Asia. We've noticed there's a lot higher quality talent in places like Mexico and you don't lose. The same negatives associated with hiring in the Philippines are not there in Mexico. So for example, you could build an office out there and fly out and be there in person in a few hours if you live in Texas, right? And the wage disparity is not as high as you would think for really, really good talent. You're only paying a dis- large number, but you know, it's not actually that bad, a 30% more than you would be for someone who's great in the Philippines, maybe 40% more in Mexico. But again, you can visit them in person, which is really big. You can have them fly out. And again, it's big for us because we do a lot of manufacturing, right?

• 32:01Speaker 01

  So they can actually understand the product or interact with the team in person. So your retention goes up, the quality of work is much higher. And we've found the quality of applicants is much, much higher in Mexico too. So if I did start an agency, it'd be focused on solely talent in Mexico. And just for example, when we're hiring a customer service role, like a new manager or director, we're getting people who used to head up Uline. Are you guys familiar with Uline? I just use it to buy like boxes.

• 32:29Shaan Puri?

  Yeah, we use it a ton for like when we had our warehouse.

• 32:33Speaker 01

  Yeah. So their customer service is awesome, but we got one of their former directors and his salary ask was really reasonable. It was like, I think $5,000 a month, but his talent was the equivalent of someone who has $200,000 in the US.

• 32:45Speaker 01

  I can't find this client info.

• 32:47Speaker 03

  Have you heard of HubSpot? HubSpot is a CRM platform, so it shares its data across every application. Every team can stay aligned. No out of sync spreadsheets or dueling databases. HubSpot, grow better.

• 33:01Shaan Puri?

  Yeah. You have one agency idea on here that I think is a no brainer, which is site speed. So we have this problem with our store, but I think everybody, everybody has this problem. Like basically if you're selling something on the internet, one of the easiest levers, the biggest levers you have is your site speed. Because if you have a slow loading thing, you're just going to lose traffic. You're going to lose customers as you have a slow loading page. You're also going to suffer in terms of your Google rank because Google takes into account your your page speed as well. And it's really easy in the e-comm space to have slow pages because what happens is you start with a Shopify store, you install 15 plugins just to get your your Shopify store to do anything because like you can't basically run a Shopify store just out

• 33:46Shaan Puri?

  of the box. You have to, you're going to end up installing a bunch of apps and each app injects a bunch of code into your page. And even if you delete the app, the code stays. There's no like, you have to like manually clean that up, which is kind of insane and probably a business of its own. But basically site speed is a problem that we, I think we've hired three different folks to try to fix our site speed. And all of them, I'm like, they claim to do something. I have no idea really if they're, if they're doing a great job or not. I don't think that they are because the next guy comes in and says, oh, man, your site speed sucks. Let me fix it. So, so I think this is a, this is a product that I wish existed. And I think could clean up because it's a, it's clearly accretive to the person. But explain your thinking on it. What did I miss?

• 34:28Speaker 01

  Yeah. So it doesn't really require much in terms of dev skill. It's not like you don't have to be great at the dev end to actually do most of these changes. And it's almost like a checklist. It's very portable company to company to company. It applies very cleanly. So for example, changing the order in which your pixels fire for Google Analytics, Facebook ads, etc. You can delay some of those very slightly and dramatically increase site speed and it won't really hurt the business that much. That's just an example of one quick fix you could do or certain apps do not compress images properly. So judge be the review app on Shopify for for a lot of sites. It does not properly compress images. So if you just apply more compression to those images, your site speed goes up at the product's play page level or wherever those reviews are. So.

• 35:09Shaan Puri?

  How would you acquire new customers for this?

• 35:13Speaker 01

  Honestly, I would probably just, just go, have you guys used Built With before?

• 35:18Shaan Puri?

  Yeah, we love it.

• 35:19Speaker 01

  Yeah, just go to Built With, pull a list of websites, make sure they're doing a certain amount of revenue or at least have meaningful revenue coming in. Just cross check that against certainly it shows traffic, right? Like Alexa or something. And.

• 35:33Speaker 01

  From there, I think you just pin them if their site's slow, right?

• 35:36Shaan Puri?

  Yeah, just cold email. I think is the way to go with this. If somebody out there wants to do a site speed shop, just DM me because this is a no brainer. I'll be your first customer. I'll be get the next 10 because

• 35:47Speaker 01

  And you could even discharge this. You could charge purely on contingency too. It's really cool because you can see a black and white effect. If you've done a good job and again, it's really easy to do a good job. It's just nobody specializes in this for some reason. So.

• 35:59Shaan Puri?

  Yeah. And it's a moving target like you'll do it. And then like six to 12 months later, they'll need it again because they've installed a few more things. They hired somebody who didn't know how to compress images before putting it up. They started using this new tracking software for hot for heat maps. And then boom, now you need it again because you've gone from an A rank back to a C. C rank on these like these site speed graders that are that are out there. I'm surprised the the site speed graders don't have these agencies or maybe they do. I haven't actually looked, but like, does GT matrix or one of these companies that have the the site speed score? Do they not offer a button that says, by the way, we could fix this for you?

• 36:36Speaker 01

  No, they should though, to your point.

• 36:38Shaan Puri?

  Oh, my God.

• 36:38Speaker 01

  Really easy, especially if all these ecommerce sites are on Shopify, right? It's very checklist.

• 36:44Shaan Puri?

  Yeah. So that's the other move. You should buy that site. You should buy the site speed site that checks the speed. And then just add this button at the end. That's the agency service to to fix the problem if they don't do that already. That's kind of crazy.

• 36:57Sam Parr?

  How are you? How are you balancing your time? It seems like you've got a bunch of stuff going on and these, I mean, you know, ideas are worthless, but it seems like a pretty good idea to me when I hear, when I'm hearing this, I'm like, oh, that's kind of interesting. I actually seems like that has legs. You've got a good network. You could probably spin something up fairly quickly and scale nicely. How are you balancing doing everything that you're doing?

• 37:20Speaker 01

  About 15% of my time is on the investment and managing our minority equity and credit positions. And then the rest of the time is just spent on the floral business. There's a pretty big lever that we're pulling right now with booting up another operating base, like a manufacturing base in Mexico, and that'll get our EBITDA to kind of five or six million. And then from there, it's a pretty good valuation. So we just want to get that over the hump that I'll probably slowly phase out. But my co-founder is solely involved in that company.

• 37:43Sam Parr?

  And that's the, that's called Sola Wood Flowers?

• 37:47Speaker 01

  Yeah, yeah.

• 37:49Shaan Puri?

  Sam, when I met Mateo, I heard what he was doing. I was like, I told him two things. I think I go, how do I invest in this? Because if you're willing to go down and move to Mexico and build your manufacturing facility, you're gonna win. Like, Paul Graham has this essay that he wrote called like Schlep, and he basically describes the guys from Stripe as being willing to do the Schlep work. And he's like, you know, and a lot of businesses, there's basically some amount of Schlep that you have to do. And for Stripe, they had to do all this like banking stuff that was kind of like annoying and bureaucratic, but they didn't really view it that way. They were, A, they were so young, they didn't really know what all was gonna happen. They didn't really realize how much they would have to do. And B, they were just willing to do

• 38:31Shaan Puri?

  it. And, and, you know, you are willing to do the Schlep. Like, you're like, oh, you're like, I'm looking for operationally intensive things. That's the opposite of what I'm interested in. I'm like, I want the least operationally intensive thing, but I get why you would want it, because it's super defensible. Once you have it, it's very valuable. Once you do it.

• 38:50Speaker 01

  It's very simple. Once it's fully set up, if that makes sense. Once you've, once you have like the best practices for lean manufacturing running, it's very simple to keep a manufacturer running versus like a D to C brand that's really reliant on the marketing end, right?

• 39:03Shaan Puri?

  Yeah, exactly. And so I told you, I remember I being like, hey, can I invest in your Mexico thing, like your facility there? I think that's a great idea. And then I also told you, I was like, man, I feel like you play the game on hard mode. You're super smart and you are like, I'm gonna go do distressed turnarounds of D to C businesses. That's like multiplying three hard things together. And I was like, why do you do this? You could just, you know, there's easier options. And you were like, no, I like this. I like, you know, I like playing in the mud.

• 39:33Speaker 01

  Once you get a really good deal, you can't go back. I'm Indian. I need to get a good deal. I need to get a good price. So.

• 39:38Shaan Puri?

  Yeah, I think that's actually what it is. I think it's genetic that you're like, oh, you know, the best deal possible, a company that's burning to the ground.

• 39:47Speaker 01

  Exactly.

• 39:48Shaan Puri?

  You can get it for nothing.

• 39:50Sam Parr?

  You're also, I'm trying to find it, but so your website's really good. But you have this blog post, or you have a bunch of blog posts on Medium, so Karta Ventures, Karta with a K.

• 39:59Speaker 01

  Oh, it should be on Substack now. I killed the Medium.

• 40:02Sam Parr?

  Oh, well, I found it on Medium, but, but yeah, it looks like it is also on Substack, but you're really good with language. So like, your thing starts off with like, your first sentence is just good. This is a guy I intend to give distressed e-commerce heavy business, to give distressed e-commerce heavy businesses with 10 to 15 million in revenue, a high level overview of turnaround, management basics and resources to dive into. That's a great first sentence. You're telling me exactly what I'm getting. And then you do a really good job of explaining kind of your background with Alex, your co-founder. You say you started these things in your early twenties. You took passive roles or you sold them. And then you like helped turn around ice.com, which is now called Ice Trends. You

• 40:44Sam Parr?

  met on Reddit. And then you say, we welcome complex opportunities that others are unable or unwilling to tackle. As a result, we can invest in non-control opportunities. We can grow quickly. But you just basically say, oh, here's another good line. My team and I are responsive, discreet, and avoid pointless formalities. We understand how critical speed is both in turnaround and high-growth environment. And we could tell you within 24 hours if we're a fit. And so you like, you just do a really good job of being very crystal clear about what your offering is. And you are direct, but you're not rude. And it's just, you have a really good voice. And you also like cite a lot of the books that you've read. So you talk about turnaround corporate artistry. And you have like a quote from the book. And so anyway, your language is wonderful. Sean

• 41:28Sam Parr?

  said he pays attention to vocabulary. So do I. You have really good words. You're and your rhythm is nice. What did you read to kind of come up with your perspective? And how did you, how did you become a good writer? You're quite good at explaining complex things.

• 41:43Speaker 01

  I think we all grew up during the era of hardcore. I don't know what it was, but for some reason, copywriting and being into copywriting was really popular from 2010 to 2013, maybe earlier.

• 41:53Sam Parr?

  What did you, uh, what did you learn for that? Or where'd you turn to for that?

• 41:56Speaker 01

  Uh, one of my friends was just really into it. So I got dragged into it too. And just reading random books. I think there was a compilation of like a hundred of the all time best sales letters. That's back when like people used to distribute swipe files and stuff like that. Um, so you'd just be on a, in a random group and someone would just distribute it and you'd rip through it. And that's kind of how I picked it up.

• 42:14Sam Parr?

  It's good. You're, you're very good. And what, what were some of the other books that you read to learn this topic? Cause you, you learned this at a very young age.

• 42:21Speaker 01

  Yeah. It's like Corporate Artistry is one of the greatest books ever, but it's written by my mentor, Jeff Sands. And that guy is an absolute beast. He's turned around. A handful of fairly large nine-figure industrials, um, like manufacturing companies, everything from bakeries to I think large restaurants, restaurant groups, et cetera. And that guy is in his fifties, I, I think. I hope he doesn't kill me if I got that wrong, but, and he just, he just shows up. So you sound like lumber mills, et cetera. He just shows up and turns the operation around within six to 12 months. Absolute machine. And his book gives you, it's probably the most value in a book that I've read in a really long time. It's just like tip after tip after tip. And you can just take it and apply it, even if your company is not distressed, you know, you just choose profitability, if that makes sense.

• 43:06Speaker 01

  Really awesome. The guy's just a complete machine. I'm convinced you could drop them into anything and he'll just make it more profitable in six months.

• 43:12Sam Parr?

  And that's because what? What is he, uh, like world class at doing? What does he do when you drop him in?

• 43:17Speaker 01

  Um, I'd say he's just very fast at making decisions. He doesn't hold back. In a lot of ways, running a turnaround is like running a startup. You, you don't really have the benefit of sitting around to make decisions, right? Like you're not going to hire McKinsey to run a full blown study to see if you should do something. You're just going to go and do it, right? And maybe you have some light directional data, but you're not going to wait for a ton of data. You're not going to run some crazy Qualtrics survey, right? You, he's going to go out and get it done. And that's, that's what he's really good at. It's just taking action. He'll show up. For example, when he turned around that, that Canadian lumber mill, he, he's American. So he just, he moved and, you know, keep in mind he has kids, et cetera, but he still just moved, showed up to a lumber mill in the middle of nowhere, Canada. And turned it around. He's got it done. No one else will really do that, right? And there's a premium for that.

• 44:00Sam Parr?

  What part of this brings you joy? Why are you doing this other than that it makes you a lot of money?

• 44:05Speaker 01

  I'd just say it's really satisfying and it's fairly repeatable. So, and I think the speed at which you learn is really, really good. Right? And it doesn't require a lot of equity to keep scaling, if that makes sense. So, for example, you can probably buy a relatively distressed brand doing a hundred million for maybe 10 to 15 million in equity.

• 44:26Sam Parr?

  I, we had, we're friends at Moyes and Suli Ali. So Moyes started native deodorant. And I was like, Moyes, we're in San Francisco. Why are you selling deodorant? Why not like do software and be normal, make more money? And he goes, I'm a merchant, man. I'm a retailer. Like this is just, it's in my DNA. Like I just, I make products and I figure out how to make.

• 44:46Shaan Puri?

  Merchant.

• 44:47Sam Parr?

  That's what he said.

• 44:48Shaan Puri?

  I've been working on these T-shirt. I've been working with the T-shirt designer to do things. And now I'm just on the lookout for these quotables. I'm a merchant.

• 44:55Sam Parr?

  That's what he said. He goes, he goes, I'm a merchant. What's that say?

• 44:59Speaker 01

  It says Carta Cog. And then this is a banana that says IRR, like internal rate of return.

• 45:04Sam Parr?

  That's so funny. Well, and Moyes also said, he goes, my second phrase, or he goes, my first favorite phrase in the English dictionary, distressed asset.

• 45:15Sam Parr?

  And it was funny, but he goes, he goes, I'm a merchant, man. Like I, and it does, I don't know if it's like a, like an immigrant thing or what it is, but like his, cause I know their, their family also owns homes, like lots of single family homes that they rent out and they own gas stations. And a lot of my Indian friends, the Pakistani friends all do that. They have gas stations, things like that. And I'm like, I don't know, man. Maybe it's just something in the culture where you're just like, you're just geared towards small business. But yeah, and like for you, is it the product that you like? Or is it just like, I just like making stuff, something that provides value and I just like optimizing it for profit. I mean, what, what do you think is driving you towards this?

• 45:49Speaker 01

  Yeah, it's in distressed side's really interesting because it's like a game of chess.

• 45:54Speaker 01

  With the existing creditors, existing cap table and kind of figuring out how to squish it together to make it work. Right? So maybe you have like really angry senior lender and just convincing them like, hey, you know, give me the position at decent price. I'll come in, I'll turn it around and eventually you'll get right side up, or at least you'll make more than you would just liquidating these guys. And then convincing the guys that you're getting the company from, because they're often really upset, right? Like, say, companies during 20 or 30 million. It's still run by the original founders in most cases, and they'll be really emotional about it, rightfully so, right? So kind of figuring that side out is really, really interesting. Then, obviously, the operating end, I don't like it as much as my co-founder. He really loves the operating end. But that can be a lot of fun, too, just coming in, getting rid of the bad apples very quickly, and then building out a team and kind of reviving the culture.

• 46:36Sam Parr?

  There's a story of, um, what's the, um, what's the famous, um, the famous hedge fund guy who's probably in his 90s now, but you guys will know who I'm talking about.

• 46:46Speaker 01

  Carl Icahn?

• 46:46Sam Parr?

  Yeah, Carl Icahn. He tells this story on YouTube, and he's like, "I bought this company, and it was not doing great, but I thought it could do great. And so, we owned, like, 12 floors in this one particular building, and I just went from, in one hour, from floor to floor to floor, and I laid off the entire floor." And he tells this story laughing. He was like, "It was the greatest thing ever." And the audience was like, "Why? You know, you're ruining jobs." And he's like, "But I'm making it better. Like, we're gonna, we're gonna have a better outcome." And like, I go both ways with that. I'm like, "Well, you're kind of just, you know, um, like these hedge fund guys. I'm like, "You're just like an Excel monkey, and you're just like squeezing every juicy can. You're not providing a lot of value." But I do understand the satisfaction of just like getting something that's not fulfilling potential and achieving potential.

• 47:31Sam Parr?

  You know what story I'm talking about? Were you like?

• 47:33Speaker 01

  Yeah, I know the exact one. I've watched the same video.

• 47:35Sam Parr?

  Did I get it wrong?

• 47:37Speaker 01

  No, you nailed it. You nailed it. Yeah, he goes through four by four, and he does exactly what you said.

• 47:41Sam Parr?

  And he's like glowing with like, he's like cried. I'm like, "Carl, you're just like ruining these people's lives."

• 47:46Speaker 01

  Carl, you're blushing.

• 47:51Sam Parr?

  Layoffs just get him hot and bothered.

• 47:53Sam Parr?

  Yeah, he's like, "I'm getting a semi, just laying these people off."

• 47:57Sam Parr?

  But yeah, I guess you're kind of in that position.

• 48:01Speaker 01

  A little bit. I guess it really depends on the company, right? A lot of cases, you have a few really good apples. People left who are really passionate about the company. They want to succeed and they're the last people left. And then you have all these people who are more or less just leeching off of like the corpse, right?

• 48:14Shaan Puri?

  What do you think about how Elon's done this with Twitter?

• 48:17Speaker 01

  I think it's great. I think a lot of those people are really self entitled and they have no perspective on anything.

• 48:23Speaker 01

  In a lot of ways, they're the kind of like the modern version of those companies, the 1980s that were really fat and just overpaying executives, et cetera. I don't really feel bad for someone who's making a hundred grand, losing their job, right? It's more so people working blue collar jobs where they're making 40, 60 grand and they're working their ass off. I definitely don't feel bad for any software engineer making 300 grand who's upset they have to work 10 hours instead of six.

• 48:44Sam Parr?

  I don't disagree with you. I just wish you'd be less of an asshole when he was doing it. You know?

• 48:49Speaker 01

  Yeah, yeah, yeah. That was kind of pointless. Like, I think he made fun of someone who's disabled or something. That's obviously horrible. That's inappropriate.

• 48:55Sam Parr?

  And you mentioned something about being in America and how like, you know, you like things that are in America. When I, does it ever give you, like, do you have any sense of pride around like creating American jobs? Cause I know on your website, you said we've created or saved 200 different jobs in America, let alone overseas. Are you into like that whole made in America thing for like the sense of pride thing? Or is it strictly like, uh, this just, this, if it makes sense, it makes dollars?

• 49:23Speaker 01

  Yeah, I think it's a mix of both. I think it really does make sense and I'm, I'm Canadian, but I'm obviously grateful for the opportunity that exists in the US. You know, Americans just much more gung ho about entrepreneurship. They're more willing to write a check and just get involved than Canadians are. If you go to Vancouver where I'm from, it's a lot of older real estate families. They're not really willing to write a check and get into something the way Americans are. They love taking risks and I really appreciate that about the US.

• 49:46Shaan Puri?

  Yeah, man. There's a, there's a thing I've noticed recently about what I call like the North Star formula for, for a business. And so I like when you can boil down a plan into like a very simple.

• 50:03Shaan Puri?

  Equation. So let me give you an example, like Sam with Hampton. I think I texted you this, but I just said 10,000 times 10,000. So you just need 10,000 CEOs who are going to pay you $10,000 a year. And you have a hundred million dollar business, 10,000 times 10,000. So it's like, can I provide enough value where if somebody's willing to pay 10 grand a year? And then can I get 10,000 people to sign up for that value? Your whole business comes down to that one equation, 10,000 times 10,000. When I met, when we were hanging out with Andrew Wilkinson, I was like, how much equity did you put into Tiny originally? And I think it was something like, you know, don't quote me on this, but I think it was something like $6 million.

• 50:45Shaan Puri?

  He's basically turned $6 million into like $600 million, just as round numbers. And 6 million into 600 million, if you want to be the next Tiny, you can just take that thing. I'm turning 6 into 600. Okay. How are we going to do that? Let's work backwards from that simple formula. Well, I think I would need to compound at 45% annually. Okay. How am I going to do that? Well, I need to buy businesses on these terms at these prices, right? So a formula can be very instructive. We have some friends that just raised $18 million and we're all like, what do you do with that 18 million? And they go, we're just trying to figure out how we could turn, uh, we're like, the goal is take this 18 million of equity and turn it into 10 million a year of free cash flow. I was like, okay, like that's a clarifying equation.

• 51:28Shaan Puri?

  And I'm curious, Matt, for you, like in the best case scenario, how will this have played out? So like you've, you, you go to the start. Uh, I don't know. How much, how much equity did you and your co-founder put in as like your seed capital? To get your whole business off the ground?

• 51:46Speaker 01

  That's kind of weird for Cardox. We both had a few exits beforehand. Like he'd sold a company that he got to kind of low eight figures in his early twenties. He'd put a bit of cash, but we put in, I want to say a couple hundred grand, like two, 300 grand to start making investments.

• 51:59Shaan Puri?

  So you, and so, and maybe you've put in more over time. I'm not sure, but like whatever that.

• 52:03Speaker 01

  Yeah, we, we reinvest everything more or less.

• 52:05Shaan Puri?

  Uh, yeah, but like just the out of pocket, like initial, not, not reinvestments from the proceeds of what you've been doing. But just have you had to take something out of the checking account or savings account just to, to, to re, to recapitalize the business in any way? Or no, it was like two, 300 grand. And then anything else we put in was reinvestments from what that two or 300 grand has made us.

• 52:24Speaker 01

  It was reinvestments from what that two, 300 grand that we put in initially was.

• 52:27Shaan Puri?

  Okay, amazing. So you're going to go from, let's say, 300 grand. And like, if this all plays out the way you want, um, you know, fast forward, I don't know, 10 years or however long you're, you plan to, to kind of do this. What would be the big win for you? How much would the portfolio be worth for this to be like a, you know, a home run outcome for you guys?

• 52:45Speaker 01

  Yeah, we are really goal driven. Um, we're a little bit weird that way, but we both want to tackle increasingly large distress deals. So that's what we get. Pleasure from, I guess, just kind of fun. Doing it and we'll just keep doing it until we don't have fun. Um, so our goal really is. Get this floral company thing can easily get to a hundred million in top line.

• 53:03Speaker 01

  Like our, our allowable customer acquisition costs will go up by 30, 40% once we finish with a few manufacturing transitions.

• 53:09Shaan Puri?

  Hold on. So you don't, you don't have, you're not goal driven. What does that mean? I, I don't even, that's like not English to me. How do you, how do you function without, without goals?

• 53:16Speaker 01

  I, I just like to do hood rat stuff, just whatever is fun, right?

• 53:19Sam Parr?

  Dude, he's like a dominant, you're like the dominatrix of PE. You just get, you just get pleasure. You get, you get pleasure like, oh yeah, you like that? Eat it up. Ooh.

• 53:32Speaker 01

  That's going on. That's my new LinkedIn subheader.

• 53:36Sam Parr?

  You just love the act, man. You just, you just like the act of, uh, you know, someone, um, uh, you, you, you whisper, whisper IRR into your ears and you're going to get weak at the knees.

• 53:47Speaker 01

  Well, it's just fun because you get to learn from people like, like you too, or hang out with other people that are really interesting. Um, and then that's really exciting too, right?

• 53:54Sam Parr?

  But don't you, but don't you, don't you have, um, like a, like a, you know, every, a lot of people who get in business, they have like, one day I want to make all this money so I can buy, you know, a thousand acres, or I want to create a school that does this, or I want to be able to make sure that everyone in my family never has to pay for medical bills.

• 54:13Shaan Puri?

  A dream instead of a goal.

• 54:13Speaker 01

  My initial dream, my initial dream and my co-founder's dream, just before we met, it just turned out we had like the same target was to make like $5,000 a month. That was it.

• 54:21Sam Parr?

  That's how it starts, man. That's how it starts. Then you realize that, uh, then you realize that, you know, you, you know, what I've noticed, I, I have all the same goals.

• 54:29Shaan Puri?

  Hold on, hold on.

• 54:29Sam Parr?

  What I've noticed is, dude, you didn't start like this. I had the same thing and the goals always change.

• 54:35Shaan Puri?

  But you said when you started, you guys have had winds under your belt.

• 54:39Speaker 01

  No, no, I mean before that.

• 54:40Shaan Puri?

  Oh, okay, okay.

• 54:41Speaker 01

  Like, early on, like, when I did my first thing, I was like, I'm gonna be stoked if I make 60 grand a year.

• 54:45Shaan Puri?

  Okay, yeah, of course, of course, of course.

• 54:47Sam Parr?

  But what about now? You know, like, what's like the, what's like the vision, the long-term vision that you, you, that kind of keeps you excited? Maybe sometimes, sometimes it's buying shit, giving shit away, helping your family, whatever.

• 54:59Speaker 01

  Right. I think getting this one portfolio company to the next level, either selling it or releveraging it to camp cash and then raising a large fund is probably like our immediate short-term goal the next two, three years.

• 55:10Sam Parr?

  Dude, that's so, that's so not what I thought it was gonna be. Sorry, go ahead.

• 55:15Shaan Puri?

  When I was in college, one semester, me and my buddy Trevor and our other friend Dan, we, we had read the, the card counting book. This was before the movie came out 21, but

• 55:25Sam Parr?

  Oh, my God.

• 55:26Shaan Puri?

  The book Bringing Down the House was out. And, and we were like, oh, not only are we gonna count cards, we decided to create an underground blackjack club on campus. And so we started preparing and we were like, and because we had read this card counting book, instead of just doing the obvious thing of being like, cool, let's just invite some, some friends over to play blackjack at low stakes. Let's see how it goes and we'll go from there. All right, that's how you would do it if you had any, like, any ounce of IQ in your brain. Instead, we were like, okay, let's go buy this, like, fancy blackjack table. Okay, cool. We, we, now we're in the hole and we've got this, like, fancy thing. And then let's run all these practice simulations to see how bad we could get beat. And then what if somebody comes and count cards? How, what's our security gonna be? We were worried about all this stuff that didn't matter.

• 56:11Shaan Puri?

  And we spent, no joke, we spent like the entire semester at college, which is like, that semester cost each of us probably like 40 grand just to be there. And instead of focusing on the 40 grand that we put into being there, we were doing this thing. And I remember one night, we were calculating, we were like, oh, my God. If we do this, we could make $3,000. And then we all started giggling like, oh, like, can you imagine that? Like, we were like, dude, what if we made 3,000?

• 56:39Sam Parr?

  Yeah, I think.

• 56:40Shaan Puri?

  That's 1,000 each. And we were so pumped about this. And it was like, it just took over our minds like a mind virus for, for, for three, four months. It made no sense. But it was like, you know, it was the humble beginnings of scheming. It was like, it was the first of many schemes to come with this same group of people. We ended up starting a company together and did many more things together. But like, that first taste of the scheme and how hilariously bad your plan and your goals are. Like, now, when I look back, I look back with a lot of fondness on that.

• 57:13Sam Parr?

  Totally. Yeah, it makes sense. It's always starts small. And then you, what are you like, you bought, you bought the safe to keep the cash before you even had the cash and the cash never even came.

• 57:22Shaan Puri?

  We never, yeah, we never even ran the, ran the club because we like, we were too worried about getting kicked out of school because we found out how illegal it was. Well, basically, we had one simulation where I was the, again, we were big into these simulations and I walked in and I played, I lost $100. And then I go, give me all the money or I'm going to tell people about this club. And I was like, oh, yeah, what are we going to do if somebody does that? Like, at any point in time, somebody could just literally take all the money because there's no recourse. What are we going to do? Call the cops and tell them that somebody stole from our illegal gambling club? And we were like, oh, this won't work.

• 57:58Sam Parr?

  Before I sold my first company, I was using some type of like mint.com style service. And there was like a thing where you could manually, you know, you connect all your accounts and it shows you your net worth and whatever. And they had this option where you could manually add something. So I manually added this really big number. And I would log into this every day, like six months in advance. And I'm like, sick, this is awesome. And I remember like, when the money then actually came in, I was like, damn, I, I kind of like felt most of that joy in that six months leading up, just like, I kind of tricked myself into already believing this was real. The, the simulation kind of gave me like, a lot of the joy. It's pretty cool. You can kind of like trick yourself into believing these things are true. And you

• 58:41Sam Parr?

  get a significant amount of satisfaction from that fake thing compared to the real thing.

• 58:48Shaan Puri?

  Yeah, you, you, because what people want is the feeling. You don't want the thing. If you, if you ever say, oh, I really want X to happen. Why do you want X? If you, if you just keep asking, why do you want that? The, the, the obvious answer, why you want anything of a, of a relationship, uh, money, whatever it is, to have a six pack, whatever. It's some feeling. It's a sense of accomplishment. It's a feeling of relief, of real, of, of less anxiety, less stress, whatever it is. And then you realize, oh, it's not the thing I want. It's the feeling. And then you might be able to get the feeling through literally like faking it. You might be able to get the feeling through something much simpler. That's not going to take you, you know, seven years and a bunch of heartache to get there. And, uh, and also if you've never had that feeling before, even when, when that thing happens, it'll be your first time having that feeling and you'll suck at it.

• 59:33Shaan Puri?

  Which is why a bunch of people feel after they get success, they get like, kind of let down. Cause the feeling wasn't as great as they, they wanted it to be. The anticipation was better than the result. And the reason isn't because the feeling is actually a letdown. It's because it's the first time they've let themselves try that feeling and the muscle's just very, very weak. And so, uh, yeah, big, big life tip is to realize like what you want is the feeling and then start, practice having that on a daily basis through like much smaller things.

• 1:00:00Sam Parr?

  Yeah, it works. Um, Mate, have you? I'm looking at you on Twitter. You have 5,000 followers. I think that being popular on social media, it doesn't really matter in most all of business. In fact, sometimes it's like negatively correlated to how popular you are. But in your case, I, at least I know with Andrew, like when he's buying a lot of companies, having some, um, like, you know, it's basically being on Twitter is a billboard for him. So when he reaches out to someone, they're like, oh, you know, I think I've heard of you. Fine, let's have a conversation. For how good it seems like you're doing and how smart you are, your, um, your social presence is significantly smaller. Is there a reason, uh, for that?

• 1:00:37Speaker 01

  No, I just don't really like it. Um, I, I just like to post content about stuff that I actually care about. Um, and I'm fairly open. And then I guess too, on the distressed side, when you're buying a business, they're more of a forced seller. Right? Um, and when you're talking to a lot of these senior lenders, if you're working with, it's a lot of guys that are in their 50s or 60s and they're very conservative, traditional, um, like banker types. Right? They're not, they don't really care about social media or anything like that. So, and I'm sure it does help with deal flow on the growth equity side or buying healthy businesses. But, um, I've just never really been into it.

• 1:01:10Sam Parr?

  Yeah, I mean, you have you have you do tweet interesting stuff. It looks like what's a Daniel Rop watch? It looks like a pretty fancy fancy watch that you just bought.

• 1:01:17Speaker 01

  I'm just a nerd about like neo vintage and vintage watches and then as well as some newer brands, but mostly smaller ones. It's just kind of it's a lot of it's like angel investing. Like if you buy into an early independent brand, which is just like a watchmaker basically going at it, sometimes they can appreciate in value significantly and you get a pretty cool watch for the money. Plus you support a small business. They'll build you whatever you want. So it's like a win win.

• 1:01:41Sam Parr?

  Yeah, your your social media is actually pretty cool. I'm gonna follow you, but you have some interesting stuff, but like compared to some of the stuff you're doing, I know a whole lot of people in the DTC space that are significantly bigger than you and are much more of a little pipsqueak and don't ever walk the walk like you like you are. You know what I'm saying?

• 1:01:59Speaker 01

  Yeah, yeah, I know what you mean.

• 1:02:01Shaan Puri?

  Uh, leave us with this example of this Weight Watchers thing. So, uh, explain, explain what happened with Weight Watchers, then we'll we'll wrap it up.

• 1:02:08Speaker 01

  Super high level. Weight Watchers was not doing so well. And this guy, this tiny firm, not not super small, but relatively small. He convinced Oprah to join them and they absolutely crush it. That's the very high level overview of what he did.

• 1:02:22Shaan Puri?

  And so this guy, uh, what what like what were the numbers? So they what did they buy it for roughly?

• 1:02:27Speaker 01

  I'd have to go pull it up.

• 1:02:27Shaan Puri?

  And then what?

• 1:02:28Speaker 01

  I'd have to pull it up.

• 1:02:29Shaan Puri?

  Okay. So how did this guy know Oprah, by the way? That sounds like, you know, oh, it's simple. He got Oprah on board. That's not doesn't sound that easy.

• 1:02:36Sam Parr?

  Yeah, 2015 Oprah is, uh, was a big deal.

• 1:02:39Speaker 01

  That's Pete there, yes.

• 1:02:40Sam Parr?

  That's peak Oprah.

• 1:02:41Speaker 01

  That's like 2012, 2012 Obama, like, you know?

• 1:02:43Sam Parr?

  Yeah. That's peak Oprah.

• 1:02:46Shaan Puri?

  So in 2015, he did a deal with Winfrey to acquire a 10% stake in Weight Watchers. Since then, the company's stock has soared by almost 600%. They sold $1 billion of Weight Watchers stock and Oprah gained at least 400 million so far. Okay, that's pretty impressive.

• 1:03:04Shaan Puri?

  It will go down as one of the best private equity deals ever. Over the 19 years, they put 226 million in to Weight Watchers and got 5.37 billion out. 4.7 billion of realized profits.

• 1:03:15Speaker 01

  Yeah, it's pretty good.

• 1:03:16Shaan Puri?

  Uh, that's pretty good. Not including the stock that they still hold.

• 1:03:19Speaker 01

  Especially at that scale.

• 1:03:20Shaan Puri?

  But they only bought 10% of it?

• 1:03:22Speaker 01

  Uh, I thought they bought more. I think they kept buying more over time. I thought they kept deploying more and more cash into it.

• 1:03:29Sam Parr?

  Dude, we have to do a pod on Oprah. Like I

• 1:03:31Speaker 01

  I love her.

• 1:03:31Sam Parr?

  I grew up watching her and like I, I, you know, she's 70 now. I just looked her up or she's 68 or something. Uh, we forget, or I forget like how big of a baller she is. I'm like just Googling. It's like Oprah buys another thousand acres in Hawaii.

• 1:03:47Speaker 01

  She came from nothing and she bootstrapped. Like she basically, you know, got, got her net worth to be something absolutely insane.

• 1:03:54Shaan Puri?

  Yeah. What, what's her, what's her story? So, uh, what, what, what do we know about the beginning of her story?

• 1:03:59Speaker 01

  Born, born in a really poor town, abused growing up, et cetera. And then absolutely crushes it. And she should run for president. I would totally.

• 1:04:07Sam Parr?

  I think she, I think she was born in like an abusive family and like, I think, I think there was even like

• 1:04:12Shaan Puri?

  She got like pregnant at 14 or something, right?

• 1:04:14Sam Parr?

  Yeah. And I think that there was some like sexual assault or some, some, some like some horrible, uh, tragic stuff. And then at age 24, I think she becomes like a weather woman or like a, like a, whatever they call it. We are a news person, but you're not actually in the office. You're like out on the streets.

• 1:04:32Speaker 01

  Yeah.

• 1:04:32Sam Parr?

  Um, she did that. And then eventually when she's like 32 or 33, she gets a talk show. But it's not like a hit right off the bat, but it slowly starts picking up. And then eventually she like makes some like groundbreaking deals. She did like one of these groundbreaking deals, sort of like Michael Jordan did with Nike, uh, what Lucas Films did with Star Wars, where it's like, you know, we'll just take a percentage of the upside. And, uh, and then that like turned out to be like one of the most, you know, one of the best deals of all time. And, and it's worked out and you know,

• 1:04:59Speaker 01

  And she did this all back when people were very, very racist. It's not like now.

• 1:05:04Sam Parr?

  Yeah. She's from, like, I think it was out of Nashville, Tennessee, uh, that she's doing this. So in the South and she kind of killed it.

• 1:05:09Shaan Puri?

  We, we, we need a how to take over the world episode on Oprah. What's, what's going on? Where is our, where is our definitive Oprah episode? Why, why have you not done this already?

• 1:05:21Shaan Puri?

  It's a real question for you, Ben.

• 1:05:22Sam Parr?

  Uh, put it on the list, Sean.

• 1:05:24Shaan Puri?

  Put it on the list. Put it at the top of the list. Let's do this after this, after this episode is done.

• 1:05:30Sam Parr?

  You got it. I'm buying my Oprah. I'm on amazon.com buying Oprah biography.

• 1:05:34Sam Parr?

  Is there an Oprah biography? I would totally buy that. Of course there is. There has to be. I mean, she's, she's the best. I'm a big fan of her. And she like did this all out of Chicago. So I think she still owns like the penthouse in the Sears Tower, which is like, you know, one of the largest buildings in the world. But no, she's the best. You know, I always forget about this. It's like, I'm in Austin and there's all these nerds talking about crystals. You know, you go to a therapist and they like recommend a crystal. Like, it's like pretty woo woo shit out here. She was pretty woo woo, but for some reason she made it very, very likeable. Like, you guys remember that book, The Secret, where it's just like, it's like, if you think about it enough and like, put it in place in your brain.

• 1:06:12Shaan Puri?

  The universe will grant you this.

• 1:06:13Sam Parr?

  Yeah. And like, she like would, she was talking about that stuff before any of that stuff was even popular. And for some reason, when she does it, it's very tasteful. Other times, my friends do it. It looks like, you know, they're one of those women wearing like a Coachella brown hat. Like, you know, and it's not cool at all. You know, I'm talking about those wide brim hats. Whenever I see one of those, with turquoise jewelry, I run away. I'm out.

• 1:06:36Shaan Puri?

  Good choice.

• 1:06:36Sam Parr?

  You know, if you work, if you're wearing cowboy boots, turquoise jewelry.

• 1:06:42Sam Parr?

  No wide brim hats, hats for me. I'm out. If you, if you wear one of those things, I'm not part of this. But for some reason, when she does it, I'm in.

• 1:06:50Shaan Puri?

  Well, that's what I want to know. Like, I think the, the story I've heard is like, grew up in these terrible conditions, overcame and became super successful. But I literally want to know, like, what was the successful part? Like, meaning, how did she get her break? And then like, what led her, what was she doing? Was it literally just better content? Like, was she just that damn good and dynamic as a talk show host? Was it like the Microsoft IBM deal where they like, you know, how did Microsoft take over the world? It's like, well, they cut this really great deal for the operating system where they could be, you know, with multiple providers at once. And then they use IBM to bootstrap and that's how they got bigger. Like, it's like, was there like a growth hack? Was there a, a smart, you know, deal that she struck? Was it the timing?

• 1:07:35Shaan Puri?

  Cause like, you know, those show, you know, cable started spreading into every home in the country and like, she was one of the top three shows and just like, she got to surf the cable wave or whatever. Like, I want to know what actually. Led her to the mega, mega fame. What were the actual those, those things? It's not like a simple answer, but that's what I'm actually curious about because you could like in the air, in the topics that I know about, um, those stories are always the most interesting. And I feel like when you, when I go into other topics, like I was like, oh, May Tab, like, what happened? He was like, oh, started off bad. Now the best. It's like, yeah, but act two, the middle part, that's the part that anybody who actually wants to make shit happen in their life, you want to

• 1:08:19Shaan Puri?

  focus on act two. Like Hollywood focuses on act one and three, right? Like the, the, the bad origin and then the, the happy ending, but it's the montage, the training montage when like you go from like scrawny to strong, the training montage that they speed up through is the part where all the interesting shit happens.

• 1:08:36Sam Parr?

  I already told you, Gino, I go Billy of the week on Wednesday. Oprah, I'm on it.

• 1:08:42Shaan Puri?

  Yeah.

• 1:08:43Sam Parr?

  There's this really cool book, um, called Messy Middle. Have you guys read Messy Middle? It's by, uh, what's the, uh, Scott Belsky?

• 1:08:50Shaan Puri?

  Yeah.

• 1:08:51Sam Parr?

  The most dreamy guy of all dreamy guys. Scott Belsky is the man. Scott Belsky basically started, um, there's a guy named Scott Belsky. He started Behance, which is, uh, where developer designers could host their portfolio. He started it, bootstrapped it, had a hundred and seventy five million dollar exit. Before it became very successful, he said he had like $50,000 and he invested like 15,000 into Pinterest at a three million valuation, 15,000 into Uber at a three million dollar valuation. Each of those, you know, 50 to a hundred million hour outcome. Plus he owned 75% of his company when it sold for a hundred and seventy five million dollars. So very, very, very successful. Now he's, it's looking like he's going to become the next CEO of Adobe. So huge deal. He's got this awesome book called The Messy Middle.

• 1:09:34Sam Parr?

  And it talks about how like, you know, starting things can be somewhat easy, but once you start that, then there's, uh, once you, you start it and there's the middle and you have the end and the end's the kind of the easy part, you know, things are just kind of working, but the messy middle is that 10 year period where it's like, is this working? Is this not working? It's a really cool book on how to like navigate that period. And it's, and I love that title, The Messy Middle.

• 1:09:55Shaan Puri?

  Yeah. Great title. Great guy. He came on the pod once a long time ago. We should bring him back.

• 1:10:01Shaan Puri?

  But yeah, he's on your like Mount Rushmore of dreamy dudes. I feel like you got Huberman up there. You got Belsky, who else? It's basically like successful and good looking.

• 1:10:11Sam Parr?

  Yeah.

• 1:10:12Shaan Puri?

  Yeah. Jawlines.

• 1:10:14Sam Parr?

  Yeah. Yeah, you need a good jawline.

• 1:10:18Shaan Puri?

  Clear cut jaw.

• 1:10:20Sam Parr?

  Dude, have you seen Scott Belsky's jaw, man? He's got a strong chin.

• 1:10:24Speaker 01

  I'm Googling after that.

• 1:10:26Shaan Puri?

  Talk about, talk about not a distressed asset. Chiseled.

• 1:10:31Sam Parr?

  Yeah. That's a blue chip stock right there.

• 1:10:34Shaan Puri?

  He also just dresses well. And I feel like dressing well is this like really easy thing to do that nobody does. And he does an amazing job of it, especially in tech.

• 1:10:44Sam Parr?

  I know he's, he's the man. Cause he lives in New York, dude. All those guys are stylish. He lives in New York.

• 1:10:51Shaan Puri?

  Yeah.

• 1:10:51Sam Parr?

  So he's got that leg up.

• 1:10:53Shaan Puri?

  Dude, I've never been to his house, but I've been to his house. I know exactly what a guy like that's house looks like. It's basically, I could picture it so clearly in my mind of how immaculate like the design is of that guy's house.

• 1:11:07Sam Parr?

  He invested in the hustle. He wrote us a very small check and I've got the paperwork for where to send the docs to. Immediately I looked up and I like saw the house and I could tell you, I could tell you off air. It's exactly what you're describing. You didn't even, you didn't even describe it other than some big words. And it's exactly.

• 1:11:27Speaker 01

  I tried to in 2018 with Rihantik for D F O. I stumbled across the hustle like this is awesome. I should try to invest in this. So I messaged you on Facebook, but no reply, so.

• 1:11:37Sam Parr?

  Oh, I'm sorry.

• 1:11:39Speaker 01

  You should go pull it up. It's just kind of funny.

• 1:11:41Shaan Puri?

  This is your revenge.

• 1:11:42Speaker 01

  No, I'm sorry. It's all right. It's kind of funny. If I would have thought that would have been a good investment, but.

• 1:11:47Sam Parr?

  It would, it would have, I'm sorry. And maybe you would have known Scott, you know, I could have helped you connect with my, with my boyfriend, Scott.

• 1:11:53Shaan Puri?

  Maybe you too could have Zilla.

• 1:11:58Shaan Puri?

  Yeah, we're not, we're friendly. We're not friends, but we've, I've Googled his house. He's not Googled mine.

• 1:12:05Sam Parr?

  Yeah, I can tell you what type of couch he has, though.

• 1:12:09Sam Parr?

  But dude, thanks for coming on, man.

• 1:12:10Speaker 01

  Thank you.

• 1:12:11Sam Parr?

  You're awesome. I'm gonna go and find that. I just pulled up Facebook. I'm gonna find that message.

• 1:12:15Speaker 01

  It's just kind of funny. It's from 2018. It's like, hey, I'm an angel investor. Please let me invest. I look what you're doing.

• 1:12:22Sam Parr?

  What's your, does your last name start with a B?

• 1:12:24Speaker 01

  Yeah, Bhogal. If you just type in B H O G L.

• 1:12:28Sam Parr?

  Uh, yeah, I see it. Sorry about that.

• 1:12:30Speaker 01

  There's, see, good deal flow. Would have been there. Should have messaged you more. Should have asked you.

• 1:12:36Shaan Puri?

  Dude, I saw a, um, a post on Reddit yesterday. It was a map. I don't know if this, this might be fake news, but it's on the top. It was like one of the most popular, popular posts on Reddit yesterday. It's a heat map that shows the average life, life expectancy by town. And there's literally a 20-year age difference between like New York, California versus like the South. It's like, you know, people in the South are dying at like 60 something and people on the coasts who are living like, you know, sort of the yoga and salads lifestyle are living till they're 80 on average. And then you can see these small pockets like in Florida. It's like the retirement community where people like migrate into.

• 1:13:18Sam Parr?

  Yeah, like Jewish New Yorkers.

• 1:13:20Shaan Puri?

  For a long time. Yeah, the Jewish New Yorkers who moved down there, they're living for a long time. Everything around it is surrounded by the walking dead of people who are gonna die at 60 something. And, uh, there's like, it's like Boca Raton kills it and then like Jort Lauderdale is like as a 30-year, uh, shorter life expectancy. I, I asked my data guy, I said, please overlay the, a map of Chick-fil-A's and it was a perfect sequence to like, to the dying early crowd, which is unfortunate for me because I love Chick-fil-A.

• 1:13:50Sam Parr?

  Chick-fil-A's not healthy? Well, we're screwed. Um, dude, thanks for doing this. We appreciate you.

• 1:13:55Speaker 01

  Yeah, no worries. Thank you.