One Chart Businesses Guaranteed To Make +$1M From Day 1

Episode 574: Sam Parr ( https://twitter.com/theSamParr ) and Shaan Puri ( https://twitter.com/ShaanVP ) talk to Jeremy Giffon about what businesses he would buy if he was starting Tiny TODAY and a bunch of opportunities that he sees people sleeping on. Want to see Sam and Shaan’s smiling faces? Head to the MFM YouTube Channel and subscribe - http://tinyurl.com/5n7ftsy5 — Show Notes: (0:00) Intro (1:23) Idea: Build businesses for people with audiences (5:48) Idea: Wirecutter for products that won't kill you (10:30) One chart business category: Regulation (14:55) Opportunity: Become a protege (19:19) Philosophy students > Business students (22:00) The myth the holdco (26:14) The pre- and post- fall (28:17) Idea: “Special situations" I.e. Distressed Venture (32:15) Working hard vs working winning while lazy (40:19) Hanging around the hoop (42:30) The most successful people respond immediately (43:55) Be Dennis the Menace (45:15) MrBeast shouldn’t be selling chocolate (47:53) Billionaire is a state of mind (51:05) Silicon Valley guys envy hedge fund guys — Links: • Jeremy Giffon’s Twitter - https://twitter.com/jeremygiffon • Live Oasis - https://www.live-oasis.com/ • Afina - http://afina.com/ — Check Out Sam's Stuff: • Hampton - https://www.joinhampton.com/ • Ideation Bootcamp - https://www.ideationbootcamp.co/ • Copy That - https://copythat.com • Hampton Wealth Survey - https://joinhampton.com/wealth — Check Out Shaan's Stuff: Need to hire? You should use the same service Shaan uses to hire developers, designers, & Virtual Assistants → it’s called Shepherd (tell ‘em Shaan sent you): https://bit.ly/SupportShepherd My First Million is a HubSpot Original Podcast // Brought to you by The HubSpot Podcast Network // Production by Arie Desormeaux // Editing by Ezra Bakker Trupiano 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. — Other 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?

  All right. This is part two of the episode with Jeremy Giffon. He is the first employee at Tiny. He was there from the beginning when they turned $5 million of equity into roughly $500 million of business value and took the company public just by buying businesses. So last time we asked him, you know, about those early days, about the first business they bought, the mistakes they made, the lessons they learned. This episode is different. Now we're asking him, if I was doing Tiny today, how would I do it? How can I do the same thing that they did? What, what businesses would I buy? What trends, what opportunities does he see? And he tells us the single best investment opportunity he sees today and why he's putting his money behind that. So this is a fascinating episode, part two with Jeremy Giffon.

• 0:37Speaker 01

  Enjoy.

• 0:41Speaker 01

  I feel like I could rule the world. I know I could be what I want to. I put my all in it like no days off on a road less travel, never looking back.

• 0:52Shaan Puri?

  I want to ask you about opportunities. So what business opportunities, trends, or ideas do you have that people who are listening can kind of expand their, their scope? Right? I remember when I was trying to be an entrepreneur, one of the big, big problems I had was I only thought the world was this big, tiny little circle. And I was only looking for opportunities in the, inside my tiny circle. And it was only when I listened to podcasts and I kind of wish, MFM is a podcast I wish existed at the time, but it's like only when I would listen to certain people talk or hang out at a dinner, I would hear some idea that was not something I'd ever considered. So my circle got bigger and bigger and bigger. And then the more that circle got bigger, the more opportunities I saw. So if I told you, what are the juiciest opportunities that you see right now that somebody could do, or that, you know, you think a smart person could go, go for?

• 1:35Speaker 02

  The like second most interesting opportunity, I, what I'd be doing if I wasn't raising a fund to do these, these buyouts, it would be finding people with audiences and either buying businesses for them or building businesses for them. So I think that, I think it's like a anomaly, like a, the business is in its toddler stage, that the way most people with audiences monetize is through ad reads or sponsorships. I think it's kind of like Hollywood when you, you know, you're a big star, you'd get paid to, to hold up a glass of Coca-Cola or something. And I think every person with an audience will eventually, the money that they make from equity in a business that they own will massively dwarf the money that they make from ad rates

• 2:17Speaker 02

  or sponsorship reads. But the big problem here is like, generally, if you're a great podcaster or a content creator, the last thing you want to do is buy a business for one, like that's risking capital, that's hard, or even start and run a business. And so I think there's a big opportunity to basically build a business around someone with an audience and come to them and say, look, like, I will be the CEO of this thing. I think, like, you know, this is the perfect product for you guys to like, really organically use and like and talk about for a long time. And I will run it and, you know, we'll split the equity or something like that. You know, Joe Rogan did this on it and sold that company for a lot of money. And there's other examples, Doug Demiro with his Cars and Bids. And the people are starting

• 2:59Speaker 02

  to do this, but it's still very early. And I think that, like, if I was just gonna start a business de novo, I would say, okay, what's, who are content creators that I really like? And what is the perfect product for them? And then just like, make it easy. You know, it's a pretty low risk proposition for you guys, for example. But if you do it right, like, even if, like, with an audience of your size, you can have nine-figure exits, you know, over four or five years. And that'll obviously dwarf all the money you make from advertising.

• 3:25Shaan Puri?

  If anyone wants to do this, [email protected]. Feel free to hit me up. By the way, this is how Tiny's doing this. Matina, which is the drink they're doing with Huberman, they bought a yerba mate company. And then they, he loves mate, and he's been drinking it for a long time. It's the perfect type of product. So they did that for him where, if Huberman was like, and now I'm gonna take a break from my science stuff to go become a searcher and go find a business, a PE deal to do, like, that'd be crazy for him. But Tiny doing it makes sense. They also did it with James Clear. They built the Habits app, right? So, so you know, another app versus ad read type of thing. So I think they're executing on it well. This is also how Congo Brands built Prime. So they, they did Alani New,

• 4:08Shaan Puri?

  and then they were like, okay, cool, we're gonna do Prime. They went and pitched Logan Paul and KSI. And they were like, hey, you guys are gonna be the promotion engine of this. You get equity, you know, significant equity in this. And we're gonna be the operation back end for this. And we know, we know how to do this. We can build a, in their case, what's probably gonna be a $10 billion plus company off of that, that brand.

• 4:28Speaker 02

  Yeah, it's definitely starting. But I think, and like, the Trenin Group has been very good at it with, you know, they did Doug Demiro and Steven Rinella with the hunting stuff. And it's definitely starting to happen. But I think like, a more, you know, This is a little bit exaggerated, but I think most people in a YC batch could find a podcaster and just say, okay, you're going to be the audience co-founder for this thing, and we're going to give you 30% or something, and we're going to work with you, and it's going to be a product that you can sell very organically. And because the broad thesis is that these audiences are still super underpriced, basically, that the equity you're giving up is you'll be more than compensated for. And I think that'll last for quite a long time.

• 5:09Speaker 02

  And the long tail is really good, too, right? Like, you could do it with a very niche YouTuber, and still sell a more expensive product, or do it multiple times, or whatever. And I basically just think everyone with an audience will eventually have some really tightly integrated organic product to sell.

• 5:24Shaan Puri?

  Love it. All right. So that's a great opportunity, which is go find a content creator who's got a great audience, high trust, and basically buy or build the perfect business for them, and have them be your audience co-founder. I think that's a, it's basically a really unfair distribution advantage you could generate for yourself by doing that. All right. Love that. What's another one?

• 5:43Speaker 02

  One other trend that I'm just really bullish on is basically the idea that everything in the modern world is like poison and toxic. I live in New York, like, the air is making me dumber, the water is like ruining my hormones, all the food that I eat at any restaurant is like full of seed oils, and, you know, everything that I eat is like some combination of soy, corn, and wheat. And the wheat is all sprayed in glyphosate, like, just everything is really bad for you. But it's like this huge, and I'm kind of a freak about it, like, I have water filters and air filters, and buy all this specific food and stuff. But it's a, it's a really mentally taxing. And I really wish, I think it could even just take the form of like the wire cutter, but for, you know, these are products that are

• 6:28Speaker 02

  not going to kill you. And, and the thing is, it's such a nefarious problem, that like, it runs the gamut. It's like clothes that isn't made out of polyester, bedding that isn't bad for you, cleaning products, like, you could do every single thing in the house. I would love to have a wire cutter kind of thing, which is a great business, for just like, this is the version of this thing that is not going to kill you.

• 6:47Sam Parr?

  Dude, check this out. So, go to live-oasis.com. I found this website the other day, my coworkers sent it to me. And it's, they say, do you know what's in your water? 90% of the water sources contain toxins, microplastics, and other contaminants. And then they rank which water, as in the cities, but also which water bottles have the water brand.

• 7:13Shaan Puri?

  I see one that I used to have. It's very bad. It says out of 100, it's a very bad penny.

• 7:19Speaker 02

  Well, that's the thing, right? Even you try, you think you've done it and then it turns out the thing you bought doesn't even work. Like it's very complicated.

• 7:25Sam Parr?

  Well, I, and I go to this and like, I'm scared because I also see the thing that I have and it says bad. And then you click it and they make you pay $5. And this is definitely a thing that I purchased recently. I'm like, fuck, I gotta see which water bottle.

• 7:39Shaan Puri?

  Like you click one, it's like sad. Horrible.

• 7:44Speaker 02

  I just want like, okay, like I need a shampoo. What is the one that like Huberman and Atiya and Rhonda Patrick all agree on? And I'll just buy that one, you know?

• 7:53Shaan Puri?

  Yeah.

• 7:53Speaker 02

  And I can, I think that can exist for almost every single thing in your house.

• 7:57Sam Parr?

  Ask Sean why he's drinking that water. I know why.

• 7:59Shaan Puri?

  Yeah. We hosted this event, this Camp MFM event and it's, we do it at Mr. Beast's house. We're in like remote North Carolina somewhere. And we all show up and this billionaire shows up. He's got like, you know, his security guard with him or whatever. And I'll just fast it up like, oh, how does this guy travel? It flew in private. He's got a security guard. But then the thing that really stood out was he had, security guard carries this case of waters. So we had Fiji bottles of water, which was like, it's in a plastic.

• 8:25Sam Parr?

  And you probably got that because he thought you were being fancy. You wanted to make a good impression.

• 8:28Shaan Puri?

  He's so impressed with my choice here at Fiji. Like I went, I went for it. And instead he's got his own like Aquapana glass bottles. And he was just, he'd always be drinking, he didn't say anything, but I was like, hey, what are you doing that?

• 8:41Sam Parr?

  Except, except he made the noise. Whenever you, when he, when he saw you drinking out of that.

• 8:47Sam Parr?

  Joe, what are you?

• 8:48Shaan Puri?

  I switched to Aquapana for my drinking water for my family. I bought an Afina shower head filter. So, cause the other thing is like, oh, you're drinking one thing, but then you'll go shower. Bathe your naked body and tap, and like the dirtiest tap water with like a 30 year old, you know, shower head in my house. And so A F I N A dot com. Uh, I bought the shower head from there. It's like filters that water. And so I'm just like one by one, replacing different parts of my, my house to try to, try to get rid of some of the, the bad stuff.

• 9:17Speaker 02

  Yeah. The traveling with a crate of mineral water. That's a, that's a good, that's a good way to spend money. I like that.

• 9:23Shaan Puri?

  All right. So two good ones. I like, I like the wire cutter for Protestant of Kill You. By the way, it's like, it's just wire cutter is kind of like value based.

• 9:30Speaker 02

  Yeah.

• 9:30Shaan Puri?

  And in this case, it's health based. And I think that's just like such a simple model that somebody could do. It's probably like 10 years of awesome execution and real like love and care. Like only the right person should start this business. It's not like anybody can do it. But I do wish somebody did it.

• 9:45Speaker 02

  I mean, Examen did it really well for supplements. Like it certainly can be done. It's just, I would know, I would use it every day.

• 9:51Shaan Puri?

  Let's do a couple more trends and opportunities. You had talked, I asked you a question when we were hanging out yesterday, which was what are, what's a business type that you really love? Maybe you guys didn't even make an acquisition in the space, but like, what are categories that you really loved? And you mentioned, I don't know, like a regulation compliance type of category. Can you explain that one?

• 10:11Speaker 02

  Yeah, for sure. So like anytime a government anywhere introduces some kind of arcane rule, you have to follow you. If you don't follow you go to jail. So it's like the ultimate kind of motivation to buy, right? And sometimes it can be really difficult. So, you know, we looked at a bunch of examples. One, one was, um, there's this great company, a software company in Italy that just did banking regulation for all, make sure all the banks are compliant with all these things. And that's like an amazing business because first of all, you're going long Italian regulation, which is probably a great trade in and of itself. But like in the future, Italy is going to have more rules than it does today. And then aside from that, it's like a bank is not going to rip that out ever.

• 10:53Speaker 02

  And it's, you know, it hits that golden criteria, which is it's relatively cheap, but mission critical. That's like a really great one. Um, and there's a bunch of these, there's all these, you know, for buying a house, for, um, for vetting tenants, for KYC and AML.

• 11:11Speaker 02

  If you, if you start looking for it day to day, you see it a lot. Like I just rented a car and there's like a process there where they check my license against some database. And I'm sure that's a piece of software. Like those are great because I love it because it's like a low lift and the downside is super high and you don't really want to mess with it once you've got it working. And the other interesting thing about them is that exists for. Every country, at least every Western country. And so you can go find the software that does that for, you know, Europe or, or one specific country or whatever. And there's going to be multiple versions of those, even Canada, like Canada has different rules than America. And so that's either it's, you know, two different software products or two different companies. So I love, I love those, those businesses as well.

• 11:53Speaker 02

  And they're also like fairly AI resilient, I think, because it's really, again, it's like medical stuff. It's really high downside. So you don't want to like trust it with AI. And then it turns out you weren't in compliance and you're going to get a huge fine or go to prison or something.

• 12:06Shaan Puri?

  Yeah, I, I made a bet recently in the regulatory, regulatory compliance type of space. And I was like, you know, we have this thing on the pod that we talk about one chart businesses, which is like a business that you don't need a, a full business plan for. You could just put one chart up on the screen and you say, that's why I'm doing this. And the one in this case was basically that regulation only goes in one direction. It only goes up into the right, nobody ever rolls back any of these needs. It's only going to increase. And so if you can become, you know, maybe the go to provider or like a key piece of software in a space like that is, it is just such a bet, such a bet you want to make because you know that regulation only goes up. You know that like this compliance, compliance requirements, they don't just say, yeah, you know what?

• 12:49Shaan Puri?

  Forget them. We don't need all that compliance stuff anymore. Like this is never going to happen. It's only going to go in one direction. And like you said, you do it or you don't get customers or you get, go to jail. It's like, well, that's a pretty strong motivator. So like, you know, I think people are going to want to either get customers or avoid jail. And it's just like the right type of space to be in. It's the type of space that 24 year old me would not have known or appreciated that that's a better business to go into than what I was doing at that time, which was like dating app, social network, like cool, new, sexy, you know, thing. And now I'm like, it's kind of like, what's sexy now is like a knee length skirt. It's like, uh, you know, show me a compliance business and I'll, I'll show you my interests.

• 13:29Speaker 02

  The other big opportunity for someone who, who's wanting to start a business is like, you can front run these things, right? You can see what's going to pass. You can see what's just passed. And you can be the first provider for that and have a huge leg up, especially if it's a fairly niche thing. But you could very well be the only option for a couple of years, which is a huge advantage, right? Why don't you start these things instead of just investing in them? I don't, I don't like operating businesses. I'm not, I don't think I'm very good at it. And it's not what I enjoy doing. And so I think everyone should try and do like really stay in their zone of genius as much as they can. I think that it's like personally very good and also good for the world if that happens. And so I'd rather like be allocate capital to the,

• 14:12Speaker 02

  because I think I'm good at allocating capital to the person who maybe needs capital and is really excited about building something.

• 14:17Sam Parr?

  All right, two more things on here. The first, I actually don't have context on this, but I'm very interested just because of the title, the boy versus the guy.

• 14:25Speaker 02

  Yeah, so the boy versus the guy. So.

• 14:30Sam Parr?

  It could go a bunch of ways. It could go a bunch of ways.

• 14:32Speaker 02

  Yeah, and there are a lot of different readings, especially depending on what coast you're on.

• 14:39Speaker 02

  Yeah, basically, it's, it's like, it's the idea of being a lieutenant or being like a protege, effectively would be the, the classier way to say it, I guess. And so, you know, generally, there's like, there's the trusted lieutenant who is, you know, just the solid number two, really important, but their whole identity is being like a lieutenant to the number one person. And then there's this other genre, which is like, on the West Coast, it takes shape as a chief of staff a lot, where it's just, you're kind of this, like, you're this young, rising superstar. There's this sense of like, you're really gunning for number

• 15:18Speaker 02

  one. And, and the idea, like, what made me notice this originally was, especially in the valley, every billionaire has one or two really young, smart boys generally, who just kind of like float around them. And there's this kind of task agreement of like, you come work for me for two, three years, you shadow me, you, you're my apprentice, and then I will back you and like, open doors for you. And it was kind of funny, like, at some point, you know, I was in like, social situations where it's like, oh, like, it's kind of like flying under the, the flag of a lord or something. Like, everyone is, you know, the, everyone is like, you know, going on the private jets of these principals or whatever, and they themselves are probably broke, but like, they very much live this

• 16:02Speaker 02

  lifestyle because they're like, under the protection of a lord. And so I think it's like, there's another, a new kind of piece of information that I've figured out about this is, it's also an age gap thing. So if you're within 20 years of the founder or the number one person in the organization, you're almost always going to be a guy. And if you think of like all the great firms or even, you know, companies where someone has become the new number one, there's almost always at least a 20 year gap between the person, just because otherwise you're too close. And so I think that dictates it a lot as well. But it's these two different things of, the other way to put it would be that like the principal really sees something in this young person and wants to, you know,

• 16:46Speaker 02

  can tell they're like on a rocket ship. They're not going to be an employee forever or whatever, but it's like, you give me two or three years and I can really accelerate things for you. And I think like that pairs very nicely with the cold email thing, which is, you know, I generally think like, if you want to start a company, you should just start a company. Don't go like work somewhere to get experience or whatever. But I think this might be the sole exception, which can really open doors of either investment or vouching or connections or whatever. And, you know, there's lots of examples of this, like, I know, like Ben Casanova, like wrote very publicly about being Reid Hoffman's chief of staff, you know, Blake Masters with Peter Thiel, you know, Sam Altman was this to Paul Graham. Like there's, there's kind of all these examples of it that I think are, are really instructive.

• 17:31Shaan Puri?

  I just recorded an episode with Joe Lonsdale, who was this for Peter Thiel? Like, yeah, he was basically Peter Thiel's protege and now has started, I don't know, more billion dollar companies than anyone else in the country. And I think, you know, he's a fascinating guy because when he was 18, 19, 20, he was an intern at PayPal. Then he was at Peter's family office, then he started Palantir with him. And then, you know, then eventually, you know, went on to do his own thing.

• 17:53Speaker 02

  And Joe's done this for a bunch of people. One of my close friends was, was his chief, one of his chief of staffs, and it's an amazing launching pad. And

• 18:01Shaan Puri?

  If anyone out there, I'm looking for a boy. Never thought I'd say that, but under this context, I am sure, sure enough, looking for a young boy. So

• 18:11Speaker 02

  We need to start a, we need to start a community. We'll call it, uh, we, we them boys.

• 18:17Shaan Puri?

  I don't know if you know this, but I've had four people who are kind of in this bucket. I hired them when they're, let's say, between the ages of 16 to 20 and that have gone on to either become, you know, that have gone on to become millionaires and in some cases, millionaires and like successful content creator, podcaster type of folks as well. And it's happened four times already. So I'm looking for my fifth.

• 18:36Speaker 02

  Yeah, I think apprenticing is really underrated. You know, you think about it in the context of being like a blacksmith or a carpenter or something, but I think for a lot of these things, it's the single best way to learn.

• 18:44Sam Parr?

  Hey, I've got a question. I noticed that you studied, do you study philosophy at Columbia?

• 18:49Speaker 02

  Yeah.

• 18:50Sam Parr?

  That, so I remembered as a kid, I saw this crazy stat that I think it was the majority of people who scored really high on, not the bar, but the test to get into law school. They actually, most of them, the LSAT, most of them were, they studied philosophy. That was their undergraduate degree. And then I saw you studied philosophy and that's kind of an interesting way to go because now you're raising this massive 100 million plus fund. Did that, what did you learn in philosophy that you think is going to help you make a good business person?

• 19:22Speaker 02

  Yeah, I don't know. It's, it's, uh, there's a, it's a big club, you know? Leave it to a philosophy major to know every philosophy major, but there's tons of names, you know, Reid Hoffman, Peter Thiel, Peter Fenton, Stuart Butterfield. It's like this weirdly overrepresented thing. My favorite stat about philosophy majors is that it's something like in the top 10% of earners, they're the highest earning of all people. So if you take the top 10% of every major, they're the highest earning. In general, they're not the highest earning, but like there's that kind of like group at the far end. I don't know exactly what it is. I mean, I can speak to my own experience. I think it's just like, if you're gonna spend four years thinking about a set of questions,

• 20:05Speaker 02

  thinking about the most fundamental questions is just really appealing. That's certainly what it was to me. I don't think I really learned anything that's super, it's funny, like, you know, I'm Canadian. I had to get a visa to be in America and a big thing, thing with visas is like, is what you studied relevant to what you're working on? And, you know, the answer for philosophy, as far as the US government is concerned is no, it's not relevant to anything. But I'm always like, well, no, it's relevant to everything. It's like, how should I live? What should I, you know, what should I hope for? What can I know? These are relevant to every field. And I think maybe the other way, maybe the other cut at it is it's just like being interested

• 20:45Speaker 02

  in the most fundamental and the most abstract versus like learning, you know, something more applied. It's something about that just kind of draws these very kind of curious.

• 20:58Speaker 02

  I guess like intellectual and I don't really mean that in a complimentary way, just like people who think like to think a lot. But there's also a big difference between people who study philosophy in undergrad and then move on and people who study philosophy for their whole lives. Like those people are really people who just like they thought they think like, you know what? I actually want to think about like, what is a good way to live for the rest of my life? And I think that's a little crazy, right? Like at some point you want to go, okay, I've like explored this. Now it's time to go, go move on.

• 21:26Shaan Puri?

  I wanted to ask you about holdcos, which seems to be the new trend or people buying businesses. I think a lot of them take inspiration from Tiny and what you guys did. What's your take on, you know, the holdco trend or influencers out there who are like, I own 500 businesses? You know, like what's your take on all that?

• 21:43Speaker 02

  Bragging about how many businesses you own is really weird and probably like a contra signaled how good you are. And by the way, like anyone who owns a lot of businesses will will and should tell you that. Like I know Andrew would certainly if, you know, if he could have Tiny with one business, that would be much better. And so it's always a weird thing to say like, oh, I've acquired 100 businesses or whatever. I guess unless you're like a constellation or shore capital or something where the whole point of it is that you like buy a million businesses.

• 22:13Speaker 02

  Cause yeah, it's always better if you could have the results from one company, that would be way better than than having to own a bunch of them. And that leads to the point about holding companies, which is the thing that people don't understand about holding companies. There's two like, there's two real reasons why you would start a holding company versus a fund or some other structure. One is because you want to hold everything forever. And I think that's a fairly faulty premise. So usually when people think, because so people look at generally they're looking at two places when they think about the merits of holding everything forever. They look at Buffett or they look at venture capitalists. You know, you don't want to be the person who sold Google at the IPO or whatever. And Buffett famously owns everything, although that's not actually true. Buffett sells stuff all the time. To your point, Sam, about him being a little bit different than his public persona.

• 22:59Speaker 02

  But like, okay, so both of those groups Buffett is talking about railroads and insurance companies and energy companies. These are companies that ostensibly will exist for 50 or 100 years. And venture capitalists, even more than that, they are looking specifically to find the one in a thousand company that will be a 50-year company. But most companies are not 50-year companies, especially not $5 million software companies, you know? Like, it's kind of crazy to buy a Chrome plugin and say like, yeah, I need to own this thing for 40 years. It's like, no, it's first of all, like, software is really difficult.

• 23:33Shaan Puri?

  My kids will inherit this Chrome plugin.

• 23:35Speaker 02

  Yeah, you're not buying one of two railroads in Canada, you know? Like, you're buying the Chrome plugin. And so, first of all, just thinking like, oh, I need to hold this forever, I think is a bit flawed. And then, second of all, if you get the chance to sell it for a great price, like, that is probably the way that you maximize returns. If you're actually interested in just making the most money. And so, that's one thing with holding companies. The other is that I think when the more investory types start them, they really don't appreciate. A holding company is, a part of it is like your holdings, the other half is a company. Like, you just run a big operating business, you know? Tiny has, I can't remember, it's like north of 1,200 employees across the portfolio. Like, that's a big business that you're running.

• 24:19Speaker 02

  And for most investors, that is a completely contrast skill. Like, if you're a good investor, the last thing you should be doing, when you meet a great investor, you're not thinking, oh, you'd be great as the CEO of a 1,200-person company, you know? Like, generally, those are very far apart. And so, what can end up happening is you spend a ton of your time actually just operating a business, and you're not able to invest, which is the thing that you're probably the best at. And so, yeah, in general, I think they're quite, they're quite overrated.

• 24:43Sam Parr?

  And you also actually said you're like, most Harvard guys who are trying to buy a plumbing business, they shouldn't buy a plumbing business, they should just go and start a plumbing business.

• 24:51Speaker 02

  Yeah, this one always cracks me up. It's like your resume is, you know, Harvard Goldman Sachs, Harvard Business School, Bridgewater, and then it's like Ohio Plumbing Company? And you're always, I always think like, I get it. I, you know, the math works. It can be lucrative, whatever. But I always think like, imagine if you had, you know, you're this brilliant young person. If you had just moved to Ohio when you were 18 and started a plumbing company, you probably control all the plumbing in the state. You know what I mean? Like, you just wipe the floor with them. And it's always weird that people want to go through all these loops. I think a lot of it is just to make themselves feel very fancy. Like, oh, you know, I set up this deal, this acquisition, these investors and stuff. But a lot of these businesses, I think

• 25:33Speaker 02

  if you just started them, you could really wipe the floor with, with the existing competition.

• 25:38Shaan Puri?

  You have one more thing that you're known for, which is something like the pre and post-fall. I don't know what this is. Can you explain this? Somebody texted me this. They go, oh, you gotta ask about pre and post-fall.

• 25:48Speaker 02

  So I define fall. It's like a pseudo biblical idea, but I really define it as like a period in your life where you've really been brought to your knees by whatever. It could be a death, or a breakup, or, you know, a health scare, or bankruptcy, or all these kinds of things that like really just kind of humble you, truly. Not like how most people say humbled, which is like, oh, I just got on the cover of Forbes, I'm so humble. It's like, no, it's actually the exact opposite. But like truly, truly humbled. And I really think that that changes someone for the rest of their life. And I think it happens to everyone. I think it happens totally at random times. It could be early in life, it could be late in life.

• 26:29Speaker 02

  But you can just kind of see it of, you know, the, the extreme example of this would be like a veteran who's been in a lot of combat. Like, nothing is really going to shake someone who's been in a bunch of firefights, you know? And, and I think that applies too, is if you've been through really hard, really dark experiences. I think a lot of entrepreneurs, they have their fall while they're building their business. You know, it can get really difficult and hard and lonely. And

• 26:55Speaker 02

  Yeah, the best way to describe it is like after when someone's post fall, you can just kind of see it in their eyes that they've been through worse. And so they're not gonna, it's just not gonna shake them that much versus somebody's pre fall. And by the way, you can become very successful. You can be late in life, but nothing bad has ever really happened to you. And I view that as kind of a liability in some sense of if you're going to partner or work with them of like, boy, like when something goes off the rails here, this might be a really big blow up. Cause of course, like, you know, if you're a broke kid, it's one thing. But if you're like a high flying person, the way in which you can blow up is far more spectacular. And, um, and yeah, it's really just like, have you really been humbled by life in like a true way? And, uh, and I think when you look at it that way, it's quite evident that, you know,

• 27:39Speaker 02

  people either have or haven't, and I think it makes a big difference.

• 27:42Shaan Puri?

  Do you want to talk about the special situations, distressed venture stuff? Or, uh, or do you want to save that?

• 27:49Speaker 02

  Uh, yeah, we can, we can talk about that.

• 27:52Shaan Puri?

  Okay, tell us, what is the, what is the opportunity here?

• 27:56Speaker 02

  Yeah, so the opportunity is, this is like, really combines a lot of the factors that I love, which is effectively, there's this whole class of venture backed companies where they raised too much money. And especially in 20 and 21. And so you get this like strange phenomenon where you can have a business that's doing $10 million a year revenue and growing 30% a year, but maybe it raised 40 or 50 million dollars. And, um, such that like the founder is probably not going to make any money because the prep stack is so high. And then the, the other part is the investor is really not going to make any money, not in the sense that they want to. So a venture investor, they like, they want a good investment to return the fund, um, generally.

• 28:39Speaker 02

  And so it's like this weird thing where you have this great asset, you know, if, if, if you guys owned a business that was doing 10 million of revenue, growing 30% a year, you'd be very happy with that. But if it's owned by a venture investor and run by a founder who's got this prep stack, the founder's not going to make any money, the venture investor doesn't really care about it. So it's kind of this like, in some sense, it's actually worth this asset. And so, um, You know, we've done these deals at Tiny before and, and what I'm really interested in is doing a lot more of them personally. And so I've been talking to a lot of founders and talking to a lot of GPs about this and there's just this huge opportunity and the opportunity is really to take a business that's because of its cap table, it's just broken. It's not working for anyone and turn it into a business that works.

• 29:20Speaker 02

  So like, say the founder owns 10% and, you know, the prep stack is 50 million. Turn it into a business where they own 30% and they can run it profitably and it can be like a great business. A question that I always ask founders is what would you do if you just bootstrap this thing or if you own the whole thing? And generally that's a different answer than if they were in their current situation. And it's a service for the venture investors as well because they, you know, they have to be responsible for these things. They gotta go on the board. They gotta audit them. They gotta think about them. A lot of these companies take up a lot of their time and they're not the ones that are going to drive returns. And so it's just this weird kind of vestige of the fact that venture returns have been so high that there's all this waste.

• 30:01Speaker 02

  Like there's these 10, 20, 30 million dollar a year companies that are not really making money for anyone. And this is weird situation, right? Because there's nothing wrong with the business, but you can get them for cheaper than you would otherwise. Because there's this like weird second and third order incentive set.

• 30:15Shaan Puri?

  Normally a distressed business, the business is broken.

• 30:18Speaker 02

  Yeah, exactly.

• 30:19Shaan Puri?

  Here it's that the cap table is broken, but the, the goals of the investors don't line up with the realities of the business. Is that right?

• 30:26Speaker 02

  Exactly, exactly. Is that what you're gonna do? Yeah, that's, I love special situations. I like all different types, you know, I think when Tiny, when Tiny started, bootstrap businesses were kind of a special situation. And now it's way more popular and I view this. A special situation is a really nice way to, I love a good special situation. I mean, that's

• 30:48Speaker 02

  Yeah, that's totally, totally. A special situation has a lot nicer than distressed asset. Yeah, yeah, yeah, yeah, for sure. But it's like, it's like this idea of, oh, there's all these people that want different things. And if you can just like arrange the bricks, so to speak, that everyone gets what they want, you can like unlock this puzzle. And like with what I'm doing, everyone is better off. The VCs are happy. The founder is happy, like everyone's better off. And I love those. I love those situations when you can do them. And then it also to go back to our like initial thing. It's a very specific thing. So you're going to come to me because you know, that's what I do. And I'm going to get stuff that other people don't get because I'm doing this very specific thing.

• 31:28Speaker 02

  And I, for my particular form of laziness, I love it when people just know what I offer and then they just come to me. It makes things so much, so much easier than having to go to them and convince them to do something, you know?

• 31:41Shaan Puri?

  Which I love because I like people like me, but it's also, it's also rare.

• 31:46Speaker 02

  You remind me of myself. I think that's why I love you.

• 31:49Shaan Puri?

  Yeah, you're great because I see part of me in you. But it's the opposite of what most people come on the podcast and say, most people come on the podcast and say, you gotta work super hard. Hard work is everything. And both me and you were like, we asked a different question, which is like, how can I be lazy and win the most? And we're like, yeah, I, I take pride in a certain form of laziness. I'm going to be super active in one area, but I, I absolutely reject a certain type of sweat. That's how I think about it. Do you think about it the same way?

• 32:20Speaker 02

  Yeah, totally. I, another like archetype I have of this is like you can divide the world into the, into the, you know, the Arnold Schwarzenegger kind of type, and then maybe the, the Sam Altman type. And it's not to say that Sam Altman doesn't work hard and Arnold Schwarzenegger isn't smart. They are both examples of doing both, of course. But like, you know, Schwarzenegger, it's all literally like in the biography, it's about like laying more bricks, like lifting more days, more hours. It's just grinding. And when he becomes an actor, it's like more auditions, more movies, more practice versus maybe someone who like Altman, who like found this big opportunity and like was really early on. It was really clever about how he set it up and everything.

• 33:01Speaker 02

  And it's more about making these like moves and probably like you, Sean, like I, I find there's a certain elegance in. In doing things with like the least amount of moves and other people aren't like that like Sam. I bet you're probably more like people who work really hard, grind it out, like put in the hours. I know you love Shackleton. I think Shackleton's a lot like this, like just like outwork everyone.

• 33:24Shaan Puri?

  Sam, you're acting like you don't like. You looked around like, I don't know, but you are like that. You're like hard equals good because hard means I'm hard, whereas I'm like easy equals good because it means that I'm clever. Right? It's like you admire a different attribute.

• 33:40Sam Parr?

  No, yeah, I mean, there's value. I think it just sweating sometimes like, you know, I think that sometimes because a thing is hard. Therefore it is good for you. I definitely believe that, but I mean, I only work like 40 hours a week. I work a normal work week, but yeah, I mean, I I fall a little bit in the middle. I do think that like just doing a hard thing for the sake of it being hard. There is like some type of like divine goodness within that.

• 34:06Speaker 02

  Yeah. And you got to do both like there's, you know, for the lazy person, there's periods of really hard work and vice versa. But.

• 34:14Sam Parr?

  But I think when people say they don't work hard and they still like achieve greatness, I think they're full of shit. Like Sean, you say that you are lazy, dude.

• 34:22Speaker 02

  Yeah, for sure.

• 34:23Sam Parr?

  You'll he'll text me a paragraph, like a book at like 10pm. Like you're still doing shit. You're just you're laying on the couch while your wife is watching TV and you're on your phone. You know, you're not at a desk.

• 34:36Shaan Puri?

  I view laziness as not that you don't do anything. It's that you don't do things you don't want to do. I just do all the things I want to do at full force because that's how I because I like them. I want to do them. I just don't do a lot of things that I don't want to do. I I'm very selective or

• 34:55Shaan Puri?

  cheap about how much effort I'm willing to put into things that I don't actually want to do. And I'm willing to be lazy on those. Right? It's kind of like the definition of work versus play. Work is, you know, work is, how do you define work? One way of defining work is it's the stuff that you don't want to do voluntarily. And play is the stuff that you do want to do voluntarily. And I just opt into a lot more play than I think most people do. And I'm, I'm, I have a lower tolerance for work that I don't want to do than I would say the, the average successful person. And the reason I like Jeremy coming on is because it's cool to see examples of a different play style. Cause we've seen a bunch of the other play style, because it gets a lot of, it sounds amazing. The David Goggins, the work harder, grind more, show up early, leave late, you know, like that.

• 35:38Shaan Puri?

  I get that. That's a cool play style. It's just not what everybody wants to do. So I like hearing other play styles.

• 35:43Speaker 02

  Yeah. I mean, Sam, you're, you're definitely right. Like I'm sure I, I do a bunch of stuff that I'm not even conscious that I'm working a lot harder than other people, because it just feels innate. But I think like another way to look at it is there's certainly a type of person who, the way you soothe yourself. So like some people will just soothe themselves by putting in way more hours, like, you know, working on that, like diminishing marginal return piece of like, oh, I just put in a few more hours on this. And other people, I think it's like, I just got to figure out the exact right thing to do here. Like, what is the exact right move? And you spend all your time thinking about that.

• 36:14Sam Parr?

  You guys want to do a 50 mile race with me in August?

• 36:19Sam Parr?

  Dude, I've been training for this thing and I had to run 10 miles on Sunday and I haven't ran that far in forever. And I'm just like depleted. So you want to come work hard? Come, come join this race with me.

• 36:29Speaker 02

  Yeah, that's probably a good one. Everyone who loves like the super endurance stuff is probably a grinder at heart. Cause it's just like about if I do so much of this, it'll just be better than everyone else.

• 36:38Sam Parr?

  It sucks. I just.

• 36:39Shaan Puri?

  Dude, when we were in Austin last week, we were hanging out with, um, do you know Isaiah Foto? Do you know who that is, Sam?

• 36:44Sam Parr?

  No, no, I don't.

• 36:45Shaan Puri?

  He's a YouTuber who lives in Austin and he's got probably like 10 million YouTube subscribers. And, um, if you go look at like, what are his popular videos or like what kind of was his break? He would do stuff like these challenge videos, these are kind of like grind videos.

• 37:00Sam Parr?

  Counting to a hundred thousand.

• 37:01Shaan Puri?

  Like that. He's like, how, I will lick this jawbreaker as many times it takes till the jawbreaker disappears. How many licks does it take? Uh, he'll hold the lighter on and he'll be like, how long till this lighter just goes out? Like how much lighter fluid is in this? How long does that last? It's like a hundred million views or whatever. People love this shit. Uh, and it's like, you know, to his credit, he found what people wanted and he gives it to them. At the same time, I'm like, oh, man, I'd shoot myself if I had to do that because that's not, that's not a path that's very appealing to me. But that same personality, I'm like, oh, what do you do for fun outside of YouTube? And he was like, I love running. Same thing. I'm like, oh, God, what's the deal with you runners? He's like, oh, yeah, I really want to run. I want to start a run club. I love running. And I'm like, if somebody told me, you got to run today,

• 37:42Shaan Puri?

  they just said, Sean, you got a bad day today. And I'm not trying to be a runner, but there's so many successful people that love running and that there's like a really high correlation there. On the other hand, I went and did a podcast with Monish Pabri. Jeremy, I assume you know him.

• 37:58Speaker 02

  Yes, yeah.

• 37:58Shaan Puri?

  Andrew told me he's like, he was my first value investing man crush. And

• 38:03Speaker 02

  This episode is great.

• 38:05Sam Parr?

  Monish.

• 38:08Shaan Puri?

  Is that the first time you've done that? When's the last time you did that?

• 38:11Sam Parr?

  Years ago. When I met my wife.

• 38:16Speaker 02

  It sounds like you've got practice.

• 38:18Shaan Puri?

  Yeah, exactly. And he was like, yeah, I take a nap every day. He's like, a good year is I make one or two investments, which is like literally clicking a button. It's not even like he runs a company. He's like buying a public stock. And he's not even buying, he's not day trading, he's not analyzing everything. He's like, one or two good investments in a year would be a fantastic year. And he reads and he chills. And I was like, man, the, both guys I would say are winning. They're winning at their craft. Like, to have 10 million YouTube subscribers is phenomenal. He's built a wonderful life for himself. And the other guy, you know, is a phenomenal value investor. But the lifestyle and the, the things that they value are so different. You know, one guy maybe has the stomach losing $75 million of net worth in a day,

• 39:02Shaan Puri?

  and he's got to be cool with that. And the other guy's got a stomach waking up tomorrow and being like, how do I come up with the next crazy video? And it was really remarkable to see that. So, you know, I think, Jeremy, you were talking about like, you know, you sort of pick your prison in a way. Yeah. I'm assuming you've ever seen these different games that people play and decided which one's appealing to you.

• 39:19Speaker 02

  It's funny, guys like Monish are like, I call them the nap room guys. Like, there's a whole set of value investors that have a, like a room.

• 39:28Shaan Puri?

  He showed me. He's like, this is my nap room. He opened it up. I was like, this is amazing.

• 39:32Sam Parr?

  Is that a thing, nap room guys?

• 39:33Speaker 02

  Yeah, there, I've met at least like three or four different value investors like that who, like they have a place to nap.

• 39:39Shaan Puri?

  I want to ask you about that same idea, but in a different way. So I'm going to give you my observation and I want you to, I wanted to know if you have any specific stories that that line up with this. So my observation, we, we talked about, does Andrew grind, right? He comes on here, he acts super zen, super calm, super philosophical. He wants to be like Warren Buffett. He's playing bridge half the day, he's reading. And then once or twice a year, he just blesses us with a beautiful investment, right? But you know, one thing I have seen Andrew do is he may not work super, super hard, but he works very fast. He is incredible at sniffing out opportunities. He is incredible at fast follow-ups. He moves really quickly when he's excited about something. That's the first thing I noticed.

• 40:25Shaan Puri?

  The second thing I noticed about Andrew is not only does he move really fast when he's excited about an opportunity, he'll just keep texting you about it, or he'll keep prodding until he finds out more information. He'll, he'll fly to meet you right away, but he also will, will be persistent. So like, I think with some of the businesses, it's like, yeah, I used to, I love that business. So I emailed him every month for like five years. And then finally one month, they were like, yeah, I am willing to sell the business. And I think that was the case for maybe Letterboxd or Dribbble, where he was just emailing the founder continuously, Aeropress, same thing. He was just emailing the guy like, hey, yeah, have you thought about selling this month? Hey, have you thought about selling this month? Some version of that question hanging around the hoop. In fact, when we sold the milk road, same thing happened. We tried to sell the business. We walked away from these guys at the last minute.

• 41:07Shaan Puri?

  And if I'm them, I'm like, oh, hate the, you know, hate those guys, screw them. Well, let's, let's kill those guys. And instead they were super professional about it. They were like, okay, no problem. Like, sounds like you have, you want to go different direction. And they hung around the hoop. A month later, he says, hey, I didn't see any announcement, like no deal went through.

• 41:24Shaan Puri?

  And we were like, no, you know, we decided not to do it for this and this reason. He's like, well, we're still interested. And he, I was like, wow, that was so different than how I would, I would have done that. So we made it a practice for us whenever we're buying businesses. It's like, A, don't get personally offended when it happens. And B, we schedule the automated reminder. A month or three months later, let's just follow back up and just make sure that we check in and say, hey, is there still an opportunity here? We still liked the business. We liked it then, we like it more now, you know, like if there's, if there's still an opportunity to let us know that. That idea of hanging around the hoop. Are there any other stories either on Andrew's moving fast and/or being persistent and just following up over and over again that you remember?

• 42:02Speaker 02

  Yeah, I mean, on the fast thing, it's annoying, but it's true. The most successful people in the world respond instantly. I cannot believe, it's kind of infuriating how true it is. But when you email the billionaire CEO, it's like a 30 second response. When you email his vice president, it's, you know, it can be a week or something. That is just so true. And I really try and force myself to respond fast. I wrote this little script for Gmail that it archives my email every 24 hours. So I like have to respond or it just disappears. And I feel like it's a really good nudge of like, just send, send the simpler text message like response. And Andrew is like, super, super high paced, really energetic.

• 42:45Speaker 02

  The thing that comes to mind is when you're at, you know, lunch or whatever with him. If he thinks of someone you should meet, he will pull out his phone and like, send the intro email before you've even like, finished the sentence. And it's good and bad. Like sometimes you're like, wait, like, I don't want to meet that person or whatever. But, but it's also just this like, if you think about it in terms of iterations, it's so many more iterations of just making something happen. And also like movement, especially when you're an operator, movement creates information. Like you learn more by doing more things. And so it's a really powerful combo. And then, yeah, in terms of following up, I think just being a little, Andrew used to call it like being Dennis the Menace.

• 43:24Speaker 02

  Like just after, just being a little bit more willing to just kind of like poke your head in, even when it might be a little like, you know, gauche or whatever, can be really, can be really powerful. It's kind of that, just like, hey, like, you still interested in selling? You still interested in selling? You still interested in selling? That Dennis the Menace bit, that's a good one. That's a good one. And he's willing to be the menace more than most people. Like he's, he is willing to, he does menace, like people do say, you're menacing me, stop it. But it also like really pays off because just like, oh, you know, it's, and if you think about it, it's like, okay, fine. Like, who's that guy who emails me every three months? Like, maybe you had a bad day or you're done with the business or whatever. And you're like, all right, I guess I'll like see what that guy has to say, you know?

• 44:09Speaker 02

  And yeah, it's incredibly, it's incredibly powerful and more people should do it. And just generally be less afraid of, like I learned this doing a lot of cold email for sales. You know, if you send out a thousand cold emails. You're gonna get one or two responses that are just, someone's going ballistic. Like, if you email me again, I'll sue you, or whatever, you know? But the other 998, it's like, either positive, or no response, or neutral. And it's just like, all upside, basically.

• 44:37Shaan Puri?

  All right, so I wanna shift gears to what I call the spicy hot take section, the semi-controversial opinion section. If this was, if we were in a club right now, this is that part where the DJ starts like, the beat's about to drop, and we all know, things are about to get a little, little crazy, a little fun. That's what's about to happen in this podcast. Okay, so here's the first prompt. I'm just gonna prompt you, and then I want you to kinda give us your rant on it. First prompt is about Mr. Beast, which is that Mr. Beast shouldn't be selling chocolate bars. What should Mr. Beast be doing instead of selling chocolate bars?

• 45:09Speaker 02

  Yeah, I mean, I think it's a testament to how valuable audiences are, that all the most valuable businesses that have been created are like, the worst businesses. Chocolate bars, supplements, merch, that kinda stuff. Like, these are really bad businesses. And so, I always think, okay, what happens if Feastables is the most successful, like, creator brand? What happens when that is, you know, a really good business? A bank, or like, a great software tool, or something like that?

• 45:41Shaan Puri?

  And then you kinda explain, why is chocolate bars, or Prime from Logan Paul, why are those bad businesses? Cause somebody might say, oh, they're doing hundreds of millions of revenue, or they're, they're gonna sell for a billion dollars. Like, but, but you're saying bad business as a characteristic, like, the underlying fundamentals of that category. So, explain that.

• 45:56Speaker 02

  Yeah, there, the reason, like, you can still be, to be clear, you can still be very successful selling chocolate bars. Like, Hugh Kitchen is one of my favorite companies, and Jason Karp is like, chocolate, and I know he's very successful at that. But it's, it's, it's kinda that thing of like, you know, is it a restaurant? Or is it a, you know, a SaaS company? Like, there's levels of difficulty, basically. And so, you know... There is just businesses, like if you contrast extremes, so a chocolate bar, low margin, not a repeat customer, not a like super necessary product or anything like that versus, say, you know, something really low on the stack like home insurance or property insurance or something, or Visa or MasterCard, or like something that you need every day. Like, there's just better qualities of businesses.

• 46:41Speaker 02

  And then the other way you could think about it is what would be the enduring enterprise value of the business without the person? So Feastables is gonna have a way harder time without Mr. Beast than, you know, if he built a bank, right? If the bank had hundreds of thousands of customers or whatever, ostensibly, he could go away from that and might make the business grow slow or whatever, but it's still like a really great, great business. And so I actually view it as very like, it's very bullish for the creators, it's very bullish for the space. It's kind of like, you're making it work on hard mode, and I wonder what it looks like when it's kind of on easy mode.

• 47:14Shaan Puri?

  All right, next one. Net worth is a silly metric. So why is net worth silly? And what's a better metric instead? You told me something about like, kind of, personal cash flow or something like that is a better metric.

• 47:24Speaker 02

  Yeah, yeah, I mean, so my like, my other line on this is billionaire is a state of mind, because the amount of billionaires, first of all, it's like, it's so bullshit, because it's always, unless it's either like, you have this in cash, or it's your shares in a public company, it's always a complete matter of taste, you know? It's like, well, my company would be worth a billion if it were to sell. And even in public companies, it's not even real, because most of the time, if you own a ton of the public company, if you were to dump it all, it would massively, you know, drop the price. And so I really think, like, it's kind of this thing, it's more like this memetic label. Once you get labeled a billionaire, it kind of just sticks, and people just refer to it. Like, I see this a lot.

• 48:10Speaker 02

  Also, people, people use it as a way to describe someone who just kind of is in a certain class. I actually think it's more of a class marker than anything, like, you know, he lives a certain lifestyle, he hangs out with a certain people, he's like a billionaire. It really has nothing to do with whether or not you actually have a billion dollars, or you own something worth a billion dollars. And the other, the other is, yeah, like cash, like liquidity is so crazy. The amount of people... Billionaires that when you're like, okay, could you wire me a hundred grand tomorrow? The answer is no, like, it's like, I've been shocked by this over and over and over.

• 48:46Sam Parr?

  Explain that more. What do you mean? So people who you have read about.

• 48:49Shaan Puri?

  They're saying no because they don't want to wire you a hundred thousand dollars.

• 48:52Speaker 02

  It's definitely, it's definitely.

• 48:57Sam Parr?

  Can you wire me a hundred? No.

• 48:59Shaan Puri?

  Not a billionaire.

• 49:00Speaker 02

  No, can't do it.

• 49:04Speaker 02

  But no, like, people, people don't keep a lot of cash. And, and it, it really is like, one way to look at this is in like a party seed round or whatever. I'm always shocked by like, who doesn't wire the money or you have to chase them down or whatever. And, or they have to wire it in tranches or anything like that. Like, and I think it's just that cash flow is so far from net worth. And then, and so like.

• 49:30Sam Parr?

  And you had like, you had, oh, sorry, go ahead, Sean, what?

• 49:33Shaan Puri?

  Sam, we have a funny experience of this. We were at a lunch with somebody and you were asking them, you're like, what level of money made a difference? Like, what's the next level of unlock?

• 49:42Sam Parr?

  And yeah, he said 25.

• 49:45Shaan Puri?

  This much, or like, you know, you said a number that was like a net worth number. And he's like, yeah, that was a good number. Um, you know, when I was doing that every year, then blah, blah. And he, you were like, wait, annual link? You were like, yeah, cash flow is that? Because I was kind of saying the whole net worth and he, and he was like, yeah, that's what I was doing in annual cash flow. And it was very clear that if you had that much in annual cash flow, you essentially had infinite money.

• 50:08Sam Parr?

  Well, it was like, uh, we were like, I think 25 is like a good number. And he goes, yeah, I agree. Having that come in every year is awesome. And I was like, oh, yeah.

• 50:17Shaan Puri?

  I literally like in the booth of the restaurant, just down to the bottom. I was under the table and I was just like, oh, what's down here? I mean.

• 50:26Sam Parr?

  You, and, and did I read that you tried to create some kind of like equivalent, uh, like, like a chart of cash flow to net worth?

• 50:35Speaker 02

  Yeah, yeah, I've thought a lot about this. So part of that is talking about one weird thing about Tiny is I've probably talked to 3,000 or 4,000 bootstrapped entrepreneurs. And the vibes that they give off, like, I don't know, I've met a handful of billion-dollar net worth founders. And the vibes between them and someone who makes $10 million a year from their Chrome plugin or whatever, very different. And there's something about just how free they feel when they have that cash flow coming in. Because there's two things. One is like, maybe the net worth never actually translates into cash. A very funny thing is like, all the Silicon Valley guys are really, when like behind closed doors, are really envious of the New York hedge fund guys.

• 51:18Speaker 02

  Because they're so liquid. Like, they might not actually be as rich, per se, but they're so, they make so much cash that it's like, it may as well be a whole different thing. How much do the hedge fund guys make in New York? Yeah, this is another hot take, which is I always, when I started getting interested in making money, it was like, the most common thing you hear is you cannot get rich on a salary. Like, you gotta own equity, you gotta own a business. In New York, there are lots of guys, lots of guys making 5, 10 million, there's people making 100 million, I've met one guy at a big hedge fund. As what? As like a portfolio manager? Like a bonnie? Yeah, there's at least one guy out there who makes a billion dollars in annual compensation. But what's normal? Like, let's say you're hanging out with your New York finance friends.

• 52:03Speaker 02

  It varies, it varies a lot. But in a good year, like, an analyst at a big hedge fund will make 3 to 5 million dollars.

• 52:12Speaker 02

  And in a really good year, it can be a lot more than that, because usually it's a percentage. And, you know, like, being a senior person at a big fund or whatever, you make a lot of money. And you kind of take no risk in some very real sense. And so I think that was certainly surprising to me. And, yeah, just to come back to the cash flow thing, certainly Andrew was always such a cash flow person. And really, like, in Canada at the time, like, there was just no funding, so you just had to live or die off cash flow. And I think it's more instructive to think about money in terms of cash flow. Because the other thing is, when you have a net worth, like, say you sell your business and you just have a bunch of cash. Even if, like psychologically, Sam, I know you're big on the like money psychology

• 52:57Speaker 02

  stuff, the idea that you're living off a fixed or finite amount just really changes how you view things, even if it's a ton of money versus this idea of like, I make, you know, whatever, a hundred thousand dollars a month or whatever, just the idea that it just comes in, it like-

• 53:12Sam Parr?

  Well dude, our, um, me and Sean have this good friend who sold a business and he walked away with sixty million dollars. And I go, that feels awesome. He goes, it feels horrible, man. I go, why? He goes, I'm a brown immigrant. I need cash flow. If I don't have cash flow, I feel broke. I need money coming in every month. I can't spend this. And I was like shocked by that.

• 53:31Shaan Puri?

  I think we should wrap it up. Jeremy, where should people find you if they want to get more of you, follow you, become big fans of you? Where should they go?

• 53:38Speaker 02

  Uh, Twitter, Jeremy Giffon. My DMs are open. Um, yeah, that's the best place.

• 53:44Shaan Puri?

  Awesome. Thanks for doing it, man. Really cool fun hanging.

• 53:47Speaker 02

  Thank you guys.

• 53:48Sam Parr?

  That's the pod.