#1171 Codie Sanchez | The Secret To Thriving In A Recession

Codie Sanchez is the founder of Contrarian Thinking, and has a goal of creating one million financially free individuals. This conversation was held at Lyceum Miami. Topics include preparing for a recession, the benefits of investing in private markets & "boring" businesses, the importance of winning the war for attention, how to negotiate business deals effectively, her financial Fridays, her daily schedule & how she conducts meetings, strategies for finding talent & scaling through automation, questions about her MBA, running a business while working a full-time job, and emphasizes the importance of building an online presence. ======================= Pomp writes a daily letter to over 200,000+ investors about business, technology, and finance. He breaks down complex topics into easy-to-understand language while sharing opinions on various aspects of each industry. You can subscribe at https://pomp.substack.com/ ======================= TIMESTAMPS: 0:00 - Intro 0:15 - Preparing for a recession 2:48 - Private markets 5:35 - Boring businesses 7:03 - War for eyeballs 8:50 - Business deals 11:46 - Levels of operating the business 13:53 - Financial Fridays 15:55 - Favorite tools to utilize 18:48 - Questions to ask yourself 20:57 - Daily schedule 22:30 - Meetings 23:47 - Finding talent 28:00 - Scale & automation 30:07 - MBA - would you get it again? 32:31 - Running a business with full-time job 34:50 - Find online

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

• 0:00Anthony Pompliano?

  Codie Sanchez is the founder of Contrarian Thinking. The following conversation was recorded at a live event called Lyceum Miami, which my team and I hosted on March 4th at the Miami Beach Convention Center. Here is my conversation with Codie Sanchez.

• 0:15Speaker 01

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• 0:44Speaker 02

  UKG is the workforce operating platform with unified HR, payroll and workforce management. Built to solve the unique challenges of frontline work. Powered by People First AI and decades of labor data, UKG turns workforce intelligence into real time decisions around staffing, pay, compliance and productivity, enabling every worker to confidently take action as work happens. Because when work works, everything works. Learn more at ukg.com/work. UKG, HR, Pay and Workforce Management.

• 1:14Anthony Pompliano?

  I think the first place to start, are we headed towards a recession? Do we think that things are going to get worse than they currently are? Or is that just a mainstream talking point to scare people? And actually, folks should just operate as they have to?

• 1:29Speaker 04

  Yeah, it's a great question. I also want to start by just saying hysterical that I'm coming after a presidential candidate. Like, no fucking pressure at all. So when you guys see him on CNBC next and I'm on YouTube, there's just like a slight deviance.

• 1:43Anthony Pompliano?

  YouTube may be bigger than CNBC.

• 1:45Speaker 04

  That's right. You tell them, Vivek. So, okay, recession. Do I think we're coming into one? Here's the truth. Uh, nobody knows. Nobody literally knows. There's this joke in economics, which only nerds think is funny, which is that how do you know an economist has a sense of humor? He uses decimal points. And so, in economics, we basically know a couple of things. That we humans love to predict things loudly, largely on CNBC, get them wrong, get a book deal done, and then maybe a movie afterwards. And so, I think the truth of the matter is, nobody knows if we're coming into a recession. And I actually think that's the wrong question. It's a totally wrong question.

• 2:22Anthony Pompliano?

  Great start.

• 2:23Speaker 04

  Yeah. Actually, you guys, funny story. Pom, one of the reasons I definitely wanted to be here today is when I used to have like zero followers on the internet, I was pretty much brand new. Now we've got a couple million of you hellians out there following us. He was one of the first guys who gave me a platform. And I will always be grateful for that. And I'm sure you guys are grateful he put this together. So I think he needs a little bit of this. How many people do this? Just, it's a big, big thing, putting together events. So I think that's super cool. The right question is actually this. Are you prepared for a moment in history in which things go on sale to a level that they've never been on sale during the time you had cash? That's the right question. Are you ready? Is it tomorrow? I don't know. Is it next year?

• 3:08Speaker 04

  I don't know. I do know one thing. Nothing goes like this forever. The pendulum always swings. And so, my question to people is, are you ready? And most people's answer is no. And they panic, and they sell, or they stay out of the market and they miss. And then what happens? The rich get richer, and the rest of us, we pay for it. And so, I think the question you all should be asking yourselves today is, do I have the knowledge I need to put whatever money, skills, and unfair advantages I have to work? Because at some point, shit will go on sale, and will I actually be able to capitalize on it? That's the right question. I do think it happens in the next two years. I don't know when.

• 3:48Anthony Pompliano?

  When you think about the current economic environment, tech was very hot for two years, three years when we had loose monetary policy. Now, as we get into this tightening cycle and deeper and deeper into it, we have seen in the public markets, the value investment thesis has proven out. We saw Berkshire Hathaway hit all-time highs. Kind of all of those stocks that are really, really focused on cash flow are working in the public markets. You're doing this in the private markets. Is there a very similar result that you're seeing of what the public market investors are seeing in the private market? Or there's some differences because of capital structures or something else?

• 4:27Speaker 04

  Yeah, it's always friction. What makes the difference between somebody who is like you, who has created the life that you have, and most people? The difference is what you've done is pretty hard. And so because there's friction to it, there's less people that play in the arena. The same thing is true in private markets. Think about what happened in, sorry guys, crypto and also tech. RIP, is Kathy Wood in the room still? Because that would make this awkward. But tech got murdered. And the reason why tech and crypto got murdered is because you could take your phone, you could click a button, and you could have an adrenaline rush that allowed you to purchase something immediately and feel like you were smart and making money. Now, in the private markets, the reason why I love buying these boring businesses is because I'm actually much less smart than a Kathy Wood is.

• 5:11Speaker 04

  She's got degrees up to here. But it's a lot harder to go and buy a business that's not on any listing, that you can't have a bunch of Robin Hooders on there buying at the same point. So my point to this is, there probably is never going to be a time where my laundromats and car washes are at 20x their forward-looking earnings. Like, that's just not going to happen. Because not everybody can go out there and buy them. The friction is real. And so are private markets slightly inflated? I think so. But will they ever get to a degree where you can have a 55% downturn in one year and have to recoup double the amount the next year, like tech? I don't think that's very likely. Until there's a way that you can buy with a button.

• 5:54Speaker 04

  And that's why I don't like to play in games where I have to... To be the smartest one in the room. I just don't play in those games because I'm never going to be the smartest one in the room. I'm never going to beat a Kathy Wood head to head on looking at individual stock analysis. But I might beat somebody like a Kathy Wood because I don't play her game. I play a game that people think is boring, that people think is beneath them, that will never get me on CNBC because I'll never invest in the next Tesla. I'm going to invest in the next car wash and that's going to cash flow me like a bond every single month. And I'm going to be happy as a clam hanging out on South Beach.

• 6:24Anthony Pompliano?

  So you have two different businesses. One is what I consider more of like an asset management, acquisition, holding company style. And then the other is a business where there's a lot of content and kind of more product based. Let's start with maybe the contrarian thinking business itself. Like, how should we think about that? And I want to use you as the example of somebody who thinks about private markets, cash flow, being prepared for economic downturns, right? You can say a lot of stuff, like, what are you doing, right? And so like, how do you think about the business that you operate? And then we'll talk about the acquisition.

• 6:58Speaker 04

  Yeah, three words, skin in the game. Show me where you put your money instead of tell me where you put your money. Completely agree. So, I mean, we have a portfolio of 20-ish businesses that do about 50 million in revenue in the boring business side. And I say that because most of us don't have access to this private equity world where the wealthiest people play. This, they own more than any other subset of humanity across not just the US, but the globe. It's not the public market investors that end up becoming the richest people in the world. In fact, if you look at the Forbes 100 list, of the Forbes 100, nobody got on that list from pure passive stock market investing, not one. And somebody might say, well, what about Carl Icahn? He's an activist investor and he does acquisitions that are behind the scenes with secondary shares.

• 7:42Speaker 04

  So there is this fake news fallacy that is sold to us every single day on places like CNBC where they try to make us think that because Kramer hits a gavel, we should buy X or Y or Z, and it's totally wrong. So my money goes into exactly what I'm telling you guys. I buy these little boring businesses. And then something started to happen to me in 2020. I realized after you did that there's a network effect it's never happened before Naval Ravikant talks about it four levels of leverage originally we had employment right we had labor labor was our first type of leverage all the way back to when that was slaves to today as employees

• 8:21Speaker 04

  the second type was capital capital was when the Rothschilds and the world's billionaires back then were created was because of the advent of the banking system they had access to more capital than could fit in their pockets the third leverage event was code so that was when we saw Bill Gates and Elon Musk and all of these guys start to have access to code which allowed them to have unfair leverage the number one type of leverage today what do you guys think it is

• 8:51Speaker 04

  audience it's audience it's not necessarily social but it's the fact that we are at a war for eyeballs and so why wouldn't I build a media empire around this boring business empire that will never be worth 20 exits forward looking earnings but my media business talking about it could be so we have a practice we talked about it contrarian thinking called document instead of create so instead of us just going out there and coming up with crazy ideas all the time I'm just like well I'm going to speak at my friend pump events today I'm going to document this process I'm gonna go buy a laundromat oh fuck that deal fell through I'm gonna document that process that documentation nobody used to care about in 2020 I thought people would think it was so boring laundromats car washes I want to be an astronaut

• 9:33Speaker 04

  turns out people care about this and you can add this leverage to whatever it is you're doing so I think today one what are you gonna do if a recession hits two are you in the war for eyeballs because if you're not in the war you're fighting it and you don't even know it

• 9:49Anthony Pompliano?

  when you think about the businesses that you do own let's go through maybe a deal that blew away your expectations and then a deal that did not meet expectations and you're like damn we shouldn't have done that deal

• 10:01Speaker 04

  yeah well one of the deals I talk about

• 10:05Speaker 04

  that was a terrible deal that I did I remember it was the first deal I lost 50k at and maybe that doesn't seem like that much money but back in the day that was a lot for me that was like my first deal I thought I really knew what I was doing and there's three things I did wrong one this deal I did with a friend I did with a buddy and anytime you do a deal with a buddy you have to set expectations just like you're getting married you have to start with the end in mind AKA a prenup for marriage or what's called a partnership agreement in investing The second thing that I did wrong in that deal is that I invested in an area that I had no unfair advantage. It was a food company. And I don't know about you guys, but food is complicated. It spoils constantly. And I knew nothing about it. So I thought, hey, first time investor in an area I know nothing about seems like a great idea. Turns out it's not.

• 10:48Speaker 04

  And then the third thing I did wrong in that deal is I didn't set expectations really clearly on what I wanted out of the deal. So in our world, this is called a term sheet. So basically like I get my money back in this amount of time. You do this. If you don't do this, I have this happen. Most people invest their money based on hopes and prayers and not based on realities and contracts. The latter is better. So that was the worst deal I've ever done. Now, some of the best deals I've ever done, and I'm gonna, I'm gonna use deals that are accessible. Because how, how many people in here have ever invested in a private market deal before? Raise your hand. Okay, we've got a few. How many people have done a deal over a hundred thousand in private markets before? Okay, not very many. Perfect. Let me tell you something.

• 11:32Speaker 04

  You can buy businesses and invest in the private markets in a way you could never do in the stock markets. Guess how much money you need to do a private deal? Zero dollars. You need zero dollars to do a private deal. Now, is that always gonna happen? No. But can that happen? Yes. Because of things like seller financing and creative financing. So my favorite deals are little deals, like ones you guys could do today. I bought a business not too long ago called Approchment.com. I bought it for $60,000. The business, but zero dollars upfront. $60,000 over the course of the year. The business was doing like $75,000 in revenue, I'm sorry, in profit that year. Why would that idiot sell me a business for $60,000 doing $75,000 that year? It's usually what people say.

• 12:16Speaker 04

  Because he's 65. It was one of many of his businesses. He was ready to retire. Nobody else wanted to buy it. So I said, oh, you're welcome. I'll buy it for this amount of money. And I'll give you some of the upside. I'll give you 5%. That business will now do $300,000 this year. And it is a boring business. We run from our phone with outsourced talent and a little bit of tech behind it. Those deals are all around you. The problem is Wall Street likes to buy them. Main Street doesn't get to know about them.

• 12:46Anthony Pompliano?

  When you start to look at some of these businesses, you've already done the deal, right? And I think you talk a lot about doing the deal.

• 12:52Speaker 04

  Yeah.

• 12:53Anthony Pompliano?

  What are you doing to optimize, to grow, to kind of integrate it? And how much of, on the back end, are you actually leveraging the businesses for each other? So you have a car wash business, and then, oh, we actually have a business that cleans car washes. And so now we have a customer within the portfolio. Or are you just allowing these to operate individually? And you're not really trying to find any sort of, you know, benefits by cross-promoting them to each other?

• 13:20Speaker 04

  There's levels to the game, right? And if I'm really honest, I'm like, if there's 10 levels, I'm a level three operator. I really am not that, I don't have that much attention to detail. I don't love the operations inside of a business. I don't really want to spend a bunch of time twisting knobs. What I like to do is, I'm a deal junkie. I love doing the deal. I love executing the deal. I love putting somebody else in it. And then I'm like, I want to do the next deal. And so the level 10 player would basically say, I'm going to buy a bunch of businesses, like Amazon does. And then they would integrate those businesses fully into what they do. And they would get a 10x return for every 1x business that they buy, because they get rid of all the back office people, they add all their systems and technology. Turns out, I'm not Jeff Bezos.

• 14:05Speaker 04

  So I don't do it that way. All that I do, and I'm honest about this, because I want more people to buy small businesses, because if you don't buy them, they just go away. Or the big guys buy them. And I don't know about you, but I don't need more Walmarts on the street corner or Starbucks. I'd prefer more mom and pop stores. So I just put these businesses in a portfolio. I have a couple people at top that review and manage all of them. But I really don't do much on the back end to integrate them. They're like little bonds. And those bonds send me a coupon every single month or every single quarter, but they're out there doing their own thing. Just like you guys probably have a bunch of stocks in your portfolio. And you're not like, well, how is Apple working together with Amazon in conjunction with whatever?

• 14:48Speaker 04

  You're like, ah, I get a 15% dividend, awesome.

• 14:52Anthony Pompliano?

  So I want to make sure I read this correctly, because it is...

• 14:56Speaker 04

  Uh-oh.

• 14:59Anthony Pompliano?

  Financial Fridays?

• 15:00Speaker 04

  Oh, yeah.

• 15:01Anthony Pompliano?

  Explain what this is.

• 15:03Speaker 04

  One of my favorite mentors told me that money is a cruel mistress. And if you don't pay attention to her, she'll leave you.

• 15:10Anthony Pompliano?

  Say that again?

• 15:11Speaker 04

  Money is a cruel mistress. And if you don't pay attention to her, she will leave you. And I think that's very true. And yet, we kind of treat her like something we're a little afraid to look at. Like, oh, fuck, what did my bank account do today? Oh, I don't know about that Robin Hood account. And so, I learned from this mentor, his name was David Osborne. We were going on a walk. And I thought I was gonna, I was gonna get the advice from this guy. It was worth a hundred million bucks. Back then, to me, that sounded like a bajillion dollars. So, I'm like, David, what does it take, whatever? And instead, like most really wealthy people do, he flipped it on me. And he asked me a bunch of questions. He said, what are you worth exactly? And I was like, excuse me? And he was like, no, no, exact dollar amount. I'm like, well, I don't know, carry the wand? He's like, you're never gonna be rich. I was like, okay, cool, this is going well.

• 15:55Speaker 04

  And, um, and then he's like, you'll never be rich if you don't know where your money is and if you don't pay attention to it. So, I listened. And I said, okay, like, what exactly does that mean? That sounds a little theoretical. Like, I do like money, I want more of it. And he said, uh, every single week, he has a time with the members of his team, because he has a lot of them, where they sit down and they look at the finances. So, I started doing this. I didn't have that much money at the time, I was still working in finance. And so, every Friday, for every single one of my businesses, I do something very easy. Let's say you guys have a Mint account, or your personal finances. I basically look at my bank account. I see, week over week, what happened and the difference between the two. And then, as you get more complex, right now, for every single business, I have a little scorecard.

• 16:39Speaker 04

  And the scorecard goes red, yellow, green. Is it going to hit the numbers that I think it's supposed to hit this week? If not, I double-click on that bad boy, and I try to figure out why. And I do that every Friday. And the reason why is, because money is a mistress, and she will leave you.

• 16:55Anthony Pompliano?

  There's a lot of people in the audience who have side hustles, small businesses. Some people have tech startups. But for the people who aren't necessarily sitting in a room with three engineers and they can build and do whatever they want from a technology standpoint, what are some of your favorite tools to help run these small businesses? Whether it's from kind of a holding company structure, or it's somebody who just, hey, I have one business, I'm just focused on growing this business. How can they use technology to actually grow those businesses?

• 17:22Speaker 04

  Yeah, it's a great question. I would start with a question back. And that question is, where in your business does it feel hard? Like, where in your business do you feel stuck? Where in your business do you have a bunch of people and managing those people is annoying? Because where your pain is, is where your potential profit is stuck. And so, in my business, our saying is, based off a book that I can't remember the guy's name, is, there's a book called Who Not How. And so, I first, when I have a pain point, I go, who can solve this for me? And then I ask that person, when they start delving into it, how can tech solve this for you? We did a little challenge at my company where, actually I haven't given the results yet, I probably need to do that for them.

• 18:04Speaker 04

  I gave $1,000 to whoever could figure out the best way for AI to replace something in the company. And we're going to run this on a quarterly basis. And so, I continuously say to the team, I'm going to reward you for replacing yourself. Because there's never a shortage of work, but there's always a shortage of curiosity to acceleration. And I find owners are really good at saying, God, I don't want to spend any more money on humans doing XYZ task. Employees are not good at that. They're going to hammer their head against the wall until you ask them, oh, wait a second, you are actually responding to every single DM on Instagram when there are 372 different software tools to do it?

• 18:45Speaker 04

  And, oh, in fact, not only that, there's these chat tools that can do it for $29 a month, but I pay you $120,000 a year. Last comment on that, you can run an analysis, which I like to do. And my team who's here will probably have heard me say this, which says, like, "How much do you make? That's beneath your pay grade." And so, I don't want them to get entitled about it, but I want every single human going, "If I make $100,000 a year, that's, I don't know what the real annual rate, hourly rate is, but that's $35 an hour." And so, every time I have a task that could be cheap, more cheaply done than $35 an hour, I want them figuring out how to do that. And when you do that, you create owners, because owners think to delegate, and employees think to do. And that's the difference between the two.

• 19:28Speaker 04

  Why I won't give you an individual tech tool is because I can see this audience already. You guys do a lot of different things. If I give you one or two tech tools, you're gonna leave here feeling like, "I got a tactic, I'm gonna do my to-do list checking, I'm gonna go use it," and it's not going to be applicable. What will change your life are not tactics, but the right questions.

• 19:47Anthony Pompliano?

  When you think about the questions you ask yourself every day, what are they?

• 19:52Speaker 04

  One, should I actually be doing this thing that I'm doing right now? Is this one item I'm working on right now a three standard deviation event maker for me, or not? A three standard deviation event means you have a bell curve like this, we all remember it. You know, the teacher used to go, "Yep, C for you," right? So you have A, B, C. I want three standard deviation events, which means that they are three groupings away from the norm. I want the things that are going to have an unfair advantage on my business. If I spend all day responding to text messages and emails, I'm never gonna have that Kathy Wood money. I don't know, she was here earlier, so she's on the top of my mind for Kathy. So anyway, I'm never gonna have that kinda cash, because I'm spending all my time on low-level activities. And so, the most important question you can ask yourself is like,

• 20:37Speaker 04

  "Should you actually be doing this thing right in front of you, or are you suffering from the worst disease you could get, which is recency bias? Because it just came in, I am going to do it." It's why if you're friends with me and in this audience, you know, I don't respond to text messages right away. I don't respond to emails. I've lost friends because of that. I think sending a voice note is akin to assault. I hate fucking voice notes. Do you like those things?

• 21:01Anthony Pompliano?

  I don't send voice notes, no.

• 21:03Speaker 04

  Thank you, they're awful. One of my, one of my neighbors actually would send them to me, and I kept pretending like I wasn't getting them. I was like, "Oh whoops, it's not working, can't answer." And finally, he called me and he's like, "Oh, you want me to walk you through it?" I go, "Buddy?" You sending me a voice note is the worst part of my day. And, um, and he said, "Why?" And I said, "Because they're really annoying." Like, I could read it in two seconds. Now I have to listen to three minutes. "How are you? What's going on? How are the kids?" I'm really nice, by the way. Um, and anyway, and then he said, "No, they're really helpful." And I said, "For you, the sender, not me, the receiver." And so, if you want to have an outsized life, if you want to have a life that's a little bit different than everybody else's, but you do the same thing everybody else does, the old adage is true.

• 21:48Speaker 04

  You will never have an outsized life if you allow other people to steal your time. And so, I try to live by that.

• 21:56Anthony Pompliano?

  What does your daily schedule look like?

• 21:59Speaker 04

  Couple, couple similarities and then a lot of deviation. I always like that quote, uh, I do this 60% of the time, every time. Um, so I think, uh, we have a couple things. So, Financial Fridays, I film on Thursdays because now I do this content thing. Um, on Mondays and Wednesdays, I take phone calls. Uh, Tuesdays, no phone calls. And I'm writing a book, so I work on the book on Tuesday. Um, at first, when I was still an employee back in the day, uh, I was in finance, everybody was working 70-hour weeks. Uh, nobody was ever offline. You would take phone calls whenever you got it. And I remember, uh, reading a book at the time and realizing that my day was being hijacked. Every single day was hijacked by somebody else.

• 22:42Speaker 04

  And that's why bankers have to work 70-hour weeks. And I thought, "What if I just instituted one thing?" Which is, "I will never take a phone call before 10:00 in the morning, ever." Like, pending, "Somebody's dying." If you're not dying, I'm not picking it up. And, uh, and I did that, and I thought, "I'm gonna get fired." Like, "No way, I'm not gonna get fired." And what turns out is, nobody noticed. I outproduced everybody else. And that window of like, you know, 7 to 10 became my most productive part of the day. So, I still do that to this day, except now I bumped it back to 12, since I work for myself and I can now.

• 23:15Anthony Pompliano?

  And when you're doing the calls, are these with prospective companies to buy? Are they with partners? Are they with companies that you already own? How often do you talk to the companies you already own?

• 23:24Speaker 04

  Yeah, good question. I only talk to the companies I own on Fridays. I typically try to do as few meetings as possible. I do think meetings are the kiss of death, except that you have to have them. And I've never found a way, so if anybody has one, love to know, to get rid of all meetings in a business. I think it's really hard to do. So on Fridays, I will meet with the portfolio companies that I have. But I'm a little bit of a crazy person about meetings. And so the meetings that we have now, all of them, and our team here would tell you this too, they have an agenda that gets sent out every single week. If you have issues that you want to talk about, if you have items you want to cover, you need to send, you need to put it in the agenda beforehand. When we get to the meeting, then people can respond and engage with the comments, but

• 24:07Speaker 04

  you needed to put it in beforehand, and you really probably should have read that bad boy beforehand. And that's because the most precious commodity we have is our time, and we give it away all the time. It's the biggest mistake humans make because we haven't figured out life is extension yet. And so I'm pretty crazy about meetings. Then on Monday, I have the meetings in the one company that I run every single day. So I think my Mondays are kind of miserable, but I like that Mark Twain-ism of if you're going to eat a frog, eat it in the morning, and if you're going to eat two, eat the big one first.

• 24:41Speaker 04

  Oh, thank you. Meeting clap? I like that. Never before ever have I gotten a clap for my meeting agenda.

• 24:47Anthony Pompliano?

  When you think of a team, especially in good times versus bad times, how have you thought about where to find talent, how to incentivize talent, when to part ways with talent? Like, that for most small businesses is the business. It's like, who are the people who work here? How have you thought about those things?

• 25:08Speaker 04

  It's so hard. The most important skill you can acquire in life, if you want to have generational, what I call "fuck you" level of money, is to bring other people along with you. Because you simply cannot do it by yourself. Simultaneously, I once, when I was starting my very first business, I went to one of my mentors at Goldman, and he said, he listened to my pitch, I told him what I was gonna do, and he said, "I already know what your biggest problem's gonna be." And I said, "Okay, great, tell me." And he goes, "No, I want you to find it out for yourself." And I was like, "Okay." And so he put it in an envelope, and he dated it, and he wrote inside, he put it in the envelope, he licked it, and he wrote on top of it, so he'd know that I couldn't open it. He goes, "In six months, come to me when you have your biggest problem, and I'm gonna tell you what it's gonna be."

• 25:53Speaker 04

  So I came back in six months, I'm like, "Problem is..." He's like, "Let me tell you." And so, he opens up the envelope, and on the piece of paper is one word, and it's "people." The worst part about your business? Your people. The best part about your business? Your people. And so, choose wisely. If I told you that I was an expert at this, I'd be lying. In fact, I don't think anybody has this figured out, and probably you've guessed this just by listening to anybody on stage, we all really don't know what we're doing. Everybody up here is just sitting in a sack of skin, thinking, "I hope people don't figure this out." And at any moment, a business is a fast-moving train on a really wobbly track. And so, I have some ideas

• 26:38Speaker 04

  on how to get great people. But I don't know that those are the best ideas. So I'll at least give you two, and then you guys tell me what you think. The first idea for bringing incredible people along with you and finding them is to build in public. And so, people have made this a little bit more normal now, but in 2020, when I was in finance, and I said that I was gonna start actually telling people about what I do, my partners at my private equity firm, I mean, they almost, they almost, they tried to figure out how to get me out of the partnership agreement. They were like, "Social media, nightmare, nobody can know. Look what happened to Mitt Romney in the election, you know, pitchforks are gonna come out." And I was like, I just don't think we can attract the best talent if they don't know about us.

• 27:21Speaker 04

  And so I think the best thing that you can do is get on social media in some way, shape or form, and start building in public. In fact, we were talking to Vivek's team backstage, and he was saying they're gonna do an open source campaign, which he's talked about publicly, so I don't think I'm giving anything away. Why do you think he's doing that? Do you think he's just like, "This seems nice, I wanna do it for the people"? He's like, "No, this is because the way to attract talent today is to let people see what you're doing naturally." We don't believe anything anymore, as humans, because we've seen what most politicians do. We've seen what most leaders do. The only way people believe you is by you actively showing them. And so that's the number one way to find talent. The number two way, I think, to find talent is be incredible to the people that are with you.

• 28:05Speaker 04

  So that first hire that you have, even if they suck, make sure when you fire them, you do it in the right way. That second hire that you have, even if they are your worst employee that you've ever had, make sure that you're transparent and honest. And when I tell people to buy businesses, what do you think the number one reason is that people wanna leave a job? Shout it out. The boss. It's always, "Fuck the boss, fuck the man." The problem is, what were the bosses at one point? They were somebody else's employee. And so it's kinda like this generational employee abuse we pass down from the time we were an employee to the time we become a boss. And so what I would say is, as you guys go out there and buy businesses,

• 28:47Speaker 04

  your number one thing to pass on is like, be a better boss than your last one. Be slightly better. Because people talk, and the world now, one person talks, they press a tweet, and everybody can hear you.

• 29:00Anthony Pompliano?

  How much of what you've been doing can you automate? So you talked about the team, you talked about your day, and kinda the time boxing and things like that. But is this eventually gonna get to the point where somebody can like, write you an email and you'll buy the business off an email? How repeatable is this? If you already have, you know, 24, 25 companies, could you manage 200, 300, 30? What does that look like?

• 29:25Speaker 04

  The answer is yes. Scale and automation is completely doable to a level that I'm not sure I see an end in sight. I mean, if you think about it, somebody Googles it, looks it up. You can look up how many companies Amazon has bought. It's hundreds. And so, when I tell people I own 24 businesses, they're like, "Liar, no you don't." And I'm like, "You guys, you've had the matrix covering your eyes for so long. You don't realize that all around you, the big boys don't grow organically. They grow through acquisition. They just don't want you to know because they hope you stay in the 9 to 5 cubicle the rest of your life yelling at people on Twitter that tell you they own multiple businesses." And so, let me tell you how I really feel about that, huh?

• 30:07Speaker 04

  So, I think the truth of the matter is, if Bezos can run as big of an organization as he did with as many underlying companies in it, I don't see an end in sight. Now, I'm no Bezos, but I think as tech gets better and better, this becomes easier and easier. And think about it this way, like, how many doors does the biggest real estate company own? How many individual apartments do property managers run? As we get better technology for buying businesses, it's all going to be democratized, both from technology and access. Right now, we're at this weird part where if I told you guys, "Hey, let me tell you what, you can go buy a house right now, somebody else can give you money to buy it,

• 30:50Speaker 04

  and you can have somebody else run it so you can cash flow on it," what do you say? "Duh." Yeah, we've been doing that for decades. Thanks, Cody. If I tell you that about buying businesses, what do people say? "That's weird. Is that possible?" And so, the same thing is happening with businesses. It just hasn't been democratized yet.

• 31:07Anthony Pompliano?

  There's two questions that people sent in. I don't want anyone to ask any questions because I didn't know what you guys would all ask. No, I'm joking. But two questions that somebody sent in. One was, you got your MBA. Was it helpful and would you go get it again?

• 31:22Speaker 04

  I gotten this question a lot lately. My little, like, the little shit poster in me from Twitter is like, "No," you know?

• 31:30Speaker 04

  That said...

• 31:33Speaker 04

  I like to think about it honestly. Like if I had a child today, you have a child.

• 31:39Speaker 04

  I do.

• 31:41Speaker 04

  I don't know if anybody's gonna allow me that. But say I have one at one point.

• 31:46Speaker 04

  Would I want them to have some of the experiences and opportunities I did when I went to school? Would I want them to be able to go to an MBA if I could? Do I feel like there's an unfair access that you get when you can put that at the end of your name? I think the answer is still actually yes. And all the people online that are telling you like, "You don't need an degree. You don't need an MBA." It's like, "Yeah, but tiny asterisks." And so, the asterisk is, if you can get into a top tier, and by that I mean a very small, top-tier level MBA, it is an unfair cheat code on the world. Because people will assume you're a lot smarter than you actually are. And so, I went to Georgetown MBA, and because of that, people still listen. I mean, I've done a few other things, and they'll be like, "Codie Sanchez, she went to Georgetown." And I'm like, "Yeah, I did."

• 32:30Speaker 04

  And so, I think it's still a cheat code. Do I think, if you have $100,000 right now, you should put it towards an MBA because it will make you more money than buying a business? Or getting in the game of business? No. If you want to learn business, go do business. I'm not a rocket scientist, but that seems to make sense. And so, I think it's a huge disservice that we have turned this this idea of a Masters of Business Administration as some credential that puts you in a place where you understand how to run a P&L, where you understand what it feels like when you can't pay your employees on Friday because the business is not doing so hot? When you understand what it feels like the first time you get sued? That you understand what it feels like to have something go really viral and not be able to keep up with growth? Your teachers have never felt that.

• 33:15Speaker 04

  They have sat behind a desk, trying to tell you the theory of business as told by the Socratic method. That, to me, is like trying to explain to somebody what sex feels like by watching it on a Hallmark movie. Doesn't work.

• 33:30Anthony Pompliano?

  Last question is, somebody asked, they have a full-time job. They want to buy a business. Should they pursue buying the business and trying to run it while keeping the full-time job? Or should they jump? Obviously, there's a lot of details in there that probably matter. But how do you think about being able to run a business and like being the actual operator day-to-day versus buying it, trying to have another team run it, and maybe you keep a full-time job?

• 33:51Speaker 04

  Yeah. I'm Jekyll and Hyde on this. On one side...

• 33:57Speaker 04

  Don't be the bad boss and don't be the bad employee. If you're going to say that you are dedicating your life to a pursuit, whether it's in a career where you own the business or somebody else does, be a person of your word. Why? Because the world's small and people remember. And so if you're going to buy a small business and you work for somebody else, do it the right way. The right way is you don't steal your time from them. We have this theory that like the boss sucks and whatever, but remember, that will be you one day. And I actually believe that karma's a real bitch in business. And so you are going to be like that little child that says to their mom, "Well, when I'm a parent, I'm never gonna do that." And then you have a kid and you're like, "Mom, so what happened today was..." And you do the exact same thing.

• 34:42Speaker 04

  And so be really careful being a bad employee because you think your employer sucks. Get a new job, take the risk, get your own ships to get in the game. On the other hand, do I think that you should quit your job right now where you're making money in order to go take a huge risk on buying a business and potentially bankrupt yourself or have to sleep on a couch? No. I think the right way to do this is instead of a side hustle, buy a business that allows you enough money to put an operator in and do it in transparency with the business that you're working with or get a job where that's acceptable and then go and run the next thing or take the big risk. I find in life, life rewards you and the universe rewards you for going all in.

• 35:25Speaker 04

  Anytime you teeter toe, the universe is kind of like, this is my woo-woo Austin coming out, actually. The universe, it kind of tests you. And your boss is gonna find out and then you're gonna panic. This happened to me before and then I panicked and I didn't do the thing. And I think I would have had another zero, which would be substantial, behind my name if I had said, "Okay, fine. I'm gonna actually go do the thing right now." So I think the universe rewards risk done at the right time.

• 35:50Anthony Pompliano?

  Where can we send people to find out more about what you're doing or if they want to follow along and learn across social or write the emails that you guys send out?

• 35:57Speaker 04

  Yeah. I think @codisanchez on Instagram, if you guys are into video. I like that. It's C-O-D-I-E. We also have a newsletter called ContrarianThinking.co. It's basically a weekly newsletter, all free, about buying businesses, building businesses, and how to do them in ways that... Your teachers never taught you, but probably should. And it's free 99. So I would go to one of those two things. And maybe what I'd love to hear from all of you more than anything is we have a mission of creating 1 million financially free humans and 100,000 small business owners. And so I'd like to put one of those on my tombstone. So if you buy a business, or if you make money off of this, I want to hear about it. If you do it on Twitter, awesome. If you do it on Instagram, awesome.

• 36:40Speaker 04

  We keep this list of everybody who's reached out to us, who's bought a business, or who's increased their revenue streams from the work that we do in the world. And we update it every single week. And so last week, I think we had like $86 million in profit from humans who said, "I'm gonna bet on me and also, you know, fuck the man." And I'm into that.

• 36:59Anthony Pompliano?

  Awesome. Ladies and gentlemen, Codie Sanchez.

• 37:01Speaker 04

  Thank you, guys.