#43 - Getting your team to take big risks, Turning office workers into remote, Quiet founders making big money
In this episode, we talked about a framework to get your team to think big.
We talked about a $200 million a year commercial laundry business.
Jessica Simpson, how she's making $1 billion still off her fame.
And a billionaire in Texas you probably haven't heard of, but you should.
Don't forget about Jambi's special, special, special package. I gave Sam a special gift, which is just underwear with pockets. I gave Sam some underwear. Okay, I'm Sean. This is Sam.
Episode 2 of our experiment.
Of the experiment, yes. And new studio, we're looking fly now. The video is good, uh, like it's good to have video because now we're sitting in a legit studio. I got a bookcase behind me, I look smart.
Yeah, it's still—
I've read none of these books.
It's a work in progress. Uh-oh, that one's gonna fall. Did you, um, see the videos that we posted yesterday?
I did.
Yeah.
Cool.
Good stuff. Good framework. Good stuff. I'll have to continue making it interesting or improve.
I actually think, uh, I rode my bike here today cause I was like, if we're going to be on video, I can't be fat. So I'm going to start riding my bike, start eating clean. This podcast is going to change my life.
Um, okay. So let's get into this. Uh, a couple of things popped up this morning that I wanted to ask you about. Um, we last, maybe last year, maybe 6 months ago, we had like 10 high schoolers in our office and we were there. I forget what they're doing. We were showing them around. I forget, but They start talking about Twitter and I was like, you guys use Twitter? And all of them like, yeah, it's booming. It's like, it's where it's at. And so a few of us at the office are buying Twitter stock.
Sophisticated strategy.
Today popped. I think it's up 10% more.
It was up 17% this morning.
Yeah. So big fan of that.
And I have noticed I have been— I've spent hours a day on it.
So I was— I had a funny conversation yesterday about Twitter. Uh, so I was, I was at work and I was talking about, I was like, you know, our, our company's not public. And I was like, um, in some ways that's great cuz you don't have to worry about the quarterly earnings and all that pressure. Uh, on the other hand, there's no sort of stock price to look at every day. You know, you could do great work and the shares of the company don't necessarily get more valuable cuz it's already got acquired. And, um, somebody was telling me a story. They were at one of these companies, let's call it maybe Facebook, maybe Twitter, maybe Snapchat. And, um,, and they were like, yeah, you know what sucked is, uh, you know, 10 days before the earnings call, the CFO, you know, messages the product manager, is like, hey, we need to lift monthly active users by like 8 million. So, um, send out an email blast, like send out a notification being like, hey, you know, something, come look. And, um, and I was like, yeah, that would suck. Uh, but, but that's how funny— well, The problem is it works temporarily because now you're hooked on that. Now you're inflating a number. It's not inflation, it's not fraud, right? It's just trying to juice the number right before their earnings so you get your stock price, you know, stays stable or goes up. But now you got to do that every quarter. Any quarter you don't do it, you're deflating, and that's a problem. So yeah, they were saying it wasn't fun to work in that environment.
And I don't— it doesn't matter if you hate or like Trump, but he proposed something interesting a while ago where he said, let's get rid of quarterly earnings report and do 6 or 12 months. And that is an awesome idea.
That is an awesome— have you heard of the Long-Term Stock Exchange? No. You ever heard of this? Oh, this is crazy. So Eric Ries, who's— who wrote The Lean Startup— yeah, might be in this bookshelf.
I can't say I've heard about it.
You don't have it up here? Okay, so Eric Ries, uh, for those who don't know, he, he wrote the book The Lean Startup, which is a great book. And, um, you know you know, he was thinking about his next project and he decided, you know, what's most screwed up about companies is this quarterly earnings treadmill that you get on and it just incentivizes short-term behavior. So he's like, if we want to change the way companies work, they're playing the game as it's laid out. They're playing by the rules of the game. They're incentivized to do short-term things. He's like, but what if there was a stock exchange you could list on where you were incentivized to do long-term things? So they have some rules around it where it's like you have to hold the stock for over a year. So there's no short-term trading. Gets rid of the day traders, the quantitative trading. They haven't launched yet, but they've been at this for 4+ years, I think, because it's not easy to roll out a new stock exchange. But I love this idea. This is an idea where I'm like, yeah, that's what thinking big looks like and innovating in a space where there's no innovation.
And I love it. Great. I— that interests me. Someone sent it to me that the— his page, it was like You guys, The Hustle should sign up for this. Uh, it's kind of interesting and, uh, I'm into it.
I think, uh, we should have him come here to talk about it. He's, he lives around here. He's dope.
Yeah.
Let's do it. And also I met this guy who ran, I think he, he was like CEO or whatever of the New York Stock Exchange. So he came to our office once and we were hanging out and I was like, so you're the CEO of a stock exchange? Like, wait, stock exchange is a business? He's like, oh yeah, for sure. We're a business. And so basically there's, and I'm kind of a rookie on this still, but like in the 10-minute conversation we had, he was like, you know, there's NASDAQ and then there's NYSE. They compete for listings. So they want companies to list on one versus the other. And, um, their business model is pretty interesting. They lose money in the US, but they have the brand of being the New York Stock Exchange. And then they power the stock exchanges of like 50 other countries. So, you know, the Swedish stock exchange, they use the infrastructure of, let's say, the New York Stock Exchange. I don't know if that's the exact country, but, uh, pretty interesting. So it's basically a stock exchange as a service, which is a very lucrative business to be in. I can imagine.
Did you see the New York Stock Exchange, uh, is rumored to be bidding to buy eBay?
What?
Yeah, yeah, yeah. Uh, we reported— that's amazing— yesterday, I think, um, or two days ago. Yeah, it's weird, right?
Yeah, that is weird.
I don't know how that's possible, but I think it's very strange.
Very, very strange. Anyway, so you were saying something about stock, uh, well, I don't know what you're saying. So why did I even tell the story about the long-term stock exchange?
Quarterly earnings report.
Oh, Trump's good idea. Trump's one good idea.
I think it was his idea. I don't care whose idea it is. I think it's a great idea because I read earnings reports all the time. I mean, it's like a huge undertaking.
Right. And what a lot of companies are now doing is a direct listing. You know what that is?
Airbnb is rumored to be doing it. And I believe what it is, is you— so the way that a lot of IPOs work is a bank will underwrite it, which means they basically buy the early version or the early offerings the, the early shares, and that sets the price. And with the direct listing, one of the components is it goes live right away.
So it's what a direct listing is, is it's the liquidity of being public without raising capital. So if you go public in an IPO, it's your initial public offering, you're selling shares in order to raise money. So it's good if your company needs to raise $1 billion, that's a great way to do it because it's bigger than most private investors can do. Um, so that's why people usually do an IPO.. But if you're Slack and you don't need money, or you're Spotify and you don't need to raise capital, you just want to get liquid and you just want to be traded, a direct listing is the way to get the liquidity without the raising capital. And what it does is it's way faster, way less onerous, and, um, and, uh, you know, uh, simpler to do overall. And so that's why some companies are not doing this. Bill Gurley is a huge advocate of it.
You can save $30 or $40 million in fees to banks, right? Doing it.
Yeah, for sure. Not a problem I personally have, but, you know, interesting nonetheless.
There's a good clip, probably. What are direct listings? Okay, what do you wanna go to now?
Uh, whatever you want. Gay weddings. Tell me about gay weddings.
No, let's do that in a minute.
Okay.
So The Hustle, we covered this thing this morning about a commercial laundry business, and it caught my eye.
I read this. So this was— it's not surprising, 'cause it's like, yeah, of course this exists, but I just didn't know the numbers. And that's what I see, one thing I really like about The Hustle is it's not always fantastic new ideas I've never heard of, but it's like, We lifted the— you know, we looked under the hood of this thing you all know about. I like that. So talk about this.
I didn't know about— okay, so here's a— I'll rattle a few numbers off. It's called— I believe it's called Star Laundry. Yeah. Um, so they charge 30 to 45 cents per pound. I'm reading the notes now. Uh, it's guessed— the people guessed that they're around $120 million in sales. The way it works is what they do is they, uh, make deals with hotels. Yep. Or commercial laundry, mostly hotels. And what they do is they'll go to the hotel and pick up to like, let's say the Westin or something like that. They'll collect 800 pounds of linens, right? Or uniforms, linens and uniforms. They bring it there. They've got these massive machines that hold 130 pounds of laundry and they put them in, they fold them. They probably do it with like tablecloths as well. You iron them, do whatever you have to do, and then you send them back. And it was started by a kid who's— or he didn't start it. He's 28 years old. 28 years old. His father started it, died. The kid dropped out of school and took it over. He's rumored to be selling but I was incredibly interested in it and I looked up some of the bigger guys in the space. There's one company I think it's called— is it— what's that say up there?
How do you say that? Sintas.
Is that what it says? Sintas. Okay. So they were at $4 billion in sales and they do a bunch of stuff like renting the uniforms to people, right? And laundering them. $4 billion in sales, like a $35 billion market cap. Right. Interesting.
So I got a half-baked idea here. So I read this and I was like, oh, cool. I know a new thing, but my brain doesn't stop there. It's like, how do I capitalize on this new thing I just learned? And so I was thinking, you know, my, so my family does Airbnb, right? Um, and they, you know, they, they do, you know, a bunch, a bunch of Airbnb nights a year and it's great, great income for them. They're retired, so it's, it's easy. But the problem is the like turnover each time. And so there's some companies that are out there that are like sort of cleaning services that will come clean your Airbnb. Um, but what I think would be interesting is if you did the, sort of Airbnb, um, this commercial laundry service. So basically you would give the Airbnb the sheets. So instead of saying, hey, use— because what my mom did, she uses her own stuff, which is kind of weird because all these strangers are sleeping on it, or she would go out and buy new sheets. But instead she would probably pay like just monthly to have somebody who delivers fresh sheets and then picks it back up like they do those like, you know, water bottles that you leave out front.
I don't know if that would be good, and here's why. So these guys are doing hundreds and hundreds and hundreds of pounds of laundry a day, maybe thousands of pounds of laundry a day. So there's Washio, and that's my Midwestern accent. I say wash. So Washio, and then Rinse. Rinse bought Washio.
And those are just for people, people's laundry.
Just for people. I've used them. I pay $50 each time I use it. It's very expensive, but they're not good businesses, I don't think. Washio went out of business or was acquired for next to nothing by—
So I think, I think it can, I think this would be better because with you, if you do an Airbnb, two things change, right? First is, um, I'm making money every time I rent my Airbnb. So factoring in the cost of either cleaning or laundry is like, well, I'm making money, but I'll pay a certain amount of my, you know, revenue, my cost. So it's thought of as a bit of a business. The second thing is, um, you know, you get higher volume. So like, you know, when these things turn over, it's like I need fresh sheets on, it's a 2-day stay, and then I do it all again.— and that's faster, it's a faster turnaround, and it's more like business, it's more like a B2B business than a B2C business where you do your laundry every 2 weeks and you're price sensitive on $50, you know?
My bet is the unit economics on that would be horrible, would be horseshit, because with hotels, you know, like, with a fair bit of certainty that there's like turnover of 400 rooms a night.
You get the volume, yes.
Yeah, every night, that's gonna happen. Yes. With Airbnb, it's not. A lot of people Airbnb part-time or when they're out of town.
Well, it's just distributed, right? So your pickup point is not one point. You're gonna get, you know, there's more Airbnb rooms in in San Francisco than hotel rooms. And so you get, you would actually get more volume if you're serving all these customers, if they wanted the service, but the problem would be operationally, you'd have to be sort of a roaming pickup, uh, versus what these guys do, which is one sale, one pickup point. So I don't know if it's as good, but that's my half-baked idea off of this, this learning.
So the, the two folks in the space, Cintas and, uh, is it called Unifirst? Um, Universe, $2 billion in sales. So they do— they, they clean it.
And these guys are national, or is this— yeah, uh, 'cause Star Laundry looked like it was just in New York.
It was just in New York and New Jersey, right?
Um, and they said it was pretty cutthroat. They're like, you know, somebody will come out and say, we'll do it for 22 cents a pound.
Super cutthroat because it's really— it's, it's probably— it's because it's unglamorous. I have a feeling it's mostly immigrants, so they probably hustle really hard. Your competition's like strong, right? Um, and so what I like to do is whenever I hear about these companies, I'll I'll— and I want to learn about the business, the first thing I do is I go to Reddit. I'll type in the name, like, Cintas and Reddit, or I'll look at their Glassdoor. I like to look at the highest reviews and lowest reviews, and I have a feeling I know how these work. I have— I am almost positive the secret sauce for these guys are hiring just shitloads of salespeople and running through them like crazy. Right. So what they do is in Reddit, they'd be like, what's it like to work here? And they would say, you can make a lot of money. It's a grind, and the turnover is incredibly high. And so there's all these subreddits dedicated to salesmanship and sales jobs. And these were all ranked— or a lot of people were talking about these. So they just hire, like, I imagine, 20,000 remote salespeople. They go door to door and that's how they get it done. And they're selling. So they like get into the laundry business, then they rent you uniforms and then they sell you bathroom supplies and just sell all types of stuff to these small businesses. Right. And they probably just go door to door to door. Just— it's a— it's a— you're on the ground.
Yeah. In your story, the guy said we have no salespeople, but I don't know if that's real or not.
Yeah.
Maybe they, maybe that was his claim.
Yeah. I don't know, but maybe, or maybe they're not expanding quickly. I'm not sure. Yeah. But with these big guys, uh, they had, it looked like the company did $4 billion in sales, had, uh, 30,000 employees. Right.
Okay. Yeah. They have some salespeople.
Right. And it was one of the top posts on when I was browsing on Reddit was like, it consistently said, what's it like to be a salesperson there?
Right.
All right.
What else we got?
Um, you want to go to, uh, um, we could just briefly talk about this. I was researching stuff for this. You know, Jessica Simpson, obviously, you know, I know her. Yeah. She has a clothing line. Do you know that does $1 billion a year?
You know, I saw this like 2 weeks ago and I was like, what? I don't even think she's famous anymore. And what is— I don't know anything about it. She started a while ago or is this new?
Uh, I'll explain how I think this works. Okay. So there's a company called, I think it's called Sequential Brands. They owned or used to own Martha Stewart's line of stuff. They do this with Jessica Simpson. They do it with, uh, Heelys, I believe. You don't remember them? Yeah, stupid things. And then they do it with, um, Joe's Jeans and a few others. They either buy like kind of forgotten about brands. I think they own DWS, the shoe store, as well. So it was like low-end, low-ish, and medium to low-ish end stuff. And they just have, uh, they work with Dillard's, Macy's, all these like, you know, shit stores that only like —right— where I'm from, the Midwestern moms go to, like, um, and they just partner with celebrities like Martha Stewart and Jessica Simpson and just make a ton of shit for them. I mean, it's quite simple, right? Um, but I didn't realize how many people still bought Jessica Simpson's stuff.
That's crazy. It's all moms, I believe, like people who liked her. Are they buying— you know, we obviously, we have no clue— are they buying this for Jessica Simpson? Oh, Jessica Simpson wears this, this is Jessica Simpson stuff, or is it just like you know, she started this thing, it got into retail, and now it just sits on a shelf and people buy it. Like, I find it hard to imagine that Jessica Simpson still has this kind of pull with people. If you said J.Lo, I'd be like, yeah, I don't know if it's just because I just watched the Super Bowl or what.
Like, kind of looks like every woman in the Midwest, just like a white chick with like, you know, blonde-haired lady. Like, I have got so many family members that look just like that, right? I understand why people would buy that crap.
Yeah, and I'm sure people are doing this with like YouTubers and Instagrammers now, right?
I got more on that. Okay, so first of all, this happens, you know, Paris Hilton still sells like crazy amounts of perfume. It's one of the best-selling perfumes of all time still to this day. Right. Okay, so there's this thing, so I went and, so we have this database on trends, trends.co, sign up, and where we looked at the IP address of everyone who's using Shopify and saw the top-selling stores, and one of them was called, I think it was called ColourPop. Yes.
Okay, I did research on that. Makeup brand.
It's owned by, what's that say? Seed Beauty.
What's it say? I know it, Seed Beauty.
Okay, it's owned by Seed Beauty, a brother and sister partnership that started it. They own ColourPop, which sells makeup, and they're the ones who basically do that Kylie cosmetic thing. So they're doing the exact same thing. Right. And it seems interesting.
They have a huge operation. There's a, I think I've said this before on the pod once, but they have a YouTube video where it's like, welcome to Seed Beauty, or welcome to ColourPop, like, here's a tour. It's like a recruiting video. But when you watch it, you're like, holy shit, this is a huge operation. What is this company? Yeah.
And that's when you go look into it where they have like a huge factory.
Yeah. It's in LA. Exactly.
Yeah. And, uh, it's new-ish.
It's only 5 or 6 or 7 years old. Right. And the brother and sister are very mysterious about themselves and the company. They don't talk much about it, which only makes me want to know more about the whole thing.
Here's what I've learned.
If it's mysterious and they don't talk about it, it's huge.
It's huge. It's huge. I know so many people and I'm like, This is huge. Why don't you talk about it? They're like, we don't want anyone to know.
Yeah. And so you don't hear a lot about these folks. Right. And so that's why I think it's massive. So if they don't talk about it, there's a guy in Texas named Joe Lamont. Have you heard of Joe Lamont? No. Okay. So In the mid-'90s, he was 20 years old. He dropped out of Stanford and started Trilogy Software. Okay. And in the '90s, it was like Oracle, Microsoft, and Trilogy were like the places to work. He started it in Austin, Texas, and it's one of a handful of reasons why Austin became a little bit of a tech hub. And what he would do is he would make software that was for relatively boring things. So for example, if you're Boeing and you have to build a big jet, you need to figure out how many screws and the seats and all the stuff you need when you're building this. He created automation software that helped make that process more efficient. I don't understand how it works entirely because I'm not even close to that industry. But then he did the same with cars and a few other things, and he would hire thousands of employees, all young people. And they had this thing called Trilogy University, and it's what they were famous for. They were hired— they would hire hundreds of people a year, all young people, and they would teach them everything. And people loved working there, and they loved it because he's a little mysterious. He's also a wild man. There's stories of him taking— they would fly all the recruits to Vegas and he would say— they were young kids, they didn't have a lot of money, but he would say, "Here's $1,000 grand, bet it all." And he would try to do that to get them used to risk. Well, anyway, he did this for a long time and if you Google Joe Lamont, and you gotta Google Joe Lamont SEC, and you can find all his old filings 'cause they tried to— I think they went public and he bought it back, but they spun off loads of companies and they grew these things like crazy. Well, anyway, in the later '90s, they hit a little rough spot and he laid off a bunch of people and they kind of like went silent. He's back at it now.
And how old is this guy?
He's in his 40s. So when he was in his 20s, early 20s, he was on all these lists like the Bill— they're like, this guy is Bill Gates, right? And he was a big deal. He went away and they say he lost a lot of money, but he was still very wealthy. But he kind of is making a resurgence now and he has acquired maybe it could be hundreds. Of small— not small, but enterprise software companies of $20, $30, $40, $50 million, maybe even higher. And what he does is he outsources most of the gigs to India for Indian developers, and he just increases the prices of the product and, uh, does well. And no one talks about this guy, right? But his enterprise has to be in the billions of dollars in revenue. And, uh, I have talked about it a little bit, and Forbes has talked about it a little bit, um, but he's a guy who doesn't say shit, but is behind the scenes, right, doing wonderful, right? Love it. And that is a perfect example of a quiet guy. You never heard of this? I never heard of this guy.
I've heard the name Trilogy before, but never Joe Lamont. So you said something in there that I like, um, which is you talked about they had Trilogy University, and I've seen this popping up now. I've always wondered why people don't do this. So when I moved out to Silicon Valley I was like, what would I want to do here? What's like the dream gig? And my, my first thought was, um, I want to be, I want to help. I want to go to Google and I want to tell Google, hey Google, why don't you have a university? Uh, you should have Google U. You have one of the best brands in the world. You need all this talent. You literally have a campus you already built. And, uh, by the way, universities suck and are very backwards and they're not training people for things that actually you need when you hire them. You have to retrain them anyways. And so why not create Google U and I'll be the dean? That was my initial thought process. How old were you? 23, 24. Before. Uh, so I didn't execute on this cause I knew I didn't have the credibility at that time to do that. Um, but you know, since then I've been very interested in this and kept an eye on this space. So, uh, we talked about Lambda School, why I was so interested in them. Uh, I still plan to start a school even, uh, but I started looking at some different companies that are doing this now. So, uh, Shopify has Shopify's Dev Degree. I don't know if you know about this. So they partnered up with a university and they're like training developers. And they basically get first dibs on hire. You know, I don't know if it's like, I don't know if that's like in the contract, but the purpose of doing this university is to help their talent pipeline, right? And then there's several companies now that are starting their own, you know, corporate universities. McDonald's was one of the first that ever did this. I didn't actually know about this, but they had Hamburger U and they were basically training young managers and sort of frontline people in an actual university setting. And they would get it, you know, they'd get a degree and they would be like, all right, now you're ready for the next thing. So it was like, corporate training, but done in the fashion of a university. And there's like a spectrum, right? So on the one end, it's just, I'm training you to do the job that we do. That's, I think, more like what Hamburger U was like. And then there's, you know, Shopify Dev Degree, which is more like become a developer and then you can get a job at Shopify or many other places. But I think this is, I think this is gonna be a trend that, that picks up, which is companies either creating their own or partnering with failing universities, rebranding it as their own and, uh, attracting talent there and having sort of a talent pipeline from the grassroots up because it's so hard for them to recruit talent, recruit top talent.
Well, why has that not happened already?
It is hap— that's what I'm saying. It is happening now. The, the sort of— there are a few historical things like Trilogy, like McDonald's. There's a few others that I, that I looked up, uh, and then there's some more recent ones. So Shopify, there's two others that, uh, more recently did this. I think I might be wrong at this, but you know that one like crappy CRM company, Zoho or something like this? Yeah. They have their own university, and I think they target Indian students, um, from India, and this is like their sort of secret sauce on talent.
So the guy who owns that spoke at HustleCon. They've never raised funding. Yeah, they're a big company too.
Crappy product. Horrible product.
It's okay. Ah, it sucks. It sucks compared to Salesforce, right? But they have some things that are perfectly acceptable for like a smaller thing, right? Um, but he is in Sunnyvale. He spoke at HustleCon and he He doesn't work anymore. He owns it though. He owns— I think he owns all of it, like 100% of it, right? Like a $500 million a year thing. And they have so many different products. Like, he has like an RV that he like drives around in, and like, in like an Airstream that he like lives in and goes to all these events. He spoke at our thing. He's a cool dude. And yeah, he told— he went to school. I forget what's the school in India.
It's like a IIT.
Yeah, very prestigious. Yeah, and he was telling me that's— that's That's what they do.
Yeah, um, that's crazy, uh, and it does work. You were saying something, uh, he lives— he has an RV. So question for you, um, I was looking into what does Paul Graham do nowadays because he's like, you know, he tweets a lot. He, he doesn't run YC anymore. So I was like, okay, what is he doing with his time? It doesn't seem like he's active, you know, investing or anything. He likes to write. And I was asking Emmett from Twitch because Emmett went to YC, you know, they're, they're friends and they, you know, he went through YC early on. CEO of Twitch. Of Twitch, yeah. So they they were in the first YC batch. And so, he was telling me all kinds of cool YC stories. And one of the, I asked him, I said, "What does Paul Graham do nowadays?" And he said something like, I don't know if he still does this, but he took a couple years, he basically moved to like the backwoods, I think in England, with his family and like live a simple life in a cabin with the kids and in nature. And then he spends all day, you know, either writing a new programming language or writing essays that he publishes online. And like, that's what he wants to do is write a new programming language or essays. And so I asked him, I asked Emmett, I was like, what's your version of that? And he gave me a cool answer. I'm curious, what's your version of that? Like, you have all the money now, like you have the money, the money's done. If you were to exit the career race, what do you do with your life? I can answer that.
I've done it. I did that for about 6 months. What would you do? For 7 weeks, I drove my motorcycle all over the country. So I did do that. It was awesome. It got boring.
Did you have a plan or was it like a walkabout?
You just went wherever you were going? I was like, I have a budget of like, I didn't spend a lot, maybe $5,000.. And I was like, I'm just gonna see what I can do. So I stayed, I couchsurfed, I like literally couchsurfing.com, Airbnbs, motels in Kansas in the middle of the country are like $25. That's dope. I stayed all over the place. I camped just for about 7, 8 weeks. I would post on my Facebook where I'm gonna go. I met girls. I used Tinder like crazy. I was single. Right. I just—
So that's what, when did you do that? You were 20?
That was about 4 or 5 years ago. And if I had to do it again, I would do that for a little while. And then me and Sarah, my wife, we would, I would rent an Airstream, and drive all over the country, and then I would probably visit 10 different countries. But that, dude, that shit gets boring after a while.
Yeah, that's what I'm saying.
I'm telling you, I've done it.
So it's, the question is, what would you do beyond the sabbatical, right? 'Cause there's the, what you would do for 3 months, that's like travel, hang out, party, whatever. But then that gets boring and hollow, and you sort of feel, you don't feel great. So what I thought was interesting was, I think the cabin in the backwoods, working on his own project, writing his own language and his essays, that seemed like his sustainable peace place, you know? He could just keep doing that. Um, and so I don't know what that is for me, but I think it's an interesting question. Uh, Emmett was— I don't know, we got to bring him on and ask him again. It was something like he would, um, go to his hometown, I think in Washington, like Seattle, and he would— I don't remember. I think he was like so stumped and he was just like, nobody's ever asked me this, might be the best question anyone's ever asked me. And that's why I remembered, uh, like, like, oh, this is a good question, let me ask some more people.
So I, um, A year ago or some time ago, we got offered to sell the company. We almost took it and I decided, no, let's keep going, this is cool. But I was tired, so I took— Jason Lemkin taught me this, he was like, just take 2 weeks off. And so I was like, no, I'll do— let's do 5 weeks. I was like, why not? I'll do 5 weeks. I gave myself a bonus. I was like, all right, I got money and time, money and time. And after about 2 or 3 weeks, I started coming back to the office. I got bored.
And were you like recharged or you were just bored?
I was recharged and bored. I mean, like, I was like, I gotta do something. I gotta go. Let's go. It's like, it gets very boring for sure. Um, what would you do?
Um, so I think, I think I talked about this last time maybe that, um, my, uh, my ideal life is basically taking like 2-year plunges into trying to do something creative. And like, that is interesting to me. So like I would do 2 years if it was right now. I would basically spend a ton of time with my kids, and then I would try to do stand-up comedy for 2 years, 'cause I think that's one of the hardest things that somebody can do. I just wanna go try it. And then I would do another 2 years where I would try to write a book, or I would try to make a movie, or I would try to build a company, or, you know, I would just do these 2 to 3 year chapters just doing a creative pursuit. I would move the hell out of San Francisco if I could. I would take my, you know, if I had all the money, I'd basically tell my family, look, we're going to move to this San Diego or wherever it is, and, um, And I would do that. And then twice, twice a year I would live in a different place for 1 month. So I started doing this where I lived in, uh, last, last one was Buenos Aires. We went down to Argentina and we lived like a local for a month and it was way better than any vacation cuz we were just living there. We weren't like tour, it wasn't tourism. Um, and it was just a month and then come back and it was a lightweight commitment. I didn't have to like give up my life and like go start a new life. It was just like a month. And I even worked when I was there. I was like, cool, I'll work 4 hours a day. No problem. Have you heard of Remote Year? No. What is this?
It's like study abroad, but for remote workers and they hook it up.
So they said that is genius. Oh my God, it's genius. Well, did you do study abroad?
It was awesome. I did study abroad.
It's amazing if you just do study abroad, but now you're 7 years into your career. That's, that's amazing. That's all I need to know. EF Tours.
That's what I did. I think EF Education First. I don't know what it stands for. EF Tours. Huge company, billions of dollars in revenue, started by a guy, an older guy. Now he's old now, but it was like a bootstrap thing. This is Study Abroad. Yeah, but I was curious about Study Abroad. I think it's an interesting thing. And a guy named— I think he's Austrian, and they sponsor a tour. The reason why I looked into it was they sponsored a Tour de France cycling team, like the best team. And that's— I think you get a return on that for some people, but it's— I think it's a thing of passion and money.
You only do that if you have a lot of money. Right.
And so I was like, EF Tours, that's the study abroad.
Sponsoring the Tour de France is like thing number 180 on the how to market our company list. Well, no, some people do it well.
Like Postal Service, uh, sponsored Lance Armstrong for 8 years. Now, had the fraud thing not happened, it would have been, it would have been great. It like helped the Postal Service, right? No, it could be good, but you do have to have a lot of money up front. And anyway, EF Tours did it and it's a huge—
So tell me about Remote Year.
What do you know? Um, well, they contacted us, wanted to work together. And so I, was looking into it and you just pay. It's simple. You just pay a fee and they hook it up where you can go live different places.
So when they— when you said they wanted to work with us, they wanted to work with the company, me, The Hustle, to do— to like what?
Advertise? Advertise. Okay. Someone just said—
but how does it work? I'm an employee. I want to work remotely. Pull it up. I want to do a— I want to do a study abroad.
.co or .com. I forget what it is, but there's other services like this where they own destinations like multiple hostels and they're set up for workers, not for partying. And you can spend like 3 months in a location.
There's— I feel like Bali has turned into that.
I fucking hate Bali. We have Steph, one of our writers, our analysts lives there and she loves it. I think it's whack.
But what's whack about Bali? You're the only person on the— on this island of Bali is whack.
It's just like a— it's overrated. It's just all tourists. It's just— it's— It's not like cool Indonesia.
I think it's just—
there's places I can't— it's like saying like Cancun.
Yeah, there's places an hour away from Bali that are what Bali— what people think Bali is, and that's actually where you should go.
Yeah, Bali is like Cancun, right? What's it say? Does it say how it works? Remote Year curates work and travel programs for professionals to see the world without having to quit their jobs. They give you basically like an itinerary, but like you're with like a group, so it's like a community. How much does it cost? And is it one whole year?
Oh, so okay, so it's, it's a group of people from different companies that are all gonna go on a curated sort of like tour living in different places working. I think this is a fantastic idea. I think this is on trend.
Wait, did I sound negative about it? I think it's interesting. I don't, I don't know enough to say it's amazing or horrible. It's definitely interesting. Either 4, 6, or 12 months. 4, 6, or 12 months. What's the fee?
I'm looking. For the purpose of this podcast, when I say amazing, I mean interesting. Amazing, obviously, as you go deeper in the business, means I know that people want it, the economics make sense. When I say amazing, I mean, oh, I'm very interested in that. That is an interesting premise.
I'm bullish on all types of remote stuff. I think it's great. I'm definitely bullish on that.
Um, cool. What else we got?
About $3,500 down payment and a monthly grant.
Damn. $3,500 down and then $2,000 a month to do this for a year. So that's $24,000 plus the sort of $3,500 application fee. But how many— a lot of people would do this. A lot of people would do it because there's so many people just see—
remote, single, and likely young. No, no, no.
You don't have to be remote. You have to actually be not remote. Right. So you want to be dying in a cubicle in New York, San Francisco, or LA. Remote job already, right? No, no, no. I think what it is is either they help you go remote for the year, like you're not remote, you work in HQ, you've done it for 8 years, you have enough sort of equity built up with your employer to be like, hey, I'd like to do a remote year with this program. And I'm sure these guys are trying to partner with companies to educate them on like, look, this is good for your company. You'll retain talent in the long run if you let them have these sabbaticals, these working sabbaticals.
That's cool. Google remote year Crunchbase.
A lot of companies do this sabbatical thing where like, after 4 years, um, you get like 4 months off or 6 months off to take a sabbatical because they know like that's usually when you just churn out.
Um, I wasn't even tired like fatigued, it's like need a change. Right. My body started telling me I needed to change.
What does it say? There is 17 million in euros. Okay, 17 million. So I guess they're going to go big or they're trying to. Trying to go big. I met with Scribd. Do you know Scribd? Yeah. I met with that guy, Tripp, the CEO, recently. The other day I went to his office and was shooting the shit and he's 12 years in. And I was like, are you tired? He's like, I have been and I took time off, but it's like, I'm taking this public. I want to go for a long time. Right. Or I want to take— I want to try and take to take it public.
Um, Scribd is big, very big, because they got into like the books and legal document space and like they figured out how to like—
north of $9 million in subscription revenue. Sorry, uh, 9 figures. Yeah, over $100 million in subscription revenue. That's good.
All right, what else we got? Anything else good? Uh, I have a gift for you.
Hold on. Cool tights. Thank you. All right. Oh, hell yeah. Okay. Jambies. Okay, Sean sent me this where he wanted to invest in them. I thought it was a horrible idea. Let's see if it's good. They do a good job. They got all the, um, D2C hallmarks. They got the D2C hallmark lowercase letters, this same font, and these pastel colors. Yes, it's Jambies. Has boxers with pockets. It sounds crazy but feels so good. As soft as luxury briefs, as breathable as the Arias boxers, and functional as your favorite.
Okay, so let me tell you, but Jambies is basically— it's for when you go home and you take— you're wearing jeans right now. Nobody wants to wear that when you go home. You do— you not take off your pants right when you get home?
When I get home, every morning there's like— my pants are at the front door. Very clearly I stepped out of them. Yeah, exactly.
You walk through the door and you step out of your pants and, uh, you leave it on the floor because, because you're bad. Uh, so these are Jambies. So basically it's boxers so that you can wear them around. Oh my God. They have no hole in the front, so there's no flashing, you know, danger. And they have pockets so you can put your phone in it. Simplest innovation I've ever seen. But do these— no hole and pockets.
Do these run up when you put your pants on? They seem thick.
So you wear them in— you don't wear them with your pants. You wear them instead of pants and instead of underwear. You just wear these. All right. So most people wear like— they had a slide in their pitch deck that I liked, which was like, everything people wear at home is not meant to be worn at home. It's like basketball shorts, yoga pants, yoga pants. So, you know, it's like, you know, all the— like, so people are wearing the wrong thing. So they're like, we're gonna make the thing that you should actually wear when you want to just lounge around at home. All right, I'm gonna wear it.
It's great. Yeah, I'll report back.
So I was all about it, and my wife was making fun of me because she's like, what the hell is this? Why? What? Because I was, I was checking the front door every day to be like, are my jammies here? Are you— are my jammies? I was so excited, I don't know why. And so I got them, and she's like, okay. I wore them, and she's like, these are just boxers. And I was like, but the pockets and no hole up for front. And then we had some friends come over and she was like, no, leave your jammies on. You love your jammies. Leave your jammies on. And I had to like, you left them on. I left them on with friends over and I was very uncomfortable. I was like, oh, I wouldn't do this really. Really? But they were like, okay, you're just wearing boxers. And I was like, no, no, no, these are jammies. And then we had a debate and it was all good. Well, I'll report back. Yeah, exactly. I need somebody right now. I'm the only person I know that likes these things. But, uh, if you, if you like 'em, you'll be too. Otherwise I'll know I'm the only one. I'll know in a few days.
I'll report back tomorrow. You want to do one more?
Yeah, I have one. Uh, I have a framework, so not an idea. You want to scroll down a little? Framework's a little bit boring. Um, but I think this one's really interesting. So, um, so this is, so if you run a team or a company and you want them to think big, um, have you ever been frustrated why people don't think bigger and like sort of take bigger swings in the company?
Yeah. And I have a theory as to why that happens.
Okay. So, so I'll tell you, you tell me your theory and I'll tell you one of the reasons I think is there. So we didn't raise venture capital.
And so I think that I, my, hypothesis was one of the reasons why this happened was because I was so frugal early on and I was like, oh, well, like, we have to— let's save $1,000 here, $500 there. And that created small thinking, right?
And that's one of the reasons. And look at you now buying $200 chairs like it's nothing.
Well, our first office rent was $500 a month, right? And then I remember being like—
now we spend— fun fact, you guys worked out of the Craigslist original office.
Maybe I'll save that story for tomorrow. I'll tell a good story about that. We worked out of Craigslist. Craigslist's first office, when like they moved out and we moved in.
Like when you walk in, the sign still says Craigslist Inc.
or whatever. And I'll tell that story tomorrow.
So, okay, but so you're saying because you were frugal early on, but, but thinking big doesn't take money. Thinking big doesn't take money, right? Most big ideas don't take that much money. Okay, so then what's the answer? So here's, here's one of the reasons why, right? So first, you know, it's about the people you get. Some people are dynamic and they, they only want to work on big things and take big swings. Um,. And so one thing is we hire people who are good at executing cuz we need to execute on something that's already figured out. You don't want people just bouncing off the walls with new ideas all the time when you need people who can execute. But what ends up happening is at a certain point you need those same people to start thinking big and taking big risks and working on projects that might not work, right? Like this podcast, for example, if this podcast gets big, it adds a whole nother dimension to your business. But let's say most likely it's hard to make it big. It might not work.. And so you are the one who can spearhead this in your company or somebody like me, but it's really hard for all the people out there to do, to spend time on something like this. I'll tell you why. So this is a Jeff Bezos theory, uh, that I also heard from Keith Rabois. So, um, the thinking is this, when you, uh, what most people do when they run their company is they measure people on their outputs. So let's say you wanna grow the newsletter, right? Cuz the newsletter's your core business. So there's somebody probably in charge of growth or growing the newsletter. And, uh, you know, you'll judge them on how much did the newsletter grow?. And so because of that, you know, they get tuned to work to being measured by their output. So if somebody wanted to work on this podcast project, they'd be like, okay, this is valuable if we get to our goal, 100,000 listeners per episode. Um, that's not easy to do. That's a top 15 business podcast, most likely gonna fail. So I don't really wanna attach my name to that because if I'm gonna be measured by the output, I don't wanna do things that are most likely to fail. So like, you know, if you're Elon Musk and you wanna go to Mars, uh, it's very hard to get convinced people to do that when it's most likely gonna fail. So what is people start optimizing. It's like we were talking about the stock market earlier. The incentives in a company are to do things, do, to, to do projects that are probably gonna work. Because if project works, you look good. You look good, you get promoted. You get promoted, you make more money. And so the game is incentivized for you to do things that are probably gonna work. But the company as a whole needs people to do things that are probably not gonna work. Yeah, a certain portion of the time. Higher risk, higher reward projects. But as an individual, tying your name to those projects is a bad career move. So how do you change that? So Jeff Bezos has a different theory, which is like, look, instead of measuring the outputs, which are in general hard to measure anyways, right? Um, how do you raise revenue? Well, you need to do these 10 other things, right? You wanna make, you want more revenue, maybe you need to, uh, get in touch with more sponsors. Maybe you need to increase your close rate from 20% to 30%. There's all these inputs, these levers that create that output.
Relatively small ones.
And, and they're very specific and those are in your control. So as you go from the output, let's say get more revenue to the input, which might be like, make more, you know, reach out to X potential sponsors per month, uh, close at this rate, uh, make sure that we follow up with 100% of hot leads. Like, those are inputs in your control. So what he does is when he measures— when he manages somebody, he measures them on their inputs, not the output. So revenue cannot go up, but if you pick the right levers and then you hit your goals on those levers, those things that were in your control, you can get promoted. What's an example? Um, let me, let me use a hypothetical example of of— well, I think it's— I think the Hustle business is actually a good one to use here. So let's say, let's say you want to measure the output you want. What's like the key output you want? Either revenue or audience growth?
Okay, so let's say revenue. Make up a number.
$2 million a month in revenue. $2 million a month. Okay, so the team wants to hit that goal. We all agree that's the right goal. What are the 3 biggest levers you need to do in order to achieve that goal?
Increase free email subscribers, increase Increase paid email subscribers, or paid trans— trans— subscribers, increase number of advertisers.
Cool, so you say number of advertisers, email subscribers, and trans subscribers. What you would do then is say, okay, am I in control of those things? Maybe not, right? Maybe getting the email list to grow actually requires me to do 3 other things, right? Like, how do you guys get the email list to grow? Maybe it's paid ads, maybe it's giveaways, maybe it's— web traffic. Web traffic from a blog, right? So it might be what you, what you actually set out as the employee, the way the employee gets measured is number of blog posts they wrote per month, uh, that received a minimum of this much traffic. It might be the number of, you know, emails sent out about trends, uh, or might be increasing the conversion rate on trends from X% to Y%.
Do you know a good way to organize that? OKRs.
OKRs is a good way to organize it, right? But what ends up happening? So, so let's, like, get— so the main point I wanted to make was if you're measuring outputs, it's a very easy thing to do cuz it's like, dude, all that matters is growth, it's revenue, it's profits. Right. What you'll realize very soon is that you can't motivate a team to do that cuz it's too far away from their— what they control. You gotta measure them by what they control and promote them. If they do the— if they were very thoughtful about picking the right levers, if they executed really well on those, if they were consistent on those things, that's a good employee. You should promote that. Because that way, even if the output was unlikely, right? Like, let's say growing this podcast into a top 10 podcast. But if Henry's motivated by, hey, after every episode you need to publish 5, 5 of the best clips. Why? Because we are pretty confident that leads to growth, right? So he should be able to win even if the podcast doesn't grow. Focus on the inputs, what you could do, what you can control, as opposed to the outcome. The second, second phrase I liked from this was it's all about zeros. What does that mean? When you think about a project, you need to have enough projects in your portfolio that either add a zero or are a zero. What does that mean? So you don't want— if let's say that, let's say revenue's at, let's call it $10,000 a month. What you wanna do is you wanna have some projects that are gonna, that are gonna add a zero to the end of that. $10,000 becomes $100,000. And you wanna ask yourself, what are our add-a-zero projects? How many add-a-zero projects do we have running right now? What often happens at a company is you have zero of those running at any given time. You have no projects that have the potential even if they worked, to add a zero to the number you have at the top. And what happens with those projects is that most of the time they're gonna be a zero. They're not gonna work at all. And so I like these— I like having this language to motivate a team. So anyways, that's my framework for leading a team. Make sure you're doing this. It helps. So Bezos is kind of famous for the inputs versus outputs. There's other things, like there's a book called The Score Takes Care of Itself.
Yeah, that's about the football guy, Bill Walsh. Yeah, football coach. It's like In order to win this championship, we're going to answer the phones on time. Yeah, exactly. We're going to answer every phone call.
He took over a really shitty team, the San Francisco 49ers. At the time, they were the worst team in the league for several years running. And what most people do is say, okay, how do we win more? And winning is the ultimate output for a team, winning the Super Bowl. What he said was, winning the Super Bowl like that, that is so far away. What we need to do is what are our inputs? So the first thing he did was he trained the front desk person on how to answer the phone. He's like, we're going to nail this. And what's the next thing we need to nail? How we practice. Here's how we get— here's how we stretch. Here's how we warm up. He's a very detail-oriented guy, so like that was his mantra. But like fundamentally what he's saying is the same thing. We measure ourselves based on the things we control, and the score takes care of itself. If we do the right— if we pick the right things, the score will work out.
Well, here's one of your clips. We got one. This is one of the— that's a good— that was a good speech, and that, uh, will help take care of our score. Exactly. Uh, cool. Anything else we want to do today? No, we can do these tomorrow. Okay, cool. That was wonderful. That was good. This is a story just like that.
John Wooden, he's like famous UCLA coach, tying the shoes, right?
Saying, yeah, how to put on your socks and how to tie your shoes. That's the first day of practice. Yeah, there was no—
there was no basketball. Everyone walked out to the court and they're like, coach, where's the ball? He's like, oh, we don't need a ball. First we learn how to put on our socks and tie our shoes so that we don't get blisters, because we're going to be practicing hard. So you need your socks to have no bunches. And everyone's like, what the hell? And this is the guy who won, like, you know, 10 championships. He just passed away, I think, recently, right? Yeah. Yeah. A few years ago.
I'm going to— RIP. I also bought— I bought Bill Belichick's— one of his books. I have a book club. We're going to read it.
Yeah. Let's do a book reco from this list here. So what's a good book that's on the shelf?
We should add more to it, but let's see.
Also, High Output Management. This principle is in this book too.
Yeah. I like the High Output Management. I hate reading it, but I like the knowledge.
I hate reading it too. I was given it.
I only read 25 pages, to be honest, but it's so boring. Um, Scott Belsky's The Messy Middle is wonderful. I'm gonna add more custom stuff. If I had to read one right now, maybe this Extreme Ownership one. That's pretty solid.
Extreme Ownership, Jocko. Where is that?
At the very bottom right. And then if you had to read—
okay, all right, we'll do, we'll do one book reco at the end of each thing. All right. And then, uh, let's—
oh, if I only had to do one, I didn't see— it's Call Me Ted right there. Yeah, the biography of Ted Turner.
All right, this is the book recommendation of the day. Call Me Ted. Yeah, why is this a good book? I haven't read it.
Ted, it's good because Ted Turner— look how he looks— Ted Turner started CNN, which eventually merged with AOL and Time Warner and all this stuff. It's a huge thing. He started, uh, TBS.
Uh, is he the one who created the concept of 24-hour news?
Yeah, yeah, he, uh, his father Ed owned a, a billboard company in the South and it did well. I think it was was making like $10-20 million a year with $3-4 million in profit. Pretty solid. He— his father killed himself, he inherited it. Within a few years, he was like, all right, now let's get into radio. They got into radio. Then he goes, we have to, uh, let's get into local TV. He got into local TV. Then he said, we gotta— we need more programming. Let's buy the Braves. Let's buy the Hawks, Atlanta Hawks. He was in the South, did that.
Is this why the Braves are on TBS always in perpetuity?
Yep. And then he, um, started, uh, he goes, now my next big project, we're gonna start CNN. It's going to be a 24-hour news network. And the only time we're going to go quick, go off air is when the world ends. So we recorded the like a goodbye segment. It's like the world's about to end. We thank you for tuning in. And wow, he, he bet it all many, many, many times. He started out on third base. I mean, he started out with wealthy family, but he turned that into a huge thing. Now he's one of the largest landowners in America and he's a huge outsider from the South. Loudmouth, pretty obnoxious, but Smart. Have you met him? No, he's probably gonna die any day now. He's got dementia. He's quite old. But Reese, him and his partner are indirectly investors in us, and I always seek out stories on him.
I remember when you started The Hustle, you were like, "I'm inspired by this guy. I want to be the modern-day Ted Turner," type of thing. You were very motivated by him.
He's badass. He's mostly a great person. He wasn't always a great husband, but He screwed up.
He did some great things though.
He did a lot of great things. He owned MGM. Just baller. Nice. So read this one.
All right, cool. Good book recommendation.
All right, we're out. Thank you.