Hire 1 to Hire 10, Sam Gets Hacked, Shaan Buys a $200K NFT, and More with Andrew Wilkinson
Like, first, it's exhilarating. Running an agency is awesome. When you're starting out, you get a seat at the table and all these places you don't deserve to be, right? I was like a 22-year-old pipsqueak and I was meeting the founders of Pinterest and Slack and they were asking me for my opinion, right? It was, it was crazy.
I feel like I could rule the world. I know I could be what I want to.
I put my all in it like no days off. On the road, let's travel, never looking back.
All right. We got Andrew Wilkinson on the pod today. We just talked about Sam got hacked and situation where Andrew got hacked and how crazy the hacking situation is. We talked about this, uh, $200,000 NFT I bought and whether that was dumb or a good idea. Uh, we talked about how Andrew is functioning during World War III going on, or, you know, the craziness of the world and how he's dealing with that. Uh, what else we talk about, Sam?
We talked about how, when he thinks it's time to hire first employees, which sounds like a basic concept, but we actually, I actually thought it was really cool.
No, there's, there's a gem in there called Hire one to hire 10. And he talks about this, this little nugget. I, I wrote that down during the pod as like, oh shit, I've been making this mistake for a long time. He, he's totally right. Uh, we talked about why bad guys usually win, fraudsters, con artists. Oh, we talked about his, his newsletter business and the art of copywriting and some of the, we, we, we took one of his private kind of emails and we started talking about some of the genius things that he did in the copywriting of that.
Uh, Sean, you were awfully quiet this episode and I was too because I was like just listening and learning. Is that what you were doing?
I was listening and learning. And then also our connection, our internet connection is not super great. So I didn't know when you were going to talk first, when I was going to talk.
So I was just decided to be paused a lot of times, but it was good. I always like having them on.
All right, cool. Uh, enjoy this episode.
All right. Andrew Wilkinson's here. What's up, dude?
Hey man, how you doing? We were supposed to do this in person, but I got COVID.
Yeah, I know. We had like 200 people coming to see you and I talk and we canceled it like 3 days in advance.
So crappy. We gotta, uh, we gotta do it. But COVID was, uh, I've, I've had worse massages, so it wasn't too bad. I was one of the lucky ones. I'm like Sean.
That's a good one.
Excellent one-liner.
Can I, uh, all right. Can I tell you guys what happened to me this weekend? I had a long weekend. So Sean, I called Sean urgently because he was the first person to come to mind because I thought he would know someone at Twitter, but basically I got hacked. And let me explain to you how I got got, cause I got got good. So basically I was sitting in my bath. Yeah, I was sitting in a bath at 1:00 PM and, uh, I get this text from a number and it says in a really nice text. I actually, I sent you a picture, Sean, and it says, we've noticed suspicious activity on Twitter from some city in India. And it said the name of the city and it was this real official looking text and it said, We just sent you a confirmation code in another text. Can you copy that code and paste it to us so we know, uh, that this is you?
It's you.
And I get this other text right at the same time. And it's from Twitter and it's, uh, 8 numbers. And I copy it and I put it in the other text. I hit send. And then immediately I was like, wait a minute. That was, I should not have done that. And what it was, was it was the, the text from Twitter that was actually someone hitting reset password and, and they sent me a text and I sent it to those people. Uh, and so they hacked in.
How did you, you, you realize right then you'd been hacked? Not like once you saw something suspicious, you didn't go back and think, how did they get me?
Right then I was like, I sent the text and I was like, it sat for 10 seconds or 20 seconds. And I was like, wait a minute. That doesn't seem right. Because I was like playing on my phone. I was like sitting in the bath, watching YouTube, it played on my phone and I wasn't paying attention. This was automated. I was just like in, in, in automated mode., and this happens and I send it and then I go, wait, that's weird. So I log into Twitter and I can't log in and I type my password and it's not working and I click reset password and it said, we've sent an email to, and it's an email I don't recognize. And I was like, oh my gosh, I got got. And then they tweeted out a thing that says I partnered up with HubSpot to give away a bunch of PlayStations. And we're going to give the money to St. Jude. Here's a picture of the PlayStation. DM me and I'll sell you the PlayStation for $500. All money goes to St. Jude's. And they— but they— I think they only collected like $2,500. But here's the kicker. One of the guys who gave money, he gave money, $500. And he goes, also, because I'm such a fan, because I like you so much, I'm gonna give you another $500. So he sent them $1,000. And so eventually Twitter helped me and I got back.
But you got to give— you got to give these guys marks for creativity. Like, so often How often you get those spear phishing emails and stuff and they're written in like ESL, they don't really make any sense. Those, those guys sound pretty good.
It was a good one. And I actually called them and I talked to them and I was even texting them and they were like trying to sound like me. It was, it was pretty wild. Uh, they, they got me. Have you guys ever had that happen?
I actually had, um, I've been, I think I've been hacked before. It was really weird. I don't, I haven't really talked about it actually. Um, but about 2 years ago, when you remember the Jamal Khashoggi killing where, you know, Saudi Arabia basically beheaded a political dissident. And I tweeted about it and said, I don't remember, something like, this is horrible and an atrocity or something. And at the time we were raising our fund and like a week later I get a DM from a sheikh and he's got this legit looking account. He's got that, you know, the headdress. And I go to his website and it looks like this legit, you know, financial institution or whatever. And he says, I really want to invest in your fund. And so I get on the phone with him and unlike any other investor pitch, he doesn't ask me anything about the fund. He just starts grilling me and he starts saying, who do you know in Qatar? Is there anyone in Qatar you know? And I'm like, oh, that's weird. Like, you know, have a chat with him for 30 minutes, hang up, don't hear anything from him. And then 24 hours later, I get a video message from him on WhatsApp and it's just fireworks and it says Happy New Year. And I'm like, well, that's a weird— like, what a weird guy. I don't think anything of it. And then for the next week, my phone is constantly rebooting. And around this time it clicks for me and I'm like, oh my God, I probably was identified as somebody the Saudis wanted to like check out and they probably did one of these zero days on me. So I ended up like basically redoing my phone, sending it away. I never figured it out, but it's like, it's freaking terrifying. This is like, I watched a video and these guys probably had root access to my phone.
What's a zero-day?
A zero-day is an attack that uses a flaw within the operating system that nobody knows about. Right. So it's like, you know, they've— they could send you a link in Safari and it could somehow get root access to your iPhone and Apple doesn't know about it yet, so they can't prevent it.
Thank God I've never been zero-dayed. Now that's— I mean, that's at least as far as I know. But that's— dude, that's so scary. Like, that's— that's like why when the UN meets, they have to, like, put their phone in a radioactive safe or whatever.
Like, then they go, you know, somewhere else. You know, like with Obama, he had a special toilet they would bring with him so he couldn't poo anywhere except for the special toilet, and it would incinerate his feces because they don't want anyone to get his DNA.
Right?
Like, that's how intense they are.
No way.
And like cups. Yeah, yeah. If he like drinks from a cup, they like Secret Service takes it. They like destroy it.
We all have a mutual friend. I'm not going to name now, but they told me that they work for this famous company. And when they go to— well, I could say it because I think Facebook does it too. But like some— I heard stories from folks at Andreessen Horowitz that when they go to China, they don't— they're not allowed to bring their normal laptop and they have to bring a different laptop that doesn't have anything on it yet. Yet. Um, and I think a lot of Facebook employees have to do that too. Um, but they like don't want certain laptops going there.
Oh yeah. Like Russia, China. I mean, you gotta be so paranoid. I mean, ideally we're— the crazy thing you realize is that, um, like I was talking to a friend of mine, this guy Matt Holland, who's got a cybersecurity company called Field Effect, and he's former CSE, which is like the Canadian Hacking Offensive Cyber Command or whatever.
It's like the kindergarten version of CIA.
Exactly. Exactly. It's like the crappy Canadian version. But he worked with, like, he worked with the CIA, like, tailored access and all that stuff. So anyway, I was having dinner with him and I was like, dude, like, I use two-factor, like, you know, I don't get text messages. I follow all the procedures. Like, you couldn't hack me, could you? And he's like, dude, like, 2 hours. Like, give me a budget. And as long as I've got budget, I can afford to go buy cyber weapons. So like these cyber weapons, these zero days, they cost like $1 to $3 million. But if you have the money, you can get anyone you want. You literally just send them a text. They don't even have to click a button and you got them. It's absolutely terrifying. The guys, you just hope we're not on the radar of some huge country. Like, why would they care about us?
He's like, you thought that was shrimp tempura you were just eating, bro? I got straight into your phone from that appetizer during this meal. Like, And I heard, I heard somebody go on Lex Friedman's podcast and they said, um, they were talking about this market for zero-day exploits and they were like, you know, it used to be iPhone exploits were like the, the crème de la crème, that was the caviar of like, you know, cyber, you know, ammo, ammo that you could go buy. And now Android exploits are higher ranking because they just affect more people. And, um, and I think maybe some governments had switched off of iPhone or something like that. I'm not sure entirely, but like Yeah, these things run like 7 figures to buy, you know, these, these exploits or these like rooted devices basically that—
I almost, I almost started a business. I bought a domain hackmycompany.com. And the thing that's interesting is that all the enterprise businesses, so like government organizations, companies over 100 people, they have IT, they think about this stuff, but nobody in the small and medium size really considers cyber. And, uh, it's just, it's something no one thinks about. And like, we've dialed it in over the last couple of years. But I really had to drag everyone along. Like nobody thinks about it, but it really is a total loss.
So you don't think, you don't think about it until you get got, you know what I mean? And you don't, it's one of those things where it's not a big deal until it's a big deal. Um, and anyone who's experienced a little bit of it, they're like, oh, okay. I understand why, but what's screwed up is in America we have Experian. Do you know what Experian is, Andrew? It's like, uh, one of the three credit bureaus. They, Lost, like, I think they had like almost every American's credit score and information. They lost all of our information and it was hacked. And like, we didn't— most Americans don't care. But then when I get like something that like this weekend happened to me, now I'm paranoid. Now I'm like really nervous.
Oh yeah. So what's crazy is like if someone really wanted to get you and they didn't have a budget, let's say like some hacker just wants to get you, they can literally just go outside your house in a van. They can get a Pringles can antenna. They can point it at your house and they can broadcast the same— whatever your Wi-Fi network is, let's call it, say it's called Sam's Wi-Fi. I just recreate Sam's Wi-Fi. I point it at you. You go on your laptop and you're like, what the fuck? Like, I can't log in. And you try your password. Once you try your password, they know the password to your Wi-Fi. They get into a security camera on your property or whatever, and then they're in your network and it's just insane.
Oh, fuck.
And now that we're talking about that, we're all targets. Maybe we should edit, we should edit this out. This is scary. This is like talking about how you've got a safe full of jewels in your house.
There's 3 things that I was going to say and I was like, there is no value in me saying this on the pod because what, what good does it tell you to say this thing I discovered that somebody could do to me? Nope. Not going to say it. Uh, then the measures I took against it. Nope. Not going to say it. Like, why, why do I want to say any of this? Basically, this stuff freaks me out. Like, I'm— Sam knows I'm very chill about almost all things. This is one that really does freak me out because these, like, these attacks, they could just come. They could come at you and it feels like you could just get, you know, you could just get robbed silly, you know, whether it's personal information. Like, you know, if I'm in the— I'm in the shower and my phone is there, I point it away. I'm like, I don't know who's got access to this camera. I'm not trying to have my nudes out there right now. Like, literally, I think about that every time I shower. Every time I log in.
Is that a thing though? Like I see people with things. So you guys have a little bit more experience than I do, I think. Or you may, maybe know people who work at these companies. I don't think, like, do you actually think that Facebook is listening to what I'm saying or that they can—
I don't, I don't think Facebook is, but I think, well, I think they have programs that record random samples and then people listen to them, but I don't think it's like a conspiracy.
Say that again.
That's, that's a thing. That's, that's a thing. So if you go on Alexa settings, like, they're like, you can opt in to being like, oh, help us make Alexa better. And they'll listen to random recordings of you saying stuff, right? On the flip side, I don't think you need to worry about that. I don't think that's like a massive conspiracy and they're going to use that against you. What I would be worried about is someone getting into your phone and having access to your camera when you don't realize. And that's a real— that's a very real thing for sure.
Yeah. Like, you know, and, you know, these are the things that where you seem paranoid, Um, but there's enough at stake for somebody to be able to, like, let's just take TikTok, for example. TikTok is downloaded on like over a billion phones right now, and it's a Chinese company, and it has access to your camera, your camera roll, your face, uh, at all times. Plus it has the feed, which can like feed you any information you want. All right. So this is like pretty much rude access to your life and your brain. And, um, And so, you know, I'm not saying they're doing anything, but like, could they? Of course they could.
Right.
Like, well, it's like that, you know, that FaceApp app where you can like make yourself fat or whatever.
They're like Russian guys.
Everyone's used it. It's owned by the Russian government probably. Right. And now they have scans of everyone's faces.
Yeah, exactly. And so, uh, and like, you've ever been on your phone and then you like, kind of, you do that thing where you swipe up to like close apps and then you see like this app that you forgot you had opened 4 days ago and it's on and it's like on the camera screen. It's like, whoa, this. The app just has my camera open right now. Like, I didn't even realize my camera was open, but clearly it is because like if I click to that app, the camera's on right now. Like, or like I can see it even in the preview that it's on. So there's all kinds of crazy stuff that, that's out there. Sam, when your thing happened, I did another round of like kind of like my shitty version of like drilling in bolts into like the, the walls of my, my stuff. But, uh, you know, I just know that anybody who's sufficiently talented and motivated, can kick my ass in this area. I just, you know, I actually just hope that they don't give a shit about me. That's, that would be the ideal scenario.
You want to air gap yourself, right? So it's like, you don't want to be the one who sends the wires for payment. You want to have a whole process and a series of things that have to happen before any money gets sent or any access. It's like, you don't want, you don't want access to GitHub. You don't want access to the S3. You got to have like many, many layers of that. But, um, but yeah, it's freaking terrifying, this stuff.
Well, thanks for sharing, Sean. I called you first and it worked. Someone, a Twitter employee, saw it and hollered at me on Facebook.
Yeah. And by the way, when he did, I was like, is this really a Twitter employee? I went and I went and stalked the shit out of this guy. It's like, oh yeah, he's just an engineer at Twitter. It looks legit.
I like friended him on Facebook and like saw if he was married. I'm like, all right, who's your wife? So like, I was, I was nervous. And then I've had people DM me saying they were scammed and I'm like, should I give them money? But then I'm like, I don't know if they're real. So like my whole brain is kind of screwed up.
I'll take care of all of it for you.
So anyway, I'm messed up, but thank you. It worked out.
By the way, you need to just buy— they were scamming people with a PS5 thing, right? You just need to buy a PS5 for the guy that helped you out. That's, I think, the only—
totally.
You had to close the karma loop. Completely.
Somehow I'm willing to do that. I think what I'm going to do is make them like FaceTime me though, or just actually give it to St.
Jude. Right. They were basically saying, oh, this is for St. Jude. It's for the kids. Okay. You can't trust any of these people online, but they were trying to give to St. Jude. You should just give to St. Jude and then that will again close the karmic loop for you.
All right, I'll do it. I'll do something.
I'm going to—
I'm going to do something. I'm going to holler at these guys. I'm going to make them FaceTime me. I'm going to actually— I'm going to be like, all right, go to your computer, log into PayPal, show me that you sent them money. All right, cool. I got you. I'll make it right.
So because I'm just speaking of this, I, um, I had a thing that I was gonna talk about on the Milk Road. Um, it was like super relevant. So basically, I don't know if you guys saw, there was some news where the number— basically the number 2 NFT project, kind of number 1 and number 2, they essentially merged. Number 2 kind of bought number 1. And, um, which, which sounds a little crazy, but that's what happened. So like these 2 projects that have had like a combined, I don't know, $3 billion in NFT sales Um, they merged Bored Ape Yacht Club and CryptoPunks.
You wrote about it. You said it's, it's as if chocolate bought vanilla, if Harry Potter bought Mickey Mouse.
Yeah, exactly. So it was like this, this strange kind of like merger at the top.
It's like if Beanie Babies bought Pog. There you go. All right. Nice one.
So, so basically this went down yesterday and when it, when the news was breaking, I was like, Okay, this is going to cause a spike in one of these projects. Either Bored Apes are going to go up or Punks are going to go up. I don't know which one. I was like, I've been on the fence about buying one of these. I'm going to buy one. So I texted Ben. I was like, all right, Ape or Punk? He's like, hold on, I'm putting the baby to sleep. I'll call you in 20. I go, Ben, Ape or Punk? The impulse is now. 20 minutes from now, I'm going to chicken out like I've done 20 times already in the past 6 months about these things. I'm buying one of these right now. And I made a bet. That the Punk would go up. Guess what, guys? Bet completely wrong. Punk stayed— Punk's down, you know, a little bit, 5% or so, nothing bad. But Apes shot up. I would have made about $70,000 in 24 hours, uh, had I just picked the other one. Uh, you know, I picked wrong on which one I thought would go up. But in doing so, I was gonna share with the community on the Milk Road. I was gonna be like, hey, here's the Punk I bought, here's the process, you know, just like share the story basically along with the news of This happened. So I thought one of these would go up. I picked this one. I was wrong. The other one went up. But, you know, anyways, here's the punk I got. And, and then I was like, I don't even want to share this. I don't know. I was like, first I need to go through all the measures to like put this into cold storage and like get this off the fucking internet so that nobody comes in and steals my $200,000 NFT that I just bought.
Oh, you paid $200 grand for it?
Yeah.
Oh, oh my God.
Are you— my previous, I don't know, most expensive piece of art would have been, I don't know, $0 to $20 t-shirt at the Jersey Shore or something. Yeah.
Like a fucking family reunion shirt. I can't believe it.
You know what's crazy is you could, you could have like, I've bought some art over the last couple of years and like for $200 grand, you can buy like a very significant piece of art. You could have this beautiful thing in your house that, you know, in a real art market that we know has existed for the last 100 years. I'll be super curious to see how this goes.
Wait, Andrew, you've bought $200,000 pieces of art?
No, not $200,000, but like, you know, I've bought expensive art for my house and office and that kind of stuff. And, you know, for $200,000, you can buy a pretty— you can buy a nice piece of art.
You can buy like a Lamborghini, maybe a used Lamborghini. You get a used Lambo for that amount. So definitely had some buyer's remorse as soon as I hit the button because I was like, what the hell did I just do? But, you know, that's the game. Like, I— the one thing I'm doing this whole year is I'm playing in all parts of crypto and I'm actually using all the different protocols and the tools and getting to know it. And I know, like, you know, a couple of projects I go in there, you know, it's going to be a scam or I'm going to get rug pulled. And other projects are going to go up like crazy. Some projects I'm going to realize, yeah, that thing I thought, you know, like was kind of stupid was, was actually really stupid. And so this is, you know, one of them is like, if you're— I think if you're going to be in the space, you got to play the whole space.
I think it's the right way to do it. I mean, I actually have a whole, uh, in the notes, I had a whole thing about this, but you got to do it wrong before you do it right. Right. And if you know, you directionally want to go into NFTs and crypto, you just kind of have to throw a bunch of spaghetti at the wall and you got to lose a lot of money. And you know, this might make money, might lose money, but just starting, I think is way more important. So I don't think it's a bad move necessarily.
Let me ask a question that Sean wrote on here, which is actually really good. So We've got a ton of topics. Andrew has a ton of stuff. I did a lot of, I did a lot of research, Andrew, on your topics. But Sean's got this great question, which is, um, what is, what are people's take on how you're functioning during World War III? So basically with the markets the way they are, with people dying, a war, Andrew and Sean, what are you guys doing and where's your head at?
So, um, I, from a business perspective, I've spent so much time trying to wrestle with current events, right? Like, think about Trump and all the unpredictability, reading the New York Times every day. At the end of the day, I'm resigned to the fact that I don't control the global economy or if this turns into World War III or something. The way that I'm operating is very similar to the way I always operate, which is I try and have amazing businesses that generate a lot of cash flow, and I try and keep as much money as I can on the sidelines and buy businesses that'll be fine even if valuations are down, there's no venture capital, there's no banking, there's no market. Um, so I'm kind of going as I usually am. Um, and this time, I don't know, I think I'm less, uh, less into it. And I, what I mean is psychologically, I'm a little more distanced from it than I usually would be because of the last 5 years. Like I kind of over-exhausted myself with news and stuff.
When you say you have money on the sideline, what's that mean?
Well, that I have liquidity. I have, you know, money in the bank waiting to—
Yeah, but do you have it literally in savings or bonds, or do you have it in equities? I have it in like US Treasury bills or GICs usually, because having things in equities like I have right now, I'm hurting.
Well, here's the thing. I mean, I talked to so many friends about this. Um, like Warren Buffett has this great line where he says, if you owned a farm and you know your farm to you is worth like a million bucks, right? Let's say it makes $100,000 a year of profit. Just because some jackass rolls up one day and says, hey, can I buy your farm for 50 grand? You just say, fuck off. No, I, you know, I'm not selling for 50 grand. It doesn't mean you think your farm's worth 50 grand now. Right. And the stock market goes up and down and you get all these bids. You just don't have to sell. So unless you sell your stock at this valuation, it doesn't affect you in any way.
Yeah. Well, the, the only difference is I think, uh, I like that mentality a lot. It's more like you're in a neighborhood and you're like, my home is worth $1 million. And then your neighbor sells their home for like $250,000. You're like, whoa, hey, what's going on here? And then the other neighbor to your left sells their home for, for $50,000. And every day you're hearing about another home sale in your neighborhood for like so much less. And you're like, look, I'm, I'm not moving. I'm holding on, but damn, I really do. You know, like, it's hard to still feel like your house is worth $1 million when all your neighbors have just sold theirs.
Well, you know, you know, the whole Mr. Market thing, right? But also, but it is irrational.
Yeah, but that's— I understand that. But what's to add a point to Sean's analogy is, and you've taken a loan against that house at that billion-dollar valuation. Totally.
That's what's funny. The funny thing is about the loans, I don't know how it is in the States, but in Canada, if your house gets valued at $10 million, let's say, and you go and you take a $2 million loan, there is no market for your house, right? The bank doesn't revalue your house every year. And so they don't call it, it's not like a margin call where if it's a stock at $10 million and it drops to $3 million, you're getting margin called day of. Real estate debt, like, I wouldn't worry about that too much.
Yeah. Except I think the real estate equities. Yeah.
Oh yeah. Well, that's, Dude, margin calls. That's like driving with a knife on the steering wheel. You have to be incredibly careful.
You don't take any debt like that. I mean, I, I, I, the market has to drop by another 100% for me to, for any of my loans to pay back. I mean, it's got to drop a lot. So I take very little or something, or it's sorry, not 100%. It's got a half. It's got a half.
I do, but it's in kind of non-core stocks that I hold outside of my business. And I don't— anything that's volatile, I don't use margin. And if I do use margin, I'm using like 5 or 10% typically, or I have other cash on the sidelines to pay off that debt if I need to. But I live in fear of debt. I think it's like, it's the number one way you can lose, you know, you can already be rich and then lose everything. So only way basically.
Well, I think at the end of the day, you need a business that generates cash flow. I think the structure certainly can exist. Anyone can recreate the structure. The question is, do you need partners and investors and outside capital? In my case, I had an original business that generated cash flow. I used that to start 5 more businesses. A couple of them worked. And then we could make a group. But yeah, you kind of need something to work in the first place if you want to own the whole thing. Yeah.
Who would have thought it would have been an agency, though? I never would have predicted that.
Well, agencies are— they're a great way to make money, a lot of money quickly, right? They just— they're linear businesses and you kind of have to accept that.
And something that you wanted to talk about today was whether it's better to own 100% of something and bootstrap it or to give up equity for, to partners, whether that's for sweat equity or money or money. But you, uh, we were talking about that and I asked my audience companies that were bootstrapped and quite big, and there's a few that are doing billions, uh, a year in revenue. And I know noticed two commonalities. One, a lot of the things that were bootstrapped to be really big, they were things that were easy to take bank loans against. So it's a lot of restaurants. Stuff. So maybe they took like loans against some equipment or they took loans against, um, a building they owned, things like that. The second thing was I've noticed that there's a lot of agencies that were bootstrapped and became pretty substantial size agencies or agencies or service-based businesses. So like recruiting, uh, companies, um, um, IT services, things like that where it's basically you bill out people's time for $100 and you charge $300 or something like that.
Well, think about it. You don't need— especially if you're a young person and you can cut— you got enough money to live for a year, you can go and start an agency because at the end of the day, it's you go and sell, you win a contract. As soon as you win the contract, you go and find a developer or you do the work yourself. And then before you know it, you're cash flowing and you're always able to hire people just in time for the work. And so at the end of the day, there's really no burn and it's very capital efficient and you don't need Uh, you don't even need an office anymore. I mean, we, we almost never had an office and, oh, you know, we, I, over time we had, you know, a couple small ones or whatever, but the big fuck up a lot of these big agencies make is they start starting like these fancy humongous $5 million offices in New York and San Francisco and Spain and, you know, whatever. Um, they're, they're great businesses if you run them right.
I think it's about 170.
How often do you say to yourself, I'm not sure if the, the headache is— the headache of having 170 employees is always worth it?
Well, it's very abstracted for me, right? I haven't been in the business for 5 or 6 years, and the way we run Tiny now is that we meet with the CEO once a year, and otherwise they check in whenever they need help with anything. And so when I was running it, like, first it's exhilarating. Running an agency is awesome when you're starting out. You get a seat at the table and all these places you don't deserve to be, right? I was like a 22-year-old pipsqueak and I was meeting the founders of Pinterest and Slack and, you know, all these amazing places. And they were asking me for my opinion, right? It was, it was crazy. But at a certain point you get so exhausted, you're making a good amount of money. You don't want to get on a plane to San Francisco every second day to go and sell. And at that point, you know, it starts to become a much more intensive business. And for me personally, I don't enjoy running businesses after about 15 or 20 people. And so once I hit that point, I knew I needed to transition to a CEO.
So when we were in the document, you say the pros and cons of bootstrapping and owning 100%. What do you have under those?
Well, I mean, I think that I've changed my opinion a lot on this. Like when I first started, I was like a Jason Fried, David Heinemeier Hansson acolyte, like 100% every business should be bootstrapped. I now think that's crazy and stupid. And I think there's certain businesses where it's insane not to raise money, right? Like if you have an opportunity to grow your business, it's like the analogy I always use is if you own a bakery and there's a line out the door and you have a single oven and you need to buy 3 more ovens, but you don't have the money. And in order to service the people in the line, you need to buy 2 more ovens. It's crazy not to raise money or go get debt or something. I just was never in that position. And I think, you know, owning 100% or owning majority in your business, it's like a dictatorship. And dictatorships can be very good, like Lee Kuan Yew from Singapore, or they can go terribly like Kim Jong Un. Right. And the question is, what's your personality and what's going to work for you? I mean, you can move insanely fast. There's no board, there's no committee. You don't owe anyone anything, you don't have an outcome, you know, you don't have to IPO, you don't have to sell, and you have total integrity. Like when Chris and I buy a business, we can look people in the eye and be like, we're cutting a check. Like, this is us, right? That's very different. Um, on the cons, I mean, you're on an island, you don't have anyone to really who's aligned and cares and can tell you you're being an idiot. And so you can really drive your business off the rails. Um, and then you also think in a limited way. I mean, I know so many entrepreneurs who could 10x their business, but they're so addicted to their dividends or they're conservative, and so they don't.
So what about that conversation?
Like, I'm— I raised money for our podcasting software company, Supercast. I'm going to raise money for our news business. Like, there are situations where it's logical.
What about that conversation of employees, employees saying they want equity and you don't get it?
It's just there's certain businesses there's certain businesses where we do and there's certain ones where we don't. Right. And the big question is what I always say to a, to an employee is equal risk, equal reward. And if the business is going to sell at some point or we think it can IPO, great. We'd love to talk about equity, but there's a cost to it, right? If you want to make $300,000 a year and you don't want to give up any of that $300,000 in order to get stock options or buy equity, then doesn't matter. So I love giving people the option and saying, look, you can either give up some of your comp or upside or whatever, and we'll give you stock options, or you can get the big salary and prioritize cash. And a lot of people prioritize comfort and cash, I find, at least outside of the Bay Area.
By the way, Andrew, you mentioned the guy from Singapore. Sam, do you know this guy Lee Kuan Yew?
I know a little bit about him. I didn't realize he was a dictator. I thought they called him the CEO. Or something.
No, he's literally a dictator, but like a good— the good dictator.
And can you give us like the 2 minutes, uh, 2-minute kind of summary of who this guy is and why he's awesome?
So effectively, he took over, um, Singapore as like an island, tropical island state, um, in Asia. And at the time, it was like rice paddies, poverty, like a bog. And he literally took it over, you know, had an autocracy, had total control, And he basically thought like a business person and was like, okay, how do we make this the most business-friendly place? How do we optimize taxes? How do we ensure we have hyper-competent government? How do we pay government really, really well? Uh, how do we incentivize the whole world to manufacture and export, uh, you know, their products from here? And basically built it into Asia's kind of outside of Hong Kong. I think it's like the central banking and finance hub in Asia. So it's a pretty incredible story.
And I think he, his background is like, he's like a math and computer science guy, right? Like he doesn't come from kind of this like, you know, political background. Like he came from a different sort of background. And I think that's why you got different ideas from, from a leader in charge.
Totally.
I was going to say, you had one thing you tweeted out, uh, that's related to how you run the business at Tiny, which is this, this Hire 1, Hire 10, uh, framework. What, what is that? Because that sounded interesting to me. And I think that that's like a— from what I understood, it was a pretty useful concept. So explain that.
Yeah. So our CEOs get super annoyed because I say this all the time. It's probably the number one thing I say, and it's probably the biggest hack that enabled us to build Tiny over the last 8 years. So, I mean, think about it like this. So if you had an army general who is commanding 1,000 troops, but he's still telling individual soldiers what to do and he's personally restocking their ammunition, and he's shuffling people around, you'd be like, what the hell is this guy doing? Right? But I think a lot of people operate their business like this. I mean, I certainly did in the early days. I would swoop and poop and, you know, instead of hiring a VP marketing, I would go and I'd hire a whole bunch of marketing people and just kind of become the VP of marketing. And or I'd bypass people and tell people what to do. And what I realized is you should never ever hire the 10 people. You should always focus on hiring the one person. So that could be a CEO who will then go out and hire all the executives. Or could be hiring an executive who will hire an entire team. But, uh, it's just, it's such a hack, right? It's like 80/20. How do I do 20% of the work for 80% of the result? Um, and, uh, yeah, I mean, it took me ages to figure this out. I feel like I've only cracked this in the last like 5 years and I still, Chris will still catch me in this. He'll be like, hire, you know, hire 1 to hire 10.
Then when you hire that mistake all the time, and when you hire that one person, how much So let's say your business is doing, let's say $1 million in revenue. It's small. No, let's say a little— let's say $10 million in revenue, $2 million in, in like actual cash flow. You have— you hire that one person, you pay them a lot of money, $250,000. Do you only hire that $250,000 person when you know for a fact you've got budget for like 2 more people?
Yeah, that— I mean, that's my approach. That's why I've shifted to is like I hire Here's an example is we hired the CEO of AeroPress and he asked me questions, oh, what do you think about this hire or that hire? And I just said, that's your hire. I hired you. I trust you 100%. You make those hires. Right. And so it's complete delegation of when I buy a business, I make two decisions, who runs it and how are they incentivized? And unless they do something dirty or horrible or the business goes to shit, you know, I just leave them to it.
What's the trick on the, uh, how are they incentivized? So, so what's the— how do you think about that when you buy a business and you say, all right, the business today is here, and I think naturally it's going to get to there, and I'm bringing on this person to get it to be some inflection above that, and I also know that things could go wrong. So how do you think about that incentive structure? Is it, is it case by case you're coming up with very unique patterns or very unique, uh, you know, packages, or do Do you have kind of one base that you, that you go off of?
It's so different. I mean, like everyone's incentivized differently. There's, there's certain people where, for example, they need to be able to say they're a partner and they have equity. There's other people who don't care about that and they want just targets to hit. Uh, I mean, we've done everything from saying, okay, let's say the business makes $100 million and it's growing at 15%. You, anything you do over 15% growth, you get 5% of. That's in its simplest. We've also done things where it's like, hey, when the stock price hits X, you get a payment. And I remember I got to have dinner with Charlie Munger like 2 years ago, and I was like, what's the perfect incentive structure? And he just said, I've done hundreds and everyone is different, and I still don't know what works. I think it's really an art, not a science, because different people are just so differently motivated.
And you actually—
like steak. So you So one more, Sam, when, when it's usually, usually when it's like, ah, it depends, there's, there's that, what that usually means is the winning formula is different a lot, but there's usually a common losing formula. So what is the common losing formula for incentives?
The common losing formula is them not being aligned on risk. So for example, if they're able to use my money and I can keep injecting money into the business, but it in no way hurts them. So for example, they don't get diluted. Or they don't have to pay a high interest rate, or, you know, if it goes bankrupt, they don't lose anything. That's a huge problem. And I've learned that over the last 5 years. And so now what I try and do is if somebody wants equity, I always make them write a check, right? Or, or I loan them money and it's literally a personal loan guaranteed by their house or something.
Right.
And it's got, it doesn't, I don't want it to be so much money. It's going to ruin them or be a problem, But I, if someone wants equity, I'm like, okay, you gotta put up something because if the business fails or goes down, you gotta have a sense of loss. People feel a lot, the people feel loss more than they feel gain.
I just imagine the Wilkinson moving truck coming in front of the house. They're like, no, honey, it's all gone wrong. You have to come and you put your own furniture, your own art on the walls. They get to live there, but they have to know that it's your house now.
And they truly have fucked up. We have done it. We, I obviously, you know, I, I never want to do that. And it's always structured in a way where it's not, you know, we're not going to have to take their car or something, but I just want, I want a feeling of like, there's got to be some downside, you know?
Sam is going to take this way too far. He's going to take their car and it's like a punch cross. Like I get to punch you just because if you lose my money, I'm going to punch you.
Yeah.
I love this, Gabe. You, uh, you also, speaking of that, of risk, you also hire people really early. You told me I don't know if you talked about this, but you were tinkering around with this bake— do you want to talk about the bake? Can you mention the bakery or no?
Yeah, well, the bakery is kind of sad.
No, sorry, not the bakery. The, the ghost kitchen.
Ghost kitchen.
You tinkered with this thing where you hired a baker and you were making stuff to sell on DoorDash and Uber Eats. And I don't know if it was entirely legal, so we don't talk about it. But the point I'm bringing up is, is that—
well, no, I can, I can, I can tell.
Well, tell the story and let me ask my question.
Sure. So basically, you know, I'm pretty interested in health and stuff and I was trying to get off sugar. And so I went to a baker friend and I was like, look, can you try and make like, like sugar-free cookies using modern— you know, there's all these like crazy modern sugars, like you guys have heard of Magic Spoon.
Yeah.
Yeah. Like Magic Spoon uses allulose and stevia and monk fruit and stuff. So he started making these and I was like, Okay, these are like not as good as a chocolate chip cookie, but they're like 90% there. And I bet you a lot of people would be into this as like a replacement. Like, think about Halo Top. It doesn't taste as good as ice cream. You can eat a fuckload of it and it's not bad for you in the same way. So I basically made that. We started making all these treats. We were cooking it out of our office, which is not technically legal. And what happened was I got a call from Island Health, which is like the local health authority. And they just said, hey, you're using an ingredient that's not approved in Canada. And unfortunately, allulose is not approved in Canada. And so you just legally can't serve food with it, even though it's generally regarded as safe and everything. So I'm still going to do it at some point, I think, but I just legally can't. It sucks. And I've never— it's insane to me you can hit up against these regulatory issues. Like, imagine being a real estate developer and like you have this amazing vision and then city council is just like, Nope.
Yeah.
Like that is insane to me as an internet entrepreneur.
And that's what I was going to ask. So you like hired a baker to do it, but then also with your newsletter business, your local news business, you hire— I forget the guy's name, but he's, uh, I've talked to him a bit. He's a nice guy. You've hired him to be the CEO. And so you, you hire people pretty— yes. And you, you hire people pretty early on and hiring someone to do something to me is a huge risk because in my head I'm like, man, if this guy's got a kid, like I'm like, his kid's now kind of my kid too. Um, you know, like it's like a big risk if he's quitting it. That's how I felt when my, when my, one of my first employees got married. I was like, oh, I've got a family now. Um, cause I was like, some of the decisions I make are going to impact this entire family. And that's really stressful. And it's also a huge conversation to convince someone who's in their 30s, 40s, or whatever, in their, even in their late 20s to leave their fancy gig at Salesforce to bail and come to my company that I'm going to pay him $45,000. That's a huge thing. I go— when I go to bed at night, that stresses me out. But you seem like you overcome that pretty easily. You hire people relatively early and you're like, yeah, it's no big deal. I'm just going to hire this person. What's that like? Like, what are you thinking when you do that?
Well, I've lost— I've, I've messed that up a lot. And I think you guys know my whole story about losing $10 million building project management software, like That was a perfect example where I got ahead of myself. The business didn't make sense, and I threw a bunch of spaghetti at the wall and none of it stuck. And I had to let a whole bunch of people go. And it was really horrible and sad. And, you know, it was like a 10-year slow death, right? So I've been through that. So now it's more— with the amount of scar tissue I have, I have enough— I have enough signal where I can be like, okay, I'm going to try this. And with the bakery, I was just contracting a friend, right?
Yeah, that was the best example.
I said, This is an experiment. With the news business, I actually ran it for 3 years before I partnered with Farhan and he took over as CEO. And by that point, there was enough signal. It was slapping me in the face. I was like, this is a big opportunity.
And is that the case with all, with all the things that you start? Retake that.
Yeah, usually, like, if I, if I go and I hire a CEO, I'm pretty high conviction that there's something there, or there's already a business that supports has cash flow. What I would never do is be like, hey, there's a, you know, I have an idea for this. I'll just go hire a CEO. Like, I would never do that.
Andrew, I feel like you've reached this point. And I used to be like, how did these motherfuckers do this? Where I remember I was doing a startup and it was so hard to get my one thing to work. And then I would meet people who were like, oh yeah, so I have that past success, then I have my current success, and then here's my 3 side successes. That, oh yeah, I had this idea and then we just started doing it and then guess what? The line's out the door. And then this other one, it's like kind of cool. We just started it, you know, like I accidentally, you know, my hand just fell on my keyboard and I accidentally wrote this app. It was amazing. It went viral. And then this other thing that I just tweeted about and then this all coming together nicely. And I just remember being like, what do they know something I don't know? Is there just like extreme luck component? And I felt that way for many years, 5, 6 years straight when I was pushing the boulder up the hill with my startup. And then I now have experienced exactly what the thing that I was most jealous of, and I have no idea what switched in between where like the last 5 things I've tried have all worked and all worked pretty much immediately. And it doesn't matter how big or small, like, you know, whether it's like the podcast or the course or, you know, my e-commerce business or my, the new Milk Road newsletter business, like each of these has just worked straight away in a bigger way than anything I'd ever done before. Um, with less work and less stress than like the old stuff I used to do. And I have no idea what changed, or I have a kind of an inkling, but I don't really know. Sam, have you ever thought about this? Or do you know what I'm talking about?
And what do you think? I know, I know exactly what you're talking about. And I completely agree. You're on a roll right now. Um, and what's your inkling? I have a feeling of my, my, my answer is it's kind of like shitty. It's like a mindset, like abundance attitude and being on, being on offense versus defense. But what's your, what's your, What's your inkling?
So my inkling is that I switched up my situation. So like I was in one situation for a very long time, like, and it was a nice situation. It was a very nice situation, but it was like where I was going to this office every day, working with these people in this hierarchy with this boundary box of like what project or projects we can work on and like what success might look like.. And as soon as I got outta that and I was just me, I was like, oh, okay, so now that it's just me that I have to look out for, I guess I could just do a podcast. I didn't have to have like this big venture billion dollar outcome. I didn't have 20 engineers to go tell what to do. I had no engineers. So I just did what I could do with no engineers, which was like, I'll do a, a podcast. I'll do a course. I'll do, I'll just try to get big on Twitter. Let's just see what happens. And oh, you know, like 5 tweets go viral and boom, got 200,000 followers. It's like, there's these things that I just wasn't doing before because I think before I had a really set thing of like, here's what I need to do. Like, here's the only way to win. And I had like almost too much ammo. I had like too many people at my disposal, too much funding, too much everything. And because of that, I had a very narrow window of what could work. And so I was just trying to come up with ideas that might work versus, oh, let me just try this. Cause I, I'm, I just kind of want to try it. And then when, once I got into, I just kind of want to try it and I didn't have it. I didn't have to worry about what other people thought or I didn't have to come in and manage anybody in that day and tell them what to do. I didn't have like investors to go pitch to. I just did the thing. And then all of a sudden I feel like, you know, sort of like all the talents and skills that I had been building up over the past 10 years, like finally got to just do them.
Yeah.
Don't you think it's like dating or something though, where it's like, you, you know, you date a couple crazy girls and it's really exhilarating. And then over time you're like, wow, that was horrible. And there's pattern matching. You're like, okay, when I go to a restaurant and a girl's rude to the waiter, that's a no, right? And in the same way with business, you go, oh, okay. Like, I used to think I wanted to build all these kinds of businesses, but those were 10-foot hurdles. I don't want to jump 10-foot hurdles. I want to jump 1-foot hurdles. And so if you think about it, all the stuff you're doing, they're in your circle of competence and they're relatively simple to execute. They don't require a lot of people, they don't require funding. I think learning that is like a 15-year overnight success kind of thing where it just clicks suddenly, right? And I'll catch myself occasionally getting pulled down rabbit trails of like, oh, what if I did this crazy, you know, drone AI startup, whatever? But then I always go back to base hits.
And I— and there's this third component of, of confidence. And so I think that because of like my work I've been more confident and I understand like, well, if I invest a dollar here, I think I can make at least, uh, $3 the next 2 years. So like just understanding how machines, like money-making machines work investments. But then also I think Sean, because we get to hang out with, we hang out with each other, we hang out with Andrew, we hang out with our circle of friends. We hang out with all the people we've had speak at our events. We hang out with our, um, podcast guests. It becomes more normal. Like succeeding has become far more normal than not succeeding actually. And not succeeding is just like, Oh yeah, it's going to happen. But then you just move on and do the next thing. And it's like, and then inevitably it works. So it's not if it's, or it's not when it's if. And I think that confidence has actually helped a ton where, so for example, now if someone wants to like real estate's an easy one because it's so predictable, but with real estate, you're like, oh man, putting $100,000 down on this house is a lot of money. That's a, you know, that's 6 figures. It's like, well, dude, but it's going to make 12%. It's like, well, I don't know that. And I'm like, yeah, I know, but it's going to do that. So you actually want to invest more. So like that confidence of just knowing the motions and knowing the routine and process has actually helped a lot.
Totally.
Yeah. The other thing I was going to say is, uh, which is what you guys both just said, but framed differently is I was taking a shitload of market risk before, and now I basically take almost no market risk. I just take execution risk. And before, even if I felt like I executed great, which I did, I feel like I did in a couple of the projects that we had done. And during my, like, kind of like the, the, the previous startup, um, the market risk was too high. Like, there was just no, it was like inventing a new fucking, like, new science, you know, on a new land. And it was just, the market risk was way too high. Now I'm just doing things that are like, oh, I knew, I just know that this works and I just need to do it well. So it's like e-commerce is nothing, there's no fancy science to it. Um, and I had buddies who did it and I just used their model and I just did my own in my own lane of their model. Milk Road is the Hustle, but in the crypto lane, which is the crypto lane I like, right? It's like I just took your blueprint for the Hustle and I just copy-pasted over here.
And then it's execution risk from there.
I know, dude, I saw that you literally copy and pasted the Twitter handle. It was hilarious. Your Twitter description is literally copy-paste. I sent you some old resources from the Hustle and we called ourselves this— your smart, good-looking friend or something who tells you everything you need to know about it. You just copy that and you put— instead of Business of Tech, you just put like delete crypto or something like that.
And actually the thing is, it wasn't even, you know why it did that? Uh, I remember 7 years ago or 8 years ago when you first said that to me and the very first, like, you know, like you, you kind of sat me down and you're like, look, people are not, people are our age. Like we don't watch MSNBC and like CNN and this stuff for our, our information. That's not the brand we trust. And you, you said it, you're like, I just wanna be like, they're smart. And I remember you said it, I sort of be like your smart, no-bullshit friend who just explains and tells you what's going on. And I was like, I like— it clicked with me 8 years ago. And so when it came time to do this, I was like, that's the exact description, the smart, no-bullshit friend.
I think one more thing, Andrew, is that I look at— I, I used to— you kind of said that Andrew, and in terms of like financial success, which is a big but not only, uh, measure of success, Andrew, you're like a grand slam at the moment. You know, you're, you're, I imagine you're incredibly wealthy and you've built businesses that are incredibly large. So by that measure of success, you are like way out there. And for a while, I think I like, you were like mystical to me where I'm like, how is he doing this? Now it's changed to where I think I acknowledge that you definitely have talent that makes you special. You for sure have skills that make you special. But really a lot of it is also, I don't know what percentage of it is each, but let's just say a third, a third, a third, a third of it is, well, he's just been doing it for like 15 years now or a certain amount of time. And he just like took the risk of raising or, um, building the business. And then he raised the money a little bit for the fund. And so it's not a matter of like, how is he doing, doing this? It's just like, well, if I want that life, like I probably could do it. I just have to dedicate 15 or 20 years and go through the same motions that he did. And that may or may not fit the— what I like.
The interesting thing is, I don't know if you know this, but Warren Buffett made like 97% of his wealth after the age of 55. So, so it all happens very slowly. He started in his 20s or whatever, and he wasn't really well known until the '90s. And the same thing happened with us where we didn't really talk about what we did. People would meet us and they'd be like, oh, you're some schmoes from Victoria who own some digital agency. You seem to own all these really boring businesses, you know, whatever. And so it requires being kind of underestimated and dismissed and playing a very boring game while watching everyone else go and make, you know, tens of millions, billions of dollars taking risk in startups. Meanwhile, we're just going, how do we take, you know, a hundred grand and make 10, 15, 20K a year on that money and just keep compounding? And so. Basically the mental model was take 70% of our profits and constantly reinvest, take the other 30%, live a nice life. And that number went down over time. And, uh, yeah, you do that for 17 years and it turns into a, you know, a big number. Um, ironically, I still feel just as at risk and terrified as I did 15 years ago.
That's real. And I think it's the classic thing of, uh, you're not, you're not actually scared, are you? Because I have liquidity now and I'm, I'm scared, but I'm like, am I as scared as when I only had $20,000 in my bank account? I can't decide.
No, no, no. But it's, it's maybe it's different for me because, you know, I have, uh, an un— for if you told me 10 years ago how much cash we have or what our cash flow is, it would blow my mind. And I'd say, how could you ever feel at risk? The problem is that the stakes are bigger. You know, we have almost 1,000 employees now. Right. So, There's a lot more, um, you know, there's the stuff that can go wrong. Do I feel that I've built out a castle with a whole bunch of moats and stuff? Yeah, absolutely. And I'm better diversified than I was 10 years ago, but there's still that kind of Dust Bowl farmer mentality, right? It's actually something I want to talk about. Um, like just, we all kind of have this feeling of like, the way I'd put it is I started chopping wood just because I was anxious, right? Like, 15 years ago in my backyard, and my neighbor pokes his head over the fence and he's like, hey, can you chop some wood for me for my fire? I'll give you $20. And I'm like, okay, amazing. I didn't know this was a business. And then before I know it, I've hired 3 or 4 buddies. We're all chopping wood in the backyard. We're a merry band. We're selling to the whole neighborhood. It's awesome. I love it. And then one day, 15 years later, I wake up and I'm in a sawmill. And I own 15 sawmills and all I do all day is file papers, but there's still this part of me that beats myself up for not chopping wood. I still have this mindset, even though all the machines do all the labor, there's still this part of me that's constantly saying, you need to chop wood, you need to chop wood. And so I think you guys have this for sure. It doesn't matter how much you have, how diversified, whatever it is, you have a need to do labor. And there's an anxiety that you're harnessing to perform.
That's a good-ass analogy.
I'm not going to lie, the first 30 seconds while you're explaining it, I thought you legitimately took up wood chopping as a hobby. And I was like, oh, that's cool. It must be cathartic. And then I realized I was inside of a Charlie Munger, uh, or Warren Buffett analogy, like parable. Um, You have this thing on here that's, that's pretty cool. Bad guys usually win. As a bad guy myself, I would love to hear how this, uh, how this, what you mean by this.
Oh man. Okay.
So do you think you're a bad guy?
I've got a story. I don't think you're a bad guy.
Go ahead.
I think a bad guy is a full-on con artist who lies.
I call myself a bad guy rather than calling myself a good guy and having all the comments on YouTube tell me I'm a bad guy. It's easier just to call myself a bad guy and have people tell me the opposite.
Or bad meaning, uh, not bad meaning bad, but bad meaning good. That's how it is.
So I'm sure you guys have had this experience and I'll kind of anonymize this story. In this case, it's a bad girl. Bad girls usually win. But, um, so this, this happened to me like almost 10 years ago. I was really overwhelmed. I was running like 5 businesses. I got introduced to this older woman. And she had just sold her business for $20 million, super successful. And she kind of says, hey, I'll mentor you, I'll help you out. And so she comes over to my office, we start whiteboarding, and I'm just like, holy crap, this person is a genius. She could help me so much. And so first she's an advisor and mentor, and then eventually she's like, hey, how about I come in and I'll help you with marketing and sales? And so I inject her into the business. She starts killing it, like business takes off, everything going great. Um, but I did zero diligence, right? She legitimized herself by being this super successful person. And because she was so successful, I was just grateful to have her. She was like a miracle and made all these problems go away for me. And then suddenly the cracks started appearing. So people started saying she was lying, she was spending money in weird ways. They're, you know, her expenses were out of control. You know, staying in crazy hotels, all sorts of stuff. And it turned out that she was lying and like falsifying documents. She hadn't sold her business. She wasn't rich or successful. And when I called a bunch of people that she'd worked with in the past, like a bunch of them had had terrible experiences, right? So we fired her, we move on. And I'm in this very odd spot where ethically, you know, I want to be like, okay, this is a bad person. I want to shoot up a flare and I want to be like, everybody watch out. Right. And I'm thinking like, okay, you know, people will diligence her. They'll call me, you know, she, she won't be able to keep, you know, pulling this off. Um, but legally, I don't know what it's like in the US, but in Canada, when someone calls you for a reference call, you're quite limited. You can basically just say, you know, I wouldn't work with them again and do your diligence. And so I usually say, yeah.
And I just say like, I'm not allowed to talk about it. And they get the hint, right?
That's smart. I, I said a bunch of stuff like that. Like, you know, I, I would never work with this person again. It's one of the worst professional experiences of my life, whatever. But almost always those people go on to work with them and you realize these people are just incredibly charming and they always assume you're the bitter ex-girlfriend, right? Cause they've obviously buttered you up and told some story. And so this woman, you know, I see her on LinkedIn and she's still succeeding and going every year, she's somewhere new. And, you know, people like this, they don't get super rich. They're so short-term. And if they only knew how much money you could make by not being a crook, they would probably be ethical. Um, but it just, it was so sad to me and I wanted my sense of justice was like, I got to put a stop to this. And you just realize like, no, like you just have to let go. Never wrestle a pig. You'll both get dirty, but the pig will enjoy it. And so, you know, these people are out there and they continue to succeed. And unless they're Elizabeth Holmes and they get, you know, in The Wall Street Journal, they're fine.
I want to know who the person is.
I will never say.
You had another example of a guy at a famous company who, you know, you had some fraud or you had some issues of people not being honest as well. Remember, you told me that about that one, folks.
I don't know. I don't know which one that is. I mean, look at like you guys talked about, um, Naveen Jain, uh, on a podcast maybe like 10 episodes ago. And I mean, like, there's a perfect example, right? There's this guy who basically did a pump and dump. That's my understanding. Alleged, alleged pump and dump. Um, but these people go on, right? Unless they're criminally indicted. And even, you know, people who are criminally indicted, look at Michael Milken. Michael Milken was literally front-running his own investors, committing tons of like outright fraud that if you were his investor, you would hate, went to jail for 10 years. And now he's lauded as a philanthropist. I mean, or how about always win?
I mean, you know, the guy, do you guys know, uh, I think his name is Gurbash. He's G is what people would call him. He's, uh, I think he's Indian, an Indian guy, Indian American. And he started a thing called Gravity something. What was it called? Gravity 4. Gravity 4. And then he started another one called like Radium, Blue Radium. Is that what it was? And Radium 1. Radium 1. And he got arrested. He was on Oprah as this like, you know, $150 million man under 30 or something like that. Like the best bachelor, most available bachelor, all this stuff. He's a good looking guy. He got in trouble 3, 2 or 3 different times. Both times he basically locked his girlfriend in their apartment, and it was— there was a camera there. I don't know what he was thinking. And he was hitting her and just being an asshole. I mean, just a horrible guy. Got arrested, spent time in jail, months. Got out, raised money again for starting the same company. Now he's overseas because he's kind of burned all his bridges here in San Francisco, in America. He's overseas. I think he raised money again for another ad tech company.
This is the hard part, is if someone is a— I mean, typically someone who does bad things like truly unethical things. They're either a psychopath or a narcissist, and they're very, very charming. They're very compelling. They're fun to hang out with. They're fascinating. They're great to listen to. It's hard not to like them. I mean, one, one actually heuristic after having that experience is I actually had a company that I looked at investing in, and I liked the CEO so much, and he was so compelling that I didn't invest because it made me suspicious. Right or wrong, I was just like, I left the meeting and I was like, I would buy anything from this guy. And I just want to give him all my money right now. And I stopped myself and I was like, this is that feeling. Don't invest, right? I probably made a mistake, but, you know, maybe I'm too concerned, but it's crazy.
Same. I'm the same way. And I'm willing to throw out the good with the bad just to steer clear of the bad because I know how intoxicating that type of grifter is. And, you know, I've actually put in some— like you talk about air gapping for, like, you know, security purposes. I've now done that on, on decision-making for some investments as well. Like, so Andrew, you sent out an email to, to us and me, Sam, a couple others about a business that you're raising money for. And it's a really great email. Like it's a truly great email. I gotta give you a lot of credit. And I actually wanted to ask you.
Sam, Sam helped me with it.
Oh, okay. I was gonna ask you what goes into writing an email like that?
I hired the master copywriter.
You had a secret weapon. Okay.
Um, well, for the record, for the record, which is I barely touched it. I barely touched it. I read it. You're a good writer.
He's actually great.
And it wasn't, it wasn't like, oh, the writing. Wow. This, this, uh, sentence structure was so fantastic. Right? Obviously that helps, but it was the thinking. It was the way of framing the business and the opportunities, telling how you stumbled into the opportunity. What type, you know, like your, your analogy to, you know, you can believe this if you want, to Chipotle. Like you really did a good job of framing this business. And it was so good, in fact, that I said, I am not gonna reply to this for like at least 48 hours because if I read this email, I'm gonna say, give this person my money instantly. Like, it was almost like whatever out of 10 the business opportunity was, it was a 10 outta 10, like pitch. And I actually, when I look back at businesses that, that I invest in that, that go on to do well, it's usually actually a 9 outta 10 business opportunity. With a, you know, sort of 5 out of 10 pitch. And in fact, it's only midway through the conversation with this person that I'm like, oh wait, so you basically have X? And they're like, yeah. I'm like, well, why didn't you just say that? And they're like, well, I did kind of, right? And I was like, oh dude, you have no idea how to pitch your own business. But that to me, once that happens, I know, wow, I'm actually like, I underweighted the opportunity because the pitch was so bad. Versus overweighting a business opportunity because the pitch is so good. And that's become like a, a standard practice. Yours was just one example, but that's become a standard practice for me of like, beware of the 10 outta 10 pitch, beware of the 10 outta 10 charm person that you want to hire, or that's gonna help you with your business.
How's the news business going?
Um, it's good. It's really good actually. We just, uh, hit a profit in my hometown in Victoria, our first market. Uh, and we're now in 8 different cities and I'm super stoked about it as you can witness, uh, based on that email, that email, how, how quickly, because You might have a knack for just understanding and framing businesses.
That's probably a superpower of yours.
I think he has that.
How quickly did that come together for you?
Uh, how quickly did I write it? Um, well, I mean, it's something I've been thinking about and kind of talking about a little bit publicly for 2 or 3 years now. So I had all the analogies and stuff formed. Um, but I mean, I wrote that in like an hour or 2 and then Sam just helped me touch it up. And then my typical writing structure is I'll write something in the first draft. And then I'll sit with it for 2 weeks or something like that. So I sat with it for a week and then finally I sent it out. But it's crazy. Like, I don't know if you guys get this. Something that drives me insane is I get all these emails from people who are raising money and it's literally just a template. Like, it almost looks like they're sending it out with Salesforce or something. The formatting is wrong. It's generic. It's not properly addressed to me. And I always think, like, what I was trying to do with that email is I wanted the first sentence to hook you. And so I think the first sentence in that email was, in 2019, I was pissed off, right? And then they, you know, line one, you're like, what's he pissed off about? What's going on? Right? There's a bit of a hook. Nobody knows how to use those copywriting tools to pitch in written form. I think a lot of people are very good at pitching, um, you know, in a, in an actual pitch setting or whatever. Um, but yeah, it's been, it's been a great tool to be able to do those tweet storms and emails and stuff.
The most important sentence of anything you write. It's the first sentence.
Well, I love that one. What's the line that you said? Let me be very clear, right? And you're just like, oh shit, like this person means business. What's going on here?
Yeah, Sam is fucking good at this. And in fact, I made the criminal mistake when I asked you this question, which is if you go to Michael Jordan and you say, Mike, how do you jump so high? He'll, if he's being nice, he'll try to answer something, something, but it's not gonna actually tell you. And the same thing, how do you know Steph, Steph Curry, how do you shoot your jump shot to be, and how do you, how do you shoot better than anybody else? People who are truly great at something, they have very low awareness to the actual like how, why, and what is making it so great. And there is, there is a way to ask questions about greatness. But it's not, how do you do the thing you're great at? Uh, because people will sort of fumble around and, and they'll try to tell you something, but it's, it really has nothing to do with, with how they do the great thing. Like for example, what you did great in that, uh, email was first you decided to not make it a template. That decision probably comes from you, some view, your, some way that you view the world and like that you, uh, observation you had about pitches that were coming to you that most people just don't have. The second thing was when you framed the business, you knew, you used the analogy of like these local franchises. That was because you had studied other, other great businesses just for fun. You probably studied the business of Chipotle and McDonald's and other businesses. Not that you were ever gonna start a restaurant, but you stored that somewhere in the recesses of your mind. And so when you saw something else that was a local franchise, you knew how to like apply that. And, and so like, you know, it's very hard to actually describe What goes into the art of making that happen? Right.
Well, not only that, but being able to communicate a moat, you know, why does this have a competitive advantage? And in this email, I kind of go through the history of the news business, local news, why local news is so much more, uh, why it has a better moat, right? And you think about it and you go, why would that be interesting? You know, 50,000 people to 300,000 person cities. That seems like a small market. But in reality, it's the stuff nobody wants. You're fishing where the fish are off the beaten path and you can dominate a local market.
You've always done this. So I actually read your email when I was— when you sent it to me in Google Drive and I was like, oh, this is really good. I'm going to— because I was putting together this course where I just like aggregate good writing and I send it to people and I was like, I got to— I'm going to use some more of this stuff. Let's see what's out there. And I went and read all your stuff on Medium and I think there's like 10 or 12 things or something. And you follow the same format over and over again, which you, it's, it's, you clearly are influenced by Warren Buffett and, uh, you're influenced by like traditional storytelling tech techniques. But if you go to your Medium, you're actually, uh, pitching your business on Medium constantly. You're just not actually, there's just no call to action. So you don't actually care if it seals the deal, but there's like things where you're ca— you're, you have a headline called So you didn't mean to do this, but you could have done this. So it could have been, we're raising $1 million for our company, but instead you made the headline, we're, um, uh, you, you, the headline was Joe Rogan could be the world's first podcasting billionaire. Is that what it was? That was that it?
No, it was, he got ripped off.
Yeah. That's what it was.
Already used counter.
So that was, it was a good-ass headline. And then you explain. So the emotion there was shock, which always does really well. So you're shocked, like, what the hell? You're saying that he got lowballed? $100 million is so much money. And you're like, no, you see, it's nonsense. You see, Howard Stern does this. Rogan could have done this. It just so happens that we have a company that does that. That's how I know about it. And then like, if you wanted a call to action, so you have your attention, interest, desire already there. If you want your action to make this a full AIDA formula, you could have been like, P.S., for ra— of course you can't do this. It's illegal. But you go to the P.S., we're raising money for our company.
And see, this is, this is like you've, you've always said like the most valuable skill is copywriting. I think both you guys have said that like 100%. I chalk up the only reason Metalab worked was because we would pick fights, we'd write these controversial articles and we knew how to like, we, I, if there's one thing I'm good at, it's just like taking, taking a boring topic and just finding a wedge and getting people going on it. And that always results in people knowing of you and passing your name around and you become a topic of conversation. And it led in our case to lots of client work and other stuff. So I think everyone needs to read the book Made to Stick. That was the book that like really clicked for me. I don't know if you guys ever—
Dan and Chip Heath out of Stanford.
It's awesome. Talk about this. Totally. And it's that one, that first line, the first line just has to hit you.
The, um, the best thing you do. So, so I think, uh, if I was going to break it down, the middle of your writing is, is like inspired by or influenced by, you know, some, some ways Warren Buffett, but you're, he, his stuff is very dry, right? Warren Buffett grew up without the clickbait generation. He doesn't need to, to do that. Uh, but like 37signals, so like DHH or Jason Fried, like to me your writing is so similar to theirs that I can tell, you know, that was like a, you know, pretty major influence on it. And one thing that they do amazingly well is they, they will basically pick a fight while simultaneously taking the moral high ground. And I think you do that amazingly well too. What I mean by that is you'll say like, you know, Joe Rogan got ripped off, but you're not, you're not criticizing Joe Rogan. You're actually saying, uh, you know, Joe, you, you sold yourself short. And an artist and a creator like you should not sell yourself short for some, to some company who's gonna take advantage of you here. And so you're taking the moral high ground while picking, you know, going against the grain and like sort of doing a call-out, which is amazing. Most call-outs just basically it's somebody, you know, slingshotting from the crowd and, you know, there's sort of a sniper that's like, you know, angry at them. And so I've never been able to do this, but I've noticed that you do this and 37signals does this amazing. Well, they'll say Facebook is overvalued and they'll talk about why Facebook is overvalued. And then they'll talk about, you know, like we are sorry, we're, we're just the kind of guys that like businesses that have actual revenues and profits, but, oh, you know, call us crazy. And so they're taking the moral high ground and they're saying that this Facebook valued at the time, remember, it was famously like, why billions of dollars?
I would argue, I would argue those guys would not be where they are today without copyright. And I think that's like the sawdust from their sawmill, right? It's like, hey, we got fucked on the App Store. What would most people do? Okay, we'll just go in with Apple. They use that as the biggest marketing opportunity ever. They were on every talk show. They were— their names were everywhere. I mean, they also got kind of canceled as well. So there's a cost to that, but, um, they've done an amazing job and that's 100% where I learned it. I worship those guys for years.
I call it like the Malcolm Gladwell effect. So with Malcolm Gladwell, you, um, read his books and you have to remember that a lot of what he's saying is just theory. There's no, there's some proof that it's real, but it's not proven. And, um, but he's such a good storyteller that you think like, oh, what you're saying is just a fact. Like, His— have you heard a story about David and Goliath? It's wonderful. And he likes to— he's like, actually, David and Goliath wasn't that hard of a contest because it turns out Goliath was like mentally challenged or like had some issues where he like— and he's also blind. He couldn't see. He had like— he had this thing where he was so big that it ruined it. He had like giganticism or something like that. And so— and then also like David was a shepherd and they're actually so good at throwing these rocks that they could take a bird out of the sky. So it's really like basically taking a big dumb blind giant and shooting him in the head with a gun. That's not hard. And like, that's his argument about— he's like, David and Goliath, it's nonsense. And is he right?
I don't—
there's no proof.
Who knows?
Is David and Goliath even real? We don't even know that. But you like hear this story and it changes you. But the problem that I have with Basecamp and other good writers, and this is something that you have to be really careful of, I work on all the time. I'm like, I can be such a good storyteller that I can get you to think that something's real, even though like I'll tell you, but there's no proof. But like, I'm gonna write it in such a way, and Basecamp does this all the time where they say, well, they'll write something and I'm like, oh, this is the truth. This is how the world is. Where it's like, well, no, let's, let's not forget this is an opinion. Right.
Totally. And there's lots of nuance. And going back to what we were talking about with bootstrapping, I, I read all their stuff. I drank the Kool-Aid and I, you know, I love those guys. They've built an amazing business, but you can't just have that perspective. It's very nuanced. There's, there's, you know, Like I said, there's so many situations where it is logical to raise money. And if you talk to DHH 10 years ago, he'd say Salesforce and Facebook will be bankrupt in 10 years. And this doesn't make sense. And again, I love these guys and I know them both. They're awesome guys, a huge fan, wouldn't have built my business without them. But, um, I do think they, they present everything in a very black and white way, which I think benefits them in a, because it makes it more compelling. No one wants to hear nuance.
This has been a good pod. What do you think, Sean?
Yeah, it was good. There's, I mean, there's a couple others we wanted to do, but we're way over, so we should, uh, we should wrap it and do another one soon.
I know we didn't get to—
yeah, I think we got like, we have like, we have like 20 topics to do.
So I mean, there's juice. It's like, here's the 5 pillars of happiness. Like, do I wanna be happy? I should probably ask about that one. Like, I would like to be happy.
And then the Jamie Dyson thing, there was the whole, you wanted to come on cuz you're like, I read this book about Dyson. I want to come talk about it. We didn't even talk about it.
Oh man, I'm so excited to talk about him. He's incredible.
All right, well, let's do, let's do another one, or unless you have time, I don't know, we can, we keep going if you want, but otherwise let's do another one and, uh, we'll do Dyson and his mothers.
Yeah, I got to, I got to roll. I got a lunch in 12 minutes.
All right, man, good, good seeing you.
Okay, see you guys. That was fun.
I feel like I could rule the world. I know I could be what I want to.
I put my all in it like no days off. On the road, let's travel, never looking back.