extreme force ofwill, extreme bias foraction, and a questioning of the defaultspeeds, it changeseverything.
Yeah, you know I'm on this business entertainment tick where I'm looking for content that is aboutbusiness, but is made to beentertaining.
So it's not just like an informational video or blogpost.
And so there's a new show called Fighting that I watched that I thought was reallygood.
Did you seeit? I saw the commercials forit.
How do you getit? It's onRoku, but I don't haveRoku.
You just Google like watch fighting and it's Roku just likes you just it's on theirwebsite, but you don't have to signup.
You don't doanything. You just click and just watchit.
So it's verycool. Imean, they basically follow around Dana behind the scenes and then the UFC like kind of the machine behind theshow.
And the UFC just to put this inperspective, they're basically there is nooffseason.
The UFC is 52 weeks ayear.
Every Saturday has to be an epicshow.
It's a live event with paperview.
It's got fighters who get injured and pull out or get arrested and now they can't fight and there's all kinds of things that can't have will gowrong.
But it's like the actual epitome of the show must goon.
So I wanted to share with you a couple of my thoughts watching this from a founders point ofview.
So the first thing is as silly as thissounds, I do think that Dana White is on my Mount Rushmore of startupfounders.
I know he didn't technically found theUFC, but he basicallydid.
He created the goddamnthing.
He's amadman. He is aworkhorse.
He's amachine. And I really don't think the UFC happens if there's no DanaWhite.
And this got me thinking there are some companies that I will callinevitable.
And inevitable company is one whose time has justcome.
So YouTube today is a giantcompany.
But YouTube's time hadcome.
If it wasn't YouTube if Chad and Steve had not createdYouTube, somebody else would have created the equivalent ofYouTube.
The idea of putting hosting video online was going tohappen.
It washappening. Somebody was going to win thatspace.
That's an inevitableidea.
The momentum of internet speeds going up and being fast enough where you can now upload and download videos was going to a point where video and it was an obviousthing.
We had flicker forphotos.
We were going to have a version of that forvideos.
I would say that Google wasn't an inevitableidea.
The more popular the internetgot, people already needed search engines andportals.
Google happened to be the winner of all the search engineportals.
But there was going to be a way to search theinternet.
That was going tohappen.
So there's inevitablecompanies.
And then there's companies that I honestly don't think if it was not for the force of will of the founder for thevision, the skill and the determination of the founder that wouldn't would not have happened or would not have happened for like 50 moreyears.
It would have missed a whole generation of people had that person not made that thinghappen.
Allright, let's take a quickbreak.
I got to tell you you ever seen those Coachella posters where it's got all the artists names and you'relike, oh mygod,wow, they got youknow, Fred again in Skrillex and this that's what the HubSpot inbound conference lookslike.
Just listen to the speaker list that theyhave.
I don't know how they pull thisoff.
Butlook, listen tothis.
RyanReynolds, SerenaWilliams, CaraSwisher, MattWolf,Darmesh.
They got BrianHalley. They got tons of good speakers at HubSpotsinbound.
It's comingup. It's September 18th to the20th.
It's live inBoston. And it's where yougo.
If you want to learn marketing sales AItrends, you want to know where the puck is going so that you can be there before everybodyelse.
Tons of great talks on stage where you're going to learn sales strategies and proven marketingtactics, but also the networking where you get to meet other people and understand what are other people in the industrydoing?
How are other people gettingahead?
So check itout. Go to inbound.com to see the lineup and grab your ticketstoday.
My examples that I would put here are Elon'scompany.
So I think Tesla and SpaceX would not have happened and would not have happened at least for another 50 years had he not made thosehappen.
I think it required a level ofinsanity,self-funding, technicalbrilliance, determination to keep going even against the odds offailure, all of that for him to be able to pull thoseoff.
I think the UFC is in that that non-inevitable bucket where if the UFC had justdied, it was about to go bankrupt before Dana bought it for $2million.
I don't think that something like the UFC necessarily would havehappened.
Yeah, Imean, I totally agree because it wasn't like a wantedthing.
It was one of those products where we didn't know wewanted.
Atfirst, it was a freakshow.
I don't know if youremember, one of the more famous guys who's first started fighting was this black guy who would use one boxing glove and onefreehand.
He fought against a 300 pound sumowrestler.
It looks like a creative character in a videogame.
All of the people looked like creativecharacters.
Yeah, there's one Hawaiian guy who is a sumo wrestler looking guy and he fought the dude with the one boxingarm.
It'sweird. It was a freak show atfirst.
But then it took like 10 years and then athletes started doingit.
It became amaze. It wascondemned.
Like John McCainfamously, I think in Congress or Senate orwhatever, asked for every state to outlaw theUFC.
He called it human cock fighting and he waslike, this isterrible.
We need to endthis. And JohnMcCain, the Americanhero, the war hero was now saying this isdisgusting,basically.
And so Dana had to find venues that would supporthim, which is why by theway, Dana and Trump are so close now is because Trump would allow Dana to host fights at his Trump properties in AtlanticCity.
And so that's why youknow, Dana had to fight and scrap state bystate, city by city event byevent, almost going out of business manytimes.
They went 40 million dollars in the hole before turning this thingaround, turning it into a $10 billioncompany.
Dana has got this greatstory.
It was like during the cockfighting, like when people started saying thatstuff.
And he waslike,well, what do you think these athletes think and people were likethey're, youknow, maybe they'remiserable.
They got to go through all this pain and hegoes, let me tell you what theythink, they'rekillers.
And they want to go out and like do something that isactive.
They need to get this energyout.
And they live their life like they'reon, like they're inheaven.
And they look at yourlife, you just go to work atnine, you come home atfive, you sit in a cubicle ashell.
These guys arefree. This is what they were born to do and what they feel like they need todo.
So if you take this away fromthem, you're hurting them way more than when they get in therig.
And I thought that was actually a pretty good spin onit.
So one of the cool things about this show is it showed a couplethings.
I'll give you the big takeaway and then some of the smalltakeaways.
So here's the bigtakeaway.
I said the word force ofwill.
And I use that word that phrase very specifically because I think it describes a certain trait of afounder.
And I try to havethis. I think the best founders all havethis.
And by theway, this comes with sometrade-offs.
When you have force ofwill, it is as brute forcey as itsounds.
It is uncomfortable to be aroundsometimes.
You are pushingpeople.
Maybe you're holding a higherstandard.
Maybe you're demanding that things are done a certain way or done at a certainspeed.
That does not feel good to the other people that are in the organization that are maybe used to working in other environments where they don't havethat.
And so there's a littlestory.
So basically it's like one of the big fights of the year is coming up in 18days.
And they've doneeverything.
They prepped all themarketing.
They've got thebillboard.
They show them painting the billboards atnight.
They show them making all the marketingvideos.
They show them doing all the different things that go into promoting a liveshow.
They're sellingtickets.
All ofthis. Whichfight?
This wasa, I remember whichone.
There was either the one where John Jones had to pull out or there was the one where Charles or Levera pulledout.
Okay. And so 18 days before he gets acall, fighter gothurt.
In his last round of his last sparringsession, he was sparring without headgear.
I think it's allLevera.
This isrecent.Yeah, he gets a cut on his on hiseye.
And he can'tfight. So now the main event that they've sold all the tickets for that they've done all the promotion for that's been building up for sixmonths.
The main event fallsthrough.
And he'slike, and it's basically him and his guy HunterCampbell.
And they're sitting in thisroom.
And this is this is business asusual.
Disasters are business as usual forhim.
And he talks aboutthis.
Hegoes, give me all thestress.
I eat that shitup. Hegoes, I cantake, I can take itall.
And he could just see he's built up thisresilience.
Thistolerance. Likeimagine,UFC, which is a live events fightingbusiness.
It's stadiums full ofpeople.
When COVIDhappened, that kills thebusiness.
There was no otherbusiness.
And Dana not only was a sport that survived COVID where it got shut down and you couldn't do live events for over ayear.
You can't just turn off a business for ayear.
I hope it's all going to beokay.
Instead, he was the first sportback.
He created something called fightIsland.
He created a bubble where he'slike,cool.
We'll test everybody even they gethere.
And now everybody here istesting.
Nobody comes in orout. And he found an Island in the Middle East that they could do thison.
And he branded it as fightIsland.
They were the first sportback.
It wasincredible. So he was used tothis.
So he's talking and he'slike, what if we did thisfight?
What if we did thisfight?
And the guys in the room arelike,yeah, we could callthem, youknow, I put out acall.
He's going to call meback.
Whatever. And somebody walks by theygo, his managers into the lunchroom rightnow.
They'rehere. And Dana within point one seconds just hops out of hischair.
Nobody else does Dana hops out of hischair.
Leaves themeeting. You see him in the cameras followinghim.
He goes to thecafeteria.
He's not even at the tableyet.
And he starts saying he'slike, who's mom versus whoever who's mom versus versus I forgot who he's going to fight at thetime.
But who's one versus gate versus gate to this is pretend it wasgate.
And the manager is like eating asalad.
He'slike,what? And he'slike, who's one versus gate to we got to doit.
And he'slike,no,man, I don't dothis.
He'slike, he'slike, what are you kiddingme?
This is a huge opportunity forhim.
If he fights thisguy, or his commsout, he'slike, who's one versus homesout?
He got to doit. And the guyslike, he'slike,no,no, he's notready.
Bubba,blah. Nowready.
Who do you want tofight?
He says this otherguy. Who's what does that do foryou?
And heimmediately, he basically in like four seconds cuts the deal with him and and Kaby wasthere.
And Kaby waslike,no, I think Dana'sright.
I think this is what he shoulddo.
It's going to be huge for hiscareer.
And so they cut thedeal.
And the agent who'sa, he's like a superagent.
He'slike,the, youknow,like, he's an agent for all thesefighters.
You would think an agent'slike, Arimanual.
He says in thething. Hegoes, this is why I don't talk to Danaanymore.
He's too intimidating forme.
Like he'stoo,too,like, forceful for me about what he wants todo.
And so I sawthat. And I noticed and Isaid, most people will watch thatscene.
Andthey'll, they won't even pay attention to what justhappened, which is that the greatest founders in theworld, the greatest heroes in theworld.
They cut through thebullshit.
There's another video I saw recently ofwhat's, who's the guy Walter Isaacson who did the bio of Elon Musk with Elon and he's on someone'spodcast.
I think he's on Steve'spodcast.
He's telling thestory.
And hesays, I don't know about the Twitterservers.
The Twitterservers. So hesays, Elon is talking to the Twitterteam.
And he'slike,hey, cutcosts.
We need to shut down the Sacramento serverform.
And his engineers arelike,okay, I'm going to be tricky because those servers are used for all of ourinfrastructure.
But we could doit. We'll make a plan and we'll be able to do that in sixmonths.
Sixmonths. What are you talkingabout?
We need to do thisfaster.
It's kind of take sixmonths,Elon.
We have that infrastructure iscritical.
It's so interroving in to everything that wedo.
We're going to experience bigissues.
We'll, we'll make a plan and we'll get itdown.
We promise you we'll get it done in sixmonths.
I need this done in sixweeks.
Sixweeks. We can't do this in sixweeks.
We would have to do abc. It could be done in sixdays.
Let's do it in sixdays. Now these guys are reeling and they'relike,Elon, it can't be done sixweeks.
It can't be done thatway.
So Elon islike, he leaves themeeting.
And I think he was going to like Texas forChristmas.
Yeah, it's ChristmasEve.
It's ChristmasEve. He's flying to Texas to go see his family and his two cousins are on the plane withhim.
And they'rebrainstorming.
They'relike,God, sixmonths, sixweeks.
This isridiculous. And then someone on the plane has the idea of they'relike, why don't we just go to Sacramento rightnow?
We'll just rip the servers outourselves.
Because one of thecousins, one of thecousins, Ithink, worked at Solar City orwhatever.
And he waslike, youknow, wecan, we can use someservers.
We definitely need someservers.
And he'slike, allright, soundsgood.
And what hedo, I think the idea waslike, if we just take the serversoffline, they're going to have to figure out how to fixit.
And they'll fix it in faster than sixweeks.
I promise youthat. I think that was underlyingit.
SoElon, on theplane, on Christmasday, basically ChristmasEve, youknow, the flying toTexas, midway through the flight just tells the pilot turnaround, we're going to go land inSacramento.
Pilotslike,okay. And then hesays,hey, do you have a pocketknife?
And the pilotslike,yeah, I do hisbodyguard, his bodyguard waslike,here, I got one andlike, what's out this pocketknife?
And so they go toSacramento, they take theknife, theybasically, and theserver, the company that thefarm,basically, they werelike,hey, we'reclosed,dude, it's ChristmasEve.
And he'slike, let mein.
These are myservers. Open thisdoor.
And now I don't need you to doanything.
Just open thisdoor. I'm goingin.
Open thedoor, getsin, takes down theservers.
I don't know the exact ending of thestory.
But samething, extreme force ofwill, extreme bias foraction.
And a questioning of the default speeds for everybody in thecompany.
And when you know that your default speed or your default clarity of thinking is going to bequestioned, it changeseverything.
And so I've been on the other side ofthis.
When I was atTwitch, Emmett was somebody who I've alwayssaid, his oven burns a littlehotter.
He's smarter than than the averagebear.
And I felt that if you were in a room with Emmett and you presented a plan that to nine out of 10 people in thecompany, it would soundokay, they wouldn't challenge yourassumptions.
Emmett would always challenge the assumptions of why we're doingit, how much it's going tocost, why it has to take thatlong,etc.
And if your logic was notbulletproof, if you were not already maxed out in your thinking of what waspossible, you were going to eat shit in thatmeeting.
You were going to get shredded in front of like 18 people and not in a meanway.
But your logic is going to getshredded.
You were going to get verballyundressed.
And that changesthings.
Oncethat, once you know that that's what's on theline, you come in a littledifferently.
You sit a littlestraighter, you walk a littlefaster,you, youknow, dodgeyour, dodge your eyes and cross your teeth when you go into thosemeetings.
And so he only had to do itonce.
And then for the next 18months, I was ready every meeting withEmmett.
And so I think that this is just a very valuable trait that they don'tknow.
Was Emmett nice aboutit?
Washe, was Emmett a courteousperson?
Emmett sort of has that like autistic forgiveness where you'relike, he's not being mean aboutit.
He's not being nice aboutit.
He's being verydirect.
But you'relike,he's,oh, that's just how heis.
He's just beingdirect.
He's justlike, he's not trying tobe, he's not trying to bemean.
And I wouldn't even say mean is the rightword.
He's just trying to get to the truth and he needs you to get out of the way so that the truth canappear.
He doesn't care about your feelings in the search for thetruth.
And infact, the more you kind of try to get in the way of thetruth, the more he'slike, what are youdoing?
Get out of theway. We're trying to find the truthhere.
That's the way I would describe how it felt from my point ofview.
And reallylike, I was rarely on the receiving end ofit.
But I saw it happen many atime.
And I took note very quickly oflike,okay, you got to come correcthere.
Well, because I don't like people who arelike, and I used to have behaved thisway.
And I regret how I used tobehave, but of like being needlesslyrude.
And I think that the people who are needlesslyrude, I think Dana would fall in that category because he loves tofight.
He loves tobattle. So he just told the story lastweek.
Hegoes, let me tell yousomething.
I'm going to war right now with Caesar'spalace.
And they'relike,why? Hegoes.
For the last sixmonths, I've been playing likeback,backera, or some like casino game withthem.
Hegoes, I'm up $17 million on them rightnow.
Hegoes, I wake up in the morning and Ithink, how am I going to win this wartoday?
And hegoes, I'm going to lose eventually because they're going towin.
But rightnow, I'm crushingthem.
In eachmorning, I wakeup, I go to work and instead of going home or hesaid, he goeslike, when my kids areasleep, I go back to the casino and I'm ready to go towar.
And I thrive offthat. Hegoes, I want my back against the wall and I want to go towar.
So I got to say this is I'ma, anybody who's an actual gamblingdegenerate, you listen to Dana's gamblingstory.
And this is only going to apply to one percent of theaudience.
So I apologize for the99% who arelike, who cares aboutthis?
I care a lot aboutthis. So his story has some holes on his gamblingstuff.
I would like to list some of the holes that I'd like to make someextra.
He tells us one time that he got too drunk and helost, hegoes, I think I lost $60,000 and I wake up in the morning and they'relike, heyman, you oweus.
Hegoes,yeah, I'll get you the60.
Hegoes,no,no,no,no,no, it's sixmillion.
Yeah. I'm not saying he does it at Vittoryloses.
Ijust, in thatinterview, hesaid, I'm up 17 million on Caesars thisyear.
Year todate. Hesays, my rule is that if I make a millionbucks, Iwalk.
And if Ilose, I'm willing to lose up to sixmillion.
Okay. MyGod. Then hesays, I've only lost twice thisyear.
So it doesn't addup. How doyou, if youwent, if you walk away when you win a million or you lose six million and you're up 17 million and you've only lost two days of the year andit's, we're halfway through theyear.
The math ain't mathin on thatone.
Fourththing. He represents himself as a like skilled gambler who beats thehouse.
He's playingBaccarat, which is like a 50 50 push game andBlackjack, where you're down for 4951.
There is no skilled like the biggest loser in the world is a professional Blackjackplayer.
I'm just going to say thatagain, the biggest loser in the world is a professional Blackjack player because your professional is something that is stacked against you is a by definition losinggame.
Secondly, you're probably really smart and could have done so many things with yourlife.
And you chose to play a game that is stacked against you as your professionalcareer.
Atthird, you're delusional because there's no such thing as a professional Blackjackplayer.
That is why that is the biggest loser job of theworld.
Well,he's, but the fact that he like continues to doit.
I'm not saying Dana's that by theway.
Dana's job is running theUFC.
Well, just a side tangent to any professional Blackjack player outthere.
That makes nosense. He could be a degenerate and also an also a greatbusiness.
He could be a degenerate gambler and also a great one of what Jordan was and many othersare.
What else did you learn in that documentary or thatshow?
The force of will buy us to action speed cutting through theBS, I think istremendous.
And his other employees even said this like the head of PR was like shegoes,yeah, the work starts at work starts at830.
It's 630 rightnow. I'm doing myworkout.
But Dana just texted mesaying, are you at the officeyet?
I told him notyet, but I'll be theresoon.
And she waslike, youknow, Dana's going to do this pressconference.
Dana's the type or once he decides he's going to dosomething, he's like a Ryan of going to doit.
He's going to bulldoze through and you're either with him on it and you're helping him do that or you should just get out of theway.
And youknow, I just thoughtman, another really hard job being the head of PR for the UFC is a very difficultjob.
And that woman is with himeverywhere.
I forget hername, but Landa or Linda orsomething.
She's always with him and whatyou'll, you'll notice is they do the press conferences after the fight in New Yorktime.
It's like at 2a.m. And then you'll see a Monday in France for another pressconference.
They work their assesoff.
Yeah,100%. Let me tellyou.
Allright. So we talked about a company on here a bunch oftimes, but I actually just met thefounder.
So I'm going to do a little bit of arepeat.
But remember how we talked about 29 0 29 the ever singthing?
It's the outdoor race where you kind of run up and down ahill.
As many times as it takes to run the equivalent of MountEverest, an awesomething.
Started by friend of the podJesse, it's Loret andothers.
Yeah. So it's I guess Everest is 29,000feet.
So hence29,000.Oh, 29 is the name of theirbrand.
We talked about them abunch, but the guy coincidentally joined Hamptonrecently.
So I was able tolike, I called them this morning and I was just talking through them because I've been sofascinated.
We talked about high rocks and we talked about a bunch of theseunderground, notunderground, but these like niche sportingevents.
And I actually think they're better businesses than I previouslythought.
So let me tell you about thisone.
So so if you go to 29 029, I think it's called 29 0 29 ever sing dotcom.
You can go to thewebsite, but check thisout.
So they do seven events ayear.
Each event only has 300people.
Thisyear, they sold out the entire year in four minutes for all of the events and he's purposely keeping thissmall.
So if you do thatmath, that's 13 million dollars in ticket sales that he'sdone.
And he told me that basically they want to own all the accommodation and so basically it'sturnkey.
Youpay $6500. You show up in somelocations, you can stay at like a fair amounthotel, which is where they they partner with or they do like glamping and you go to like Whistler and all these like really beautifulplaces.
And so you showup, you do this event and they you're reason to keep it at 300 people is so you can meeteveryone.
And so you can have this experience where you get to know all yourpeople.
And so you keep coming back year afteryear.
But listen tothis, they started in 2017 when they started in2017, Jesse it's slur was Mark's partner onthis, which is like the whole idea of like an influencer partnering withyou.
Jesse only had5,000, 5,000 followers on Instagram when theystarted.
He wasn't that big of adeal.
And yet in their first year ofbusiness, they made $500,000 inrevenue.
In2018, their second year ofbusiness, they did a million dollars inrevenue.
By2020, he said they were doing reallygreat, but COVIDhappened.
The business got wipedout.
And so in2021,2022, they had to start all overagain.
But he says it's a greatbusiness.
He's like it's negative workingcapital.
People pay up front and I can use that money to go and pay for all the accommodations and pay foreverything.
And he says it's a greatbusiness.
I waslike,well, what's wrong about thisbusiness?
Well, he said the first thing that sucks is it's afad, meaning toughmudder, a bunch of other events like you look at some of these events like Spartanrace, they get really popular reallyfast.
And the tough mudder was doing 100 million inrevenue.
Now it fell for bankruptcy a couple yearsago.
Like you have to figure out how to keep people coming back over and over and overagain.
And I askedhim, Isaid, how doyou, how do you dothat?
Like what are likethe, what are like the keys to make thiswork?
Because this is kind of an interestingthing.
I don't know if I would ever want to start one ofthese, but maybe one day he said the firstthing, you need astory.
So you have to tell your friends what's something exciting that you're going to bedoing.
And it can't be really like running a marathon because everyone kind of doesthat, but it has to be a little bit moreexciting.
You need astory. You need to be going somewherebeautiful.
You need to be doing some ridiculousrace.
The second thing is going to bechallenging.
Do you know how many people who start a marathonfinish?
70%99%99% of people who start a marathon end up finishing that particularrace.
Not so hardthen. It's not sohard.
In hisopinion, you need roughly a 70 or75%chance.
He said for hisevents, roughly70% of people go through withit,30%fail.
The third thing you have to learn some type ofskill, like a new skill or acquire some type of new fitness in order to accomplishit.
And the lastthing, it needs to be in a beautiful place or it looks cool inphotos.
So I was thinking aboutthis.
Let me give you three ideas for ridiculous fitness events that could workout.
Youready? Allright. The firstone.
We're going to call it the Burley beermile.
You dress up like PaulBunyan.
You go into mountains on a track and you're atrack.
You run onelap, chug abeer, run anotherlap, chug abeer.
You do that fourtimes, fourbeers, onemile.
What do you think about thebeer, the Burley beermile?
Look, if you can give people any excuse todrink, you already have80% of a goodbusiness.
Okay. There's a reason that like top golf is reallypopular.
There's a reason that people go to baseball gamesstill.
It's not because they're wondering what's going to happen in the top of thesix.
It's because they want to eat hot dogs and drink beeroutside.
Like giving people an excuse to drink is a great businessmodel.
If you just layer on top ofthat, acontrast, ajuxtaposition.
Oh, it's fitness andbeer.
Loveit. I'm alreadyin.
I don't know about the PaulBunyan.
I think that's a not sure that's on trend with the aesthetics that we're going forhere.
But I think if we workshop this idea a littlebit, you could havesomething.
Allright. How about the paddle prisonbreak, a paddle boat race from Alcatraz to the coast of SanFrancisco?
The prisonbreak.Oh, I like thisone.
My mind was still on the beer one for asecond, by theway.
I feel like just the beer mile or thebeer, the beermarathon.
It's a half marathon and you drink 13beers, I thinkhas, haslegs.
Or maybe it'slike, maybe it's a quartermarathon.
It's six beers and six miles or something likethat.
Dude, I dida, by theway, I do the beer mile incollege.
So you chuck a beer tostart, run alap, whatever you for fourbeers, fourlaps, onemile.
I threwup. And if you throwup, you have to run a fifthlap.
It took me 15 minutes todo.
It washorrible.Yeah, but we call that the victorylap.
It'slike,oh, I had to do a victorylap.
Why? Because I threw up duringit.
Oh,man, you soundfun. Allright.
So let's do prisonbreak.
So prison break is we drop you off the side of Alcatraz in a smallboat.
The paddleboat. We're going to call it the paddle prisonbreak.
Is there like a lane setup where we're just going to lose people into the oceanhere?
What's goingon? We got some liabilityconcerns.
Well, we're not going to let details get in a way of a good ideahere.
I think there is definitely something to the prison break out of Alcatraz if you dothat.
There's a swim race that happens everyyear, but I'll give you my last horrible fitnessidea.
Youready? We're going to callit.
For the prisonbreak, you have to start incuffs.
Great for theTardo. Adds astory.
Adds achallenge. You're going to have to learn and have to help each other get out of thecuffs.
So everybody's incuffs.
You need somebody in this race who like can just get out of cuffs and then they'll get the little pick and they'll start picking other peopleout.
And then you that's how you get out ofthis.
And you have to have a criminalrecord.
And in order to getinvited, you must have to have at least aclass.
A little gold patch on your on theshoulder.
If you actually have a felony or amisdemeanor,yeah, we'll just call you outthere.
And the last horribleidea, we're going to call it the SkylineScramble.
A race throughNYC, but you can't touch theground.
You got to go from building tobuilding.
Like a parkourchallenge.
Yeah,baby. The only person who surviveswins.
No, these are all horribleideas, but I did think it was incredibly interesting to hear this guy'sbusiness.
I didn't actually think that this company could be as good as itis, but I'll be easier to see if this thingworks.
Ido. I think these types of experientialbusinesses, I remember when I ran aconference, it wasn't the samething, but like having a thing that you worked towards and then all the people cometo, it waslike, I was a very fulfilling thing to do versus just being on the internet all thetime.
It felt nice to meet your customers and things likethat.
It was prettyawesome. So you didn't give me the heads up aboutthis, but I'm down to workshop a few ideas live where you hear if you'dlike.
Allright. What do youget?
When you were thinking tothese,what,what, how did you put yourself in the mindset to even come up with theseideas?
What, what got yougoing?
Well, they're not very goodideas.
So,uh, so whatever mindset I wasin, I would say avoidthat.
We're going to go with maybenostalgia.
So,uh, the BostonRover, it's redrover.
Remember thatgame? RedRover?
It's, but with just all the people in the city ofBoston, as many people as you get on one team and we're playing RedRover.
Just a city wide hide and goseek.
A city wide hide and goseek.
Exactly. It's not really fitness at thispoint.
No, children's games I've goneinto.
It's, they're all horribleideas, but I just thought that this segment isfascinating,dude.
I think that one day I could see myself doing this to make one ofthese.
Yeah.Yeah.Yeah. They seemawesome.
It's likethe, you know how we talked about like viralfood.
It'slike, how do youmake, how do you make your restaurant goviral?
Well, you need like some type of food that's either oversized or extra small or is a different color or it's typically aside, forexample,uh, cookiedough.
It's themain.Yeah. It's like cookiedough.
You make that the main thing or you mash up two things that don't go together or you mash up two things thatyeah.
And I'mlike, what could you do forfitness?
And I thought it wasinteresting.
I think that's the sameidea.
By theway, speaking of beautiful settings and doing races in memorableplaces, where should people be racing to rightnow?
I think they should race to wander.com slashMFM.
Why should they dothat?
Well, it's actually a pretty good dealhere.
So if you go to wander rightnow, wander is a place where you can go rentbeautiful,um, luxury vacationexperiences.
I'm booking one rightnow.
Actually, I have my assistant working on it thismorning.
So,uh, if you go towander, theydo, they're doing a special deal for MFMpeople, which is that if you go to wander.com slashMFM, you download theirapp, signup, you don't have to book a vacation oranything.
You were automatically entered into a luxuryvacation, getaway,um, on behalf ofus.
And so they are going to be giving away a stay to onelistener, which isamazing.
Your odds are actually prettygood.
Thispodcast, not that popular could be used and maybe one in a hundredcan'ts.
Whoknows? So goahead, download the appand,uh, and enter thewin.
And if you download theapp, you'll also get $300 off your nextday.
Um, so you get a discount and you get into thegiveaway.
But check outwander,dude, I was looking at some ofthese,um,properties.
The problem I have withwander, I got a bone to pick withwander, which is the pictures are so good that I started booking vacations to places I don't even want togo.
I just like normally you'relike, I pick a city and then let me find a place to stayhere.
I went and I waslike,dude, this house issick.
I guess I'm going toNaples.
Where, where am Igoing?
I don'tknow. I'm going to Floridanow.
I wasn't even trying to go toFlorida.
And sowell, they'resetting, they're settingexpectations.
Sohi. So forexample, have you everseen,um, have you ever seen like people who take pictures of the pyramids and then they zoom out and there's like hot dog vendors and there'slike,uh, you only meanInstagram, like reality type ofthing.
Like these photos are so freakinggood.
If they zoomout, is there going to be like a trailer right next to thehome?
Like how are thesestill?
No,dude, I've had people who use these for like corporate off sites because like some of these places are prettyballer.
So they use it to like doa, there's like one inSonoma.
I know my friends did for a corporate offsite.
And they werelike,no, it wassick.
It wasamazing.Um, theymight, there has tobe, Imean, these photos look so good that there has to be some version of like shoot for the stars and you still land on the moon type ofthing.
But,uh,yeah, if it's anywhere near as good as itlooks,I'm,uh, I'm veryexcited.
You have on thisdocument, the difference between running a business for growth versus EBITDA versus cashflow.
I'minterested. You got myattention.
Yeah, this is a CEOschool,uh, tacticalsession.
When you were running thehustle, did you obviously all of these things aregood.
You wantgrowth. You wantEBITDA.
You want cashflow. The problem is when you want three thingsequally, you usually getnone.
Um, so there are generally in any business at any point intime, tends to besome, some order ofpriority.
Uh, when you were at thehustle, didyou, which are these did you focus on and was there ever a shiftin?
Oh, now we're focusing on this instead ofthis.
I didn't run the business longenough.
We know we sold like four and a half years in to make theshift, but it was for the longesttime.
It was revenue was the number one priority followed by cashflow, followed byprofit.
And so what I wanted to do was double revenue everyyear.
So I think we went from like 500,000 in revenue to 2.2 to like five to 12 or something likethat.
And we didn't make a lot of profit along theway.
I think the year wesold, we did maybe a million inprofit, but our cash flow washigh.
So I was able to add like two million dollars to our bank account and explain to somebody who'slike,wait, how do you have a million dollars ofprofit, two million of cashflow?
How does that work in a business like thehustle?
So I'll give you guys a really easyexample.
So we had this thing calledtrends.
It was $300 ayear. But for the sake of thisconversation, let's just say it was $1200 ayear.
And if a customer paid upfront, let's say they paid me on June 1st, $1200 for an annualsubscription.
My cash flowwas $1200.
That's so much my business accepted into our bankaccount.
But the way that gap accounting generally accepted principles ofaccounting, the way that works is that $1200 was really only $100 in June, $100 inJuly, and $100 eachmonth.
And so my revenue was only $100 per month that they stayed withme.
Even though Icollected $1200, thus myprofit, let's just say that it cost me $75 to produce thecontent.
My profit was $100minus $75.
So $25.Exactly. And so I'm in the situation rightnow.
I have a business that my account business where we've been running it for maybe four yearsnow.
And it's doing reallywell.
It's been I was only growthfocused.
So I was likeyou, I wanted to double or more everyyear.
And so we did where you wentfrom.
Which the reason being is typically not always typically it's harder to growrevenue.
But it's easier to once revenue is grown to becomeprofitable.
Exactly. I think it's the right order ofoperations.
Actually, there's one pre step even beforegrowth, which is just product marketfit.
Meaning have I made something that peoplewant?
Do I feel like if I producethis, that there's a market pull forthis?
So oncewe, youknow, it was a verify product marketfit.
Great. Now it wasgrow. I think in yearone, we did six or sevenmillion.
I think in yeartwo, we basically got to 12 something year three was bigger thanthat.
Now your four is bigger thanthat.
So we basicallyeven, youknow, growing by somewhere between15,100% every year for the fouryears.
But I have pulled out exactly zero dollars from thisbusiness.
I have put in my pocket zero dollars from this business in fouryears.
Wait,really?Yeah, I've taken nothing out of thebusiness.
I've reinvestedeverything.
But it's nota,oh, I could have took a ton of money out of thisbusiness.
It'slike,well,like, forexample, oneyear, we basically had noprofit.
Wedid, youknow, eight figures of revenue and we were breaking evenessentially.
And I waslike, what are we doinghere?
How did thishappen? So like thebank, but did the bank account ever goup?
Like, wasyour, was your cash position evergood?
Well, ine-commerce, you have one othervariable, which isinventory.
And so the cash has been prettysteady.
But the inventory assets are goingup.
But they're also inventory that might take a while tomove.
It might beslow. It might bewhatever.
And so youdon't, I don't want my cash tied up ininventory.
That is not actually theplan.
That'sa, it's abyproduct.
Unless you can pay your employees and bills ininventory.
Itsucks.Yeah,exactly.
So I've been going through this process where I shifted from where I first was ingrowth.
And then I shifted toEBITDA.
And so that required a certain set ofskills.
So I'll share with you some of the lessons learned shifting to EBITDAfirst.
Sowe, and we've successfully shifted toEBITDA.
And so EBITDA being earnings beforeinterest,tax,amortation, amortation anddepreciation.
Exactly.Okay. So what did I do to make thatshift?
The first thingwas, and the reason I'm saying this is because there's probably people out there who are running a business that's been high growthlow, low cash flow or high growth lowprofit.
And for somebusinesses, that's the rightmove.
You want to stay in that mode for a very longtime.
Maybe it's a winner take allmarket.
Maybe it's a land grabsituation.
Maybe your venture back and it's a billion dollar or abus.
This is notthat. This is a business I own thatI, youknow, if we sell thisbusiness, it mightbe, youknow, a hundred million dollars or less is like where this whole thing willland.
But that'sgreat. We are on thebusiness.
We have nooutside, youknow,investors.
And so it's no bigdeal. Soanyways, the point of this point of this branch isbasically, how do you make thatshift?
So I first went and talked to peoplewho, so stepone, figure out what the right EBITDA targetis.
So I go and talk to people who are in the same space to figure out what EBITDA margin is kind of the low end of what's possible to the high end of what'spossible.
And then I ended up shooting for somewherelike, youknow, the60%mark, like 10 to25%.
Yeah. So forme, that's like17%margin.
So the best ones werelike,yeah, we have25% like thee-commerce.
But then you dig into the hood islike,oh, you don't do any marketing likesomehow.
Well, Ido. So that's just not going tohappen.
But getting to17,18% islike,wow, that would be reallygreat.
And then the low end is like10%.
So that's the firstthing.
Then envelope create like aEBITDA, what I callit, EBITDAbudget.
So basically you take for every $100 of revenue that comesin, what percentage is going to go to each of the followingcategories, myoverheads, my cost of goodssold, myup-ex, my advertising andmarketing, etcetera.
And so you create an EBITDA budget and you basicallysay, where does the dollars flowtoday?
So you do a last 12 months lookback.
So we're on average everymonth, we're spending5% of revenue onoverhead.
And youknow,12% on in thee-commerce, maybe it's shippingfulfillment,whatever.
So you create a current statusbudget.
And then yousay,well, in order to get mymargin, I need tofind, youknow, eight points of extra profit marginsomewhere.
So where's it going to comefrom?
And so you start to basically pull calories from from these differentdepartments.
Allright,marketing, you're going to have to give me two pointshere.
Andshipping, you're going to have to find a way to cut off one point and you basically find the extra eight points of margin that you're going toneed.
And that stuffis, it's not hard to do it in aspreadsheet.
It's really hard to track it on a weekly and monthly basis to make sure that it's reallyhard.
So once I didthat, now it's time tocommunicate.
So stepthree, communicate the planrelentlessly.
So I then go to the leaders of thecompany, Isay, heyguys, forget everything I saidbefore.
Now this is whatmatters,right?
We still want to growsure, secondarypriority.
First priority is we're going to growEBITDA.
What'sEBITDA? Where are we tracking thistoday?
So I'll showthem,hey, here's what itis.
Here's what it needs tobe.
Here's how we getthere.
And here's the cadence of how we're going to trackthis.
And now I put the bonus onthem, Isaid, you need to find me one or two points of margin in yourdepartment.
Or you need to find me three points overhere.
How are you going to doit?
So come to me tomorrow or in two days with the plan of how you're going to get that extramargin.
Andalso, I want you to create areport, attractsthis, youknow, the sortof, youknow, if you're a cost center or your profit center of thebusiness, you need to create a little dashboard and you need to show me how you're going to basically update that every single week or every singlemonth.
So we dothat. And every singlemonth, I start hammering people onthis.
And then the fourth step is tie their incentivesto.
So I go to my CMO and Isay,great, last year your bonus was based onrevenue.
This year your bonus is based onEBITDA.
Do you wantyour, and by theway, I'll actually increase yourbonus.
Youcan, we'll remove thecap.
You can actually get a bigger bonus if you're able to get even biggerEBITDA.
So now it's on you to figure out how thathappens.
But if we don't hit our EBITDAtargets, you get nobonus.
Okay. So now incentives are aligned to achieve thatthing.
And so those are the kind of the first foursteps.
Laststep, which is basically actually go do the thing over and over and over and overagain.
Somebody gave me some great advice along theway.
Theygo,oh, you're in EBITDAmode.
Yes. Cold springcleaning.
So here's what you're going todo.
You're going to go and you're going tosay, this got to be similar hangingfruit.
You're going to go and you're going to find a bunch of SaaS subscriptions that you should cutoff.
You're going to findthis, this agency you're paying too much and realize that we don't need thatagency, whatever itis.
And you're going to feel likecool, we cut thecosts.
Schedulecalendar,writer, and 30days, you're going to do the exact same thingagain.
Yeah. And you're going to feellike,well, we already cleaned itout.
But it's just like cleaning ahouse.
You first clean out the surface levelmess.
Once that'sgone, now you start torealize,oh,wait, we never actually dusted this area or this closet and actuallystopped.
Now let's start to unpack thiscloset.
And so we'vedone, I would say three or four of these spring cleanings now thisyear.
And it's only six months into theyear.
So I've done it at least threetimes, maybefour.
And each time we go and we unearth morestuff.
And you can't do it everyday.
That's not the right way to focus onit.
Butlike, youknow, on a monthly or every two months basis to go back through andsay, allright,let's,uh, let's trim some morefat, where's morefat?
And inevitably you will find morethings.
But why are you going afterEBITDA?
Because so I'll mention this a littlebit, but if people rag onme, I'm not like incredibly wellversed.
But I've been looking into like EBITDA might bebullshit.
Like, so there's this thing called gap generally acceptedprinciples,whatever.
It's like what we all like abideby.
There's a lot of bullshit inthere.
Why EBITDA versus cashflow?
So cash flow alsoworks.
Cash flow required me to do a second bigproject.
So the second big projectwas,okay, where's that cashgoing?
Why doesn't the cash go in mypocket?
Oh, the cash goes intoinventory.
And so separately we did this like after I did the EBITDA cleanupfirst, first couple ofmonths.
Isaid,okay,great. Now the EBITDA is great everymonth.
But my bank balance is not going up proportionate to theEBITDA.
And so first three months of theyear, we killed it onEBITDA.
Awesome. Where's the moneygoing?
Oh, it's going intoinventory.
How do we get our inventory levels to be right size said that this cash flow flows to the owners of the business and not to thewarehouse?
Because today it's going to thewarehouse.
And which is a separate challenge and a separate disciplinealtogether.
And it's a three-leggedstool.
You need all three legs to have an amazingbusiness.
You need a growthleg. If you're notgrowing, the business is not worth verymuch.
You needprofit. If you don't haveprofit, the business is not worth verymuch.
And then you need that profit to result in free cashflow.
And if you can get allthree, you have abeautiful, amazingbusiness.
But inorder, I kind of wanted to go in thosethree, becauseagain, there's not going to really be much cash flow if you're operating at a netloss.
So I need to first be making sure there's a surplus ofprofit.
Then I need to make sure that surplus of profit is resulting in free cashflow.
And you just so happen to be in an industry where those EBITDA and cash flow things are reallyhard.
It's reallyhard. Like to figure out the inventory and stuff likethat.
That is ascience. I'm not envious of the group who go throughthis.
My major takeawayis, Decom is a terrible business to bein.
And then is it not a terriblebusiness?
If you are winning the game and you still think it's abad, bad category to bein, that's when you know it's a badcategory.
Mostpeople, they lose thegame.
They're failing atit. And then they blame thecategory.
So forexample, and the opposite is truetoo.
I was telling somebody aboutpodcasts.
Ohman, podcast isgreat.
Hegoes,well,yeah, you won thelottery.
So of course you love lotterytickets.
Like, youknow, your podcast ispopular.
Itworks. Like ofcourse, podcasting is great foryou.
But for the million podcasts that are not really getting listenedto, isit, wouldyou, would you feel the sameway?
Is it winningdependent?
And so this one is interesting because art e-commerce iswinning.
And even inwinning, I'mlike, note tosell.
This is not the category to be in nexttime.
Beyondthat, I would say playing the game on hard mode has a bunch ofdisadvantages.
And I wouldn't put myself in this positionvoluntarily.
However, once you're in a position where you're playing some game on hardmode, there is one bigbenefit, whichis, if you ever get to play an easiergame, you willdominate.
It's likea, it's like I was playing pickleball with aguy.
It was his first time playingpickleball.
He'samazing. I'mlike,yeah, why are you doingthis?
He'slike,well, I'm like collegetennis.
I played a harder game and I won thatgame.
Solike,yeah, I'm pretty good atpickleball.
It's notso, it's not that hard forme.
In the sameway, I was listening to Andrew and Chris fromtiny.
They were doing like aQ&A.
And the guy waslike,yeah, I'm ine-commerce, D toC, which you guys say you don't love thatspace.
Would you recommend I justquit?
What should I godo? And hegoes,well, one of the things that worked for us was because we ranagencies, which are can be lowmargin, grindy businesses with a bunch of HR problems and hard to scale because we dide-commerce.
Once we went into easierbusinesses, we just cleanedup.
We could buy a software business that was running at10% margins and get it to40%.
Just because that guy wasn'treally, he wasn'twilling, ruthless withpricing.
He was not negotiating withvendors.
He was not taking care of all these little things that wehad, we had to do to survive in these other categories that in a softercategory, you're not as on the hookfor.
Who do you think is winning in e-commerce and what attributes do theyhave?
Shopify?No, Imean, ofcourse, ofcourse,retailers, D toC, whatever you want to callit.
I think rightnow, the retailers that are taking advantage ofTikTok, the TikTok flywheel are cleaningup.
What I mean by that is there is a very specific moment of time right now where you can create content on TikTok either yourself as a brand or evenbetter, you use an army of affiliates and UUCcreators.
Whether it's with TikTok shops or people just hear about the brand so much onTikTok, they go Google search it and they find your Amazon or they find your D to Cshop.
Thatflywheel, I'm invested in a couple of companies that are doingthis, that flywheel is pretty unreal rightnow.
But only for certain categories I wouldimagine, is it only for things where young people areusing?
Nope. That'samazing. That'sridiculous.
Let's moveon. I've said toomuch.
Allright, I want to talk about one thing that you actually had on here that I have noidea, like it's way out of character foryou.
Your dream house or do you want to do paintedchickens?
Well, I don't have much to say about the dream house except fordude, look at this sickhouse.
That's the entiretopic.
But let's gothere. It's an amazinghouse.
This is a house that this guy on my team sent me and I can't believeit.
It's the most beautiful house I've ever seen in SanFrancisco.
It's 11,000 square feet estimated marketvalue, 23 milliondollars.
It's on the ocean in SanFrancisco.
There's just a fewphotos.
This house is first to get 11,000 square foot home in SanFrancisco.
It'svery, very hard todo.
Every view is like the Golden GateBridge.
You're right on thewater.
You're right on theocean.
But even if you didn't want to go on theocean,well, guesswhat?
You have an infinity pool in the back that's just spilling over into the PacificOcean.
On top ofthat, there's one photo in here that I just have to showyou.
I see a beautiful porch that's overlooking the San Francisco Golden GateBridge.
Nextphoto.24. Like a wine seller that is big enough that it was bigger than my childhoodbedroom.
25. A huge home theater that looks like they're just watching some type of naturedocumentary.
Soawesome. They're studying thishere.
Here itis. The reason I want this home to begin with26.
A half-core basketball court with all windows where you can see the Golden GateBridge.
This isawesome. Is this Floridaceiling, like 25 footceiling, all glasswindows?
You're looking at theocean, thebreeze.
There's a glass door that'sopen.
You see the Golden Gate Bridge and you have a beautiful basketball court inside your home with all this light wood that I justlove.
Oh mygod, this iscrazy.
Dude, this house isunreal.
I must buy thishouse. It's not forsale.
So that's the firstproblem.
Besidesthat, I now have atarget.
I now have adesire. Youknow, I thought I had enoughmoney.
Now I have adesire. I need to be able to drop 30 million bucks on thishouse.
Dude, in order to buy a $30 millionhome,oh, check thisout.
Okay, so it was owned by SharonStone.
Before that or afterthat, do you know who ownedit?
Adentist. A dentist owned thishouse.
What thehell?Yeah, it says this guy was adentist.
In order to buy a $30 millionhouse, I'll tell you how much money Ineed.
28 million and then I'm going to borrow two and I'm going to buy this house with every dollar I own and that'sit.
No, I think you need I think you need a 100 million dollars to buy a $30 millionhouse.
Would you say that'saccurate?
Probably atminimum,yeah.
Atminimum. Themaintenance, the taxes on a house like this is going to be pretty insanetoo.
Like your carrying costs are going to bewhat?
Half a million to a million bucks ayear.
Yeah, it couldbe,no, it doesn'twell, it could be that it would be that high probably because you're on the coast and you got the seattaxes.
Taxes alone in San Francisco of this on this house is going to be like quarter million to $300,000 ayear.
That's just the propertytaxes.
So all themaintenance, all theinsurance, all the all thecleaning, all that stuff on top of this thing is going to be at least another quartermillion.
So at least half a millionbucks.
Yeah, that'sinsane. That'sinsane.
This is a it's a sickhouse.
The the last thing I wanted to ask youabout, you said you wrote someessay.
Yeah, your boys getting this program on I started writingessays.
Why? I told you I've just had a creative season and I wanted to do differentthings.
I like writing and I waslike,well, what do I want to writeabout?
I realized I want to write about the stuff that I'm curious about or whatever I feel like I have a a golden insight to something that anything that feels insightful tome.
I want to be able to write it down and why do I care aboutthat?
You want to spread yourseed,baby?
You got to spread thatseed.
Well, that's part ofit, but actually the bigger part is I've known there's this feedback loop thathappens, which is once you have to deliversomething, you start to look forit.
Meaning when we start this podcast and let's say every week we got to do this podcast and when you show up to thispodcast, you got to have three interesting business things tosay.
You need to have three interesting businesstopics.
In order to dothat, your brain starts to now go seeinteresting, go find interesting businesstopics.
It starts to ask a few morequestions, start to write a few morenotes, start to pay a little more attention in this wonderful feedback loop gets built where you start getting smarter about business more because you have this outlet where you got to go put it and you're on the hook to go put it somewhere every sooften.
In the sameway, one of my favorite things is to learn somethingnew.
I'm just kind of like a learningjunkie.
By having a place togo, I now am hunting for more insightfulthings.
I'm readingmore. I'm talking to peoplemore.
I'm having more connections between two different ideas that aredisconnected.
That's the realreason.
Because I have the thing I shared withyou, I haven't even publishedyet.
I'm going to publish all these on my website justchanpuru.com.
But right now this one's on a Googledoc.
I'll throw it up after this so that it's releasedonline.
The essay is called paintedchickens.
The reason it's called painted chicken is because have you ever been inside of asubway?
Do you eatsubway? When I was akid.
Yeah. I likesubway. I admitit.
Butsubway, the quality has gone like way down since I was akid.
I can't tell it has the quality gone down or have our taste goneup?
No, the quality has gonedown.
Do you know what Iknow? Do you know all the controversy with Chipotle rightnow?
No.No. Like Gen Z hatesChipotle.
Why? So basically the things started training onTikTok.
There's Chipotle jipping you onquantity.
Okay. Or justlike, basically like the way that this like Chipotle used to bebombed.
Now itsucks. Here'swhy.
And different people have different reasons why thetaste.
But one of the big ones is like they're just skimping on thething.
And then the CEO came out and did the hilariousthing.
You didn't seethis?No.
It's sofunny. The CEO came out and hegoes, ohman,look, if you go into Chipotle and you want a little bitmore, our guys are great aboutthis.
Just he just give him alook.
And itdoes. It's like stupidlook.
You dothat. Our guys are girls andgirls.
Our guys and girls are great at who can you up withthis?
And so there's all these memes now of people beinglike,yeah, when I go into a Chipotle and I make thisface, like theirreaction.
They're justlike, they're notlike, I got youbro, let me hook itup.
And they're like also impersonatinghim.
Where they'relike, when you go into a Chipotle and you give thelook, our guys and girls and trans and black peopletoo, they're all great at doingthis.
And people are making fun of this CEO forlike, youknow, flubbing this speech that hegave.
Soanyways, Chipotle is under the microscope rightnow.
Well, now they all likeKava, which I just wentto.
It'sawesome.Yeah, they likeKava.
Well, one of thereasons.
So then the founder ofChipotle, I think came out or somebody who was like the XCE came out and he said twothings.
Hegoes, it's insane that people think we would tell our staff to like skimp onportions.
That's terrible forbusiness.
Like we've testedthis.
The thing you do forbusiness, if you want to grow revenue and grow profits in a store is you give people biggerportions, which makes them love the place to comeback.
Sales go through the roof and waste also goes down because you're giving them the food versus throwing itaway.
If you actually want to save on foodwaste, it's not by doing lessportions.
It's by having more customers first so that you sell through all yourfood.
That's the way you reduce foodwaste.
It's not by skimping to customers and then they don't come back as they'reangry,right?
That would becounterproductive.
The second thing that came out was the guysaid, basically when Chipotle had all thoseE.
coliscares, they had to change their whole supplychain.
I don't remember thestuff.
There's a couple years ago where liketwo, three times likewhoops, whoopsagain,oh,E.
coliagain, sorry aboutthat.
So they changed all of their operatingprocedures.
So what they used to do was in the store in theback, that's where they would chop the veggies rightthere, they would dowhatever.
Now it all comespre-bagged, sealed from like a central headquarters where they can have really tight foodsafety, vacuum seal it orwhatever, shipped at a store or store just has to openit.
They're not doing the food prep onsite.
Well, the result of that is the food taste lessfresh.
And the result of that is that they can say they cut down the number of suppliers they were working with because it was too muchrisk.
So instead of local farms for themeat, they now started going to cut a few vendors that are now shipping out much farther distances and maybe are more mass production lesstaste.
So the taste actually has gone down not just the taste buds because of the supply chainchanges.
So they need to bring backE.
coli or whatever waslike,yeah,dude, let's roll the dices a little littleright?
Like the food's got a tastegood.
Who cares if you get sick once ayear?
Which is insane if they sellthem, if they serve millions of customers when it's like fourpeople, youknow, thatis, that's like statistically insignificant out ofimagine.
Which is always the worstargument.
Like whenever one of the social networks islike,dude, do you realize like they're getting hammered by Congress and what they want to say is there's two billion monthly activeusers.
How many people are in yourstate?
How many murders are there in your state perday?
Do I blameyou?No. I run a state a hundred times bigger thanyours.
Like they can't saythat, but that's the reality is the law of largenumbers.
If you'reFacebook, literally anything that can happen is going to happen on your platform every singleday.
That's just the rule ofstatistics, even the most likehonest,strangest, most screwed up behaviors are going to happen because it's so manypeople.
It'sinsane.Yeah. And so now they've had a change of soulthing.
But what was your essay aboutthem?
So my essay is aboutpay, I call a painted chicken because if you go tosubway, somebody's motto was eatfresh.
And if you go intosubway, it's just hilarious to hear eatfresh.
And then literally he's opening up a bag of chicken and you see thechicken.
And the chicken has grill marks onit.
But you'relike, how can all the grill marks are souniform?
What kind of grill do theyuse?
If you go look itup, that the grill marks are paintedon.
They don't grill thechicken.
That's not what those grill marksare.
The grillmarks, thegrill, the grill marks are literally painted on thechicken.
And so I love this analogy because in everybusiness, there are there's always lipservice.
Youknow, every business has these stupid things that theysay, go go read the website of like BP and BP will belike, we care about communities in theenvironment.
And they're like spilling oil into theocean,right?
Like everybody has their their version of eatfresh, which is you say eatfresh.
And then you just you're painting onchicken.
And so what I wanted to talk about was what are the few examples where there's not paintedchicken?
Meaning what are the examples where a company has values that they actually live by and they actually mean something because I think anybody would agree that like a value system isvery, veryimportant.
I remember my firstbusiness, I was trying to make a decision and we asked ourmentor, we'relike,oh, we're doing a sushi restaurantthing.
I waslike, should we use the eco-friendlypackaging?
But it's more expensive and it's kind of like the paper strawdisintegrates.
But it's good for the environment or should we use this one that'scheaper, bad for theenvironment.
And it's super durable is actually goodpackaging.
And she waslike,well, you're asking the wrongquestion.
You're asking the question of which packaging should weuse.
But the questionis, what do we valuemore?
The environment or the convenience ofaffordability?
There is no rightanswer.
It's just a question of what you valuemore.
And you shouldjust, all your decisions need to comeupstream.
Move your decision makingupstream.
Once you know your valuesystem, everything becomes obvious afterthat.
And this is just a goodlife, a good bit of lifewisdom.
If you're in a situation where you don't know what to do withsomebody,oh, shouldI, they treated me thisway, but Ishould, should I respondkindly?
Should I be meanback? ShouldI, should I ignorethem?
What should Ido?Well, if your value system is I'm a kindperson, that's what Ido.
Idon't, I don't change my behavior based on otherpeople.
Well, then the answer isobvious.
Just be kind to moveon,right?
Like that'sit. So what I started to look at was what are the company values that I actually remember that meant something to not onlyme, but the people who worked in thatcompany?
And the first one that comes to mind is Facebook's move fast and breakthings.
Yeah, I lovedit. Youlike, I think we've heard that everybody's heard thatphrase.
My notright. So Isaid, move fast and break thingslike,okay, that'sgreat.
Is that popular because Facebook ispopular?
Like maybe it's just a popular value because Facebook was sopopular.
Allright, that's theoryone.
Well,Sam, what's what's Microsoft's corevalue?
What's Microsoft's move fast and breakthings?
Noidea.Twitter,Lyft,Uber, I pick any of thesecompanies,right?
Do you know any ofthem?Like,no, we don't know any from any ofthem.
Infact, the only other one that I couldremember, like move fast and break things wasGoogle's.
Do you know what Google'sis?
Do you knowevil?Yeah, don't beevil.
Exactly. But then it got silly because they maybe did a littleevil.
Well,exactly. So I wasthinking,well, what is it to learn fromthis?
So the first thing I learned is maybe these are memorable because they'recatchy,right?
Maybe that's the firstthing, which is that instead of just sayingintegrity, you should say don't beevil.
Don't be evil is moreprovocative.
It's morecatchy. It's more interesting than integrity or honesty or begood.
Right? If they just said be good versus don't beevil, none of us would remember that Google's values begood.
But a lot of us paid attention when they said our values don't beevil.
So I think there's something to less than one is if you make itprovocative, you make itmemorable, if you make itmemorable, people might actually useit.
So that's the first littletakeaway.
The secondis,well, there are other catchy rhymingthing.
Youknow, you could just try to be catchy like thequicker,picker,picker,upper.
That'scool. But whydoes, why does move fast and break things have a little bit more weight toit?
I think it's becauseit, you have to pay theprice.
So you got to pay the cost to be theboss.
And what I thought was interesting was if I went to 100 CEOs of Fortune 500 companies and Isaid,hey, we think that youshould, you're the company should movefast.
That speed is an importantvalue.
Speed isimportant,right?
Move infast. Would you say that's a value for yourteam?
Ofcourse. 100 out of 100 would nod their head andsay,yep, ofcourse,definitely.
We valuespeed.Awesome.
And if yousaid,well, when you movefast, likenaturally, sometimes things might gowrong.
You might bump into somethings.
You might break some things when you're moving sofast.
So let's agree that it'sactually, it's going to be move fast and breakthings.
How many of the out of the hundred would nowagree?
And the reality is that 99 would be chickenshit.
And they would belike,well, hopefully I'll let it know when we're not trying to break things aroundhere.
Itdepends. It's speed without breakingthings.
And once you go to speed without breakingthings, you're now subway eatfresh, paintedchicken, yourbullshit,right?
It's now aunusable, non-usefulvalue.
It might be something you put on yourwebsite, but it's never going to have anyweight.
You're never going to be one of these generational type companies that operates differently and is known for how theyoperate.
And so I went and read this quote from Zach and I want to read this toyou.
So hesays, the value is actually movefast.
But my theory on values is that most organizations have a lot of values that don't mean verymuch.
They're just tablestakes.
Like if you say just behonest, of course you're going to behonest.
You should behonest. Everybody agrees withthat.
Everybody knows that it meansnothing.
It's not an option to not behonest.
That'sautomatic. So hegoes, I think the defining principle for acompany, meaning your company is going to have one thing that you guys really do is your A plus strength should be something something more interesting that has atrade-off.
So move fast is interesting for us because we had to give something up to getit.
So the question isactually, what are you willing to giveup?
Values are notfree. Nothingis.
Dude, that'sinsane. Imean, what an insightful personto, Imean, he's just like an eloquent guy for how young hewas.
Imean, that'sa, that'sa, that's a really goodquote.
And so if I think about other great values that have like had resonance and stuck with people and meant something topeople, youknow, forexample,Nike's, this is more of aslogan, but just doit.
If you think about the the phrasing of just doit,is, is Nike's just do it as powerful if it just said do it or dothings?
It's verydifferent. But the word just changes it because just implies there's acost.
Just implies thatit's, don't hit the snoozebutton.
Don't, don't shy away fromit.
It's goingto, it's going to bepainful.
It's going to beuncomfortable, but just doit.
And so I thought there's something to learn inthat.
That's kind of inspiring forme.
Somy, my essay wasbasically, if you want yourculture, your values to meansomething.
And my friend Seiki has this greatphrase.
Hesaid, cultureis, there's many ways to defineit.
But the best wayis, what do people do when the boss isaround?
I lovethat. I thought that was prettypowerful.
It's your defaultbehavior.
And if you want your default behaviorto, to meansomething,to, to bedifferent, to be a defining characteristic of your company that is different than the way other companies in your spaceoperate.
Here's the three stepformula, whichis, you choose onething, not 10things.
So forfast, forFacebook, it was moving fast forApple.
It's thinking differently forNike.
It'saction. Then you make it real by acknowledging the cost or the tradeoff.
Andlastly, you make itcatchy.
You make itprovocative.
You phrase it in a way that's going to turnheads.
So that'smy, that's my essay called Payne'sChicken.
First, that'sawesome.
Second, while you're on this little like valuedriven, mission driven companyquest.
Have you heard of this company called BrunelloCuchelli?
You probably haven't because it's not yourstick.
But theymake, the first thing you're who isthat?
No, it's this Italian company that makes really expensive cash mereclothing.
And they're mostfamous, they're most famous thing is likesweaters.
Soit's, I'm wearing a free t-shirt made at100% polyester from aYouTuber,bro.
Yeah, that's why I knew it wasn't yourstick.
But it's not my stickeither, but it kind ofhas, is becoming it because I like it somuch.
But BrunelloCuchelli, the founder started it because he was like an expertat, Iguess,cashmere.
Like hewas, I don't know what the termis, but he knew how to put togetherclothing.
And he basically waslike, youknow, my dad worked his assoff.
He was working seven days aweek.
And I wanted to create a humaneworkplace.
And so we're going to do that by creating these amazing sweaters where we hand stitch and it's doneperfectly.
What do yousay? It's donebeautifully.
And he makes these really high insweaters.
And the clothing isgreat,whatever.
But what's more interesting is thisguy, thefounder.
And I just saw someone shared this photo of hisschedule.
6a.m. wakes up at his countryside, how home slowly getsstressed, goes to the office at830.
And then hesays, atone, I walk home forlunch, then I take a 30 minute Ciesta at 3o'clock.
I go back to work at530. The whole company stops working and takes the late afternoon walk because we believe that rest is super important to being soulful and personal studies in port aswell.
He has light supper at 8p.m.
And from 9p.m. He heads up to the cafe to meet friends where they discusspolitics,philosophy, religion and other subjects late into thenight.
And I waslike, is this guylegit?
Is he the realdeal? Heis.
So thiscompany, this sweaterbusiness, it's a publicly tradedcompany.
I didn't realizethat. It's a publicly traded company with a market cap of like $4billion.
He's building his company to build a great workplace and to create greatproducts, not to make moneyfirst.
And it just because ofthat, I want to give him moremoney.
And he's going to make moreprofit.
Yeah, I'm on the website rightnow.
Andit's, youknow, it just from a swipefile,like, youknow, there's so many little things that they do in their branded marketing that iscongruent, completely congruent with everything you justsaid.
One of the great marketing lessons I learned a long time ago was somebodysaid,yeah, it's got to beepoch.
I was epoch wasepoch,EPOC.
They said every point ofcontact.
So theysaid, once you decide what you're allabout, every point ofcontact, meaning when somebody hits you in onyour, if you're all aboutluxury, but then your customer service hotline is like some janky old webform.
It's not every point ofcontact.
Like I'm lookingat, forexample, one of the little gifts on the sitefor, youknow, he'slike,go, go click on the sweater section orwhatever.
It's this guy and it's amodel.
But themodel, he's peeling an orange and he pops like an orange slice into hismouth.
He's just kind ofwandering.
He's like walking alittle, suddenlyaimlessly.
He's just sort oflike, he'schilling.
He's not trying toohard.
He's enjoyinghimself.
He's right by thewater.
And I'mlike,man, the creative direction tosay, because normally what yousaid, if you have the founders got theirbeliefs, then you have the revenue team that's trying to jack uprevenue.
They're adding pop-ups on thewebsite, try to make itlike, youknow, improveconversion.
They have the creative director who's not even invited to the meetings and they're trying to do one thing over here and it is not congruent atall.
Andpeople, whether they can see it ornot, they feelit.
And you could feel when something iscongruent.
It's the same reason that the Apple Store looks the way it does and the iPhone looks the way it does and the packaging looks the way it does and the commercials look the way theydo.
It is congruent when it's done well as abrand.
It was very rare to see that to behonest.
Yeah, these hands are on top ofit.
Now, I likethem. I don't know if I want to spendlike, I'm looking at $1,500 for apolo.
I don't know if I'm thereyet, but I'm definitely thinking aboutit.
Maybe I'd buyit. Maybe I'd buy a $2,000sweater, butlike, everything they have ishigh-end.
Like, it's one of those places to attract a goodcustomer.
And I think he has repelled mesuccessfully.
I would not be a good customer ofthis.
But you know what'scool?
You've said he has hisschedule.
Lightsupper. Lightsupper.
I don't think I've ever had a lightsupper.
I'm hitting heavy dinners overhere.
And I justrealized, just change in thewords.
If I just changed mywords, Isaid,okay, what am I going to have for my light suppertonight?
I bet that would fix mydiet.
Just thatone, you change yourwords, you change yourlife.
I bet you if I just changed that oneword, lightsupper.
It wasn't even in my goddamn vocabulary until justnow.
Yeah. Thankyou. I'll be takingthat.
Is thatit? Is that thepod?
