3 strangers reveal how they make $10M, $20M, and $30M/year

Transcript

All right, I own 40 $10 million in revenue. We acquire and this year we'll generate around $20 million of revenue. We manage and that makes $30 million per year of revenue for the company. Those are three ideas that didn't even exist in my cone of vision. I don't even know that people do businesses like that. All right, how does it feel to be in real life? This is strange. This is weird. It's been... There's normally a screen right here. Actually, we should put a side-by-side of the last time we were in person in San Francisco doing it on the red chairs. So when you started this thing and then I came on two or three months later, we had these bright red chairs that we bought off Amazon for $150. And it was just us sitting on chairs. And I hated it because you could see a cross shot. Yeah, I think I might be doing it now. And you're just sitting like this. And then we had a camcorder. We would have a guy in the room and we'd be, hey, are we good to go? Is it all good audio video? And he'd be, I think so. It was, I think so is not what you want to hear from the guy who's just setting up the recording. He was my summer intern. Yeah. And it was one camera. You ever done audio video before? No. But I hear you. Yeah. I can hear you great. What do you think of New York? Have you been to a bodega yet? Yeah, we went to a bodega. Yeah. So I talk about bodega culture. I don't know if you've seen any that I've impressed. Have you seen any that have impressed you? I have to stay out of bodegas. I just start chatting it up for too long. It's the best, right? Dude, I've been here for 75 minutes talking to this guy. Dude, the cashier. Yeah. It's the best. I'm friends with so many bodega owners. And we could do a full MFM just inside a bodega. I probably should have done that actually. And it's the pure definition of entrepreneurship because you could clearly tell, oh, one day someone asked for cereal. [SPEAKER_04] Now they have 10 Costco sized things of cereal and they're individually packed into an iced coffee cup and they just sell cereal now. Yeah. That's just what they do. There's no, does this go with our mission statement? No, we sell cereal now. Right. I don't know if you need a license to sell food, even though it says don't repackage this for individual sale. We sell cereal now. Right. And that's what I love. All right. So today we're doing something a little bit special. You said you were coming and I reached out. I basically just slacked the Hampton channel. I go, who in New York has an odd business that we can impress Sean with? And so we picked three different entrepreneurs. They had, I tried to find three businesses that were off the beaten path a little bit, because that's why people watch MFM. You guys watch or see strange businesses. So hopefully you can open up your mind and be, oh, there's a million ways to get done whatever I want to get done and build a big company. Right. So I picked three. Okay. Okay. So they're going to come on. What are they going to do? So we told him, we just bumped into him. We just told him, hey, come in here and don't start with words. [SPEAKER_03] Because MFM, you got to start with a number, and don't make us dig it out of you. [SPEAKER_03] Just give it to us. [SPEAKER_03] You know the shtick, you know what we like to do here. [SPEAKER_03] We like to know MFM. [SPEAKER_03] We like you to not be humble and brag about that. We want you to brag a little. So they're going to say a number. They're going to say what they do. And then we're going to get to know their business because we're nerdy about businesses. And then at the end, we will ask them two things. We'll ask them what adjacent business opportunities are there? What other businesses do they see because of where they are in their tiny niche that we don't have enough exposure to that other people might go run at. And then how can we help them? What's the burning question? What if they just had me and you for 10 minutes, what would they want to talk to us? So that's what we're going to try. All right. The first guy, Ben, we can bring them in. What's up? How you doing? All right. Welcome to the podcast. Thanks. All right. So I've known Alex for years, for a year. Yeah. A year. A year. [SPEAKER_04] We're very good friends. [SPEAKER_04] So I'm going to be biased. [SPEAKER_04] Okay. Start us off with the big number. [SPEAKER_04] All right. [SPEAKER_04] I own 40 publications, 40 magazines, $10 million in revenue. [SPEAKER_04] 40 magazines, 10 million in revenue. Yeah. What sorts of magazines are we talking? [SPEAKER_01] Real estate advertising. [SPEAKER_01] Real estate advertising. [SPEAKER_01] Okay. Give us an example. [SPEAKER_01] All right. So. [SPEAKER_03] You got to carry one. [SPEAKER_03] You don't have one on you at all times. [SPEAKER_03] That's insane. [SPEAKER_03] Yeah. [SPEAKER_03] Real estate agents basically pay us to promote their listings. [SPEAKER_03] So magazine is a lookbook of all the listings that are on the market at that time in their neighborhood. And it goes to a lot of different locations. Like do you have different 40 meaning? [SPEAKER_04] Yeah. [SPEAKER_04] What sorts of magazines are we talking? [SPEAKER_04] Real estate advertising. [SPEAKER_01] Real estate advertising. [SPEAKER_01] Okay. Give us an example. [SPEAKER_01] All right. So. You got to carry one. You don't have one on you at all times. That's insane. [SPEAKER_03] Yeah. [SPEAKER_03] Real estate agents basically pay us to promote their listings. [SPEAKER_03] So magazine is a lookbook of all the listings that are on the market at that time in their neighborhood. [SPEAKER_03] And it goes to a lot of different locations. [SPEAKER_03] Do you have different 40 meaning? [SPEAKER_03] 40, 40 meaning basically we've divided the country into 40 locations. [SPEAKER_01] Zones. So we're covering all of the U.S. and Canada. [SPEAKER_01] How big is the magazine? How many pages? [SPEAKER_04] Anywhere from a hundred to 200. [SPEAKER_04] Well, who's the reader? Because you said realtors are the ones advertising or want. Realtors are advertising. Who's the reader? We have a mixture, but basically we mail the magazine out and we'll mail it out based on property value, income, things like that. [SPEAKER_01] With the goal of being a real estate agent has a bunch of listings in New York City or something. [SPEAKER_01] I don't know, a date in Ohio. Yeah. [SPEAKER_01] And you want to show the resident of the homes on this block that they should either use this real estate agent or buy some of the nearby homes. [SPEAKER_01] Yeah. [SPEAKER_01] Either or. [SPEAKER_03] Okay. [SPEAKER_03] Yeah. [SPEAKER_01] Agents definitely are using it to pick up listings. They want to be able to say, look where I'm going to advertise your home, things like that. [SPEAKER_04] But they also want to sell the listing they have. [SPEAKER_04] And what's it called? [SPEAKER_04] Haven Lifestyles. [SPEAKER_04] Haven Lifestyles. [SPEAKER_04] Okay. [SPEAKER_04] How did you come up with this idea? [SPEAKER_01] All right. [SPEAKER_01] So I started it with my business partner, Ryan. We were college roommates. I was a couple of years out of college. [SPEAKER_03] I was actually a bill collector for five years through college and after. [SPEAKER_03] A bill collector? [SPEAKER_03] I was a bill collector, which I actually think really helped with sales. [SPEAKER_03] Just having to call people all day for money, being rejected. Are you the muscle? What is a bill collector actually doing here? Yeah. [SPEAKER_01] Dialing them up. It was credit card. So it's Victoria's Secret. It's literally Victoria's Secret credit cards. But yeah. Anyhow, I did that. [SPEAKER_03] I actually was a supervisor. I got dragged into some HR nonsense that I couldn't believe and having to basically defend myself. And I texted my college buddy. I'm like, dude, you want to do something? And he was like, yeah, let's start the magazine. So that's where we started. But why the idea of the magazine? He was already doing it? He had a small publication in Annapolis, Maryland. [SPEAKER_01] And he said that basically agents had reached out to him and, why don't you do something in DC? We want to advertise in DC. [SPEAKER_01] So we just launched one. Who's the biggest? How many companies do what you do? [SPEAKER_03] There's a lot of small publications. So each city you go into, I have a publication, but we have them across the whole country. And you do 10 million in revenue. Can you say how much profit? Yeah, 2.5. Okay. And the biggest one in the space is how big? [SPEAKER_01] I don't know. [SPEAKER_01] It's not public. We could be one of the biggest in the space. [SPEAKER_01] There's not, most of them are franchised. How many years have you been doing this? [SPEAKER_04] 10. 10. [SPEAKER_04] Okay. [SPEAKER_04] So it's been a slow build. You've been steady at this revenue for a while. It's been a slow build with jumps. [SPEAKER_01] Give us your year one. [SPEAKER_01] What was year one? [SPEAKER_01] 300k. [SPEAKER_01] And that's just me going, meeting individually, just grinding it out. Okay. And my business partner handling everything. And did you know right away, this is it? I'm going to do this for a while. [SPEAKER_03] Or were you, even after year one, were you still like, I don't know? [SPEAKER_03] I never thought 10 million, but I thought enough to support myself. [SPEAKER_03] Yeah. [SPEAKER_03] We launched an initial publication. [SPEAKER_01] We just did a free version of the magazine. [SPEAKER_01] Just let us put you in. I'm going to show you what it's going to look like. And then I went around and had meetings all week. [SPEAKER_03] And I'm like, here it is. [SPEAKER_03] I mean, literally the very first meeting, the guy's like, all right, I'll do it. I was like, okay, cool. I'm 25 years old. All right. And just meeting after meeting was that. Got to a meeting where a guy's like, what can you do for 10,000? Which is way more than we were charging. How many covers can I get? So all of a sudden, I'm calling back to my business partner every few minutes. Like, dude, there's another, another, another, there's something here, but I kept my other job for eight months. But the, it's more a brochure, but it's a magazine because it's got a lot of pages, but it's a brochure. I mean, you're just showing off other people's stuff. You're just sending a magazine. You're just sending a magazine unsolicited, correct? There's not subscribers. [SPEAKER_01] Yeah. [SPEAKER_01] No subscribers. [SPEAKER_01] You're junk mail. [SPEAKER_01] Sure. [SPEAKER_04] Yeah. [SPEAKER_04] It's not a subscriber magazine. [SPEAKER_01] But so, so the, the, it's more like a brochure, but it's a magazine because it's got a lot of pages, but it's a brochure. [SPEAKER_01] I mean, you're just showing off other people's stuff. You're just sending a magazine. You're just sending a magazine unsolicited, correct? There's not like subscribers. Yeah, it's true. It's no subscribers. You're junk mail. Sure. Yeah. It's not a subscriber magazine. [SPEAKER_03] Also I should say, I mean, there's like, call them Victoria's Secret just underwear. [SPEAKER_03] Yeah, exactly. [SPEAKER_03] A huge portion is online at this point. [SPEAKER_03] We do drive most of our traffic online, but everyone is paying to be in the magazine. [SPEAKER_03] And who is doing, so let's say I want to be in the magazine and I say yeah, I'm in. [SPEAKER_03] Who does the artwork? [SPEAKER_01] Who actually makes the pages? [SPEAKER_01] We handle it. Most of our designers are in the Philippines. Yeah. And how many of them are there? [SPEAKER_04] Because to have 40 magazines, and how often—quarterly or monthly? [SPEAKER_04] They're every once every six weeks. We print 30 different magazines a month. [SPEAKER_04] Why did you just say every week we've got seven going to print? [SPEAKER_04] Most of it's online. [SPEAKER_04] Most of the exposure. So when you're talking about subscribers, junk mail, whatever. [SPEAKER_01] So we mail copies out. [SPEAKER_04] We do that based on network, things like that. [SPEAKER_04] And then we're also driving another 90% of our readers online, which are then looking for people that have recently been looking for homes, things like that. [SPEAKER_04] How many people work there? [SPEAKER_01] 20. So I'm confused. [SPEAKER_01] This is a dumb question. [SPEAKER_01] I don't really understand how junk mail works. [SPEAKER_01] So I can just mail anything to anybody. [SPEAKER_01] Email anything to anyone. [SPEAKER_01] So you just look up, hey, address it. [SPEAKER_01] Which zip codes are neighborhoods have a certain profile. Yeah. [SPEAKER_03] And then you download from some site all the addresses. [SPEAKER_03] Yeah. [SPEAKER_03] It's all through the post office. [SPEAKER_03] You basically can pick postal routes and they'll deliver. It's actually cheaper when you do that. [SPEAKER_01] How many magazines do you send a year? [SPEAKER_03] Half a million. [SPEAKER_03] Yeah. So this is the post office's business model, right? The post office is pretty much funded by guys like you who are using it. We have to make sure it stays within certain dimensions. It can't go over a certain amount of weight or where it's a problem. [SPEAKER_01] The post office is basically Facebook ads. [SPEAKER_01] Yeah, exactly. [SPEAKER_01] It's Facebook. [SPEAKER_01] It's selling. [SPEAKER_01] You are the product. [SPEAKER_03] It's selling your address and your mailbox without you benefiting or agreeing to it. [SPEAKER_03] To others. What would it take to get you to a hundred million in revenue? It's definitely possible. [SPEAKER_03] No, no. Ask it in the Asian mom way. Why aren't you at a hundred million? Yeah. I mean, it's a good question. [SPEAKER_04] Hey, I want to tell you about something pretty cool. [SPEAKER_04] We have a database of all of the unsexy business ideas that have been discussed on this podcast. [SPEAKER_04] So hundreds of episodes, the team at HubSpot went through, they pulled out all the unsexy ideas. [SPEAKER_04] So not the super high tech ones, but the simple, relatable, interesting, profitable ideas that we have brainstormed and they're all available for download for free. [SPEAKER_01] Just click the link in the description below. [SPEAKER_01] Thank you to our friends at HubSpot for sponsoring this podcast and putting together this free resource for you guys. [SPEAKER_03] Back to the show. [SPEAKER_03] It's a question I would have for you too, because I know you always say you get to 10 million. [SPEAKER_03] I know you can get to a hundred million. [SPEAKER_03] So how? [SPEAKER_03] I think there's a few different ways. [SPEAKER_03] I don't think there's one switch to flip. [SPEAKER_03] I think there's a lot of other verticals we could be hitting. [SPEAKER_03] Other than real estate. [SPEAKER_01] Like home services. Home services. Is that something you're talking about? Yeah. Which we do within our publication. But I think if it was specific to their market. You've told us about the business. [SPEAKER_01] Magazine company, AKA junk mail. [SPEAKER_01] You send it to people. [SPEAKER_01] What's the burning question? [SPEAKER_01] Where could smart friends help you? [SPEAKER_01] Yeah. I mean, honestly, I do think that question of how do you take this from 10 to a hundred? Can I take a stab at helping you? First I always want to know what's the default growth rate. Meaning how much did you grow last year to this year? What do we expect if nothing changes? Probably 10%. [SPEAKER_01] 10%. [SPEAKER_01] Okay. So to get to a hundred, is your real goal a hundred? [SPEAKER_03] What's your real goal? [SPEAKER_03] My real goal is to double profit. [SPEAKER_03] Double profit. [SPEAKER_03] Okay. [SPEAKER_03] So you might not even need to grow top line. We grow profit faster and we grow revenue. Yeah. It seemed like when Sam was asking you, who's the biggest at doing this? And you were kind of like, ah, we might be the biggest. [SPEAKER_01] One thing that I can immediately tell that's very different about you than the way both me and Sam are reverse engineer type guys. [SPEAKER_01] We like to understand what's working for others, how big other people are to give ourselves, we create this almost like box. [SPEAKER_01] And I feel like you don't do that as much. [SPEAKER_01] Is that fair? Definitely. Yeah. But you're happy. Yeah. Super happy. Yeah. [SPEAKER_01] And you were, we might be the biggest. [SPEAKER_01] One thing that I can immediately tell that's very different about you than the way both me and Sam are reverse engineer type guys. We like to understand what's working for others, how big other people are to give ourselves, we create this almost like box. [SPEAKER_01] And I feel like you don't do that as much. [SPEAKER_01] Is that fair? [SPEAKER_03] Definitely. Yeah. But you're happy. Yeah. Super happy. Yeah. What I mean is we have a sickness and you seem fine, but we'd like to infect you with our sickness. He doesn't need to change. For more. Yeah. [SPEAKER_04] But if you did want to change, here's what I might do. [SPEAKER_01] I think what I would do is maybe it's not direct, like, oh, who also sends home listings, sells to realtors, but just the general model of mailing out magazines or informational stuff to homes and generating a big business off the back of that. [SPEAKER_03] Who else does that? [SPEAKER_04] That's not exactly your space. [SPEAKER_03] Yeah. [SPEAKER_03] Are there wealth management companies that grow this way? [SPEAKER_03] Or is there some other category that grows this way? [SPEAKER_03] I think the most intriguing are neighborhood publications. [SPEAKER_03] So I don't know if you've heard of Stroll. [SPEAKER_03] Or Revolution. Is that one? I don't think it's Revolution. [SPEAKER_03] There's Stroll. [SPEAKER_03] There are others. [SPEAKER_03] Is this what's going on in your area? [SPEAKER_01] Exactly. [SPEAKER_01] Years ago, I talked about this. [SPEAKER_01] I think it was called Revolution. [SPEAKER_01] It was a neighborhood publication. That's a franchise model that back then, I think we were in real life when we did this. [SPEAKER_01] It was north of a hundred million. [SPEAKER_01] Yeah. [SPEAKER_01] They're definitely over a hundred million. My gut tells me that if you did have dedicated home services, that would be much better. And maybe there's a way to do it more informationally. [SPEAKER_04] So instead of what you do right now, you're just like, here's the homes for sale. [SPEAKER_04] It's utilitarian. [SPEAKER_04] If you just said, hey, here's all the home service providers, that wouldn't be that great. [SPEAKER_04] But if it was like, let's say it's winter and it's like, here's the five tips every homeowner should do for listicle type of content. [SPEAKER_04] Right. [SPEAKER_04] And then on the inside, there's providers, but you just do something that's actually the ad. [SPEAKER_04] The front cover is basically a give. [SPEAKER_04] It's useful information, entertaining, useful information about home service or home care. Yeah. And then inside, you obviously have home care providers where if people don't want to do it themselves, they could hire a provider. They could hire a lot of pros to come do this stuff for them. I wonder if you could get good at that. But I would just, if I was you, I would start with a study, not an answer. I would go get real familiar with what are all the other players doing in the space? [SPEAKER_03] Who's big, who's not, who used to work there, go talk to them, go learn from them. [SPEAKER_03] I would go on a one month expedition of that. [SPEAKER_03] And I think you'll know so much more by the end of that. [SPEAKER_03] Well, him and I are buddies. [SPEAKER_03] We talk about hiring all the time. [SPEAKER_03] I'm, just go recruit someone who's at the bigger company and just have them come and work for you. [SPEAKER_03] Yeah. [SPEAKER_03] Why, is there a world where instead of 40, it could be 80 markets? [SPEAKER_03] It would be dividing the four. [SPEAKER_03] Well, we could go international. [SPEAKER_03] We're already in Canada. [SPEAKER_03] So there are markets that make sense for us to go into. [SPEAKER_04] But as far as 40 to 80, you would then break down the 40 into 80. [SPEAKER_04] It's the same geographical area. [SPEAKER_04] It's just going to be more, because we're literally covering the whole US. [SPEAKER_04] Got it. [SPEAKER_04] But I do think if you break it down, it's going to resonate more. Like there are areas that we have full states combined together because it's just not Ohio, Indiana. It's just not that sexy of a market. Would you ever sell this? [SPEAKER_01] I would. [SPEAKER_01] It's not necessarily my goal. [SPEAKER_01] I'm pretty happy doing it. You just want to own it forever. [SPEAKER_01] Yeah. [SPEAKER_01] That is crazy. [SPEAKER_01] You might be too happy. [SPEAKER_01] It's crazy talking to an emotionally stable person. [SPEAKER_01] You wanted to double profits and I wonder what would happen again. I think this is more psychological than strategic and I think people underrate how much of entrepreneurship is psychological and not strategic. [SPEAKER_04] Mm-hmm. [SPEAKER_04] I wonder if you just decided that instead of 25% net margins, you're going to have 35% net margins in the next six months. [SPEAKER_01] What would happen differently? [SPEAKER_04] Because I think right now my read is that you would like for there to be more profits, but you don't really have a, I have to have more profits by this date. Mm-hmm. And if you literally just change the way you talked about it and thought about it, I'm sure that the answers would become obvious to you as you started. [SPEAKER_01] Is that true? Do you have a goal and a date where it's going to happen by? Yes, but it is more recent change in mindset. So what is the goal and date we can hold you to? [SPEAKER_03] It was one year from a month ago. [SPEAKER_03] So it's, I got 11 months to double. [SPEAKER_03] To double? [SPEAKER_03] Yeah. [SPEAKER_03] Double profit. [SPEAKER_03] To be at double as in double the run rate at that point. [SPEAKER_01] So get to 4 million in run rate profit. [SPEAKER_01] Five. Five. How's the first month been in terms of, if we were saying out of 12 months, you've already used 8% of your time. [SPEAKER_01] Yeah, exactly. So what is the goal of the date we can hold you to? It was one year from a month ago. So it's, I got 11 months to double. To double? Yeah. [SPEAKER_03] Double profit. [SPEAKER_03] To be at a double, double as in double the run rate at that point. So get to 4 million in run rate profit. Five. Five. How's the first month been in terms of, if we were saying out of 12 months, you've already used whatever 8% of your time. Yeah, exactly. [SPEAKER_03] Are you doing what you needed to do to create momentum or not really? [SPEAKER_03] It's like. Yeah, I think so. [SPEAKER_01] The main thing, the easiest way to double profits right now, I think is retention. [SPEAKER_04] We already work with 10,000 plus agents every year, but we don't get them to advertise that many times. So I mean literally double retention and we're fine. [SPEAKER_03] You have the inventory. [SPEAKER_03] Exactly. [SPEAKER_03] We have the clients. [SPEAKER_03] We have people that are agreeing to advertise with us. [SPEAKER_01] Do you ask them multiple times? Yeah. We ask them every cycle. Why don't they just do it again if it's money? A lot of times they just want, I've got a big listing. Great. Now's the time. And then they just drop off. Do you ever pre-sell them on, instead of this one time, say, I'll give you a discount if you do it for 12 months? [SPEAKER_01] Yeah. Yeah. We have 1500 people that do it for the year. So they're just on auto debit. [SPEAKER_01] So there's a decent amount doing that. [SPEAKER_01] But I think there's a lot of things we can do to improve their experience where they're coming back every month or I just need them to advertise one more time. [SPEAKER_01] I wish you would have brought us one. [SPEAKER_04] In the last, okay. [SPEAKER_01] Let's say this year, how many of those agents have you personally talked to on the phone? [SPEAKER_01] Zero. [SPEAKER_01] Should I? [SPEAKER_01] Yeah. [SPEAKER_01] Not necessarily to sell them, but even just take your hundred top spenders. You should call every single one of them and figure out what do they love? What do they hate? Why aren't they doing it more? How do you get them? Are they actually just out of sight, out of mind? Oh yeah. I do. I will do it. Yeah. And you will learn a lot just by taking a roster of your top hundred. I also learned this in our recent business that has done pretty well. I asked the CEO, I was, Hey, this has gone pretty well. What'd you do? And he goes, you know what I did? I came in and he goes, I tiered out our key clients as tier one, tier two, tier three. And he created a definition for each. He goes, tier one is somebody who's, they would do me a favor. I have them on a texting relationship. They know me. I know them. They would do me a favor quickly. Tier two is I got their email. We've traded some emails. We each other. We're acquaintances. We're friendly acquaintances. Tier three is, we're transactional. When they need me, they call me. When I need them, I call them. We haven't really talked much because that transaction is infrequent. Yeah. And then there's tier four, which is worse than that. And he's, when you do that and you just score yourself, Oh, what would a really healthy relationship look like here? What would a really weak relationship look like here? And then you look at your top hundred and you realize, shit, we have no tier ones, couple tier twos and everybody else is tier three or four. Then it's a wake up call. Nothing bad's going to happen by talking to your top hundred customers, but a lot of good can happen from going and talking to them. Yeah. I that. And you could do that in 30 days. You could talk to all 100 in 30 days. What do you think? [SPEAKER_03] Are you impressed? [SPEAKER_03] Did you ever know that something this could exist? [SPEAKER_03] No, it's so simple of a business, right? [SPEAKER_03] Yeah, it's pretty simple. I mean, it's just, they didn't even subscribe. I'm used to media businesses where it's first I win their hearts and minds and I get them to listen to me regularly or read me every day. Then I get to make money. [SPEAKER_04] He's, no, no, no, no. [SPEAKER_04] Read this. [SPEAKER_04] Yeah. [SPEAKER_04] Ah, have you heard? [SPEAKER_03] That's incredible. Why are we doing junk mail? You know, Lindy? The AI tool? [SPEAKER_03] Yeah. [SPEAKER_03] Yeah. [SPEAKER_03] Flo, the guy who started Lindy's in Hampton. [SPEAKER_01] He's, Alex Daniels has the most impressive AI setup I've ever seen. [SPEAKER_03] Oh. [SPEAKER_03] And that's been a little bit of a claim of fame that he's had. [SPEAKER_03] What, can you give us a little sauce real quick? What are you doing? [SPEAKER_04] We used Lindy to run the sales process. [SPEAKER_04] So they don't have salespeople. [SPEAKER_04] We do have salespeople, but they're on, they've shifted to a different focus, which is where I'd like them to be more of that customer experience and getting people to come back. [SPEAKER_04] But Lindy is able to respond to every email that's coming in, follow up with it, upsell them, go through the whole process. [SPEAKER_03] Oh. [SPEAKER_03] And that's been a little bit of a claim of fame that he's had. [SPEAKER_03] What can we give us a little sauce real quick? [SPEAKER_04] What are you doing? [SPEAKER_04] We used Lindy to run the sales process. [SPEAKER_04] So they don't have salespeople. [SPEAKER_04] We do have salespeople, but they're on, they've shifted to a different focus, which is where I'd like them to be more of that customer experience and getting people to come back. [SPEAKER_04] Lindy is able to respond to every email that's coming in, follow up with it, upsell them, just go through the whole process. [SPEAKER_04] But it was a big Lindy, which is what Flo was talking about. It's crazy. [SPEAKER_04] That's awesome. [SPEAKER_04] Well, all right. Appreciate you, dude. Cool. [SPEAKER_01] What you've done is awesome, dude. [SPEAKER_01] All right. [SPEAKER_01] Thanks guys. [SPEAKER_01] We need a name for this. [SPEAKER_01] Dragon's Den, the Shark Tank, the swimming pool, the Denim Dungeon. [SPEAKER_01] Let's go. [SPEAKER_01] The Denim Dungeon. [SPEAKER_01] What's up? [SPEAKER_03] What up, brother? [SPEAKER_03] How's it going? [SPEAKER_03] How are you? [SPEAKER_03] Yeah. [SPEAKER_03] All right. [SPEAKER_03] Your name and the impressive number. Yeah, this with the big number. Great. I'm Josh. [SPEAKER_03] I run Team Outsider. [SPEAKER_04] We acquire family owned campgrounds and this year we'll generate around $20 million of revenue. [SPEAKER_04] 20 million in revenue. [SPEAKER_04] Okay. [SPEAKER_04] So explain like I'm an idiot cause I kind of am. [SPEAKER_04] What do you do exactly? [SPEAKER_04] So we acquire campgrounds typically from families who are looking to retire. [SPEAKER_04] A campground, the majority of it is like a hotel, right? So we're renting different spaces. [SPEAKER_00] Some people come in their RVs, so they have effectively a traveling hotel room. [SPEAKER_00] We also have tent spaces and cabins that we rent to people who don't want to stay in a tent and don't have an RV. Do you camp? When's the last time you went camping? [SPEAKER_03] Like 10 years ago, but I appreciate it. I haven't gone camping in 20 years. So a campground is literally just a piece of dirt, right? So the ground. We have amenities. So all of our campgrounds have stores. We typically have a cafe where we'll sell ice cream and sometimes burgers and pizza. [SPEAKER_03] Like cabins basically, or? [SPEAKER_00] We have cabins as well. Yeah. [SPEAKER_03] We have swimming pools, lakes. [SPEAKER_03] At one of our campgrounds, we have a go-kart track. [SPEAKER_03] Oh, okay. [SPEAKER_03] So it's a very outdoorsy hotel essentially. Effectively. Yeah. Okay. We're looking at one here. Perfect. What's the most popular one you guys have? They're all really popular in their local communities. The first one we bought, which is really good. [SPEAKER_03] It's right near Grand Teton and Yellowstone is really popular because that's a major tourist destination. [SPEAKER_00] We have one right outside New York City called the Never Sink River Resort. [SPEAKER_00] It's a couple hours away. [SPEAKER_00] So that's really popular with folks who live around here. So give us a story. What makes a guy want to buy a campground? How'd you even realize that that's a good opportunity? Yeah. So I met my partner in college, Cody. We studied together and started a business together, which was tremendously unsuccessful, but showed us that it was really good relationship. And so we stayed friends post college, got some working experience and then realized we wanted to do something together again. We were looking for a business where two non-technical founders could hopefully have a winning situation. [SPEAKER_03] And we wanted a market that was large enough to participate in and interesting. [SPEAKER_03] One where there was an immense amount of fragmentation with ownership, one that was operationally complex and one that was meaningful where the team members would feel good working there and where the customers would feel good about being part of it as well. And so how many do you own? Currently we have 16 and there are about 4,000 sites amongst those in 10 states. And did you raise money? Yeah. So the first one we did with our own cash and an SBA loan. So that was the Yellowstone one. How much was that? About 3 million. And so how much money of yours and loan did you put? The loan was 80 plus percent. Yeah. The rest was cash. [SPEAKER_00] And sorry. [SPEAKER_00] So that was an already operating site. Everything we buy is existing cashflow. It's been there generally for decades. Most of these are staples within their local communities. So let's walk through that first one. Sure. So you find this property. It's doing what when you buy it? It was generating around half a million dollars of top line of total income. [SPEAKER_03] Top line. [SPEAKER_03] And then the cashflow on that is what? About 35%. [SPEAKER_03] Can you do that for me? Yeah. We call it 150. Okay. [SPEAKER_00] And you buy that for 3 million bucks. Mm-hmm. [SPEAKER_00] Okay. [SPEAKER_00] So that's the entry. [SPEAKER_00] Mm-hmm. [SPEAKER_00] And then you do that knowing, hey, we think we can turn that 150 to 250. [SPEAKER_00] What was the insight at the time? Yeah. So that one didn't have a lot of digital marketing. It was a mom and pop thing. [SPEAKER_03] All of them are. [SPEAKER_00] And everything's on paper and they've been doing it forever. [SPEAKER_03] And they're like, our kids don't want this shit. [SPEAKER_03] Do you want it? [SPEAKER_03] Exactly. [SPEAKER_03] So we are oftentimes a succession plan for these sellers. And then you do that knowing, hey, we think we can turn that 150 to 250. What was the insight at the time? Yeah. So that one didn't have a lot of digital marketing. It was a mom and pop thing. [SPEAKER_03] All of them are. And it's everything on paper and they've been doing it forever. [SPEAKER_03] And they're like, our kids don't want this shit. [SPEAKER_03] Do you want it? [SPEAKER_03] Exactly. [SPEAKER_03] So we are oftentimes a succession plan for these sellers. [SPEAKER_03] And so these are multi-year relationships. We've got a couple under contract right now. One of them I've been talking to the seller for five years. And generally what happens is we maintain the relationship and when they're ready to sell, we get the call hopefully. [SPEAKER_04] And what were you going to do to make it better? [SPEAKER_04] And what is better mean? [SPEAKER_04] Yeah. [SPEAKER_04] So there are a few things we can do. [SPEAKER_04] One of them is introduce professionalized systems. [SPEAKER_00] So digital marketing, a better website, VoIP systems for the phone to make sure that training is happening the right way. [SPEAKER_00] Does marketing mean like Yelp and Google reviews? [SPEAKER_00] Google reviews, but also paid ads, a better website. [SPEAKER_00] Oftentimes there's no digital reservation systems. [SPEAKER_00] We'll introduce that. Got it. So that's on the technology side. I think I missed it. So you're like, I wanted to do something with my friend. And then you had the business school explanations, high fragmentation, blah, blah, blah. No, no, no. Like where were you sitting when someone was like, should we buy campgrounds? Or you met a guy who's rich that bought campgrounds. You're like, we should do that. Like what actually happened? Great question. So our backgrounds were in hospitality and real estate. Okay. So there's obvious confluence there. [SPEAKER_03] And then Cody lives in Bozeman, Montana and is an avid RVer. [SPEAKER_03] So he said, Hey, the thesis sounds interesting. [SPEAKER_03] Why don't you fly out here and let's drive around the country, meet some owners, team members, guests, and see if this is something that actually has a spark to it. [SPEAKER_03] Right. [SPEAKER_03] So I flew out from New York, spent some time on the road meeting different campground owners and team members and guests and just fell in love with the space. [SPEAKER_03] And how much money have you raised in total now? We have raised around $60 million. [SPEAKER_00] You've raised 60 million bucks from fire. [SPEAKER_00] What'd you say? 15 properties. We've sold a couple, but we have 16 currently. And what is it all worth? North of a hundred million. [SPEAKER_00] Does that mean that 40 million is you and your partner's equity? [SPEAKER_00] No, we've raised outside capital. [SPEAKER_00] So at this point we have family offices we work with. [SPEAKER_00] We have a select group of accredited investors we work with, and we have a few institutional partners we've worked with as well. I guess what I'm saying is of the 20 million in revenue, or if you value it, I don't know anything about real estate. [SPEAKER_03] However you value it, how do you get personal cash flow or net worth from it? Like most real estate operators, it's promote based and different deals are different depending on the investment partner. Right? [SPEAKER_00] So we are back end incentivized largely for most of these. Typical private equity structure where there's a preferred return, there's a return of capital, and then there's a split depending on who the investor profile is. So when you do that first one, you go buy it for 3 million, it's doing half a million in revenue, 150K of cash flow. [SPEAKER_00] What happened? [SPEAKER_00] What was the success story of that one? [SPEAKER_00] Obviously it was successful as you wouldn't have 16 more. [SPEAKER_04] Well, we were able to refi a couple of years later. [SPEAKER_04] So took all of our cash out. So you brought the NOI up to what? The NOI in that one went from closer to 300 at that point. Okay, so you doubled the profit on the thing, refinanced it out, used that capital to go buy the next one. [SPEAKER_00] Exactly. [SPEAKER_03] Exactly. [SPEAKER_03] That's awesome. [SPEAKER_03] Why are campgrounds, if I wanted to go do real estate, why would I choose campgrounds instead of whatever, retail shopping, multifamily, office, whatever? [SPEAKER_03] What would be my advantages if I was going into this? Strong yield. It's operationally complex, which means there's opportunity to drive value and attractive depreciation characteristics that are similar to manufactured housing, for example. [SPEAKER_03] So you can depreciate the roads and the infrastructure. There's very limited land value in a lot of these more rural markets, limited building value. [SPEAKER_03] So the depreciation characteristics are also attractive to people who are tax sensitive. Will you do this forever? I hope so. Yeah. [SPEAKER_03] I love it. [SPEAKER_03] Looking down 10 years or 20 years down the line, where do you hope to be business-wise? Yeah. So look, I think the larger opportunity as more of life moves online, I believe businesses that get people together in the real world are going to be more valuable. Yeah. [SPEAKER_00] And there are different types of experience-oriented real estate that can speak to that thesis. But campgrounds still have a lot of runway. [SPEAKER_04] We still have a big pipeline of properties we'd like to be a part of. [SPEAKER_04] And so hopefully we're doing this forever. [SPEAKER_04] Who are the big dogs in this space? [SPEAKER_04] Yeah. [SPEAKER_04] So there are two very large REITs in this space that initially were into the manufactured housing side of the business, but recognized both from a depreciation perspective and also the infrastructure is very similar, right? You're renting pads. There's a campground REIT? There are manufactured housing REITs that have a large portion of campground exposure. Oh, that's interesting. Yeah. So that was one of the ways we were researching this that we got more comfortable with the idea. When you're buying these, you're buying out the operator and then you put a property manager, property management companies. [SPEAKER_03] We're the manager. [SPEAKER_00] You are the manager. [SPEAKER_00] Yeah. [SPEAKER_00] So initially we didn't think we were going to go that route. [SPEAKER_00] You're renting pads- [SPEAKER_00] There's a campground REIT? [SPEAKER_00] There are manufactured housing REITs that have a large portion of campground exposure. [SPEAKER_00] Oh, that's interesting. Yeah. So that was one of the ways we were researching this that we got a little more comfortable with the idea. When you're buying these, you're buying out the operator and then you put a property manager, property management companies- [SPEAKER_03] We're the manager. [SPEAKER_00] You are the manager. Yeah. So initially we didn't think we were going to go that route. Initially, Cody, my partner, went and managed our first location for the first year, scrubbed toilets, did the whole thing. [SPEAKER_00] And we thought, learn how to hold a shovel and dig a hole, and then you can hire a third party to manage it like most real estate sponsors do. [SPEAKER_04] And what we realized is, A, you can't outsource culture. So that was going to be really important for our success. And B, if we wanted to scale, there weren't really, at least at that time, competent third parties that could scale with us. So we made the decision to build an opco in-house and have been managing our properties ever since. [SPEAKER_00] Your branding is cool. [SPEAKER_03] Thank you. [SPEAKER_00] It's awesome. [SPEAKER_00] I appreciate that. [SPEAKER_00] And when I was looking, I was like, I would like to go see this. Is there a world where you would buy many of them in a similar region and create a membership? [SPEAKER_00] You know, KOA? [SPEAKER_00] Is it KOA? [SPEAKER_00] Yeah. We're actually a KOA franchisee in certain markets. [SPEAKER_00] So how do I explain KOA to someone? I don't know. [SPEAKER_00] McDonald's of Campgrounds. [SPEAKER_04] Okay. [SPEAKER_04] They've got 550 flags across the country. They own about 50 of them themselves, but they are a franchise. [SPEAKER_04] But is it like he's saying where it's a membership or it's just a brand you can trust? [SPEAKER_04] It's not a membership. [SPEAKER_04] You know what you're going to get when you go there. [SPEAKER_04] It's a brand you can trust that you know what you can get. Yeah. So when I do road trips and I want to camp, something might be a lot nicer. Something could be a lot worse. But KOA, I just know what I'm rolling up on. I was talking to a famous guy and he was like, oh, an hour outside of cities or something called what is it? [SPEAKER_04] Postcard cabins or something like that. He's like, oh, I love going to those with my kids. What's the story there? Then I looked it up. It's owned by Marriott or something. [SPEAKER_03] They sold to Marriott last year. Okay. It's a little bit of a different model. [SPEAKER_03] They were focused on very remote single units and destinations where you didn't have to see your neighbors. [SPEAKER_04] We are more community focused. [SPEAKER_04] So a lot of our campgrounds have seasonal guests, which means these are people who reserve the right to a specific space for the duration of the season, pay before the season starts and come every year. [SPEAKER_04] Grandma's there. [SPEAKER_04] Aunts and uncles are there. [SPEAKER_04] Kids are there. [SPEAKER_03] Everyone's been raised there. [SPEAKER_03] All the friends are around. [SPEAKER_03] So it's very sticky and communal. [SPEAKER_03] But is there a world where you do brand it? [SPEAKER_03] So each property has maybe a different shtick, but it's all under one brand. [SPEAKER_03] Potentially down the road. [SPEAKER_03] I think real estate brands are inherently tough to scale. Yeah. [SPEAKER_00] And until we have meaningfully more scale, that's probably not the right focus for us. But as regional concentration starts to happen, which is already naturally happening, perhaps that's something to explore. So when I hear you, I know nothing about real estate. Yeah. When I hear you describe this, I think that sounds awesome. You're outdoors all the time. You do a lot. Obviously that's not the case. What's the day to day work? Are you just cold calling these places trying to make a deal? Writing a lot of handwritten letters, a lot of cold calling, a lot of checking up on- Have you found that a letter with a cookie converts better than a call? A lot of it is luck. The challenge in this space is effectively our sellers are behind the front desk most of the time, which means in season they're exhausted and they don't want to take a call. So the bottleneck of the business is just getting in touch and wooing. [SPEAKER_00] Finding people who want to sell. [SPEAKER_00] Building relationships and being the trusted succession plan. [SPEAKER_00] Because they care. They don't care. [SPEAKER_04] It's not just a money thing for them. [SPEAKER_04] Exactly. [SPEAKER_04] These are their friends that they have been personally servicing for oftentimes decades. [SPEAKER_04] And so whoever's taking over that relationship is a really important person to them. [SPEAKER_04] Are there campground owner publications or summits or podcasts? [SPEAKER_04] There are. [SPEAKER_04] Yeah, there are Facebook groups and conventions and all the things. Are you just posting them all the time with the same thumbnail image across all of them? [SPEAKER_03] So everyone starts saying, oh, this is the guy. He seems like a good guy. [SPEAKER_00] A bit of that. We're trying to figure out how to do it in an authentic way. [SPEAKER_00] And that's a tough balance. [SPEAKER_00] Because there's a level of mistrust around being over marketed to in this space. [SPEAKER_00] So a lot of it is catching them on the right day when the campground is a little bit less busy and they answer the phone. [SPEAKER_00] We can start a relationship and then, years later when they're ready to sell, we get the call. [SPEAKER_00] That sounds pretty awesome. [SPEAKER_00] How many hours a week do you work? [SPEAKER_00] A lot. [SPEAKER_00] Yeah. [SPEAKER_00] You grind? Yeah. [SPEAKER_00] You're in grind mode? Yeah, absolutely. [SPEAKER_04] But I love it. [SPEAKER_04] There's a lot of real estate people. They choose real estate because while real estate is work, there's a way to do it or a state you can reach that is not about grinding. [SPEAKER_00] Yeah. And it's about you have a lot of flexibility and you got cash flow coming in or you flip a property and you can take time off. You could do all kinds of things. [SPEAKER_00] Sounds like you're approaching it more like company building than it is. Yeah. You grind? Yeah. You're in grind mode? Yeah, absolutely. [SPEAKER_04] But I love it. [SPEAKER_04] There's a lot of real estate people. [SPEAKER_04] They choose real estate because while real estate is work, there's a way to do it or a state you can reach that is not about grinding. Yeah. And it's about you have a lot of flexibility and you got cash flow coming in or you flip a property and you can take time off. You could do all kinds of things. Sounds like you're approaching it more like company building than it is. Company building and it's a hospitality business. Right. We've got tens of thousands of guests every year, 350 people on the team. So there's no easy break period. [SPEAKER_04] Are the people you employ to run a campsite, are they pains in the asses? [SPEAKER_04] Like are they hippies or are they meth addicts? No, we have some amazing people that work with us. [SPEAKER_03] We'll flip this and send it to them. [SPEAKER_03] Yeah, please. [SPEAKER_03] The majority of our team is incredible. [SPEAKER_03] They're aligned with our mission, which is to be the most hospitable team in the world, which when you're trying to replace a mom and pop operator is really important because the hospitality that a family provides is awesome. Really tough to beat. But we do have some fun stories of team members that haven't been the right fit. We had a situation where we found out we had employed a convicted bank robber. [SPEAKER_03] He'd robbed nine banks. I had to go personally fire him in person. And what was that like? Terrifying. [SPEAKER_00] Yeah. [SPEAKER_00] He actually was incredibly nice and reasonable, but the drive in, I was very scared. [SPEAKER_00] Had another situation where we found out through a guest that some people on the team had been cutting down our trees and selling the wood for cash on a Facebook page. [SPEAKER_04] So it wasn't a great situation. [SPEAKER_04] And again, these are total outlier situations. [SPEAKER_00] They're just fun for conversation. [SPEAKER_00] Hey, why do you live in New York? [SPEAKER_04] Why do you do this in New York? [SPEAKER_00] My family's here. [SPEAKER_00] My wife's here. [SPEAKER_00] My son's here. [SPEAKER_00] My parents are here. [SPEAKER_00] My in-laws are here. [SPEAKER_00] So when you have kids and the grandparents around, but my partner's in Bozeman and look. [SPEAKER_00] So let's hit it real quick. [SPEAKER_00] What's the burning question? [SPEAKER_00] If you had a burning question, something that we can give you a quick, maybe different insight on than as an outsider, what would be helpful? [SPEAKER_00] Sure. [SPEAKER_00] As you think about what we do and trying to scale culture to a team of hourly employees across 10 states with this workforce, what is something that we could do differently to keep people incentivized to deliver the level of service that we're trying to deliver? [SPEAKER_00] If you can solve this in 10 minutes, I will love you forever. [SPEAKER_00] Well, actually I'll give you a quick story. [SPEAKER_00] So my first business was a restaurant business, which has the same problem. [SPEAKER_00] Frontline workers in hundreds of locations, if you do it right. [SPEAKER_00] And we met with the founder of Chipotle and he said, if you can get a frontline worker to care about the customer, treat this the way you're treating this first location, you'll make billions of dollars. [SPEAKER_00] The problem is that's the hardest thing in the world to do. [SPEAKER_00] And Chipotle actually did some pretty interesting things where they have general managers. The general managers get comp. [SPEAKER_00] If any employee you ever have becomes a general manager, even if you no longer work at Chipotle, you get 10 grand in the mail. [SPEAKER_00] They do lots of things to build a culture where they get people to stay longer than they normally would to work their way up the ranks to actually think of themselves as an owner of that place. [SPEAKER_00] And so I would study. I'd make a list of the 15 companies that have already solved this problem. [SPEAKER_00] I would study what works. [SPEAKER_00] I'd look for common patterns and I would try to hire people who were there in the early days, either as consultants or as a full-time person. [SPEAKER_03] Often you can find retired people who you're not going to hire them, but they kind of want something to do. [SPEAKER_03] And they're sitting on this wealth of knowledge because they helped scale, you know, whatever, some cruise line. [SPEAKER_03] Sure. [SPEAKER_00] And now they're just retired. [SPEAKER_00] And I think that's what I would do if I was going to solve this problem. [SPEAKER_00] My real life answer is I run away from businesses that have that problem. [SPEAKER_03] Because I'd rather pick a different hard, but you've picked this hard. [SPEAKER_03] Yeah. [SPEAKER_03] Good luck. [SPEAKER_03] Have you read, obviously you've read Will Guidara's Unreasonable Hospitality? [SPEAKER_03] Yeah. [SPEAKER_03] We had him on the podcast and he told two stories that were interesting. [SPEAKER_03] Because I was like, okay, this works good in a fancy restaurant. [SPEAKER_03] Where else does this work? [SPEAKER_03] And he told two stories. [SPEAKER_03] The first one was he worked with a Ford dealer, a car dealer. [SPEAKER_03] And I worked with them. [SPEAKER_03] I go, look, let's just find a forgotten moment where we could blow someone away. [SPEAKER_03] And Will goes, let's go sit in the car. [SPEAKER_03] Let's look around. [SPEAKER_03] He goes, what's in the glove box? [SPEAKER_03] And the dealer was like, nothing. [SPEAKER_03] We don't keep anything there. [SPEAKER_03] He goes, I got it. [SPEAKER_03] Let's put a $15 Starbucks gift card in the glove box of every car. [SPEAKER_03] And we're going to put a note that says, we wanted to surprise you with something special whenever you go to open this glove box. And that's all it said. The second example where he got his team to do it. He told the story of a UPS store owner, not exactly a high margin or wonderful business necessarily, but he was like, every week the owner had a competition for whoever did the most hospitable thing. They just got a $20 bill. That was it. And he was like, just doing that one contest. It changed the whole culture. [SPEAKER_04] Because now everyone was competing on who can be the most hospitable. [SPEAKER_04] And just one little trick. [SPEAKER_04] And grownups are just like kids. [SPEAKER_04] We just like stickers. [SPEAKER_04] Totally. [SPEAKER_04] And so he told these two stories and I was like, oh, those are so small. [SPEAKER_04] but he was like, every week the owner had a competition to whatever person did that was considered the most hospitable thing. [SPEAKER_04] They just got a $20 bill. That was it. And he was just doing that one contest. It changed the whole culture. Cause now everyone was competing on who can be the most hospitable. [SPEAKER_04] And just one little trick. [SPEAKER_04] And grownups are just kids. [SPEAKER_04] We just stickers. [SPEAKER_04] Totally. [SPEAKER_04] And so he told these two stories and I was, oh, those are so small. [SPEAKER_04] And he was, they tracked referral business and it definitely worked. [SPEAKER_04] Okay. [SPEAKER_04] And so he gave, you should listen to that podcast. [SPEAKER_04] It's my first million will go there. [SPEAKER_04] It was really cool. [SPEAKER_04] Amazing. [SPEAKER_04] Look forward to it. [SPEAKER_04] But yeah, that guy's awesome. [SPEAKER_04] And he gave you actionable tips. [SPEAKER_04] Yeah. [SPEAKER_04] Fantastic. [SPEAKER_04] Thank you. [SPEAKER_04] Right on. [SPEAKER_04] Well, congrats on everything, man. [SPEAKER_04] Thanks for coming on. [SPEAKER_00] Appreciate it guys. [SPEAKER_04] All right. [SPEAKER_04] Yeah. All right. See you. Should go camping. [SPEAKER_04] Yeah. [SPEAKER_04] It's pretty awesome. [SPEAKER_04] All right. [SPEAKER_04] The last one is going to be funny. [SPEAKER_04] All right. [SPEAKER_04] How's it going? [SPEAKER_04] What's up? [SPEAKER_04] All right. [SPEAKER_04] Welcome to the hot seat, the denim den. [SPEAKER_03] Denim den. [SPEAKER_03] Let's go. [SPEAKER_03] Is it live right now? [SPEAKER_03] The dudes in denim were live. [SPEAKER_03] Yeah. [SPEAKER_03] All right. [SPEAKER_03] You want to give us the big number. [SPEAKER_03] I'm Brian. [SPEAKER_04] I run a company called autopilot. [SPEAKER_04] We manage $1.8 billion. [SPEAKER_04] And that makes $30 million per year of revenue for the company. [SPEAKER_04] We started about three years ago for the company autopilot. And one number that blows my mind, I think it's a testament to how much people want to invest in retail traders. [SPEAKER_03] It took Bill Ackman and Ray Dalio about 10 to 15 years to start managing a billion dollars. [SPEAKER_03] And the fact that autopilot, this tech company that plugs into your Robin account, your Schwab account could manage 1.8 billion to me blows my mind. [SPEAKER_03] I'm shocked. That's crazy. I didn't realize how big you guys were. [SPEAKER_03] So what's the business do? [SPEAKER_03] Yeah. So the business we're most popular for launching the Nancy Pelosi stock tracker on Twitter. I thought your big number was going to be 44%. [SPEAKER_02] That's Nancy Pelosi's annual returns or what are her annual returns? [SPEAKER_02] What does Nancy Pelosi do? [SPEAKER_02] In the last three years, she's up around 240%. [SPEAKER_02] Check the app for the actual performance. [SPEAKER_02] I have to say that for SEC compliance, but she's outperformed the spy significantly. So the spy in that same time is up around 30 to 40% and she's up 240%. And your app, I can invest alongside her picks because she's a politician. So exactly. So she's not a politician anymore. [SPEAKER_02] So her, well, she retires in January of 2027. So we have that much time to copy her trades and follow her trades. [SPEAKER_04] But basically I can follow anyone. [SPEAKER_04] You could follow anyone. [SPEAKER_04] So you could follow her. [SPEAKER_02] You could follow different politicians. We also take 13 filings from different hedge funds. [SPEAKER_03] And that was the way that we kickstarted the marketplace. [SPEAKER_03] I think every startup has that chicken and egg problem they have to solve. [SPEAKER_03] For a marketplace, you have the supply side and the demand side. And if you don't have anyone to follow, that's not good. You're not going to get people to come follow that person. But if you don't have anyone to follow, no one's going to want to launch on your platform. They're, why am I doing this? [SPEAKER_04] So we were, Chris and I, we got together and we're, let's just manufacture the supply side. Let's take publicly available information. [SPEAKER_02] Because the whole premise of autopilot was anyone can become a hedge fund. [SPEAKER_02] Is that anyone can be a hedge fund? And instead of having a Substack news newsletter where you could follow my content, I can charge a certain amount and you could follow my trades or my portfolio that I think is good. Exactly. Got it. And I think there's a lot of Substacks. I'm sure we've all read some of them, but you don't know the performance of this person. Maybe the right one. And they'll always post their winners. They write a very convincing case. Yes. And then they talk about how last time they were right, but you only know their chair picking a winner. [SPEAKER_02] They might've been wrong three or four other times for that one. [SPEAKER_04] And so with autopilot, you have a track record of success. [SPEAKER_04] You can see people's winners, their losers, their performance, their entire performance. [SPEAKER_04] And then you can see how many dollars are following them, their content, et cetera. [SPEAKER_04] How much money have you raised? We've raised about 16 million. [SPEAKER_02] One six. Yeah. One six, 16. And 30 million in revenues seems like a good company. Yeah. What's that worth? [SPEAKER_03] I don't know. We're going out to raise a Series B. [SPEAKER_03] The valuations at different venture firms have floated rounds between 300, 400 million, which is crazy, but that is venture money. Not sure what it's actually worth. How old are you? 31. You start this business. What's the first idea you had here? First idea is what? So the first idea we actually started six years ago, it was an idea. And 30 million in revenues seems like a good company. [SPEAKER_02] Yeah. What's that worth? [SPEAKER_03] I don't know. We're going out to raise a Series B. [SPEAKER_03] The valuations at different venture firms have floated rounds between 300, 400 million, which is crazy, but that is venture money. Not sure what it's actually worth. How old are you? 31. [SPEAKER_02] You start this business. What's the first idea you had here? [SPEAKER_02] First idea is what? [SPEAKER_02] So the first idea we actually started six years ago, it was an idea. It was a company called Iris, Iris for the eyes. So you could see into other people's portfolios. I was trading on Robinhood. You've been thinking about this idea for six plus years. [SPEAKER_02] Yeah. [SPEAKER_02] And I think we all, any retail trader, I don't know if you guys invest in the stock market yourself on an app. [SPEAKER_02] Yeah. [SPEAKER_02] Anyone's like, there's stocks that just fly and it's obvious. Like I remember buying Nvidia or buying Tesla and you're like, some things are just obvious to younger people, but if you just don't do the research, you're not going to get those asymmetric gains. [SPEAKER_02] Yeah. [SPEAKER_03] But most people don't do the research. [SPEAKER_02] Most people don't. [SPEAKER_02] And I think most things I think are obvious are wrong. Most of the time when I invest, I lose money. [SPEAKER_02] That is fair. [SPEAKER_02] And there's, or do you have the inverse Cramer effect or? [SPEAKER_03] No, no, no. [SPEAKER_02] But I think there are certain people who just have a knack for it. And I think we were talking earlier about how most people should just invest in index funds. I would say that's true for the most part because a lot of people want to do it themselves, especially with this advent of DIY, but I think the goal is autopilot—for you to find someone who you have confidence in and can see the track record of success. You put 10 to 20% of your net worth, not all of it, but about 10 to 20% in these high risk, high reward strategies. You know what's fun? Wait, so we're doing this Ray Dalio thing tomorrow. We're interviewing him and he started as a newsletter. It was like a $1,500 a month newsletter. That's smart. And then someone was like, Hey, if you think you're the man, then why don't you have your own fund? And he's like, maybe I will. And now we have the biggest one in the world. And so my question is, why doesn't—I think Motley Fool. [SPEAKER_02] So Motley Fool does nine figures a year in subscription revenue. [SPEAKER_03] For you who don't know Motley Fool, you give them a hundred dollars or some amount of money and they give you stock picks, but they also have a fund where they invest in their own picks. And I think they have over a billion AUM. It's all public. You can look it up. So every financial blogger who is a stock picker should be an autopilot person. Yeah. [SPEAKER_04] I think that's going to happen. We have there's going to be way less of them because everyone's going to be able to see who's legit and who's not. [SPEAKER_04] Exactly. [SPEAKER_04] And so we have a 6,000 person waitlist to launch a portfolio on autopilot. So we do a lot of due diligence. We look at the track record of success. We analyze their actual portfolio. Because, for example, if you run a newsletter but your actual portfolio is bad, we don't really want you on the platform. [SPEAKER_04] Who's the most famous or successful person that launched their portfolio on here? Not the politicians you're tracking. [SPEAKER_04] It's a guy named Peter Wolf. And so I checked out his personal Robinhood account and I was like, this guy's up 200%. [SPEAKER_04] How do you check someone's personal Robinhood? So I would go on a video call and I would look at it. But right now we have tech where he could actually connect his Robinhood account to our platform and we could analyze it. [SPEAKER_04] And 200% over three years. Right. Three years. Yeah. I mean, you're right. And it's like, what does it do in a downturn? But I liked the way he was thinking about what he does to hedge against risk. And I was like, you know what, launch on the platform. [SPEAKER_02] So you guys are kind of like you're the editorial team. You're American Idol. You're letting them audition, right? [SPEAKER_04] You're picking the pickers. Yeah. Then they launch their portfolio. People then pay upfront to do it or people just copy the trade and you get it. That person gets a commission. Yeah. There's a subscription fee, very similar to SubStack. How much? The pilots—that's what we call them—they could set it. It ranges from a hundred bucks a year to 500 bucks a year. And how much are the top people making? [SPEAKER_03] The top people are making around one to 2 million per year on autopilot. [SPEAKER_03] Whoa. [SPEAKER_03] Okay. [SPEAKER_03] That's outside of their stock gains. [SPEAKER_03] That's just their autopilot. Yeah. That's just their autopilot. Perfect. [SPEAKER_02] So that means they have how many subscribers—like 10,000 subscribers? [SPEAKER_02] It depends on how much they charge. But, for example, Peter Wolf has around 220 million of people following him on autopilot. [SPEAKER_02] Oh, so you see how many dollars are backing you. [SPEAKER_02] Yeah. [SPEAKER_02] And so, for example, this is a stat that we pull—Bill Ackman, who traditionally [SPEAKER_03] Okay. [SPEAKER_03] That's outside of their stock. [SPEAKER_03] That's just their autopilot. [SPEAKER_03] Yeah. [SPEAKER_03] That's just their autopilot. [SPEAKER_03] Perfect. And so they, and so that means they have how many subscribers, 10,000 subscribers? It depends on how much they charge. But for example, Peter Wolf has around $220 million of following him on autopilot. Oh, so you see how many dollars are backing you. [SPEAKER_02] Yeah. And so again, for example, this is the stat that we pull, Bill Ackman, who traditionally raised a lot of money really quickly when he graduated Harvard, it took him about five years to raise $60 million. [SPEAKER_02] This guy on autopilot within one year raised $220 million. [SPEAKER_02] So you're basically it's like Justin Bieber was YouTube native. Yeah. [SPEAKER_02] Right. He was a YouTuber first and became Justin Bieber. And you're basically saying the next Bill Ackman, the next generation's Ray Dalio is going to come from a platform like ours or from you guys specifically. [SPEAKER_03] Do I put my money into Peter's fund? [SPEAKER_03] Yeah. [SPEAKER_03] So what would happen is you connect your Robinhood account or whatever brokerage you have and it, we automatically follow his fund. So when he makes a trade, we send a notification to your brokerage to automatically buy or sell that security. Copy trade. But it's not giving the money to the guy. Yeah. And that's actually- [SPEAKER_02] You keep the money in your Robinhood. Yeah. And that's how we are able to operate from a legal standpoint. Whenever you're giving custody of assets away to someone, the SEC gets really involved. Is that a brokerage? You have custody. [SPEAKER_03] That's when a lot of regulation pops up. How old's the business? It's about, autopilot. We've been running autopilot for three years, but the entire business structure is six years. So autopilot has existed for three awesome years. Yeah. What's going to happen in six years when you have three bad years? If we have three bad years. Stock market bad years. Yeah. That's what he's saying. I think what we see is the retail investor right now perseveres longer than they used to. Three years is a long time. I would say if it was three years downturn, consistently, I feel the whole world will, there'll be a lot of questions for the whole world. But that happens. It happens to Robinhood and these other guys, right? What do you mean? I think three years straight, it hasn't really happened, but I think you'll see one and a half years happen. [SPEAKER_04] So I think Robinhood almost died. [SPEAKER_04] Yeah. [SPEAKER_04] But they didn't because they had raised billions of dollars. And they had an emergency funding round. [SPEAKER_02] Yeah. [SPEAKER_02] So it was a near death. [SPEAKER_02] When was that during the GameStop? [SPEAKER_02] Yeah. During GameStop. They were about to go under and I think they had to raise $4 billion immediately. Because they needed liquidity. [SPEAKER_03] There's something with being a brokerage and the DTCC, not too familiar with it, but they're like, you need to post up this money there. We don't have it. Are people nervous to invest? Are venture guys that nervous to invest? [SPEAKER_04] I think what we've seen in venture is the AI wave. [SPEAKER_04] And fintech was sexy in 2020, 2021. Right now with our metrics, I would think it would be very exciting for venture capital. [SPEAKER_04] But with fintech, we have some friends in fintech, and a lot of fintech companies make no revenue. You could be Wealthfront and you could have billions of dollars in AUM and your fees are so tiny that you're making $30 million in revenue? I think, yeah. Or GMV like that you still have to pay to. [SPEAKER_03] Right now, because we've launched our own portfolios where we take a hundred percent of the revenue, the Pelosi portfolio is ours. [SPEAKER_02] So we get a hundred percent of that revenue. [SPEAKER_02] Our GMV revenue is 30 million, but our autopilot ARR is around 22 million. [SPEAKER_02] Okay. So you have more real revenue than like, remember Ankur was doing carry and he had a billion in AUM, but the revenue was literally a million. [SPEAKER_02] Yeah. I know that to me always blows my mind. I think the thing that's interesting about us is when you look at other traditional asset managers, they just put your money in ETFs and mutual funds and there's no real alpha they're trying to get you. [SPEAKER_04] So they can't really charge that much money. [SPEAKER_04] Cause you're like, why would I go to them? [SPEAKER_04] Why don't I just go to Wealthfront that charges 0.1%? [SPEAKER_02] And so with autopilot, the reason you pay so much is because these people, the hope is that they outperform the market. [SPEAKER_02] And so I think the average income that people pay on autopilot is around three to 4%. Does Nancy Pelosi hate you? Probably. I would say. Did you guys interact? No, we've never. [SPEAKER_04] No cease and desist even from her? No, no. Wow. [SPEAKER_02] Nancy. [SPEAKER_02] They're. [SPEAKER_02] Or props. [SPEAKER_02] Perfect. [SPEAKER_02] Or she's getting soft in her old age. I mean, the goal is when she retires, we try to have her actually join the fight and have a commercial. That'd be incredible. We did sponsor the UFC and got a fake Nancy Pelosi. Did you see this? This is incredible. [SPEAKER_04] No, we've never. No cease and desist even from her? [SPEAKER_02] No, no. [SPEAKER_02] Wow. Nancy. They're, they're. Or props. Perfect. Or she's getting soft at their old age. The goal is when she retires, we try to have her actually join the fight and have a commercial. That'd be incredible. We did sponsor the UFC and got a fake Nancy Pelosi. Did you see this? This is incredible. And so the goal was, this was the UFC before the election and Trump was supposed to sit row one at the UFC. [SPEAKER_03] And we were like, wouldn't it be funny if we sponsor the UFC and it shows invest like a politician right in front of Donald Trump. And then we have a fake Nancy Pelosi right by him. Like you all bought a ticket or. Oh yeah. Or as part of the sponsorship. [SPEAKER_02] We had the ring sponsors. Yeah. We had the ring sponsors. And then they hired a lookalike Nancy Pelosi and they had her walking in. They had like the, you had like. Social content of her entering the arena. Did you have to actually buy that ticket? We had to buy that ticket. [SPEAKER_02] That ticket row one was $60,000. No way. How much you spent on the whole marketing buy? About $450,000. [SPEAKER_03] Did it help? [SPEAKER_03] It didn't help directly. I think the brand affinity was there. [SPEAKER_03] Would I do it again? [SPEAKER_03] Probably not. [SPEAKER_03] It would have helped if Trump was actually showed up. That was a weekend when there was an assassination attempt. [SPEAKER_03] So that makes sense. [SPEAKER_03] There was, and I was like, dang, he's not here, but I'm glad he's safe. But I think if he did show up, I think the media that would have been picked up, the earned media would have been insane. Hey, it was ballsy. And sometimes you gotta do what you gotta do. [SPEAKER_02] That's, I think it was cool. We're still talking about it now, right? [SPEAKER_03] Exactly. [SPEAKER_02] That's attention. [SPEAKER_02] That's fair. [SPEAKER_02] That happens when you do unique, over the top things. [SPEAKER_02] So, that's amazing. [SPEAKER_02] We're trying to think of the next stunt, but. [SPEAKER_02] How many people work there? [SPEAKER_02] Right now, 30, 35. [SPEAKER_02] So you're doing about $800,000 of revenue per. It's about a million dollars per employee. Walk me through the, what does this look like if this is actually big? Cause some of the weird ideas here, this is a weird idea. And weird ideas have a lot of potential, even though on the surface, it takes a little time to understand. For me, it was kind of a common sense idea. [SPEAKER_03] Like, I don't know, growing up, I was like, man, why can't my Robinette account just follow this other guy's Robinette account automatically? [SPEAKER_03] Like, I don't want to just give my funds away to someone else. [SPEAKER_03] Like I want to be able to do stuff myself, but I also want to go on vacation without worrying about when to sell or when to buy. [SPEAKER_03] I think the solution to me was just the most obvious. But I think the ultimate goal of autopilot is to become the world's largest asset manager. When you look at BlackRock, they actually do this for institutions. BlackRock connects all these financial institutions, companies will go on a tool called BlackRock Aladdin and buy different portfolios. [SPEAKER_04] So it already exists at the institution level. [SPEAKER_03] When you say buy different portfolios? [SPEAKER_03] BlackRock will create their own portfolios based on different risk. And so like if you're Walmart and you're heavily invested in groceries for this quarter, you could actually hedge your bet on BlackRock Aladdin. If you're a Facebook employee, you could actually find a portfolio on autopilot that hedges tech. [SPEAKER_02] And that tool that BlackRock created makes around $6 billion per year. [SPEAKER_02] And BlackRock's one of the largest asset managers. [SPEAKER_02] And so I think with autopilot, one of our goals is to get that same tech and build it for retail investors. [SPEAKER_02] How do you get those? [SPEAKER_02] How are you going to hire those people? [SPEAKER_02] Well, he's saying people come to the platform like it's a two sided marketplace, right? [SPEAKER_02] And so then the pilots come and they're the ones with the ideas. [SPEAKER_02] You verify their employment where they've worked. [SPEAKER_02] But really the goal is where anyone could just publish those portfolios and get paid. And then as a marketplace, we take a cut of that revenue. What would be the burning question? I have a bunch of large macro questions on AI, but I also have questions because you guys have been running companies for 10 plus years. [SPEAKER_02] One of the biggest things is hiring. How do you find people that are highly motivated? [SPEAKER_02] What questions do you ask? [SPEAKER_02] Because one thing that I've noticed is when you hire especially more senior level people, their ability to BS is greater than my ability to detect BS. [SPEAKER_02] And I think there's certain questions or certain things that you could look at that you guys probably have more experience that would actually really help autopilot get to the next step. Well, for one, having a personal audience is definitely one of the biggest perks is that you're able to, if you cold email someone, they're like, oh, I've heard of you or I know of you at the very least. And I think that's the best you have a lot of people who apply, but whenever I would hire for people in roles that I didn't know what the hell I was doing, I definitely would have an outsider hiring committee. So I would have outsiders interview people all the time. Mm-hmm. That was going to be one of my tips. I've covered probably three or four tips. They're not all related. The first is I find a lot of my hiring mistakes where I didn't actually understand what I was hiring for. I wasn't clear enough. [SPEAKER_03] Sometimes that comes from, I do the work for a little bit and I'm like, oh, okay. So I would have outsiders interview people all the time. Mm-hmm. And that helped me a lot. Yeah. That was going to be one of my tips. I've covered probably three or four tips. They're not all related. The first is I find a lot of my hiring mistakes where I didn't actually even understand what I was hiring for. I wasn't clear enough. [SPEAKER_03] Sometimes that comes from, I do the work for a little bit and I'm like, oh, okay. What the person's going to need to do is X, Y, Z. As you scale, that happens less. But still writing down, not a generic job spec. I think a lot of people outsource the job spec to either ChatGPT or a recruiter, and it's super generic. It's going to attract a generic candidate. And it's not actually clear. What are you trying to get somebody to come change in your company? [SPEAKER_04] What do they need to be world-class at? [SPEAKER_04] What problem are they going to have to solve and be really, really clear? [SPEAKER_04] So that's the first thing. [SPEAKER_04] Second is getting outside help. [SPEAKER_04] So I have a buddy who he's better at hiring than I am. [SPEAKER_03] And so what I would do for any executive hire is I would call my friend, be like, hey, once I've done the screening, will you talk to these three or four candidates and give me your take? And it really wasn't about who he picked. [SPEAKER_03] It was me becoming a better hirer and interviewer by understanding the difference of like, I thought this person was great. [SPEAKER_03] He sniffed out their bullshit really quick. [SPEAKER_03] Why did he do that? [SPEAKER_03] And I'm watching the call and I'm realizing he dug in a different way, asked a different style of question, didn't accept their first answer at face value. [SPEAKER_03] I got to start doing that. [SPEAKER_03] And so I got better by doing that, not just because they helped me pick this person, but because I realized where I was weak in the interviewing process. [SPEAKER_03] I also think there's two really good pools to hire from. [SPEAKER_03] One is you want people who've either done it before or never done anything, but can do anything. [SPEAKER_03] So done it before is who solved this problem for. [SPEAKER_03] I always start there because if I can find somebody who's already done this before, that's going to help me a lot. [SPEAKER_03] And I mean specifically, so it's not just, oh, he worked at a successful company, but they do enterprise sales and we don't even do enterprise sales. Right. It's, no, they solved this exact thing before. We've talked about this a lot in the pod where it's, it's so fun to hire young people. They don't have any experience. It's so fun, right? Because that's what you are recently. But nine out of ten times, if you're just like, hey, you did that there, do that same thing here. Right. And that tends to just be way better. So we will map out which companies have solved this problem before. Who was the person that was there at the year when they had this problem where we are? Who was that person? And then were they the real shot caller on the team or were they just doing something? But there's somebody else who was amazing. I go to that level of detail there. So that's one pool you got to get good at. And the other pool is diamonds in the rough, unproven talent that you can almost be a stock picker on and be like, okay, I think this person's a 10 Xer. And I build the company with those two pools of people. And you build systems so that you consistently are sourcing from both of those. Yeah. [SPEAKER_04] Most of the one thing, most people ask—are you the CEO of the business? [SPEAKER_04] How much time per week do you spend recruiting right now? [SPEAKER_04] Right now about 20%. [SPEAKER_04] That's pretty good. [SPEAKER_04] Most people, that means one full day a week, basically. Most founders who have hiring problems, if you ask them that question, they're like, hours. I think it used to be that. And now I'm seeing how important it is. And if you listen to a lot of the most successful founders that were in a scaling phase, they spend 30 plus percent of their time just on recruiting. Are you guys profitable? Yeah. Okay. So you're at 20 million in revenue? Or 30 million. 30 million. [SPEAKER_03] 30 million in revenue. [SPEAKER_01] I guess cash flow positive, not cash profitable, but. Sure. [SPEAKER_03] So your default alive. [SPEAKER_03] What's the growth rate going to be this year over the next year? [SPEAKER_03] About 250%. I would think almost all your entire job is collecting people. What sorts of people do you need to be hiring right now? A lot of software engineers, product people, growth people, marketing people, really anyone. [SPEAKER_02] People. Just people. I think the thing is maintaining that high bar. [SPEAKER_02] And we've just hired a lot of people and perhaps I'm actually very quick to get rid of people. [SPEAKER_04] If they come in and within two to three weeks, they haven't really done anything. [SPEAKER_04] I just immediately, I'm like, all right, you're getting out of here. [SPEAKER_02] And that impacts culture, which is why you got to get the hiring right. [SPEAKER_02] It impacts culture. [SPEAKER_02] But I think everyone who's been here, anyone who we tell people, if you're here for longer than three months, you don't have to worry. [SPEAKER_04] So I think after the three month mark, people are like, okay, I'm chilling. [SPEAKER_04] But before that everyone's freaked out. Are you going to only hire New York? [SPEAKER_04] Yeah. [SPEAKER_04] Yeah. [SPEAKER_04] Can you afford it? [SPEAKER_04] We, yeah. [SPEAKER_02] We've, I think especially with AI, the salaries that we're paying people, we just offered a guy a 350K salary. [SPEAKER_02] And I'm like, this is crazy. Because I've never made that much money. [SPEAKER_02] I still don't. [SPEAKER_02] But yeah, I think the goal is with AI, each person is much more effective. So a good person with AI could be 10, 20 times more effective than an average person with AI. That's crazy. [SPEAKER_02] My CTO used to say it too. [SPEAKER_04] Can you afford it? [SPEAKER_04] We, yeah, yeah. We've, I think especially with AI, the salaries that we're paying people, we just offered a guy a 350K salary. And I'm like, this is crazy. [SPEAKER_02] Cause I've never made that much money. [SPEAKER_02] I still don't. [SPEAKER_02] But yeah, I think the goal is with AI, each person is much, much more effective. [SPEAKER_02] So a good person with AI could be 10, 20 times more effective than an average person with AI. That's crazy. [SPEAKER_02] My CTO used to say it too. [SPEAKER_02] He's like, you're one person. No, you're three people. He says, you're three people. [SPEAKER_04] He used to say that all the time. [SPEAKER_04] And people, it's funny. It's real simple. It's just people realizing what you mean. It's like, no, you need to be able to do the work of three people because you got to be smart about what you don't do. [SPEAKER_02] Don't do the bullshit, automate stuff, figure out a faster path. That's your job is to be three people. And when we used to do offsites, we would say every day is two days. Like two days of stuff needs to happen every day. And so I think when you do that, you set a different bar for your team on how they operate. [SPEAKER_03] Yeah. [SPEAKER_03] Dude, thanks for doing this. [SPEAKER_03] Yeah. [SPEAKER_03] This is awesome. [SPEAKER_03] You're awesome. [SPEAKER_03] We, I messaged him roughly two hours ago and I was like, where are you? [SPEAKER_04] Yeah. [SPEAKER_04] I saw the post. [SPEAKER_03] I'm like, yo, Sam, I got to get on my first. [SPEAKER_03] This is a dream. [SPEAKER_03] Can you be here? [SPEAKER_03] Well, you guys have, are one of the great growth hack stories. [SPEAKER_03] There's what you guys did with the Pelosi tracker. You have another tracker. [SPEAKER_03] Do you have other trackers? Yeah. We've, the Leopold tracker. Who's the best? [SPEAKER_04] Right now, Leopold, he's up. You know this guy? Is he a 25 year old? [SPEAKER_04] He was a 22 year old. [SPEAKER_04] He worked for Open AI. [SPEAKER_04] Now he's 25. [SPEAKER_02] He left Open AI and then started a fine. [SPEAKER_02] Isn't he up like $10 billion or something? [SPEAKER_02] Around 5 billion. [SPEAKER_02] So he's a billionaire now? I think so. I think so. And he raised outside capital? [SPEAKER_03] I think a lot of it was friends and family, but he. [SPEAKER_03] Daniel Gross and Nat Friedman and smart money was immediately behind him. [SPEAKER_02] How much did he raise? [SPEAKER_02] I think originally 500 million, not that much. [SPEAKER_02] And now he's at around upward of $5 billion. [SPEAKER_02] But what he did, which was super smart. He's 10X in two years. Yeah. [SPEAKER_04] He looked at what companies, what were the bottlenecks of Open AI. And he was like, okay, well, SSDs. A lot of people thinking GPUs. [SPEAKER_02] He was like SSDs, Micron. [SPEAKER_02] And so he just started buying all of the other bottlenecks that no one was focusing on. [SPEAKER_02] And now they're just skyrocketing. [SPEAKER_02] And isn't his, somebody is the chief of staff at Anthropic. [SPEAKER_04] Oh, that. He's got some information flow as well. That's pretty good. Yeah. [SPEAKER_03] I mean, he's brilliant. Have you read his situational awareness paper? No. [SPEAKER_02] I did this and it was very, very useful. Take the PDF for situational awareness. It was on my list of what is situational awareness. That's his hedge fund name. He published a white paper or blog post, a PDF before he launched the hedge fund or right after. I think it was actually maybe before. And this is how he attracted the money. [SPEAKER_02] He launched this thing, which was basically, he had a very strong point of view on what the next 10 years of AI looks like. [SPEAKER_03] Very bold predictions. [SPEAKER_03] It was like, and then huge tension between China and America. [SPEAKER_03] Okay. And then because of that, this, it was super specific predictions of where the puck was going. [SPEAKER_03] So he published this thing and a lot of smart people were like, yo, this is one of the smarter takes of what's going on. [SPEAKER_03] I think that attracted more capital, more awareness. [SPEAKER_03] And situational awareness was the name of his publication. [SPEAKER_03] Name of the publication. [SPEAKER_03] And I think it's the name of his fund or his company. [SPEAKER_03] So take it, give it to your Victor in your Slack. [SPEAKER_03] Yeah. [SPEAKER_01] I say, Victor, break this down into the 10 key ideas, predictions and hypotheses that he has. [SPEAKER_03] Explain it and explain it to me. [SPEAKER_03] Victor did a wonderful job. [SPEAKER_03] He's just chewed up this PDF for me. [SPEAKER_03] It explained it step by step. [SPEAKER_03] And then I asked follow up questions and it was just great. And I was like, so did that play out? Was he right about this? Did he trade on that? And it just answered every single question. It was so good. Is he, is a guy like him. [SPEAKER_04] Victor, by the way, is an AI thing that Sam put me onto. I am now hooked. I ended up investing in it. Thanks for telling me. I told you about it. You should have told me that. Well, it was at an absurd valuation, but it's that good that I was like, yeah. [SPEAKER_03] Well, I told you. I told him about this tool. Did he trade on that? And it just answered every single question. It was so good. Is he a guy like him? [SPEAKER_04] Victor, by the way, is an AI thing that Sam put me onto. I am now hooked. I ended up investing in it. Thanks for telling me. I told you about it. You should have told me that. Well, it was at an absurd valuation, but it's that good that I was like, yeah. Well, I told you, I told him about this tool. [SPEAKER_03] He's like, I don't know. I don't trust these tools. These are stupid. And then two days later, he goes, these tools are awesome. Have you heard of this tool? I made him feel dumb. I was like, why do you just trust a random startup with all your stuff? And then I heard a little more and I was like, let's try it out. [SPEAKER_04] And I tried it in one of my slacks. I was like, this is amazing. Now it's in every business. Yeah, it's good. But the, I'm curious about the personal side on this. Is he low key right now? Is he trying to hide out? No, he posts on Twitter. Really? He's very good friends with Dwarkesh. So he's done the Dwarkesh pod a couple of times. [SPEAKER_04] I mean, is he cool? [SPEAKER_04] Yeah. [SPEAKER_04] Do you think Peter Thiel's cool? Do you think a lot of Asperger's genius? He's cool. Yeah. That energy. [SPEAKER_03] Yeah. He has that. [SPEAKER_03] He's great. I love it. Yeah. [SPEAKER_04] You can follow him on autopilot. [SPEAKER_04] You think that's cool? [SPEAKER_04] I'm saying cool is not the word I would use. [SPEAKER_04] I love it. Yes. I think he's awesome. And so you can replicate his? [SPEAKER_03] You can follow his top 15 picks on autopilot. [SPEAKER_03] And how do you know his picks? [SPEAKER_03] Because he followed the 13F. [SPEAKER_03] And so it is. [SPEAKER_03] There's a little lag. [SPEAKER_03] There's about a 45 day lag, but we only track with the lag. And a 13 day half, how big does your fund need to be? A hundred million dollars. Oh, okay. Damn. So he's the guy right now. He's the guy. He's the guy. [SPEAKER_04] Does he do podcasts? [SPEAKER_04] You actually get them on. [SPEAKER_04] There's a couple. [SPEAKER_04] We're trying. [SPEAKER_04] I think we were reaching out. [SPEAKER_02] Yeah. [SPEAKER_02] And it's stuff like this that make me very adamant that people should always invest in index funds, but there should always be 10 to 15% of your net worth on high risk, high reward stocks or portfolios. [SPEAKER_02] And so this is where autopilot doesn't right now want to take a hundred percent of what you have, but just 10 to 15%. [SPEAKER_02] Your liquid net worth. [SPEAKER_02] Where is it allocated? Who are you following? [SPEAKER_02] Right now? I follow basically 20 different pilots on autopilot right now. So right now of your 100% net worth. So my 100% net worth, it's 90% on autopilot. [SPEAKER_04] A lot of it is in. [SPEAKER_04] I want to know the truthiness. [SPEAKER_04] So you said you connect with their brokerage account, but people have many different accounts. So you connect to all of them. You could, but you don't know if this is tracking all of them or just tracking something, right? As the user, I don't know if you have everything that this person has done. [SPEAKER_03] Right. Yeah. [SPEAKER_02] So winners and losers. [SPEAKER_02] So what it is, is the people will go on our platform and create a model portfolio. [SPEAKER_02] And so you only see the history of the model portfolio from when the pilot joins to now. So it's not actually following their brokerage account. Oh, okay. [SPEAKER_02] But what we do have is what's called skin the game where the pilots will also put their money on autopilot following their own portfolio. And so you could be like, wow, Peter Wolf has $500,000 following his own trades verified by autopilot. Gotcha. Gotcha. [SPEAKER_02] Gotcha. [SPEAKER_03] Are you having fun? [SPEAKER_03] I would say right now I'm having fun. I would say the last three years have been, it's hard. [SPEAKER_03] I would say getting from zero to 1 million in revenue was the hardest thing I've ever had to do. [SPEAKER_03] Getting from one to 30 was actually a piece of cake. [SPEAKER_03] What do you think the next threshold will be? [SPEAKER_03] I think we're on track to hit a hundred million in revenue by March next year. [SPEAKER_03] I think it's going to be difficult. Run rate. Recurring revenue. Not run rate. Right now we're at a 70 million run rate. [SPEAKER_02] But we want to get, I passed on investing in this twice already. [SPEAKER_02] Yeah, why did you do it? I know. [SPEAKER_02] But it seems like a really hard thing to get off the ground. [SPEAKER_02] It was very hard. How'd you do this? [SPEAKER_02] Well, I'm a degenerate and they were listening to MFM, I think. [SPEAKER_02] So they knew that you've talked to Chris a couple of times. I talked to Chris. I really admired the marketing. So I think I just reached out giving respect. [SPEAKER_04] I was like, hey, I think it's brilliant what you guys are doing with the plus checker on Twitter and the UFC. I just thought you guys were doing a really good job. I think without the marketing, we wouldn't be here just because of how hard this stuff is to do. What was the first round's valuation? It was very hard. How'd you do this? [SPEAKER_02] Well I'm a degenerate and they were listening to MFM I think. So they knew that you've talked to Chris a couple of times. I talked to Chris. I really admired the marketing. So I think I just reached out giving respect. [SPEAKER_04] I was like, Hey, I think it's brilliant what you guys are doing with the plus checker on Twitter and the UFC. [SPEAKER_02] I just thought you guys were doing a really good job. I think without the marketing, we wouldn't be here just because of how hard this stuff is to do. What's your, what was the first round's valuation? The first round was a 7 million. Right. Yeah. But that was 2021. There's a lot of yeah, man. Yeah. [SPEAKER_03] Yeah. Well, either way, I'm a fan and I think what you guys are doing is great man. I appreciate you coming on. [SPEAKER_02] This is awesome. All right. [SPEAKER_03] We appreciate you. Thank you guys. We'll talk to you a little bit. That was awesome. [SPEAKER_02] Good picks. Yeah. That was cool. That was fun. I hope this is a Hampton plug, by the way. I definitely just went into the New York channel and I just said, yeah, who's interesting. Cause I didn't want to tweet it out. Cause I wasn't sure what we're going to get. I'll do the plug for you. If you're an interesting business owner and you want to be in a community of other interesting business owners, [SPEAKER_03] join Hampton and maybe you too can be on MFM someday too. I didn't realize how big autopilot was. I thought it's been scaling a lot. It wasn't that big six months ago. Well, he told me, I knew it was 30 million in revenue. I thought that meant like GMB. Cause those businesses, not his business, but that category of business is usually pretty shitty. [SPEAKER_04] Right. [SPEAKER_03] Like numbers can be huge, but the actual business, but not his, that's insane. Yeah. He's doing well. That was cool. [SPEAKER_04] You know, one of the things with probably the biggest thing for me since I started my first million until today was I remember pre my first million and I'm 10 years before that, the full 10 years, I felt opportunity, success was this needle. [SPEAKER_03] You had to do this. [SPEAKER_03] This haystack or it was this narrow thing. [SPEAKER_03] It was this thing I had to search for in this room and it was so hard to find. And I needed this brilliant idea. [SPEAKER_04] And if I just is this the brilliant idea? Where's the brilliant idea that I need perfect execution. [SPEAKER_04] I remember opportunity just felt so scarce. And then one of the things of you moved to San Francisco, you meet a bunch of people, we start doing this podcast. It's like, you just realize, oh dude, there's thousands of different tens of thousands of different ways that I can win. [SPEAKER_04] Opportunity is everywhere. It's really about picking what's the right fit for me. [SPEAKER_03] It was a total from lack to abundance mindset shift on success. Like where does success live? [SPEAKER_03] And what I like about a thing like this that we did today is those are three ideas that didn't even exist in my cone of vision. [SPEAKER_03] I couldn't even, I didn't even know that people do businesses like that. [SPEAKER_03] And there's also parts of their business and their lifestyles and personality that I want to, that I love and I want to steal. [SPEAKER_03] Right. But I don't admire the whole thing. [SPEAKER_03] For example, Alex, I'm like, oh man, he's so calm. Right. I need to learn from that. I don't necessarily want to trade what I have for what he has, but I want to steal this from him. And I wasn't in a rush. Yeah. Better and for worse, but mostly for better. And same with Brian, huge business taking off. I don't want to do all those stunts. I don't want to raise VC, but that's pretty awesome. But I admire the creativity. Like Josh's outdoor business. [SPEAKER_04] I'm like, that's awesome. [SPEAKER_04] I don't want to raise money, but it would be maybe fun to own one. [SPEAKER_04] I should go camping. [SPEAKER_04] Yeah. [SPEAKER_04] No, but there's small things where I like, I think people sometimes in the comments tease us about having, I hate when people say you have these guests that are out of touch. [SPEAKER_04] Whenever I hear that, I'm, no, you're out of touch with his life. That's about you. You're out of touch. No, but what I mean is I'm equally impressed by a billion dollar company versus [SPEAKER_04] a $5 million company. They're both equally awesome. Jesse Itzler said this at one of our events. [SPEAKER_03] He goes, it was an interest. And what does somebody, what do people, what should people know about you? It's like, Hey, I'm Jesse Itzler, blah, blah, blah. I did this. And he goes, my thing is I root for everybody because when you root for everybody, you can never lose. [SPEAKER_03] And then he sat down and I was like, I kind of liked that fortune cookie thing he just did. [SPEAKER_03] I like it. [SPEAKER_04] Jesse Itzler, really a cool man. [SPEAKER_04] Yeah. Exactly. [SPEAKER_03] No, he's the best. It's cool. It's like, whoa, that's the next level. So in the same way, when you root for everybody, you can never lose. [SPEAKER_03] There's something, if you think you can learn from everybody, you can never lose. [SPEAKER_03] Right? [SPEAKER_03] So it's great. [SPEAKER_03] He just did. [SPEAKER_04] I like it. [SPEAKER_04] Jesse Itzler really a cool black man. Yeah. [SPEAKER_03] Exactly. [SPEAKER_03] No, he's the best. It's cool. [SPEAKER_04] Black guys like him. [SPEAKER_04] It's the next level. [SPEAKER_03] So in the same way that you, when you root for everybody, you can never lose. [SPEAKER_03] There's something about, if you think you can learn from everybody, you can never lose. [SPEAKER_03] Right? So it's great. Tomorrow we're talking to Ray Dalio. There's going to be some awesome things to learn from him. Again, parts, not the whole. We're not trying to do what he's doing, but I'm still going to pull something away. I'm going to get a win and I'm going to have some fun in that hour. Just in the same way I got wins and learnings and fun in this hour. I think the new slogan should be, we get high and low, because I get equal joy. We'll go pop into a bodega. I'll love that. And now we're going to hang out with one of the richest people in the world. [SPEAKER_04] I'm going to love that equally. Right. All right. [SPEAKER_03] That's it. [SPEAKER_03] That's the pod. [SPEAKER_03] Thank you. Right. All right. That's it. That's the pod. Why am I going to pull up a pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull pull Thank you.