https://www.listennotes.com/e/8619d178ca624a00bb2aa5445f5cf7d9

That'S what we're going to do. So I'll start asking you questions. So tell me, what was your financial situation growing up?

You know, like upper middle class, like I grew up in a nice neighborhood in Houston and kind of like my dad grew up on a farm and felt like, I feel like he always felt like we were kind of overspending, but like there was, never a problem with that other than his real annoyance about it, you know? But, yeah, there was, you know, they gave it, provided a very good life for my brother and my sister and I. Yeah, awesome.

And so, I mean, fast forwarding immediately, you went into Wall Street. Why? Why did you do that? Why did you get into Wall Street?

You know, one thing that I was confused by growing up in the place that I grew up and just looking at what, when I finally became aware of what everything cost that everyone around us was doing, it just seemed like trying to make a lot of money when I was young was smart. And then my dad always used to say this one thing, which I just popped in my head. He used to say, A little work when you're young will save you a lot of work when you're old. And that sort of stuck with me the whole time. So there was that part of it. And the other part of it was he was a trader, he was an oil trader. And, Not that I knew much about what that meant. I couldn't have told you the first thing, but like, he was a trader and I knew that. So, you know, I got this opportunity to become a trader. And I knew that if you were good at trading, you made a ton of money. And so it all sort of like lined up to what I was trying to do.

Awesome. And your dad said, you know, make a little money when you're young. What were you earning then? I mean, you're on Wall Street.

No, nothing. This was, he was telling me that when I was like- oh, got it. in, you know, trying to teach me lessons about like the responsible way to live life or whatever. It's like a little bit of work when you're young will save you a lot of work when you're old. Like basically, you know, what he's trying to say is like, you don't want to be stuck, you know, you want to be financially free by a certain time in your life.

Totally.

And that requires an enormous amount of.

Work is the literal answer to that. So you did a ton of work and you landed a gig on Wall Street. Like, what were you earning back then?

I think the first year was like a $55,000 base or something. And that was 2003.

Okay.

Maybe I got like a $20,000 bonus or something that first year.

Yeah, nice. And so at what point did you decide that Wall Street wasn't for you, or maybe you didn't decide it wasn't for you, but that you got bit by the startup bug? Like, when did that happen and why?

Well, it happened the day I showed up in New York because I was rooming with these guys who were starting Vimeo, the video sharing website, in my apartment. So, you know, I actually had a pretty successful for a 20-something year old trading career. But these guys were, you know, they were just living this crazy life and it just seemed like so fun. And they had all these young people, like, working in this exciting industry and It was, you know, they were, they also, they sold early and they continued to do well in interesting ways. So, you know, it kind of like, I just could see and feel that what they were doing was more meaningful than what I was doing and kind of the financial part of it was, They were doing a little bit better than me, but still, my career in Wall Street accelerated to the point in my late 20s where I was doing whatever I wanted to do. It was not-- Right. --and saving a ton. But there wasn't a clear path to that. And a series of events happened that created a clear path. to that for me. I think if you have a successful Wall Street trading career, there's this saying that every year they offer you $1 less than the amount, or no, $1 more than the amount that it would take you to quit. So it's like they know literally just enough to keep you going. So I had either the good fortune or bad fortune of you know, like, I, I, like in 2009, the year after the crisis, everybody doing what I do, everybody, the year of the crisis and the year after the crisis did unbelievably well doing what I did, this credit default swap trading stuff. And then I had a rough start to the next year. I had this really big bet that just went horribly wrong. And so my boss at the time thought that a bunch of He thought that Europe was going to have a levered debt crisis like in the US, and there would be this amazing trading opportunity like there was in the US in 2008. And so he sent me along with a handful of other guys over there to wait in anticipation for this to happen. Long story short, several of us got short in the market ground higher. We made no money and like my comp was down like 95% in one year. And, you know, and like at the same time they were regulating the credit default swap market and the market back in the US was shrinking rapidly. And that's just like not, you know, it's one thing it went from like there being a huge demand for the individual doing that job, like people were getting huge deals to change banks and stuff to if you had a good job, you were just holding onto your seat with all your might. And the opportunity to like, do what I did, which was like go to London, kind of fail for a year and come back and find something decent was like not, it was like not a good environment to do that. So it came back, there basically weren't any good jobs. I took this like job at a second rate hedge fund really, and it just, you know, I got fired after nine months or whatever, or it's not even, I got fired after like six weeks. It was just the wrong fit and I had this personal crisis at the time. I was going through this horrible breakup with this girl that I was meant to move back to the US and start dating. And it was just everything was wrong. And got fired from that job. And then that was my out. That was the path. Because I was finally out. And my prospects for finding it, I looked for a long time.

Did you want to be out? Did you like wanna?

So it's really hard to, I wasn't yearning to get out for the whole, it was the only thing that I knew. And by the way, when it's going great, it's like one of the most fun things you can do. Like gambling is like very fun and like, sure. It is just the thrill of, you know, sort of putting on a position and then watching it manifest, you know, in your favor. And then you in turn, like, making a huge amount of money personally as a result of that happening is a very positive feedback loop. I had a couple friends who were way more successful than me, which is always motivating, but I was doing neck and neck and a little better with most of the people I knew. So I wasn't, yearning for a way out. What scared me was looking at the guys who are now my age, right, when I was in my late 20s, mid 40s, and I looked at them and I didn't like what I saw. So a couple of them were running the bank and making tens of millions of dollars per year. and I still didn't love what I saw, to be honest.

Right.

Like getting into the office at six in the morning, absolutely, just the stress of that job, the amount, and like the three guys below you are trying to take you out in your sleep, and like the people above you are like, what the fuck? It's just, I didn't like how it looked, and I wasn't even close to anything, but I just felt like I could see it. And then there was like, you know, when I started on the trading desk, my boss lived in Darien, Connecticut, and we were getting to work at 5:45 a.m. every day. And he was on like the four-something train. And like he was back on the six-something train in home after his kids went to sleep.

Right?

Like it sounds unbelievable, but it just was what these guys did.

Sure.

You know what I mean? And it wasn't even weird. And I looked at that. And then from when I started on the desk to through that 2008 period, it went from the boss trading that to the boss of the trading desk had a dope apartment in Tribeca, a sick house in the Hamptons, two Ferraris and whatever else, right? So if that was the paradigm of ascending in this world I was in, I was like, I'll do it. But if the end game was back to, Coming in from Darien, Connecticut on the train, I was just like, I think I'd saved a couple million bucks. I was like, I'm just gonna spend this trying to figure out another life for myself because I don't want that to be it. And if I burn it all, then I'll just go back hat in hand and just try to go for it. But that was a very long answer to like, did I want out? It's like, I didn't want out that second, but when I got out, as I observed this world, the air coming out of the bag in this world, and yeah, there were still people absolutely killing it, but it just felt like the number of them was getting smaller. So I was like, I'm gonna try to do something else. I don't have kids, I don't have family. I'm going to try to get my burn as low as possible and just see what I can figure out. And that was, and I knew I wanted it to be the internet because of my friends and my brother started an old world business and used the internet and he did like a private equity roll up and did pretty well. So, my view, I had a mentor say a very wise thing to me. He said, we're probably all going to work till we're 90, whether we need to or not, because it seems like people's age you know, are starting to realize that that's a healthy way to live. And the skills that you have from the last 10 years are not worth what they were 10 years ago. Think about the skills that you might need for the next 60 and go out and get those skills. So that really, and I think that was great advice, by the way. I was just like, without and now it's getting a little weird with AI. I don't love the underlying backdrop for what I do, like building B2B SaaS. It's just a strange market of undercutting and creating stuff, copying and whatever else. But I also know a lot of other stuff about the fundamentals of entrepreneurship that I've learned from this journey. I could probably go do something in the real world and I would I would imagine it would be very difficult, but I could probably make a life for myself. So anyway, there was no question that it was the internet at the time. I still think it's probably something, I don't really have a problem with the skills that I have, but that was incredibly wise advice at a very good time.

So then, so you do, again, fast forward slightly. You start your first startup. and Jackie's got here in the notes that you were kind of like forced to make that thing profitable. So what was the like, give me a little bit of context there, like just a super brief version because we don't, you know, there's more things we're going to get into more depth with later, but like just a little sense of that and then just walk me through your financial journey during that period. Like, yeah. So you started this thing with a couple million in the bank.

So you started a startup. I did something really so another thing that I did is I made some chunky investments and stuff and like, You know, most of it like didn't work out like this. I've heard it some other times in this podcast that early stage venture is like not what you should do with your nest egg. And I just did a bunch of that stuff and it was just horrible. So, you know, let's say I had like a million and a quarter left. I didn't take a salary for five years. My plan was to fund this business with my brother and have somebody else operate it. But in actuality, it was the only thing that I was like kind of working on like five different things and like this one thing worked. And fast forward four years, it's like we're still making like monthly contributions to this thing. I'm running it. It's my whole life. I'm waiting on like him to like for his wife to say that it's okay to like put in this 25 or 50 grand. So like we basically both got, I mean, I have this thing that I say where a startup will consume every dollar near it. especially with a first-time entrepreneur. So it just got to the point where we ran out of dough to put into it. And then it forced us to just get profitable. And then that was that. I was heavily under the influence of people like Jason Fried, who wrote Rework and kind of the four-hour workweek thing. I wanted to have a bootstrapped business that optimized for freedom. and I still think that that's smart as an entrepreneur to pursue that path. So that was really important to me, but it was very uncomfortable getting there.

Right. And once it was profitable, so you weren't paying yourself for the first five years, what did you start to pay yourself?

How did you- yeah, just whatever I could afford. It got kind of like pretty good, pretty fast, you know, but like maybe it started with like 50 grand and then like a couple of years later I was making like 150 and then a couple of years later I was making like 500. But then it sort of got stuck and I was like living in New York, you know, with this maybe it's 350, maybe it's 500. I don't really it was something like that. I have a couple co-founders and we were like, like a million and a quarter million and a half of profit on this tiny business on this $3 million business. So I was sitting there in New York and I was like, I can't, you know, I want to have a family someday. It was my late 30s. It's like, I can't do it on this, on this, you know, whatever. And by the way, I have a family now in Austin, which is not New York, and I was right, you know, like, I just can't even believe how expensive stuff is, you know, if whatever. So. So, yeah, that was, that was the story with that.

Cool. Yeah, that's awesome. And I wanna move, but I've just suddenly realized I didn't do my job in asking, have you got a pair of headphones that you could put on? Because I can hear myself in your mic and that's not good for the audio quality side of things.

You're right, that is not good. No one's ever said that.

By the way, my audio team is gonna absolutely give me shit if I don't sort that out. So that's good, thank you. And you look like a proper podcaster, so I figured you'd have some headphones, so that's awesome. Yep. Thanks, mate. So, okay, when did you sell that first company then?

2021.

Okay, so kind of mid-pandemic and how much did you make?

I ended up, so we sold it for 10 million. We had a business broker and with these small transactions, they take 10% off the top. I owned 40% of that. So after everything, I think it was like 2.6 or something, maybe like three or something like that.

What did you do with it?

Well, I paid off my mortgage.

And.

Which was like maybe 1.2 or something. And then I bought a boat, which was like 150 grand. And then, you know, new car was like 80-90, something like that.

And then- My notes here say you're not good, you weren't good with money back then, but like paying off a mortgage seems like a smart thing.

But here's where it gets- Ridiculous. I had this other company, which I started called Get Emails, which is now called retention.com, which I'm CEO right now.

Yep.

I wanted to sell Robly, the first one, because it was evident that from the traction, from Get Emails, which is now retention.com, that it was going to be much bigger. So we sold Robly. And my whole plan, I was very burnt out at the time because that was just such a war, getting to that point. And I was just like, I'm going to sell this in 18 months. and that was the plan. And we'd found a seller, spent six months doing diligence and stuff. We had an APA, like ready. And meanwhile, we were ready to sign in February, but like in August, I went into the woods for a week solo hike and like had this, like knowing that I wanted to sell this business and I was about to have a kid, I had this moment of clarity about how I wanted to run my life. You know, I don't want to have personal debt, you know, I want to be, you know, conservative in all these ways and only buy spy and like never trade and like, you not getting alternative assets and stuff. And meanwhile, I left, it was during one of the Bitcoin rises, and I started learning about crypto, and it's just so infecting when you do that. It's just a religious movement, and the story is so good, right? So I started nibbling a little on crypto against my better judgment of a week before in the woods. And then this, The second company was supposed to be sold for 35 million upfront and 35 million earn out. And we were literally about to sign the document on February 7th. In the middle of January, I buy this land for whatever, a million and a half bucks in the hill country with a mortgage, thinking that I have whatever, $15 million coming in. And then I also got so into this crypto thing that I put a million bucks in this blockchain fund, late 2021.

You said it was fun on Wall Street gambling. That was fun. It sounds like you.

Yeah, and the interesting part of it was, it was as if I had already had the money. And it wasn't stuff that would absolutely wreck me, but it was totally the opposite of these principles that I want to live by. And it was in advance of actually having it, which is very strange that that happens. And I've also heard about this on other guests on this show that they have done the same thing. They have this event happening and before it happens, they've already levered up and spent all of it.

Right.

But you had this moment of clarity in the woods, this wise man in the woods, like, okay, this is the meaning of life.

Yeah.

And then you get back and then you get back home, you're like, F.

This, I'm going all in crypto. Yeah, I didn't even like F this. It was just like, oh, like, yeah, it was this weird FOMO thing that happened. And then like, and then I'm like, okay, if I have like 20 million bucks and like rates are so low, then probably like I should have some debt and, you know, I got like a two and I retook a mortgage out on my house. Okay. You know, it basically took that money and like put it into this crypto fund. So I made like a levered bet on crypto. in advance of what ended up being like the guy. Yeah, exactly. You're laughing. I mean, this is why I said.

This is why I said you're not getting money. Okay, I got it. I got it. But Tombo, I just want to make sure I'm straight here because I'm slightly confused. So you sold that first company, you got 2.7, 3 million, whatever it was, paid off the house, went to the woods, moment of clarity, then you...

But in the meantime, you'd already started this other thing.

Yeah, and it had already replaced the income that I... So it's already making...

Okay.

And that was what would become- $10.

Million from that one also.

Cool. And so that business that you had going in the background that was spitting off all this cash that you were then spanking on crypto- Whatever, yeah. Was what would become retention.com?

Yeah.

Okay, got it.

And so- Most importantly, I paid my mortgage off after that transaction. And then not only did I go buy some land because my wife wanted to in advance of actually getting more money, I retook out another mortgage.

Yeah.

After deciding. By the way, I paid them both off last year. I paid them both off last year. And you could argue that that's a stupid financial move long term, but like, I want to get back to this.

Yeah.

So tell me about it. I'm interested in that. So I want to come back the stupidity piece. I want to revisit because this is fun. But the stupidity is probably unfair. But the mortgage thing I'm really interested in. The mortgage thing I'm really interested in, right? Because I own a house and we've got a mortgage on it and my wife wants to aggressively pay it off. I am more of the mind that like, hey, we should be putting this in the markets, let it do its thing. We're young enough that this is gonna kind of be worth it in the long term. Talk to me about that trade-off and how you see that as like a man that spent more time thinking about the markets than I have.

Yeah, so I think that there is absolutely no question that one of the best financial trades that you can do is taking the money from a low coupon mortgage and putting it in SPY and never ever trading it and just letting it rise. Inflation, compounding earnings from corporations back into it, the self-selecting nature of the index, those three things combined, there doesn't even really have to be growth to make that a home run trade.

Right.

I'm an entrepreneur. So then why ever pay off a house?

Yeah, so like I'm an entrepreneur and I view my businesses as still quite risky. They're still very early stage, you know? So there's just some sleep at night thing about knowing that I have no personal debt. And like my variable expenses are incredibly high, but they're variable for a reason. Like I can get my wife to stop spending five grand a month on clothes or whatever it is, right? We can not pay a nanny $100,000 to like help us with our two kids, right? Like all of this stuff is very optional. So, so yeah, that is it is an irrational financial decision, in my opinion, that is purely to make me feel better emotionally.

I totally get it. And so that's why I struggle to really, I struggle with that conversation with my wife because I totally get it. I get why she wants to do that and I kind of want to do it too, but I just know that the better financial decisions put in the markets. So I'm just like, I'm torn on it constantly.

Yeah, it's just a tough one. It's just a hard one.

Yeah.

What would be smarter for me is would be to reduce my variable expenses and keep the mortgage. But again, it's just hard to do. We looked at our budget this morning. It's like, well, where is it coming from? Where are we gonna, yeah, yeah.

Okay.

So.

By the way, would you, if you had your go again, would you have bought the crypto?

No.

I mean, I would have done it in a very different way. So, like, if I had to do it again, I would have never. I mean, I say I would never, but we're still, like, I'm still doing some impulsive things that are not, like, that impulsive. I'm just trying to, like, figure out ways to not do it. But, like, the real problem with that was, like, a, it was, like, a very high concentration of crypto versus. my other liquid assets. It was like, kind of like got me to like this two thirds crypto position.

Right.

The beautiful thing was they called the capital over two and a half years. So the first two capital calls were horrible prices. The next three were at like bargain base, you know, it was amazing. So I think the fund even now is like flat, which is like incredible that like all of that could have happened. And then I did, to give myself some credit here, After the, I had in addition to putting money in that fund, I had bought and held Bitcoin and Ethereum for like two years after the election. And my wife had some too. She's like, why don't we just sell all that and pay our house mortgage off? And literally, like it was like the genius trade of the century. Somehow having bought it all then, like we ended up making money on that part of the crypto, then liquidating it at the absolute top. paying debt off. And then I still have this fund, which got hammered. But I don't really, it's not like I think crypto is a doomed asset class. I just think post that election, everybody was like, million dollar Bitcoin. And that is exactly when it just goes through this round of levered unwind, whatever. So yeah, I would have not done the concentration thing. I would have just bought Bitcoin and Ethereum rather than a fund because I think you're just paying unnecessary fees and But the nice thing about that fund was I wouldn't have had the discipline to buy it over that time. I was so into it and I had so much FOMO that I would buy all right then. I'll tell you what the worst case scenario would have been. The worst case scenario when I actually sold my company, I was so bullied up on crypto that I would have put way too much into it. And then I would have been so humiliated on the immediate decline of this whatever I put in it. to whatever it became that just, like, I would have sold it for my wife's sake, you know, to like, and then it would have rallied and I would have been totally humiliated. So all things considered, yeah, all things considered, you know, it wasn't all that bad. It just put 2023, it made 2023 for me a lot tighter than it needed to be, and it was all my doing. Because in addition to that, I ran my business in a way where I thought it was a unicorn and I was wrong. So I was kind of reinvesting everything and now I'm back to this bootstrap cash flow mentality. But that plus that other stuff just put it in, it was just wrong.

Okay, so this is the piece I want to come back to. So I'm just going to walk us back a little while because we've kind of gone in and out of time timelines here. So I just want to be really clear.

So.

Sold the first company at the same time you're building up this company that was called emails. I've forgotten what it was called before it became retention.

Yep.

So building that up, that becomes the main thing. What was the kind of revenue journey of that company leading up to the what you believed would be the sale? Like, what did that whole period of time look like?

Yeah, it went from, I think when we started talking about a sale, it was at like, It was maybe like two years after starting it and it was maybe at like six or seven million ARR.

Okay, so pretty quick.

Yeah. And then it was like in February it was like at eight or something, you know, when he walked. And now that one's at 20 million.

Sorry, who?

Yeah, the seller. Literally like the day we're supposed to sign the APA, the guy.

Okay, so talk me through this story from the beginning. So like when did, how did you come to, like why was selling even on the table two years in, it's growing like crazy.

Yeah, I was both burnt out by my prior journey because it was so hard and I had no confidence in my own ability to get farther with company building than I had gotten. Because I perceived our team as entirely lone wolves and we didn't know how to manage anyone and I would just probably screw it up if I tried. Because that's kind of what happened with our first company. We kind of hired a lot of people and let them all go. So it seemed easier to just Go this path, you know, sell 18 month earn out, you know, I'm on to other things, right? But yeah, that's not how it went. You know, like it was a literal, like, I mean, we bought, like, I did all this stuff because I was like a hundred, dude, we were talking about, you know, integration strategy, like whatever else. And then somebody got in the dude's ear, like a couple nights before he was supposed to sign and he's like, I'm not doing this. I don't want to buy the data company. I need to stick with cleaner businesses or whatever. I don't want to add it to our story. So yeah.

What did that feel like? Was that just like a massive gut punch?

Yeah.

Like I said before, I had literally internalized having this money. And again, it was such a good thing that it didn't happen because I would have bought way too much crypto. It sold it all at the lows. But I just know that I would have, and I'm not just, I just know that that's what happened. But it was very horrible. But it kind of like, what did you do? My attitude changed fairly quickly because at the time, I was sharing an office with this startup called Jasper AI, who was kind of like ChatGPT 4, ChatGPT. But for two years before they started Jasper, I was sharing an office with them. We were both with these tiny companies that were schmuck stuck at 2 million ARR. And then I was literally having lunch with Dave the next day to tell him I signed the APA from this company that I started in his office. One of us got rich. Look, amazing. And I went in and I was like, he walked and it was just like, what? I was like, yeah, man. And he's like, well, Tell you what, dude, you got a pretty fast growing thing and maybe not as much as ours, but here's what I'm doing. I'm hiring these killer people from these IPO tech companies and we're building a real company and they're amazing. Maybe you should. At the time, I had six people and 8 million in ARR and one salesperson. So he's like, just talk to this guy that I just hired, this COO named Shane Orlick. He came from this company called WalkMe and he's like, just talk to him. So I go talk to this Shane Orlick guy and it was like, it's fine. I've only talked to him once. It was one of the most transformational things for snapping me out of that ever. He's like, dude, I got an idea for you. hire two more salespeople or maybe four, right? Like, you're only costing yourself by running your business this way. Like, there is so much upside for you. Like, it is just, you know, and this guy could, like, sell anything to anybody. He's just this, like, super, super infectious optimist type of character. And that was it from that point. And that's kind of what got me on this, like, unicorn thing. I'm like, well, if Dave could do it, I could do it. And that's a real thing, by the way. It's like we thought we were $3 million guys. And then I saw him, I saw these guys do this who I knew very well. And I'm like, they're not any smarter than me. You know?

Right.

Like it was like before I saw that, it was kind of like these unicorn guys were like a different class. And then I saw that happen.

Totally, I get that. I get that mentality for sure. I feel the same way a lot of the time. Like, firstly, before we move on, I just want to know, what did you think you were going to sell for? What was that dollar amount that you had like in your head?

Well, it was 35 million upfront and a $35 million potential earn out.

And you own 100% of the company?

No, I own like 40. The worst mistake I ever made, which is plaguing me to this day, is I didn't reshuffle the deck at that point. I didn't reshuffle the deck when I started the second company. I was able to reshuffle it at that point, but the problem is, the only deal I could get done with everybody involved was like, well, here's where the business is today. New cap table gets the upside. And then there were so many people involved, I didn't even get that much more. It's kind of, I've been so under- equipped since day one that I'm like here and everybody needs more. And it's a really hard position to be in.

But.

I'm fine. I'm happy, at least with the upside, the people who are growing the business are doing very well now. you know?

Yeah, awesome. Okay, so that's how I. And then, like, see, you were selling because of this burnout, and then you kind of chat with your mate Jasper with the, you mate at the company Jasper, and then you get introduced to this COO who's like, you're like, are you crazy? Just hire a bunch more people. Like, obviously this thing can grow, but, like, but weren't you burnt out? Like, how did you manage that process.

Of getting back on the horse?

It was, it was.

It was just very re-energized. Well, okay, so I was getting unburnt out watching what was happening with Jasper. Does that make sense? Like, I was quite burnt out when I set out to sell it. And then as I watched what happened with those guys, I was like, man, that looks fun.

Right.

So second wind.

Yeah, exactly. And I've done a pretty good job, I mean, I've done a pretty good job at maintaining that second wind up to this point. It has, I've been having a really good time.

And that's been how long now?

So that was like 2022. So 2023, we had kind of like super high expectations and then resetting. And then 2024 was just a much more solid year all around in terms of realistic expectations. And then now is, I think we're an interesting, we sell the e-commerce stores. It's kind of an interesting time. with these tariffs and everything. So, yeah, for sure. You know, I'm not really sure about the future outlook, but, you know, we're in a, we're in a decent position.

So, yeah, that's cool. And so where did it leave you financially? You thought you were going to sell, you spent a lot of money in advance. You didn't sell. Where, where were you at that point?

Yeah.

I mean, I, I probably, you know, I had like, maybe like in peak prices 2022, maybe like a million bucks of SPY, a million bucks of this fund, like 750 of other crypto, you know, and that was like the liquid stuff. And then I had this business, which I've never known, I've never had any idea. I still don't, I don't have any idea what it's worth, right? Yeah.

Okay.

So, yeah, I mean, it's probably worth a lot more than the assets that I have.

Yeah.

But it, you know, could I just, be like, hit the sell button? Like, no.

Sure.

Yeah.

Okay. And again, just to sort of tie a bow on it, like, if you had a sold it at that point, what are the mistakes you think you would have made?

I would have bought way too much crypto. That would be the, and I would have sold it.

That's the main one.

Yeah.

I was so sold on the, as was the rest of the world, by the way, there were a lot of people sold on this. I was so into this. thing in like the story of Bitcoin and the story of blockchain and, you know, I would have I would have way over invested in that. I did anyway. It ended up being okay in the long run, but like I was way too exposed to that.

Do you still own any now?

Well, just the fund. Everything that I could sell I sold right after the election.

Got it. Okay.

Again, I don't mind it. It's just like I'd rather have just like Bitcoin. It's like easy, you know, you're not dealing with K1s and all that nonsense related to funds.

Okay.

All right.

So then you get this sage advice from this ops guy. You're inspired again. You've got more fuel in the tank. Has the business grown since then?

So now, I started another business a year ago that is the same product that we sell to e-commerce, but for B2B, it's called RB2B. so if you add those two up, it's 25 million ARR. And at that point, I was talking to that guy who was 8 million. So it's it's tripled, you know.

We.

Only had six people at that time. We have 40 full time employees now, but that's not really a lot for a 25 million ARR company. Like, typically it's like 150 people they have at this at this point. We have no funding. you know, it's a really good situation. We're kind of generating like a million dollars a month in profit and, you.

Know, it's- yeah, that's bonkers.

Again, yeah, it's bonkers, but again, something is very weird about the trajectory of these things. I'm really anxious about this tariff situation and the pipeline in the C-Com business. And then I just feel like we need to change the product a lot and the B2B product to get it growing to much bigger than it is. And like, it feels just as bad in this position that I'm in right now, as it did when we were at like 3 million ARR and I was dealing with the same thing.

Right.

You know, it's just the weirdest human. It's like, if you would have told me then that I would be on this podcast saying the numbers that I'm.

Saying right now and saying I feel.

Like emotional state, would be identical. I would say you're crazy, check me in, right?

Dude, I can so relate. I can so relate. My numbers aren't the same as what you're quoting here, but from where I've come from and where we are today, if you'd have told me when I started out, exactly what you said, if you told me when I started that I'd be just as anxious then as I am at the beginning, I would have laughed you out of the room, and yet here we are.

If you would have described my current business to the former me, I would have, and this was my stated goal. I literally wrote it down. I wrote in a journal when I was 37, I want to have a 2 million monthly recurring revenue business with 35 people. And then you back it in and you're like, you're printing a million dollars a month and splitting it up between your co-founders and I would have no problems in life. That future version of me. But somehow it doesn't matter. It's like, and by the way, I felt the same way about, when it's like I felt better about the overall anxiety of my days from when I left finance to when our business actually turned to profit. And it wasn't even turning profit is when I saw it, when I could extrapolate, they would actually be sustainable and it was like growing until that moment. It's like, it's almost like it doesn't matter how much money you have. If you're like burning your nut, it feels horrible. And I think that's the same way with companies. It's like once it like gets to the size that it wants to be and it's like on the up again and things are like stable and it all makes sense. It doesn't ma, I just don't think it matters the amount that you're making. It's just the fact that it's like, you know, not sure. It's like the e-com space. It's like, right. A lot of business selling e-com are shrinking right now. The company, the e-coms themselves are shrinking right now. It's like, that's just an, it's a, it's a position with anxiety, regardless of where you're coming from. Right. Like, right.

So by the way, I can like, so I remember when I was 27, I read the four hour work week and, and I was like, and I went through the, the dream lining. exercise and it was so, so naive. But I remember sitting there and writing down all these things because, like, a lot of what you've said is, it, like, aligns with what I was thinking. I just want, like, freedom of time and choice and I want, you know, whatever, all this kind of stuff. I remember writing it down. I was like, oh, man, when I'm making four thousand pounds a month, like, I could never need more money than that. Like, this would. That would be incredible. If I've got four thousand a month going into my bank account, like, that is, that is as good as it gets, and. Yeah, it's amazing how that line moves and that story changes and you breeze way, way, way past it and you're absolutely just as anxious. So I'm interested, so the company's doing 25 million, it's profiting a million a month. What are you personally taking home at this point in time?

So I would have answered this question differently a week and a half ago. There's this horrible law in the US that President Trump put in during his first term called Section 174. And what it is, is you are forced to amortize your engineer and product people's salaries if they're US, over five years. If they're foreign, over 15 years. My whole team's in Canada. So now I'm paying these people all of their salaries, yet I have to recognize the expenses over 15 years. What is the net effect of that? The net effect of that is my taxable income in the IRS's perception is 35% higher than my cash income.

Right.

I did not realize the mag, we switched accounting firms and they were super conservative on this, much more conservative than they were last year. I did not realize the magnitude of this problem for me.

So.

I'm still trying to sort it out. Let's just say, you know, my effective tax rate is like 60% as a Texas resident. Yeah, totally. So like, if I think I got paid, I don't know, $4 million of cash last year. which I thought would have been a 40 tax rate being a Texas citizen, but it was actually a 60 tax rate as a Texas citizen.

So that is utterly bonkers.

No, it's, it was, like, I had one of the worst weeks that I've had in a long time last week because it's the strangest feeling in the world. Just. Okay. My fault, right? Like, I kind of got excited about paying my mortgages off. I, like, didn't budget enough for this, but, like, to see money you have earned there and then just have it disappear. It's like I go to this website, I send it to the IRS and it's just gone. I thought that last Wednesday I was going to be able to put $500,000 into the market to save. Not only was I not able to do that, I had to pay 500 additional that I had not accounted for. neat.

Right?

So like, this is another thing that's like kind of at, and like, again, I think once I figure it out, it's just my wealth paradigm has changed a lot in the last couple of years. Like, I made more money last year, like kind of like the year before we were breaking even in the business. And then last year it was like on its way to really good and it ended really good. And like this year was gonna be really good. And then all of a sudden it's like, well, wait, your tax rate's actually like someone who lives in Scandinavia. you know, like you got that wrong, you know? So, so yeah, I'm trying to figure that out. I think there's, you know, something there, there's a plan to mitigate some of it, but like, you know, like it's, we're an LLC, so it's like the worst for an LLC owner because it's hitting you at your highest marginal tax rate. If you're a C Corp, then it only gets taxed at the 21% and it doesn't flow out to you and get double taxed because it's not cash.

Mm-.

So like we need to switch to a C Corp. You know, there's other things we can do like that to like mitigate a little bit, but like can you imagine the surprise of literally in a day, like I was like, I had been, I felt like I had been so responsible with our financial planning. I'm like literally like already told my RIA that I'm going to send this dough over. And I was like, I called him, I'm like, dude, like not only am I not sending you this, like I'm having to pay another 500 grand that I was not aware of. So anyway, that's adding to my anxiety in the last few weeks.

Yeah, fair. Okay, so, well, I'll get to the nuts and bolts stuff. So what is your, what's your current net worth then after that 500 grand?

Yeah, so like, I haven't checked since this down trade, like what our stock portfolio is, but like, We have like, you know, a couple million of stocks. They got this crypto fund, which a month ago was worth 50% more than it is now, but they were up quite a bit. So like maybe call it a million bucks, maybe a little less. I have two properties that have no debt on them. Like my house in Austin is probably worth, you know, two and a half or three million bucks. And then I have this piece of land that's like one and a half. And then I don't really have and I have my business. So, you know, add all the other stuff up. I don't know, it's probably six. if I'm counting correctly, maybe six plus the business. Yeah. So six plus the business. And, and that was very likely going to change very fast if this tax that, you know, I was probably gonna save a few this year and a few, possibly more next year. And, and I will save some. It will just be less, you know?

Okay.

Yeah. So.

And. And so given, like, kind of accepting that tax shit show, do you kind of prefer the way that you're building your wealth now in this sort of like step by step, you're kind of earning each month, you've got this bootstrap business, you're able to cash flow it and kind of bring money out personally and you're able to drip that into your net worth versus like a big windfall in the form of a single sale event. Like, what do you think is better?

So I think it's honestly, I can't believe I'm saying this, but it's kind of like the trading job. When you're winning, this is the best way.

Sure, yeah.

When you're losing, it's almost like you'd rather be funded by a VC guy, because then you just walk.

Yes.

You know? But like, kind of like I said before, it's like I'm a bit confused about how the next few years are going to look. Granted, I think there's enough going for us in cushion and like whatever else you want to call it, like we'll get it to the right spot. But like, I think we're in for like a turbulent couple of years. But like, for instance, I had coffee with a guy who's at the same place we are, but he's venture backed. He raised 50, which is not a ton for being a 25 million ARR. And he's like, Dude, your life sounds like the dream. I don't know what you're complaining about.

Because you don't have to send a deck once a quarter to all your investors.

I have investors. He's like, At our revenue level, it's never enough. Forget the fact that everyone else they gave money to when they gave money to us is only still at 3 million. They're sporting me emails every day about how company XYZ grew 600%. So it's never enough. I have way too many executives. I'm hiring more. I'm flying around the country every week to talk to customers. He's like, you're telling me that like your biggest problem is like your product is stuck. Mine is too.

Right?

Like, you know, like other people are building, copying everything that we do and undercutting us also, like you're not unique. So, so yeah, I think it's really important to do that perspective taking exercise. And, you know, even when I like, you know, I'm going through this equity stuff and I'm like, God, I can't believe I only have like, you know, 45% of this or whatever after all, it's like, Yeah, but like a lot of people that are helping a lot have a lot, which is great. And we're doing so well that it's still a great situation. It's very helpful to remember that this was my vision of five years ago.

If someone were to offer you a buyout today, would you take it?

Well, yeah, I mean, there's always A price. I don't know what that price, honestly, I don't know what the price is. What I would love to do is I would actually love to sell the e-commerce business and keep the B2B business, 'cause I have this, I've become a thought leader in the B2B space.

And yeah, your LinkedIn's kind of on fire.

Yeah, and not only that, it's like the audience of my content is very similar to the audience of the purchasers. There's this incredible alignment between me as a content creator and our buyer and the fact that these people actually live on LinkedIn. They do their jobs on LinkedIn. So it is such, I mean, we went zero to 5 million ARR in 13 months with this product that I consider horribly inadequate. So like that just gives you an idea of like the power of that and it's leverage that I don't have in the e-com space. Furthermore, we can actually build the product for us to use, which is hard on the e-com side also. It's like I'm not a direct consumer e-com guy. It's really hard to like have an intuition about what that buyer really needs. So meanwhile, you know, it's the golden goose that's paying all the bills. So it's kind of like we need to pay attention to it a little bit. So it's kind of like this thing where it's like a bit distracting to this other thing that I think there's, you know, I think we just have better leverage to like grow. But like, you know, I'm not like I also think it's a terrible environment to sell companies in general right now. I mean, I don't know. Like, I'm not seeing like a ton of Oh, yeah. I think people are so uncertain about the future of software with this AI thing that it's just like nothing is happening, right?

If people are copying your product and undercutting you now, just imagine what it's gonna be like when the vibe coders come out.

Yeah, so it's like that makes me even more enthusiastic about the founder brand thing, because it's like, how are you gonna differentiate? you know, and like that is one of the only ways I think. It's like maybe there's some data play, maybe there's network effects, but like that one's an obvious one. It's like brand, you know, there's a lot of soft drinks. People still buy Coke, you know, everywhere, right?

So 100%. Yeah, I totally agree with you. All right, let's come back to money for a second. What's your monthly spend like these days?

So, this is also a very hard one. And I tried to look and triangulate it. So we have had an ongoing construction project at our house, kind of like since we moved in five years ago, getting it to the point where it's where we needed to be for two kids. We're only having two kids. It's now there. The last thing is happening right now. I actually put a pool in five years ago that I had to replace now because I got this container pool that was supposed to be cheaper and better. And it was during COVID and there's a backlog. It was not cheaper. It, you know, rusted through and like I literally had to just start over and like spend even more to like have them remove it and replace it. That's happening now. Um, and my wife and I have started like traveling more, but like I think it's like 750 a year, right? So what is that? 60 a month, 65, like if I, but keep in mind I pay my mortgage is off. So, you know, we got nanny's in preschool and, you know, she likes Wellness and clothes and, you know, we gotta, we got a boat that we split with somebody that's 20 grand a year and add all that on.

What's, what's your, what's your kind of thing?

Like, my thing is, like, you know, like, we went on a really nice ski trip this year to Aspen and, like, really just stayed at the nicest place. And it was just, you know, if you were to do it inexpensively, it was, like, 10 times more than the inexpensive way. But, like, it was an incredible experience. And, like, we, we've spent five winners in Aspen. We got a ton of friends there. Like, that was. Such a good use of money, in my opinion. My wife thought so too. I also love having a boat 10 minutes away from my house to wake surf. I'm not using it a lot anymore because I have a two and a half year old and a six month old, and they literally sort of like a startup consumes dollars. They just consume every second of time that is available from you.

Correct.

Yeah.

So that'll be like, maybe I'll use it, but before I had them, and I was working less even, I was on the boat like four times a week. So it was like the greatest investment finance, you know, like my dollar cost average of that thing was in a really good spot now, not so much because we use it, you know, 10 times a year, but it's still amazing to have.

Yeah, super cool.

Those are my two splurge things.

Awesome. And so what do you think is your biggest takeaway from this whole experience?

I mean, look, man, I'm still struggling with it, but I just want to like stick to, I really want like to, Sam has these chat GPT coaches. I want to like make a chat GPT financial advisor, not even a financial advisor, just like a spending advisor for me and my wife that like before the credit card is activated, you have to like run it through this chat GPT and like see if it like, you know, is actually aligned with what we have said we wanted, you know? 'Cause I'll give you another example. It's like of something that happens. Or happened, not happens. This didn't happen to us. This was us doing this. So things were feeling really good in the fourth quarter, the third and fourth quarter last year, in the first quarter this year, really until a week and a half ago when I figured out this tax thing. you know, banged out both my mortgages. Like, it seems like I'm gonna, you know, make this amount of money that I, like, didn't even think was my thing. Like, 5 million. I don't even know. 6 million, who knows? So I was like, Helen, we'd been talking about getting a second car because we got two kids now. We have a second car, but it's very. It's like a little convertible vintage Mercedes that I got my wife for her wedding that you can't put a kid in. So she's like, what do we need to go to places? So it's like, okay. Let me just bank this $5 million this year or whatever it is, then wait till the end of the year, and then order any car you want. And then literally in February, she's like, well, you need to take Charlie to this and I need to this, should we just do this now? And it's feeling so good that I'm like, you know what? Yeah, order the one you want is not gonna get here for six months. And it's splitting the difference. We're not really being not principled about it. And then this thing happens and I'm like, we gotta walk. I'm sorry, we just have to walk on this $5,000 down payment we made. This was an unbelievable swing in perceived situation that happened a week ago and it sucks and everything, but I'm like, you know what? The spirit of that was let's save a lot of money and reward ourselves. And in a goal set in January for December, somehow One month later, you know, like we had deviated from that core principle. So, you know, that's the kind of stuff that she and I struggle with.

So where is it sounds, it sounds like you still, there's still a part of you that's that kind of like impulsive trader from Wall Street back in your 20s. And then there's also that's kind of fighting day to day with this like wise man in the woods that kind of like, You figured everything out. How do you how do these things meet each other day to day? Like where are you at with it?

So the method that we've tried to put in place is my wife and I every month send our transactions to an accountant and we actually have him make us a P&L and we go through it.

Cool.

And that's added accountability. But sometimes we miss a month because March, I was gone almost the whole month and she was gone for half of it with me or whatever. so we miss it and then it's like when we're I feel like when we're looking at that every few weeks, it kind of reminds you of this kind of stuff. But still the you know, I don't know. I'm just trying to improve my habits even more. You know what I mean?

So you said when you thought you were going to sell the company, but it didn't happen, you're glad that it didn't because you weren't mature enough for that money yet. Do you think you're mature enough now?

I don't know. I can't honestly say yes because I just told you about something that literally happened two months ago, right?

Yeah. Yeah.

Look, I don't think I'm doing things that will bankrupt us, but I think that with very, you know, with not that much different of an emotional experience, I could have like saved more. You know what I mean?

Totally.

I could have been, but maybe that's just me, you know?

I think we all could. I don't know. We've had folks on here that are like hardcore fire people who are just incredibly good at saving money.

That's not me.

That is not me either.

I'm not interested in that. You know what I mean? I don't want to live that way. By the way, another thing that I love to do is I just like I'll never let somebody contribute for gas on the boat. Like, I like, you know, picking up dinner tabs if, like, my wife's friend who's an artist is with us. Like, I like having 10 people over and cooking filet mignon. You know what I mean? Like, I just like entertaining and, like, it doesn't feel lavish to me, but, like, when you break down the frequency and, like, you know, kind of what it is, it's like, yeah, we're spending, like, a couple thousand dollars more a month on food than, like, someone who doesn't do that. you know?

Sure.

So a fire person would never do that. That's what sort of put it like never, it wouldn't even be a possibility.

The Aspen holiday is not a thing.

Yeah, yeah, yeah. But like even having 10 people over for maybe Mr. Money Mustache, because he's like so rich, but like having 10 people over and cooking a very, very nice meal that costs like $400, like that probably wouldn't happen. You know? I don't know. But I really love that community and I like doing the nice things for them and like whatever.

Yeah, totally. Yeah, anything else you want to add? Any other takeaways here that you think are important?

No, this was a great, you're good at this man. This is a good interview.

Thanks. It's all Jackie. I can't take credit for it. She's the smart one. She does all the hard work and I just come on and say stupid shit. But this is fun, man. I really appreciate how open you are about this stuff, 'cause it's different. People, I think there's too much of a desire to, or everyone portray themselves as like this ultra smart, like, you're clearly a very smart guy, but, you know, they've got it all dialed in, it's all under control, it's all going to plan kind of thing. And I think this, like, it's probably why you're doing so well on LinkedIn, right? 'Cause you're just like genuine and honest about like what's actually going on. I think that's a real superpower. I want to ask you actually, like on LinkedIn, this is just for me personally, not for the podcast, because you said specifically because you said RB2B, like your buyers are there. So like my big struggle with LinkedIn, so I've been going hard at it for a few, like a year now and like I'm still at like nine, I'm not quite cracked 10,000 followers. And my biggest struggle is like my expertise is around podcasting, so I post about podcasting, but that basically what that means is that It's like an echo chamber. So I just like all the people in my industry fucking love it, but I can't reach the marketers. And so I'm trying to figure out like how to write the content for the people that like I want to sell to. Yeah. And like all your personal posts about like your personal life and like your real real life experience and all that shit. Does that like actually reach the B2B people?

Like how do you- Yeah, so what's your strategy there? I don't talk about- I hardly ever talk about personal on LinkedIn. But I talk about business in a way where it describes an emotional journey, which works for me because a lot of the content pillar, which this content pillar is like build in public. And I feel like people who are doing it don't do it well. They just say, oh, this month we hired four BDRs. I'm like, oh, one. Sure. Whatever. And I'm talking about the anxiety of, or whatever. Yeah, yeah, yeah. And just sharing an unbelievable amount of information for the stage company we're at.

And is it enterprise marketers, B2B people that are picking up on that?

Yeah, it's pretty, probably the biggest to start. So here's another interesting thing. I made a post, you can talk about certain things and it will agitate certain, or I can, right? If I talk about ABM tools and you know, like ABM in general or break down an ABM campaign because I got data somewhere that will be all VP marketing of like B2B SaaS companies because they're the ones doing that. If I talk about, like I made this huge post about brand and, you know, that was all marketers. But like, sure, you know, if I'm like giving a monthly update about my startup, it's like mostly SaaS founders, right? So it's like, yeah, sure. If you could find which is very hard. This is like one of these things that's very easy to say and very hard to do. If you can find a pillar that is both authentic to you and somewhat non-mainstream, a little bit on the polarizing angle that resonates with them, and it's a thing that it's actually getting these people to read it and whatever, I would just try to really work that pillar, try to post about it a million different ways saying the same thing.

Sure. But it actually contributes to your lead flow.

This is the only source of traffic for RBDB, LinkedIn.

Wow. Okay, that's impressive.

Yeah, yeah, but it's like, yeah, there's a lot of problems with RBDB also right now. Okay. But the LinkedIn thing, you know, and yeah, I think it's like, it's an incredible point of leverage for me, which is like why I'm so excited about that business and the prospect that I can make the idea that I can make the product better. But yeah, it's, yeah.

Cool.

All right, well, I have not figured it out in its entirety.

No, you're doing it.

It's still stuck as I ever was. you know, five years ago, just at a higher place.

Yeah, exactly. Well, you know, you know, you ask someone what you want, what they want their net worth to be. It's always like what they've got with another zero on the end. And it's same with ARR and LinkedIn followers and all the rest of it. So you're killing it as far as I'm concerned. Cool, man. I'm gonna stop.