Why All Entrepreneurs Are Contrarians w/ Codie Sanchez

What's up everybody? Welcome back to another episode of Founder's Journal. This is your host, Alex Lieberman, co-founder and executive chairman of Morning Brew. I have another very special guest episode today, my good friend Cody Sanchez, the founder of Contrarian Thinking, a prolific content creator, and I think the first person to really popularize boring businesses like laundromat businesses and car wash businesses and ATM businesses before they became sexy over the last 12 to 18 months. On this episode of the show, Codie shares lessons that she learned during the final days of working in corporate America. And I'm so excited for this episode because I met Codie a few years ago, I believe at a conference, and she's one of my, I'll call internet friends, this kind of group of trusted advisors and mentors who I've only met in life a few times, but I talk to constantly over the internet because Codie has so much learned experience and wisdom, and I try as much as possible just to learn from her. Today, she has built multiple multimillion-dollar companies. She's gathered over a million followers on social. She has an amazing newsletter, which you can sign up for on her website, codysanchez.com. And she has so much knowledge that I knew I had to have her as a guest on the show. I know you're going to love this episode. And by the way, it was just her birthday. So if you want a reason to reach out to Codie, hit her up on Instagram or over her newsletter or on Twitter and just say that Alex sent you and wish her a happy birthday. So here is Codie Sanchez for a guest Founders Journal episode.

Hi, I'm Codie Sanchez and I own a lot of boring businesses. And that might sound weird to you guys, but basically what it means is that I buy small businesses that you all use— landscaping companies, roofing companies, cleaning companies, everyday businesses— but you probably don't think much about the fact that you spend money on them every month. Now, the big boys call this private equity. And if you also didn't know, most of the richest people in the world are there through acquisitions, some version of buying and selling small companies or private equity deals. And I started doing this about 15 years ago. Today, I run a company called Contrarian Thinking, about 100 million views a month, millions of subscribers. I'm coming for you, Morning Brew, with those email list subscribers. But I didn't start that way. I actually started being in finance for a long time. And I thought I'd read you something that I wrote when I was sitting in a corporate job, kind of scared about what to do next and reflecting on the fact that I felt really trapped. Even though I had some measure of success, even though I made some money. So I thought I'd let you in on what young Codie thought before I had the zeros I have today and before I had the businesses that I run now. All right. This is flashback to like, let's call it like 2014, 2013. I was sweating in the Uber on my way to go meet with my CEO. He was larger than life, controlled my entire future, and called me for a dreaded walk and talk. At this time, I ran a really large Latin American investment firm. I made tons of money, was the pride of my Latino parents. On the outside, kind of successful, and yet on the inside, categorically miserable. As we walked along the beautiful grounds of the Monarch Resort in Cali, he said to me, what are you really doing at the firm? I was kind of confused since we're all leading international divisions, and mine was in the lead. I was bigger than anybody else. So I tried to explain how I think the future of raising money as investors will be done online. That newsletters are really powerful, that social media builds trust. And I thought this new wave of tech would be better than steak dinners and cold calls. And he kind of just shakes his head and said, here, Codie, we get rich quietly. We build the we, not the me. And you either get on board, or you get off the boat. That was basically an ultimatum. Play his game or pound sand. Now, was that fair? I mean, I didn't think so at the time. But a line was drawn. And I had to decide, do I want to keep playing with borrowed chips? Or go by my own. I jumped off the boat and learned how to swim. I didn't do it immediately. I wish I did. It still took me a while. I was still scared before I did it, but I eventually jumped. And if I have one regret, it's that I didn't do it sooner. Now, in retrospect, it was the best thing that ever happened to me. I've been investing for years. I had cash. I had other businesses. But I'm so scared of risk and failing that I never would have built the quote unquote empire that I have now if I hadn't jumped back then. And let's be honest, I didn't jump. I got pushed. So not 3 weeks later, I flew out to the headquarters, put in my 2 weeks' notice, handed over my computer, said goodbye to zeros. And I had built up this really big business. And the worst part of it that I'll never forget is despite that, I took nothing with me. No severance, no equity, no clients, no assets. Tail between my legs, I swore I'd never do that again. I went to another firm and I had to build it all from scratch again.

Wow.

So I finally started my own holding company. I took control of my future and I built a boat that I had room for others in. This got me thinking about something yesterday when I was giving a speech actually with Tony Robbins and Dean Graziosi, which is that sometimes a no is the only way to get to your yes. And as a young person, I didn't realize that. It was mostly just, I was pissed. And I was pissed that somebody could tell me No, you should do it this way. That's not right, Codie. And then I realized that there's actually real power in that. Now we use the word at Contrarian Thinking, unemployable. And the idea is that you become so strong-willed, so relentless, so focused that you become unemployable, that you can't work for somebody else because most companies don't run at the speed of the fast. They run at the speed of the slowest. And if you are one of those really fast humans, It's tough to pull others along with you the whole time, especially when you don't have skin in the game. And I think hitting that hard wall is the only way to realize, oh, we're going in the wrong direction. And so I guess if anybody's listening to this right now, that would be the advice that I'd give you. There's probably somewhere in your life right now where you know you're not doing exactly the right thing. You know you should probably make a pivot, a turn, a change, a jump, but it's too scary and you're not sure which is the right direction. And I'm not that woo-woo, although I do live in Austin now. I think that realizing that sometimes the universe, it doesn't really have your back. That's like a what, a Gabby Bernsteinism? It will push you to the thing that you say that you want, whatever that thing is. And so it'll kind of test you and tease you. And that's what it did to me many, many times. The other thing I thought I'd talk about today, since Alex gave me this space, and Alex is a homie and a great guy, Is I've built up a bunch of companies now. That company at First Trust, we were almost $1 billion in assets under management when I left, just my division. The company itself is, I don't know, hundreds of billions of dollars or something. And there's a bunch of things that I wish that people would've told me when I first started building that are not PC, that people won't tell you, that society doesn't normalize. And I pulled 18 of them, but let's just go through a few that I think might help you if you're also on the journey of building. And the first one is, when you're building, it gets lonely. Choose growth over company. The 1% is a small percentage for a reason. It's because most people want the things that are there, but they do not want to do the things that they must to get there. I found that my circle got a lot smaller and that people in my life, even people like my parents or some of my closest friends, struggle with the fact that I'm on a Friday night, I'd rather be reviewing a pitch deck. I'd rather be doing an email than going out. And I have been like that way for a long time. Maybe you guys have been too. And so realizing that most people aren't just gonna come along with you and you gotta get in a room with a bunch of people that get that. And if you're not in that room, that's the most important change you can make. I mean, we did another like kind of viral video on my Instagram @codisanchez. And it was basically this research showing that if you sit next to top performers, they increase your performance by on average 15%. As evidenced by a big study across multiple years and hundreds of employees. And if you sit next to an underperformer, they decrease your performance by 30%. So that person sitting next to you saying, hey, you know, when are you gonna be done? Why don't we go do this instead? If your biggest goal is something unusually hard to attain, you can't have those people sitting next to you asking you, are you done yet? Are you done yet? Are you done yet? Have you ever been in a car with a 2-year-old? On a road trip and you've had them in the back and that's what they say. They start chanting, are we there yet? Are we there yet? What does that usually do? Drains energy, makes you anxious. It's the same thing with the humans that you surround yourself with. Wake up, check your bank account. We talk this one a lot. I have a saying, which is money is a cruel mistress. And if you don't pay attention to her, she'll leave you for somebody who does. And the only way I think to get that mistress of money to stay with you is that you have to pay attention to her. It doesn't mean that you have to place importance on her, that that has to be your main driver. But giving her a little nod once a day, once a week, I think is super important for those of you that really want to grow. This one was interesting too. I think I said something along the lines of, waking up at 5:45 AM solves 99.9% of problems. To which people's response is typically something like, must be nice if you don't have kids. Sure, if you have tons of money. Yeah, that sounds great if you don't insert XYZ excuse. Which I get. I think when you see other people achieving something that feels impossible for you, our immediate reaction is self-preservation, which means if I see somebody who is up every morning at 5:30, seems well-rested, seems to have a happy life, seems to also fit it all in, my immediate reaction is, well, they must be no fun. Like, what, you just get up every morning at 5:30 and what do you go to bed at 8:30 and you just live this routine life? It's just, it's a survival mechanism. And I think the moment that you get over that survival mechanism is the moment that you realize No, if somebody else is doing something and I get to see that, you can't be what you can't see. And so that means that I have the potential to do the same thing if somebody else is doing it. Nobody is any more special than you are, all comprised of the same bunch of meat and bones and blood. So waking up early is a cheat code.

We're gonna take a quick break, but more from Founders Journal when we get back.

Mark Twain has this saying. If you have to eat a frog, eat it first thing in the morning. If you have to eat 2 frogs, eat the big one first. And I always think about it shorter than that, which is do the worst to-do list item first. This is actually one that was taught to me by one of my friends and mentors early on in business. Usually we prioritize our to-do list, and typically what we do is we take off the small ones. But I was sitting on a panel yesterday with Jay Shetty, and he said something I really liked. He said there's 2 types of days. There's an efficient day and effective day. An efficient day is where you do a ton of little things and you check everything off the to-do list and you're really efficient. An effective day is when maybe you do 1 or 2 things, but those 2 things can change everything. And there's also a law that I talked about yesterday called Pareto's Law. I'm sure you guys have heard about it, the 80/20 rule, which is 80% of your results will be driven by 20% of your actions. And we know this to be true. Right? So if you eat relatively happy, which happens in what? How long are we eating throughout the day? Let's call it 2.5 hours. And if you work out once a day for 60 minutes, those 3 hours of your 24-hour day can drive most of your health. Sure, you can also walk your 10,000 steps. Sure, you can also do peptides, you can drink enough water, you can do X and Y and Z. But if you eat well and you work out every day, that's your 20% that drives 80%. And that is true across all things. And so figuring out how to first do the important things that matter, second, do the hard things because those build willpower, and then third, do the efficient things because we all have to be humans paying bills and normal things like that. No is a full sentence. Use it. This one was really, really tough for me for a long time. Still is to some degree. People will take up your time if you allow them to again and again and again. And so my husband and I actually do a couple things. To remedy this. First, I think you guys should keep your voice notes to yourself. I fucking hate voice notes. And the reason why is I think you're transferring your time to somebody else. It's much easier for me to pick up the phone, press record, and go, hey, so what I was thinking for today is we should do X and Y and Z. Now I'm not really sure, and maybe we should also add this. That's a bunch of junk. Instead of saying, hey, let's meet at 7 here, do these 3 activities in a text. It's just more concise. And so I say no to voice notes. I just don't do 'em unless it's a buddy and they're telling me something funny. It's a no for me. Apple, feel free to reach out. I'd love to conclude a policy on the phone where we could just opt out of all voice notes. That'd be incredible. But nos can be small things or big things. You know, one of the nos between my husband and I right now is that we're not saying yes to any more travel this year. We just got too much going on. And what happens is if you don't set these boundaries, people will push them for your entire lives until you start living somebody else's life because their will is asserted. stronger than yours. And most of us, especially if there's any women listening right now, we're kind of societally told to be pleasant, go with the flow, be easy. Whoa, take it easy. And the truth of the matter is, you know, if you want an extraordinary life, you can't do the ordinary. And the ordinary is to go with the flow. But I think a great example of this is Bryan Johnson. If you guys follow him, he's become sort of an internet bud on Twitter, but he's this gent who's trying to live to 200 years old. He's reversing in real time his biological age. So I think he's in his 40s, and his biological age is now somewhere in the 18-year-old range. And he gets an extraordinary amount of shit on Twitter. I mean, it looks odd, some of the stuff he does. He goes to sleep every day at 8:30. He takes like 112 pills a day. He kind of looks like a vampire because he doesn't get a lot of sun exposure. transfusions of blood. He has a son that they do a lot of this together, and a father. So it kind of looks like this crazy, you know, father-son-child complex. And yet, he's pursuing something kind of extraordinary. What if he could double his lifespan from the average human? Well, the average human only lives to, like, what, 75, 76 years old? But let's say that's not that abnormal to get to 90 or 100. And he could live to 200. Yeah, it's probably not gonna look normal to us the way that he's living now, but maybe he's onto something. The last thing that I'm going to leave you with is, I remember somebody told me this a long, long time ago, and I think it still rings true, which is there are a bunch of people in your life, you can call 'em the peanut gallery, that didn't pay for the front row seats to what you're building. And if you're here listening to Founders Journal, the truth is As a founder, it's going to be harder than you think it was going to be. It's going to take longer than you thought it would. It's going to cost more, and you're going to make less upfront almost every time. And the world around us has sort of glorified this idea of founders, right? Like, I'm a founder of a company. And really, that's not the goal. The goal is to be free, but to be honest about the fact that being a founder comes with massive responsibility. At the end of the day, if I can't pay payroll on Friday, that's me. And that means that I have to do a little bit more of the extraordinary to make sure that everybody else on the team gets paid. And sometimes I don't pay myself. In fact, I'm probably one of the least well-paid people at my media company right now, where I pay most of the executive team, if not all of them, more than I make. And why do you do that? Because you're building something that you can't sleep for the want of thinking about it existing in the universe today. And the last thing I'll leave you with is I was sitting next to this guy, Jeffrey Kent, who's a billionaire, on one of my flights. And he talked about how he ran a company for 60 years. And it stuck with me a lot, this idea of time, consistency, and focus. And maybe time, consistency, and focus is greater than any other ingredient to success. If that's true, since he ran Abercrombie and Kent for 60 years and sold it a couple of times and now made $1 billion on it, If that's true, then really what you should be optimizing for is what am I good at that the market wants that I can take the pain on for an extended period of time longer than anybody else? Because if I can do that, then my likelihood of success is so much higher than everybody who is speculating, looking for get-rich-quick schemes and ways to arbitrage their way to fame, wealth, et cetera. So maybe I'll leave you with that. I hope you build something worth fucking building. I hope you don't run and chase after the next shiny thing. I hope the idea of NFTs for the sake of speculating on that fucking monkey sounds ridiculous to you like it does to me. And I hope whatever it is you choose to build and found is worthy of writing on your tombstone. And it doesn't mean that you can't screw up, and it doesn't mean that you can't have some fun and you can't get money in your pocket early on. But I think most of us are more capable than we think, and I'm excited to see what you real builders build. Thanks for having me.