Why Successful Business Minds Have Paranoid Brains

What's up, everyone? Welcome back to another episode of Founders Journal. I'm Alex Lieberman. Before we get started, I just want to share one thought, and that is with the return of Founders Journal, my public audio diary around my entrepreneurial journey, I have 3 core principles that are guiding what I do for this show every single week. The first is to create shit that helps increase the odds of entrepreneurs' success. The second is to connect with my audience as much as humanly possible. And so I would love to connect with you. Shoot me an email at alex@morningbrew.com. Just say hi and I'll take it from there. And the third is I want to try a lot of different formats and see what resonates most. With that, I am bringing back a format that I tried last week. Everyone absolutely loved the first time around, and so we're going to give it another go. It is called Temperature Check, and you can basically think of Temperature Check as a true journal-style episode where I sat down at the end of last week and I wrote a simple journal prompt at the top of my notebook. The prompt said, Alex, time for a temperature check. What went well this week? What didn't go well? And what did you learn? And everything I'm going to say for the rest of this episode is my answer to this prompt, exactly as I wrote it. No editing, no filtering. I hope you enjoy. Time for a temperature check. What went well? I had a few great conversations with really interesting people who I learned from, and that's kind of my bar for a good call. Good people who teach me really interesting things. The first call was with Jess Chan. Jess is an awesome person and an amazing marketer who is an expert specifically in direct-to-consumer marketing. She became a CMO of a self-help product company called Best Self Co. just a few years after graduating from college. The business did $45 million in sales and Jess left after the company's acquisition to build her own companies. She started an email marketing agency called Longplay, and now she's trying to turn that into a software tool that automates people's email strategies. I have a few thoughts from the call. Thought number 1, agency business to software business transition is such a classic move for agency entrepreneurs. And this isn't a bad thing. This is just something I see over and over and over. Here's how I believe the story typically goes for people who start agencies. You start an agency to solve problems for clients based on your unique skill set. You grow the agency into a cash-flowing asset, and then you come to a revelation. You say to yourself, I'm making money, but I can't really enjoy it because I'm at my client's every beck and call. I don't want to do this client services thing forever, so I'm going to automate the work I do for clients and I'm going to turn it into software. Then I get to cash flow, not deal with clients' bullshit, and spend my time how I want to. And to me, that is the classic journey of agency owner to software business. The second thought from my conversation is that great operators are incredibly disciplined and intentional with their time. And you're going to see this theme over and over for the rest of this episode. Jess not only works in 10-hour marathons, which I am mind-blown by given I am like a dodo bird and I need a 30-minute sprint to be followed by a 30-minute break, but she's also super intentional about the type of work that she does each day of the week. Monday, Thursday, and Friday are Jess's heads-down workdays where she reserves large uninterrupted blocks of time for building. And then Tuesdays and Wednesdays are meeting days where her attention can be more fragmented. The final thought I had from our conversation, and arguably the most important, is we spoke about our respective mental health journeys and how our own mental health challenges are a blessing and a curse. They're a curse because suffering from anxiety, OCD, or depression sucks, and I would never wish these things upon anyone. But the glass half full perspective is that these experiences created a level of urgency For both of us to get really smart about mental health, mindfulness, spirituality, and these different modalities that make you smarter about yourself. The other part of this is that it's these characteristics that have led to these, you know, mental health hurdles that have also made us really talented professionals creatively and just as entrepreneurs. And so it's hard to have one without the other. That was my conversation with Jess. It was amazing, and I can't wait to talk to her more. Now, my second great conversation of the week was with Austin, my co-founder for Morning Brew. Austin and I grabbed breakfast in New York City and we caught up on everything from what's happening at the Brew to other things we're keeping an eye on in business, to travel and our personal journeys. And I had a few takeaways from our meal together. First, I have realized that Austin and I have become much better friends post-working hand in hand together on Morning Brew. I feel like when I was CEO of the business and he was COO, our relationship was way more sterile and single-dimensional. We would spend 98% of our time talking about work, and the 2% of the time we weren't talking about work, somehow the conversation would quickly pivot back to work. And I used to say that my relationship with Austin was more like a first cousin than a best friend. But I think that has really changed in the last 2 years. Now, do I think it's possible for co-founders to be best friends? Absolutely. But I think it's really difficult and it requires a ton of intention to create time and space for non-work things to be talked about. The second big thing from our conversation is that one of the most tired truisms that people say in, I feel like, life, self-help category, startup category, is the fact that you are the sum of the 5 people that you surround yourself most with. And while I don't think I ever want to hear that phrase again, I have seen so much truth in it just from looking at my relationship with Austin. When we started Morning Brew at the University of Michigan, I skewed super far left on the creative side and Austin skewed super far right on the analytical side. And I think simply by spending every day the last 8 years talking to each other, we've actually started to move closer to the middle. I started as a 4 out of 10 analytical brain, and I think I've moved closer to a 7 out of 10. And Austin started as a 4 out of 10 creative brain, and I think he's moved closer to a 7 out of 10. When we talked today, I noticed that the way we think is way more similar than when we were talking back in college. The third conversation I had was with Justin Welsh this week. And if you don't know Justin, he has become a social media celebrity, building up a 900,000 follower audience across Twitter, LinkedIn, So for context, Justin's background is he spent 10 years as a sales leader in health tech companies, managing teams of up to 150 people and growing a business from $0 to $50 million in recurring revenue. But then he got burnt out. He became a creator, and today he does well into the 7 figures in revenue as a creator. I have 2 key takeaways from our conversation. First, I find that some of the most impressive business minds have chronically paranoid brains. And in general, I wouldn't call Justin a paranoid person, but I mean this trait in a good way. When I was talking to Justin about his business, one of the things he mentioned to me is his desire to both professionalize his brand and grow beyond just being a social media guy. And it's this same 4 steps ahead mentality that made Austin, my co-founder, such a great partner for me at Morning Brew because the paranoid brain is great at identifying cracks and looking around curves far before you're ever caught off guard. The second thought is based on a part of my conversation with Justin where he shared some of the numbers with me surrounding one of his creator revenue streams, which is his Content Operating System LinkedIn course. While I'm going to keep all of the specific numbers private given it was shared in a private conversation, What I will say is the course is absolutely crushing it for Justin, which helps to shape my perspective about online education businesses right now. So first, there was so much hoopla during the pandemic about how cohort-based courses are the future of education because no one completes prerecorded classes. Everyone would end up referring to this Udemy stat that only 5% of people complete classes on Udemy. But I think this is kind of a bullshit concept that was used to be able to raise a lot of venture money for cohort-based education businesses, because you could also make the argument that a cohort-based course is less convenient in a consumer's life, given now they have to be available for a specific window of time, whereas asynchronous offers people flexibility. And so I think asynchronous education or prerecorded courses are not going away, and they'll actually continue to be the most common way that people learn online. The second thought around online education is that courses whose focus is around making you money, they will always sell better. Justin was smart to make his course not just about building an audience on LinkedIn, but also about monetizing that audience, because people are always going to be more likely to pull out their wallet if they think that what they're buying is going to end up adding to their wallet down the line. So those were good conversations I had this week, and I'm just going to quickly rattle off a few other things before we get to the next part of the prompt. First, I love playing golf. Golf is a great part of my life. I find it fun. I love how the stadium can change every time you play. I love the challenge of getting more skillful, and I love that this is a hobby I can do for a really long time. And it also allows me to meet people with really interesting life experiences constantly. For example, I played golf earlier this week and I played with 2 guys that I was randomly paired with who happened to own ski mountains. While I'm not going to say what mountains they own, it was so cool to hear their stories about how one of them was literally an employee at the mountain growing up and now they own the place. But also as interesting was learning about the business behind ski resorts. I always assumed that ski resorts are brutal businesses because so much of what you do is out of your control with the weather. And what they shared is that a well-run ski mountain has at least 30% profit or EBITDA margins. And also a well-run ski mountain will sell the majority of its tickets before the season ever starts. For example, for these owners, they sell 80% of their ski passes ahead of the season. And they do it by using a concert ticket pricing model where once they sell a certain number of ski passes, they end up raising prices. So it creates a feeling of scarcity where you want to get the lowest price, so you have to buy now. One final stat I learned from them is that the cost of building a ski lift is kind of crazy. It is $15 million to put up a new ski lift every time you want to do that. Okay, rapid fire before moving on. Other things going well in my life. I feel grateful that I'm happy with my work right now related to Morning Brew and my agency. It feels good that my brain is constantly working and growing again. And I love the feeling of going to sleep and waking up thinking about something that I'm passionate about. And the only other one is that people really liked when I posted this temperature check format online. It was also a reminder that vanity metrics like likes mean very little. I'll give you an example. My temperature check tweet got 210 likes, which is only 0.1% of my Twitter followers, but I received more than 150 DMs from people who said they read the whole thing and went on to write long responses to me. Now, before we get into what didn't go well last week, let's take a quick break. Next up, what didn't go well? Well, the first thing that didn't go well is I have this worry that my obsession with the ghostwriting agency will make me less present in my life. One of my biggest fears after stepping out of the CEO role of Morning Brew and thinking about what I wanted to do next was that stepping into anything would make me a less present father, husband, family member, or friend. And I've been very clear to myself and to others that sacrificing my life for work is not something that I am willing to do. But now, as I work on this new business, I can feel the wheels turning again. I can feel my brain constantly thinking about this thing, and I can feel myself lost in my thoughts. around how to build this into a great business. And that scares me a little bit. I'm left asking myself the question, how can I continue to be present, not just physically but mentally, with the things and the people who matter most to me while also feeling energized and obsessed by my work? The second thing not going well— getting back into the early stages of a business is reminding me how much a startup can dictate your emotional state as a founder. Here's a quick story for you. One of the clients for StoryArb sent us a message basically saying that a thread that we posted for them tried to do too much and it was confusing to their audience. And this may sound like nothing to you, but when you are obsessed about creating a great product for your customers in any business and a customer isn't satisfied with the product, you take it personally. And I ended up sharing in my last temperature check that my biggest fear with my ghostwriting agency is client churn because I want to make sure the product that we give them is multiples of what we charge them. And so this client that I'm referring to, I've gotten really close with them over the last few weeks, and they ended up texting me with a screenshot of the fear that I shared. And they said the following: I know this feeling because I've felt it and I still feel it. It never goes away, but don't let it dominate you. My feedback is aimed at providing an honest opinion, but of all of your clients, I'm not panicked about any view or like number on a single post. If you're going to have 120 clients, you can't retweet any time a client complains. If anything, the clients that are looking for you to retweet after complaining are the ones that you should cut. Not only was this awesome to see another entrepreneur validate the experience that I was having around being fearful around client churn and being emotional when a client wasn't fully happy, but it also made me realize the importance of building great customer relationships where your customers become your friends and not just your clients. Now for the final part of the temperature check. What did I learn? I learned a bunch of random shit this week, and I'm just going to go from the top. Number 1, Elton John's Farewell Yellow Brick Road tour has grossed $887 million over the 309 shows played through the end of May, and with 18 scheduled dates left before its conclusion in Stockholm in early July, He will probably add on another $40 million or so on top of that. This means it will be the first tour ever to gross over $900 million, and his career gross is now at $1.928 billion since Boxscore started tracking this type of metric in the 1980s. Second thing I learned this week, there is this awesome company called Sleepy Sue, and it created a product called Postal Service for the Dead. And Postal Service for the Dead is an ongoing collective project where people send letters to anyone in their life who has died. And honestly, I'm thinking about doing this for my dad. I remember shortly after he passed away, I did this program and this was actually an activity that they encouraged. So whether it's on their birthdays, death days, anniversaries, holidays, or random days where you're feeling grief, writing letters to those who have died has always been a powerful tool. But Postal Service for the Dead is kind of the first offering that lets people experience the physicality of actually writing the letter on a physical note, putting it in an envelope, stamping it, and mailing it out. And what this company does is they give you 3 options. Option 1 is you send it, no one reads it, and it's just for you to have an outlet. And in that case, you leave the envelope blank. Option 2 is you give permission for this company to read your letters. You just write a heart on the back of the envelope. That's what signifies You can read the letter, but don't share it with the world. And then the third option is the company can open the letter, they can read it, and they can share it with the world. And you put a star on the back of the envelope to indicate that. And I just think this is such a cool concept. I can only imagine what the founders of this business get to read on a weekly basis. It has to be such a therapeutic and cathartic experience for a lot of people who have experienced loss. So that's the second thing I learned this week. The third is that Rob Dyrdek, and I may be butchering his last name, uh, is an absolute crazy man. And for those of you that don't know Rob, he's an entrepreneur. He's a reality TV personality who was a former professional skater. He's best known for his roles in MTV reality shows, Rob and Big, Fantasy Factory, Ridiculousness. And I was listening to his interview with Sam Parr and Sean Purry on My First Million. And I thought it was an incredible interview, but this guy is out of his frickin mind. And I just want to share a few things I learned. The first is that Rob is conservatively worth $350 million today, and he said that back in 2016 he was worth $15 million. So he has more than 20x his net worth in 7 years. Rob also is like a tracking maniac. He runs his life out of a spreadsheet. He tracks every minute that he spends. Because his goal is to optimize every minute that he spends in his life down to a T. His goal, actually, he shared on the episode, is he wants to get to a place where he earns $1 million a minute for every minute that he works. Final thing I learned in the episode is there's this huge protein brand now called Momentous. It's kind of like the Ferrari of protein supplements, supposed to be like super clean. It's high priced. And Rob was talking about how he co-founded this business, and basically the business was doing nothing and like running in place and raised a shit ton of money for many years. Like I think the largest they got to was a few million bucks in revenue. They ended up having Andrew Huberman promote Momentous Protein on the podcast as an ad read. And for those of you that don't know Andrew Huberman, he has one of the largest podcasts in the world where he focuses on talking about science and health and things we're learning about the body and about healthcare and medicine and. Supposedly, the advertisements through Huberman 20x'd revenue for Momentus, where now it's doing something closer to $30 million in revenue a year. So one, this is just a lesson in how long it takes sometimes for businesses to hit their stride and to find product market fit, but also just the power of individual brands and creators in 2023. Okay, I'm gonna rally off a few more and then I'm gonna stop because I'm running out of breath. I realized this week when you start a business, how much of the shit you do is mundane busy work, but it's necessary to push things forward. I thought that was important to add because. People glorify this startup grind. They think it's so sexy as hell to be an entrepreneur. But a lot of what I'm doing right now for this ghostwriting agency is incredibly mundane and not stimulating. And that is just part of running a business. I realized this week how bad I was at delegating for Morning Brew. Like, horrible, horrible. I used to think I was a great delegator, but I ended up doing sales, like selling advertisers for Morning Brew, probably 2 or 3 years longer than I should have. My goal now as a business owner is to delegate as fast as possible and fire myself as quickly as possible. Next up, I spoke to a Twitter account whose niche is luxury watches. I think there is a huge opportunity for someone to build an audience of watch lovers on Twitter and LinkedIn and then build a business around that audience. It's, it's such a high-value, high-earning, high-spending audience. So I'm talking to someone who's doing that. Manager's paradox is a very real thing. You end up doing a really great job in your job at a specific skill, which gets you promoted. But then once you get promoted, you end up not being able to do the thing that you're really good at because you have to start managing. And so many people experience this paradox of the thing that got you to be a manager you don't get to do anymore. And so you have a confusing feeling where you don't love being a manager and you wish you were just doing the thing. That got you the manager's job. Last 2, I used to put top entrepreneurs like Elon Musk and Bill Gates and Jeff Bezos on such a pedestal. Now I look at them with nuance. I can appreciate them for their business acumen, and I wanna learn from them as I grow as an entrepreneur. But then I can stop there and look to others as role models for things like family values, spirituality, wellness, versus generalizing a person's value across many things in life. Because to be honest with you, for a lot of these entrepreneurs, there's not much I admire them for outside of entrepreneurship. And the final learning this week, I was reading Not Boring, which is an amazing newsletter and blog by Packy McCormick that explores interesting startup companies and tech topics. And he did a breakdown on a business that he invested in. It is called Varda, and Varda is one of the most ambitious companies that I've ever read about. Basically, its goal is to do manufacturing in space, starting with pharmaceutical manufacturing. And so they're basically building a space business, a manufacturing business, all these different businesses in one. It's wildly ambitious. The team is stacked with former SpaceX employees. And what they're doing, I learned in reading this article, what they're doing is only possible because the cost of launches of things into space has come down by 99% since 1970. This business was not possible 2 years ago or 20 years ago, and it's only become possible because Elon Musk and SpaceX have brought down the cost of getting things into space by 99%. Okay, I'm going to take a breath now. That is all for today's temperature check, everyone. I hope you really enjoyed it. And now I would love to hear from you. Here's the only thing you have to do. Go to your Gmail or your Yahoo or your Outlook or whatever you use for sending email And type in the email address alex@morningbrew.com. That is my personal email. It will come to me, and I want you to type in three letters: H E Y. Hey, I want you to type in those letters, and I want you to hit send. I will read your email, and I will respond. I may ask you about yourself. I may ask you about a topic you want me to cover on a future Founders Journal. I may ask you what you think about this temperature check, but it'll be this little surprise that you only get if you email me. Until next time, I love you all, and I'll catch you next episode.