Rob Dyrdek: Happiness, Ideas, & Making A Billion Dollars

Hello, capitalists. Welcome to capitalism.com today I'm going to be joined by Rob Dyrdek. You may know him from tv, you might know him as an athlete. You may not know about his entrepreneurial background. Not only has he started and acquired companies, but his primary project right now is to help entrepreneurs who are in the idea stage get clear on their vision and have a really great launch. Sounds familiar, doesn't it? Yeah, we had a great time in this conversation where he talked about the types of companies that he works with. He talks about how he structures his life. But the biggest takeaway that I had was his relentless defense of his own well being. The way he structures his life for happiness and motivation directly carries over to his performance as an entrepreneur and as a celebrity. Rob is now taking equity stakes in companies as an investor, as a promoter, and as an advisor. And you'll be surprised to hear some of the insights that he's had on companies and how they have helped them grow and reach as much as $100 million valuations in just a couple of years. We had such a great time on this chat and my secret hope is that we can rope him into being involved here@capitalism.com I hope you enjoy this chat as much as I did. Please enjoy this conversation with Rob dearda. Rob, it's great to meet you. I'm so glad we were put in touch. I've been looking forward to chatting with you.

Welcome to capitalism.com thank you so much for having me.

Rob, I wanted to kick things off by telling you that you're the person that I want to be when I grow up because you have a TV show, you invest in a bunch of different businesses and you seem to be having a great time while doing it. So my first question for you, Rob, is on a scale of 1 to 10, how happy are you?

Well, let me say I think you should want to grow up to be like me because I am a 10 of a 10 almost every day on happiness.

Right?

But that is by complete design, right. And from years of optimization.

So that I understood what really makes me happy, then designed a life around that, then optimized it in such a way that truly, you know, I almost rarely even have a negative thought is at the depth of how much happiness and balance that I have in my life. And I do think it should be everybody's goal in life to grow into that level of happiness.

So I didn't expect you to say that, that that was something that you optimized for, but it has been my observation in seeing you, at least publicly, that you seem to be having a great time at everything that you're doing. And where I'm at in my own personal life is kind of realizing that if you prioritize that, all of the other important things seem to fall into place. So when did that start becoming the metric that you were optimizing for?

I mean, look, I'm. It was. I was. I used to have a ton of fun on the camera and in front of. In the front facing. But would be chaos behind it, right? And not. Not chaos in like a depression sort of way, but in a. You're working so hard, but where are you going? Where is all of this leading to? And what is. What is. Does all of this mean? And at the same time, I was like, what type of business person do I want to be? You have all these different companies, you have all these different things. And in that sort of journey of. Of trying to get clarity on. On sort of who I was as a person and what type of business person did I want to be. I found a business book called Start. And it was. It was written by this consultancy group based here in Los Angeles. And it's just in concept, it was like, know what you want out of a business before you ever start it? Do you want to build it, to sell? Do you want to make it $5 million and $2 million in profit and split the profit? Do you want to. What do you want to do? But what. What really it made me realize is, why don't I apply that to my life? And I think I started at that point of like, well, who do I really want to be? What is the ideal ve version of my life? And what does that look like? And then I began to see my life as sort of these interconnected systems. And I started. I started first with designing the life that I want, a life plan, and the life that I wanted to live. And then I evolved and grew into the person that I am today. Right? And what happens when you do that almost at anything, right? When you want to write a book, you're going to start a podcast, you're going to start a business. It starts first with the idea, Then you go through this diligence, you learn about it, right? Then you decide, oh, I'm going to do it. You go through a build phase, then you launch it, and then you realize, this is way harder than I thought. Like, this is chaos. Like, then you fight to get through. Once you get through the launch, you finally, once you actually do something, you begin to Realize how much you don't fully understand about it. At some point there's a horizon where you grasp it all and now you create a more clear plan to achieve it. That's when you find product, market fit and business and scale in life. It's when you become, your experience begins to turn to expertise, right? But I saw how that all worked in life. And as I grew into the life that I live today, like you evolve into becoming, you expand into your ideal person and ideal life. Then you're like, wow, this is amazing. I just created reality. Then every day is about living optimized and healthy and happy and all of these things.

So I'm jiving with everything that you're saying, but I know that I've fallen into the trap and I know a lot of entrepreneurs fall into this trap of they set the goal and then agree to be miserable until they hit the goal. I don't pick up that that's the plan you followed.

I don't even, I don't even believe in that.

Tell me more, right?

Because it's at the end of the day, like you, most times you set a goal, you can only make that goal through the base of your existing knowledge, right? And the only thing that you and you can break it down into a handful of milestones, right? And then like you must absolutely believe that you're going to get to the first milestone, right? Because the, you get pulled by goals, right? And you get pull goals. Progression towards these milestones generates belief in you, right? And when you have the belief, you have the energy to keep pushing and be patient because you're making progress in these milestones. If you're not making progress towards that first milestone and you keep trying everything over and over, but you just keep your eyes on the big prize, but you can't make any progress, that's where it's going to be extraordinarily miserable, right? When you're making clear progress and hitting milestones and getting on to the next one and getting better and better at creating clarity in your path to your big idea. Filled with energy, filled with excitement, plenty of patience because you can actually see now, oh, it's going to take five years, not three years like I thought, but I'm still making progress. That's where, that's where it comes from. It's only those that put an anchor in the, in a goal that they don't fully understand that, that they're miserable because they're just not ever getting close to it. And even those, you know, a lot of Entrepreneurs, you know, is you hear many stories of like where, you know, I just, you know, just tried, took me 10 years and then I had the breakthrough, right? And I'm not saying that that's not, you know, a one way to do it. I just believe that's the hardest possible way to do it. And it's because you're not learning and evolving in the right direction.

To accelerate your pathway to that big goal. It's almost like escape velocity of earth. You've got to begin to generate enough energy and clarity. Then once you understand where you're heading, so much better, you go there so much faster.

Right, so I'm processing this as you're saying this of I want to ask you how you deal with setbacks then, but I'm assuming that because you have prioritized happiness in all other areas of your life that setbacks don't feel like absolute death to you. Whereas a lot of entrepreneurs, business is their life or business is this such a deep desire that every setback feels like a reminder of feeling like a failure? Is it your priority of happiness that allows you to keep that momentum even when you get punched in the face?

Well, look, I think it's also I grew to hear, right, like I used to be in chaos, right? I was acquiring companies, I was starting company. And I like, I did so many different companies, right? I like, I was like, and I couldn't understand why wasn't it working? Like, oh my God, like now I'm like, you know, this one worked, why did this one not work, right? There was so much chaos. And when I finally decided, like, okay, I'm not, I'm going to grow into, expand into.

The type of entrepreneur that I want to be. But it was never just about business, right, or about television. It was about life. What type of life did I want? And so what are some of the things that bothered me with life? Okay, well, as an entrepreneur and someone that does a lot of risk taking, how do you offset that risk?

Right?

Okay, well, you invest like the capital that you earn into cash flowing assets that are passive, that give you the balance of your high risk, really aggressive, aggressive, big return stuff that you're trying to master on your side, right? So now, now as you grow like that direction now, you have a deeper foundation, a sense of security. You get more consistent, you get better, you get smarter, you get more security, you have more value, you operate with more energy, right? You operate more efficiently, you're more automated, you're more optimized, right? So you grow into that and so to me, part of my goal was how do I build? You know, a friend of mine referred to it as, I've never met anybody in my life that defends happiness like you do. And I really built this entire world around, around me that has insulated me in such a way that setbacks are.

They'Re never reactive setbacks. When you get to this level, you are seeing all of the places where you are most likely going to get hit. And it's like, that's the risk assessment. So you can proactively. Now you're trying to make pivots, seeing that hit coming rather than all of a sudden you get hit with it as it was earlier. So now I'm trying to fight these, these, these clear setbacks that I can see coming before they get there and then by the time they're inevitable, I've come to peace with them before I've had to deal with them. Most people get, you know, get hit by a hammer, especially if you're early and you're young or you've put, you know, all of your money into an idea, all your time, energy and soul. And like, you know, think of like so many people's businesses just, just died in, in three months. And when the pandemic hit, right? And it's like, it's just the, you know, it's the, you know, misfortune of the industry, the time, the, the, the opportunity and the station in your life at that point, right?

Of.

Forces where someone like me, you know, I keep five years of cash of my lifestyle expenses, I have all my entire lifestyle expenses is paid through my passive cash flowing income. So when the pandemic hits for someone like me, I don't even like, I'm like, this is crazy, but it doesn't affect my way of life. Doesn't affect. What do I do? Okay, I get time off from shooting so much tv. I'm going to double down and push forward on all the stuff I want to build and launch with my venture studio and launching my media, media side and that sort of stuff. So again, I'm, I built that system, a life system and a life plan and grew into it in a way that I'm, I, I don't, I don't have work life balance. I live a highly balanced, highly optimized existence in all aspects, right? So you basically. And at what's the center of that? I'm just, just peace, happiness and energy, right? Like you just, you go from thing to thing all day that you love doing. Now I grew into that and even being that, that balanced and that optimized of being a father of two and a husband and, you know, having 16 businesses and shooting 250 episodes of television a year and having a podcast and working on all the projects that I'm working on, I still do all of that within the allotted 30% of time that I give to work. I spend the other 30% with my family, the other 10% working on my health uncompromised, and then the other 30% sleeping. Right. So through all this, I never compromised being balanced as I built all this over the last six, seven years. And then I. What, what did that make me better at? I'm super good at being balanced because you don't just all of a sudden, I'm going to work less and hang out with my wife more. Like you have to build, design it's, then eventually automate it, then optimize it to be able to grow into this level of balance.

Yeah, there seems to be, and this is my own work as part of my journey right now, it seems to be that when you can prioritize energy and prioritize happiness, which is such a filler word for being optimistic and feeling full of energy and pursuing the things that you enjoy, that you tend to have more time because you have the actual focus and the capacity to put into the things that show up for you. And my next question for you was, with everything that you do have going on, how do you work in things like the new podcast that you just launched, or investing in that next project, even having the capacity to review that project, because I imagine that your calendar gets filled faster than most entrepreneurs. So how do you protect that capacity from going to a bunch of different directions?

So, number one is you have a limited amount of capacity.

Period. Right.

Period. Right. So it's not like I use 30% of my time to do all of this, that is TV, podcasts, build companies, all that. So I know I have this finite amount of time. So there's only one way that you gain capacity, right? You automate. Right. So then it becomes effortless, right. Or you hire. Right. And so for me now, and most people, they. They don't know why they hire somebody to try to help them do more, but they don't. They don't understand. They're not hiring them for the right reasons. They're hiring them hoping they will show them how to be more efficient, better do this job cleaner, faster, whatever it may be, versus where you get to a state where for me, it's like every Time I put a body in it is, it's now 50 more hours a week that of capacity for me. And because I'm asking it to be so much more specific as it relates to the whole of what I'm hoping to achieve or do, right? So when I do a podcast I don't. I hired you know, the head of previous head of Forbes Entertainment to come in and help me build out my media side and starting first with the podcast, right? And then I have that expertise and that focus on, on developing a build that. But it's hard still hard takes a lot of time, right? And so I know that like I got to drive this to automation, right? So as I'm even doing the podcast and, and trying different, trying different ways of doing it because I'm looking to find a way that I can get the highest quality content with the least amount of effort, right? And then eventually drive that to where it's, it's systematized and then I can optimize it over time to where it becomes effortless. In the perfect example of that is.

You know, ridiculousness, right? I shoot 250 episodes a year of television and it's exactly 4% of my total time and 12% of my total work time in the year, right? So it's a it like and that is from extraordinary levels of getting it automated and then getting it to deep levels of optimization, right? From shooting two episodes over a 12 hour period to shooting six and like a four hour period, right? Like that's the, that's the depth and reducing pre production time from weeks to half hours, right? Like that's the depth of optimization over time. Now.

You got to manage your capacity. You got to know when you do something new that it's a lot, it takes way more energy and all this stuff, you know. And keep in mind this is. I have an 80 page document called the Rhythm of Existence that is the, basically the operating system for my life and it's managed by my chief of staff and two assistants. And that goes down into like, you know, the food that gets delivered and how the cats are handled to you know, every last aspect to getting a haircut cut every Friday at 9:30. Like all these things that I can eliminate.

That, that and of course there and if something occurs like oh, a water of pipe breaks in my house, I'm not like, it's like pipe bro, like there's a leak and all. Like I don't even have to like think twice about it. Like the system is built to come in and handle it where that could break a normal person during the day of like, oh, you know, like I gotta call a plumber, you know, whatever it may be. But again, this is from the lens. You know, I refer to it as like a machine mindset, right? Like how do you get to where everything is automated and you know, your capacity. Like to me it's. I did so much in the spring, launched the foundation, launched the podcast, launched.

Doing a whole apparel line, entirely new brand launched Mind right. Lusso Cloud, our footwear brand, like all these things, like, and started doing press again and podcasts. You know, I didn't do it for, for years and man, I was pinned against it, right? I was, I was pinned against it. And your capacity, you mean? Yeah, I overshot it, right. So I had to make. And then, then what was suffering was, was how I was organizing all of these new things inside my, my business flow structure, right. Which made me have to stop. But, but you know, when you get over capacity, you don't. It's like anything else. You don't just like, I got to get back. I got to. Because you are experiencing in the present what you created in the past, right. And what you get to do in the future, you get to create in the present. And I knew I had got myself here. So now I couldn't just stop. I had to now build a plan to get myself out of it. And part of that was I had to restructure even how I built my company, right, and categorize it into nine separate divisions. And then on Mondays, I had to switch my Mondays to half hour calls with the heads of every single division and spending two hours in the morning organizing what I want to speak to them, make all of them do hot sheets that all go into my main hot sheet. That allowed me to make sure that we were on the same page and never all of our priorities were in order so I could start each week clear and have everybody clear rather than before. I tried to just let these standing meetings like fill in the blanks. But you can't do that with so many integrated moving parts when you're trying to build something at this level. Right. And. But I, I felt it and, and immediately stopped and then reorganized the. And that's a big reorganization when you got to restructure the way your company even works and then re. Restructure your entire weeks and force everybody to kind of follow behind. But then I immediately got back my capacity started to automate how we dealt with the different groups and different things. And then my capacity got Back to manageable and no longer putting pressure on me.

Yeah, I'm really glad to hear you say this selfishly because I'm going through a similar transformation myself. And my wants to figure everything out. Part of my brain wants to know how you did that. But I assume that that starts with just that commitment to protect happiness, to defend happiness and to protect your capacity knowing that you're only going to have 30% of your time dedicated to this. And when you're up against that now being proactive to create the next chapter. Am I summarizing you fairly?

Yeah. And look, and it goes back to that commitment. I wasn't like, oh, I gotta like carve into my wife time.

Yeah. I was not. Because that's what most people do. Especially, you know, super driven people. Right. Because I consider this system I've created to protect me from me, me. Because my old tendency was to like, you just. I gotta work for the next three days, like 18 hours a day to get caught up, right? And it's like, that's not sustainable because then I would just then be exhausted and like, what? Like, you know, even though I haven't done this since I've been married, so I used to be pre.

Getting married and kids. But like, you know, back then I would just work so hard. Then I would need to like, like go party and relax for a week because I was like so continually fighting the balance, like over and over. Right, but, but your commitment to it is what. And then it's awareness, right? You have to like I'm. So I track every single hour of the day, right? And I have it all script, there's these scripts and it's all automated and pumps into these dashboards and I tag them. So I have these beautiful dashboards of how I spend my time. Exactly. It's extraordinary. Right? So I can show you. Not by. I'm not saying I'm balanced. I could show you the number of how balanced I am. Right. And so what that does is just. That's, you know, that's extreme. Right. Most people aren't willing to me, it's just how I live now. So I don't even like think twice about it. But when I started it was like, oh, this is crazy. You're tracking every single hour. But it's like you become. You've mastered time. And when you understand how you spend your time and then you, then you try to. You lay that on top of like, how do you feel? Right? Like it's you. You're mastering your energy, right? So, so You're. When that becomes your commitment, you don't. When you get over capacity and work, you know, you have to figure out a way. And that may be releasing something or stopping to do something, but you get what you get good enough to. When you're, when you look at everything like I design it, automate it, optimize it, you get really good at understanding, like, being patient of like, I just got to get this to automation. Then I can make it better and better you. So you can, you can give yourself three or four months to get something to kind of, you know, you're taking it there. Rather than like, feeling like, this is just too much, I need to stop doing this, making these, these reactive sort of decision makings. But to that, I also, every single day of my life since 2014, maybe not every single day up until the last few years, but I would track 0 to 10 how I feel about my life, how I feel about my work, how I feel about my health, right? So this is qualitative data. And what I found was like, I, I look at the world.

As like the, like, half full or half empty. I realized that I, when I was like, below like a five, I, like, could pick apart why I bought a couch. Be like, why'd I even buy this couch like this? You know what I mean? Like, it's like you, you can pick up when you're half empty. You, you just, you, you like, you, you are just like picking apart the most random things, right? You're in this total reactive like, like state. Like you're in this negative state. And, and. But when you're above a five, you're hopeful, you're filled. Like, it's like, oh, stuff hit you. It's like, okay, you know, whatever. And. But what I call it is qualitative awareness where I began to. Because what happens over time is you begin to see the same things pull you down. And it becomes so clear when it's like, it's like one person you work with. And it's so clear that like, every time you get into a state below, when you wake up and track that number, and it's like when you think about it, you're like, oh, it's because I fought with this person I work with, right? Like, I had this disagree. Like, and it's like that happens three or four times. It's like, okay, I have to change this, right? And I think even for me, like, one of the big ones early on was like, like, like I didn't understand finances. I just didn't Understand finances. And I didn't understand, but I didn't. Money was confusing to me. I just worked really hard and made a lot of it, but didn't understand like it, it was this plague. I had three or four investment advisors and like, you know, I just like, you know, like I had no idea what type of return it was making. And ultimately that financial aspect of it led me to like, you have to like learn like exactly what you want out of money and ultimately like what do you, what does money mean to you? And I think like when I finally, that was like a huge breakthrough because I was in that state of just keep working hard and just keep trying to make money and eventually you will make so much money that you can figure it out. Rather than like really understanding money, understanding like what you want it for and what it provides you. And then learning to grow.

Money, assets and value was a, was a huge change for me because I grew. You know, I quit high school, you know, had a normal, hardworking, middle class family from Ohio. They never had any money. It's like nobody taught me. I was raised by entrepreneur wolves and it was just like, you know, risk over everything, like, oh, if you want to do it, you got to go do it. When I was young, you know, my fantasy factory and Robin, big days when I was just you know, doing thing after thing, okay, Now I'm, I got this television platform, I'm going to do this and this, okay. I'm going to start this show like when I'm just doing thing after thing. I used to say, like, Dyrdek Enterprises, our money's fearless, right? Because scared money doesn't make money. And it's like that is a very valid statement. But my money wasn't fearless. It was reckless, right? It was like it wasn't. I wasn't doing calculated risk investments. I was just being reckless with money, right? So I thought it was more a badge of honor, you know, to you know, make a million and lose a million. Right. Versus like really understanding that. No, it is about long term value growth that someone like me would have never learned. And they don't, you know, regardless of what state you are and where you come from, learning and understanding money is still this extraordinary, elusive thing because people don't, aren't. People don't share philosophy of what they do with their money because they don't want you to go do it and lose money and then it's their fault. There's this really taboo way of like sharing like investment advice between peers and just, and just how to learn it in general. It's like get a wealth advisor and give them your money to manage it. Right. And then really that's just, you know, they're 90% of them are just driven to make a commission off of your doll.

Right.

And I have no downside.

If the market turns on you or your investment turns on you because they get paid a fee to manage your money. You know what I mean?

Yeah, you are preaching to the choir right now, Rob. I actually feel very convicted right now because I'm definitely guilty of having those swings of burnout, needing to recharge, burning need to recharge. And what I'm, what I'm encouraged by is hearing you say that you can actually plan ahead of that by protecting how much capacity you give to each project. I'm curious how that applies into the Dyrdek machine because you have people who come in and you're not an incubator, you're not a VC fund. You're working with brands that are often in the idea phase where you don't know if it is going to have product market fit or not. And yet I've heard you say when talking about it that your goal is to win on every single one of them. Them, you know, that early stage is going to be chaotic. So how does that apply when you're walking into a new opportunity and empowering whoever is at the helm of that new brand?

Well, look, it's. Most people don't set out to master the idea stage of business development, right? Because it is this the greatest chasm in all of entrepreneurism, right? And so for me, I realized early on it's what I absolutely love the most, right? And so it's the most exciting, it's the most fun till you launch, right? Then it is utter and total chaos. And just like, you know, like what, like you just, you realize everything you don't know once you get there. Now you do that with a purpose, right? With a system, right? So I realized that, that, okay, this is sort of the phasing that happens. It's always, you know, discovery, diligence, build launch scale, right? And so if, if I now have broken it up into here, now, I was like, okay, you know, I want to build from the idea stage, right. So that means I've got to get across the valley of death to product market fit. And as you do it more and more you begin to see what I'd consider business and entrepreneurs through a multidimensional lens, right? Where when I first started doing it at, through the System all the company what I because I consider them almost like vintages of wine. Like at my 2016 companies, my 2017 companies, my 2015 companies, it's like because you can I keep evolving. And because like my knowledge of how to build a company used to be like this. Now it's like this, right? I used to look at it as you got it, you got brand minds and business minds and I was both of them. You put it together after launching, you know, you know, 10 businesses in the first two years. It's like I and seeing all of the different sort of struggles and evolutions depending on the type of entrepreneurs. Because I always, when I first launched it was do or die are entrepreneurs, right? I'm about the person. I'm betting on the person over everything. Give me that grit, fortitude, ambition and determination, that unwavering belief in themselves that they can create this vision and like that work ethic. But that is literally just like the engine. But the engine is pointless if you can't find harmony in how a business actually operates. And I realized that some of these extraordinary do or dire entrepreneurs where really just great brand and marketing minds but don't fully understand product development, sales and certainly don't understand operations or finance. Like I really saw as I began to develop that it really ends up being the greatest. Like CEOs have general are creative and right and left brain but have general knowledge in brand, product, media, marketing, sales, operations and finance. So they can see how the entire engine of a business works and can build strategy to make sure all of it works together harmoniously. Right? Because the product people could care less about what the margin contribution margin is. Right? And marketing people.

Could care less of like where the product line can scale to because they're just like give it to me and I could sell it, you know what I mean? Type of vibe. So it's the idea of when I began to see it through that lens. Now it you, you become more and more intuitive on the type of ideas and the type of entrepreneurs you will even build with. Because at the end of the day I'm still. It's no different than I talk about life and goal setting and anything else, right? Like it is really like exciting in the idea stage because you're not doing anything yet. Then when you're just building the plan of what you're going to do, oh, it's amazing. But when you go and do it is where, where the pain start. And for us we're ultimately mastering how to accelerate the product market fit because what happens is we go from weekly meetings to quarterly meetings to just call me when you need me versus which then releases more capacity. And then the higher the quality of the entrepreneur, the better the idea is and the clearer the value proposition is and, and much more clear the consumer is and where that adoption is going to come from and how you're going to speak to them and convert them. When all of that is clear, you're going to have a much more accelerated path to product market fit. Now, God forbid you throw on unfair advantages like celebrity investors and earned media opportunities, all these other things and use your own platform to drive.

This already very thought out sort of pathway to success. That is where for me I get to experience the joy of creation and go through the process. But I get to hand you off and help you put all the bodies in place that you can now go and grow and scale. Because you don't build a company, you grow a company. It is an organic, living like living thing. It does not like, it's not a plan that you do. It is a, a living, growing thing that you have to constantly be nurturing and optimizing to maximize its true opportunity.

So let's walk through an example of this because you and I are co investors on at least one project. The one I'm thinking of is Outstanding Foods and they've gone from like 0 to 1 2, skip a few hundred million in like 9 seconds or something like that. Like they've done a great job at positioning themselves in the marketplace, getting distribution. And I'm curious what your involvement was in that business from the beginning. Because their first product did, did not hit the awareness that they needed it to in order to have liftoff. And then they had a couple follow up products that hit and now the business is growing. So what was your involvement in the beginning stages of that, of getting it to, to that liftoff it needed?

Yeah, I mean look, it's, you know, Outstanding Foods is also part of my vintage. Right. When I, when I first actually met him.

Lewis Howes introduced us. Would it be, would be September, October of 2016. Right. And you know, initially for me at that time, at that stage, I was, I was super obsessed with all things financial. Right. Because not only did I go on to where financial models used to be like, you know, weird science to me, I didn't understand. And I, when I finally.

Really learned, I began to fall in love with financial models. Right. And I really began to see like, oh my God, like the matrix, that is a business is where I used to think it was. Through the brand and the product. Where now I really believe it's through the lens of the financial model, right? And where some of like your smartest and most creative work has to be done. And at the time I was just deeply obsessed with like building out these, these financial plans and. And you know, when I was presented with the idea, it started first with like this. This is a Piglets bacon chip. That's an Unami mushroom that's fried and tastes like the most delightful piece of bacon chip ever. That's plant based.

25 year vegan, like 25 year vegan products development.

Chef, right? Like, it's like, man, this is special. I'm like, this is so much bigger that the time that was called Fresh Soul and it was the Piglets bacon chip by Fresh Soul, right? And like I'm like, man, what is Fresh Soul? I'm like, you just invented an entirely new category of chips and like in. And you're basically, you're not like taking on, you're not Hampton Creek and Beyond meat. Like you're taking on Doritos. Like you literally have an entirely new snack vertical to open up. It just happens to be plants based and it's delicious, right? Like, and really pushed him to like rethink the like the positioning of the brand. Like be more aggressive, like be, be bigger. I'm like at the top of. It's not necessarily about plant based, it's about taste, you know. And you know, initially I was like, oh, call it like vigilante, be aggressive. And he hit me with pig out. And it was like, oh man, that's a little too aggressive. And then it was like, but I don't know. And then like we started talking through like, oh, it could be outstanding foods, could be the parent. Then it could go like pig out, chicken out. It can go into all these different verticals. It really then became informed this sort of life feeling that process. Then we went through and completely went through the process of creating the entire brand together and going out and developing sort of the look and feel and eventually creating BAE the pig and all these sort of things in making this great, amazing brand. But what I learned through Bill Glaser is like, man, this is a multi dimensional CEO. He's super creative and like can.

Be very like open to how you can evolve brand storing and positioning. But it was one of the most beautiful tactical revenue models I had ever seen from anyone I was looking at from a business perspective. Then it was that financial background. It was the first time that I truly met like a Financial backgrounded individual that had a creative mind.

Would you clarify what you mean by the financial model and the financial background? I don't know that part of the story but also I don't think of.

Snack and foods company as having a great financial model because the margins are really low. So would you clarify what you mean?

Yeah. And so to me it's number one, he had an investment banking background. I see, right. So he came from like, like, you know, much more from like understanding creating value, raising money and what it is. And so as it, as it related to the tactical operating model, it was product for product, like, like.

Store for store growth on sort of okay, this is what online needs to be. Here's going to be our first retailers. Here's where we're going to grow to, here's how our margins are going to grow. This is what our trade costs. Yeah. And it's, it's, you know, the difference is, is.

So often and you know, it kills me because I like, you know, I got one the other day because you know I just allow people to make video pitches and send them to me on my website. Like rather than send me a deck, you got to make a video. If you want to get in front of me. I'd rather like, like feel your energy and hear your vision. And you know I got the age old like here is in the first year we're doing 35 million. In the second year we're doing 125 million. Right. It's like, it's like man, like and you know, I want to say like man, you can't, like you can't create a bigger red flag. I mean some high net worth individual who does not understand like, like money, who's never going to look at the model, who's buying the vision, you know, maybe. But when you say you're going to do 35 million in the first year and you've never even done this is the first time in this industry there is not a chance on ear that's going to happen. All that says is you just don't understand how money works. Right. You don't understand how a business even works in the first place. So I digress to it was the most thoughtful model as it related to every single detail. That was real.

Right.

And the problems with the margins and how you have to ultimately where you're going to capture that margin at scale and how you earn it all back and the milestones you got to hit. It was like, like the most believable financial model I had ever been presented with, right? And I think even people that start business and try to raise money specifically and don't come from a finance background and don't understand how to create or manage their own model, what do they do? They hire somebody to build a model for them. Right? And so they pray. Yeah, well, look, they hire somebody and nine times out of 10 they'll hire like a guy that like built like does accounting for like, you know, software companies to try to build a CPG good financial model and doesn't even know, doesn't even under. Doesn't even have clarity or understanding on. On all the costs and expenses that go into a CPG business. Right? So it's that level of detail that now again, I was the same way. I wouldn't. I started companies for years on financial models I didn't even look at or understand. I raised millions of dollars on financial models I had nothing to do with. And it's like I reflect back on when the tougher, realer investors would ask me simple questions that I wouldn't understand.

And then I would then had no interest in investing many. And it'd be like, why I got all this energy and passion, like, look at what I'm doing. And it's like, now I get it. You know what I mean? Where it's just like, ah, it's just like you just don't fully understand this. Right? Like you don't understand a business multidimensionally. Right. And. And that again is. I only started learning that with outstanding food. So even as we developed it, you know, co packer issues, supply chain issues, the Unami mushrooms that like all this stuff. And he was smart enough to like, this is way more problematic. I'm already late to market. I'm starting to burn money and pivoted into the piglets pork rinds. Seeing the pork rind and keto wave going, right? Like, all right, I'm going to go into this and enlightening it. A bottle lightning in a bottle launched that thing and exploded. Right? Like in what it is and then saw like, wow, here's this functional. Here's this new pathway of more functional products. Even the original product line that he had intended, like he bailed on based off of how much success he was seeing in these extruded puff products and scaled into the outstanding puff and takeout, right? Or launch takeout and then had to transition it to outstanding puff. But that's a perfect example of what you continue to deal with as you're building and scaling a business at a different Level. But that's like the process and I learned so much as it relates to, you know.

Supply chain can just get you co packers, you can just get, hey, there's so many waiting time bombs inside, you know, so many aspects of a business. And why founder market fit is such a huge thing for me at this point because there is the learning curve of learning a new industry or new supply chain or new different thing is so big. As an entrepreneur, it doesn't matter how good you are, you step into some new one. And what happens to great entrepreneurs who hate their existing industry because it has all these drawbacks, low margins and returns and shelf stability, all this, the things that they hate about it. I'm going to go do this because this has long life stability and like you know, like all these things but they, they're only seeing it through the lens of what their industry that they don't like about it rather than looking to their industry. And how do I see an opportunity in my expertise and try to build something in that? That's what I really look to hunt for more than anything these days.

Rob, you mentioned that people will send you pitch videos about the projects that they're working on. And it also sounds like you really love to be involved in that ideation phase of the business. For example, I did not know you were that involved in the idea phase for Outstanding Foods. So when an entrepreneur comes to you, there's often this perception in the entrepreneurial world that it is difficult to approach somebody who has poll in the media or who has a big following or who has capital. So there's hesitancy over approaching someone like you that has both capitalized capital and a following. How do you like to be approached when somebody is pitching you in one of those videos?

Look, I don't, I don't. It's still fundamentals, you know what I mean? At the end of the day, you know, it's still.

You know what I, you know, I'm on a recent podcast, I've been doing these monologues and like I'm. What I try to tell people is money loves clarity, right? Like you are, you are pitching someone as an investor because they are, they want a return on their money. And like when you can tie together, this is why this is a product that has a unique value proposition. Here is the people that will buy this, this is where they are and how I'm going to get to them and, and how much of it they're going to buy. And then this is how much I'm. It's going to cost me to get them to buy it. This is how much the product costs. This is how much we make. If we make this much money and this rate, it creates this much value that this person would buy it at this multiple. It is like, ding, ding, ding, ding. Like, where. Where there is this beautiful, like, simple way to talk through while the opportunity can be a great return. And most people try to sell, like, passion, you know what I mean? Like, I got this amazing idea and look, what I like about the video is it's. You can really tell somebody's experience and knowledge on how they talk about their idea for 10, 10 minutes, right? You. You can see, like, this is a product person. This is someone that came from sales. This is someone that's got like a brand person who just like, sees like a product. This is someone that, like, you know, just read an article about RX Bar being sold for 600 million. Here's the next RX Bar. You know, it's like, it's the. But, like, have no even understanding what that really means. It's. They just. I have this idea and this is someone will buy it for 600 million. I think that sort of lens is the. Is what. What it is. But it's also when it's just pitch me, I get just. They're all fascinating, man. And it's really why I've transitioned to, like, talking to like, a lot of people that pitch, just to, like, give them advice, you know, like, hey, I wouldn't do it, but you should, like, consider thinking about this when you talk about all this stuff. It's why I just really enjoy, like, like, sharing my thoughts. Because I think a lot of people have interesting ideas that are one step away from, man. If you just thought about it like this and approached it like this. Here. Here's where your actual opportunity is, right? And. And, you know, I find it, you know, super humbling and always like, God, so nice that you went through all this to like, you made a video and came to the side and uploaded. It's not like we promote either. Like, we do, you know, some posts on social media here and there, and for people to constantly find it and do it. Even though we've been doing podcasts with the different people that have pitched, it's still super humbling every time I get one, you know.

Yeah. This is why we make all of our incubator members put together a pitch like that. A, because it gives them the clarity they need to be able to do it. And second, because it prepares them to go out to an investor or an influencer. Influencer or an advisor and make a clear, concise ask. Whereas most people are just saying, like, here's my problem, please. Like, please fix this problem for me. I wanted to wrap by asking you about something I heard you say on the Impact Theory podcast, which was you said that in your mind, belief doesn't just matter, it's everything. Was the fundamental thing that had to be in place. Would you expand on what you meant when you said belief is everything to you?

Well, look, I am, you know, I think particularly in that one. Like I was.

Kind of going through the idea that only people that lose belief give up, right? And to me it's like whether it's self belief, you know, whether it's like your belief in an idea, you grow that, right? And how do you grow that?

Well, you grow your belief.

You mean you grow your belief, right? And because it's like in the beginning, you want to do an idea, you go and learn about it, you're growing belief in the idea. Then you, you build a plan, you share that idea. People validate. Oh, that's amazing. You will. Then you're like, oh, this, I think this is going to work. Then you start building the plan, you start learning and seeing it. You're like, oh, this is it, right? And so, so now if you fast forward now, you launch this idea and you're back to how I was saying early. These, these.

These.

Milestones are where you're growing belief and you're learning more and making progress. You're like, man, I can really do this. You get to the first milestone, you're like, man, like, now you see the second one, clear of what you got to do, you start to really generate belief. Belief that like, wow, I'm going to actually accomplish this. This is actually going to work. And to me, I, I just think that, that people underestimate like that, that where confidence and self belief and belief comes in from in general is, you know, it starts first with how you were raised in the foundation of your early success. That, that basically starts you with a foundation. Foundation. Now it's on you to just determine what are all the things that you have to do to grow that within yourself. And that is especially true in business, but also in life, right? And then when you become really good at something, what do you do? You're an expert. You have confidence, you have belief in yourself like others have belief in you. It generates all of that together, which ultimately, ultimately leads you towards expertise and ultimately something taking less effort that gives you more energy than it takes too, right? In the sense of how powerful belief is in everything that you do.

Yeah. I used to kind of stress out about this because I agree that belief is required, but if I didn't believe something yet, like if I don't believe that I can have $100 million dollar exit or a billion dollar valuation or whatever, if I don't believe that I would beat myself up over that. Why can't I make myself believe this? But to your point, it's more like a muscle that gets built and you find more evidence for it and you choose to kind of operate like that might be where faith comes in. It covers the gap of what you don't yet have evidence for and then you eventually find evidence as you gain more clarity and gain more capacity.

Yeah, but, but make no mistake, faith is the bridge. But when you lose belief completely, faith is gone.

Amen.

You know, you can't, like, you're not going to keep being faithful when it, you just, you, you, you go to where I, it's not going to work. Right. And how do you get to be knowing you can do a billion dollar valuation or $100 million exit is you grow into that. You know, it's like when I, I, when I, I decided in 2016 I was going to build and sell 30 to 50 companies and make a billion dollars in liquidity. When I did that, I had never sold a company in my life, right? I had never built and sold a company in my life. It's like, but this is what I'm going to do, right? In 2019, we sold four, right. Three years later and it's like when you sell the first one and it's like, oh, oh, whoa. What? Look at, oh, look at, like then it's like, then one you built from scratch now that gets acquired and a huge paid. It's like, okay, yeah, I got, I figured, I really understood now. I've been through it, it's going through and it's like now like there's, there's like, not only only did it, did it help push me into the person that I, the ideal version of who I wanted to become on all aspects, right? But then it, it has, it has built this deep core level of belief where it's like every one that I do, I know it's going to go on that path. And if it's twisting or turning in some form or another, it's it, I know it because in the beginning it was like, well, I only, well, if this doesn't happen then maybe it won't. So when that thing starts happening, it's like, oh man. Okay. Yeah, well, at least I saw the one hole that was potential in this thing. Not finding that way I know how to look at that again in the future, you know.

Yeah. So Rob, I want you to know that Build with Rob is becoming my new favorite podcast because it's so specific into the deals that you are doing. I really enjoy that part. Part of it. But I'm curious what type of deals you look for now.

Yeah, look, I mean I'm.

It'S, it's, I still want it to be idea stage. Right. I, I, I would never do anything that's post revenue. Right. So it's not like, and, and I would do a deal with someone that has an idea that I can help shape as long as it has very little capital in it. Right. I still want to be first capital in and in the most significant stake next to the co founders. Right. And I want to co find, you know, almost everything I'm co founder in and occasionally I'll do these sort of, they've done the brand development and I just believe so much in them that I'll do it with them. But there's no, it's industry agnostic and you know, really I'm, my principles ride through all entrepreneurs and all ideas. It's a matter of like running them through that filter. And it's just so clear to me when it's the right entrepreneur and the right idea.

Once you've created everything into such a system and your knowledge becomes so deep, you transition to efficient, effortless, intuitive decision making and you're feeling so much pure. Because I can have a conversation with an entrepreneur about their idea for 10 or 15 minutes and really understand their skill set, the potential, the idea. Then I go and validate that through immersions and data. Then I could take my own insights to then shape that a little bit more than say, if we can do it like this, let's go. So that really look, I'm, you know, I have a water filter system coming out. I'm looking at Adaptogen beauty brands. Like I have cannabis sparkling water coming out. Like, you know, it's, there's all of these different things that I'm constantly looking at and evolving and really open to do just about anything if it feels right with the right founders.

Rob, I hope I am like you when I grow up. And my takeaway from this is defending happiness at all costs is step one. Everything else comes to that. Thank you so much for being here on capitalism.com it was a joy to meet you.

Thank you. Thank you.

If you listen to this entire episode and you're thinking, man, I want to have an idea that that lights me up so much that I can present it to Rob or Ryan or just have that type of launch that gets me excited to continue to go through the hard work and build that confidence and that belief that I can have an eight figure exit or a nine figure exit. If you're thinking that right now, it's time we work together and you can do that inside of our incubator, just go to capitalism.com Inc. That's Inc. And we can help you get clear on your vision, launch profitably, and build the foundation of a business that you can scale and sell. Thanks for listening. I'll see you guys on the next episode. Take care.