Billionaire Secrets You Should Learn

I think bank accounts and money equal one thing, freedom. We were completely taught the opposite of what leads to real, real wealth. And they told us, forever, buy local. That's how you make a difference. No, it's not. You make a difference by owning local. And what we realized is there's an actual blueprint. There are humans who hold up the world and there are humans who want to burn it down. And you all get to be the builders, not the burners. If there's enough of us, there are only five ways to get really, really rich. But one of them is easier and with less gatekeepers. I'm going to break that down, live in front of hundreds of people, and I'm going to share it with all of you. So you're going to want to come along. So I have one mission that I'm trying to teach people about all over the country. And it's why I won't shut up on stages and Instagram and everywhere else. I am trying to teach people this game of ownership because I think ownership is the only way to push back on, on a power vacuum. And so I hope that that's what we get more of today. The counterweight to bureaucracy and politics is actually not protesting. I sat on the 30th floor of Goldman Sachs in 2008 while the world was quote, unquote, collapsing and the 1% Occupy Wall street movement was protesting all below. What happened to those guys? They got some media time. Now, I'm not a fan of socialists, sorry, but they didn't actually make any real change. Nothing happened with a protest. Why? Because a protest has no profit associated with it. In fact, who can protest? People who don't have jobs. And so the only real protest is you, the humans who have profit pushing that profit to things that matter. And they told us, forever, buy local. That's how you make a difference. No, it's not. You make a difference by owning local. And that is the message that we have across this country. So, Lions got your health covered, I got your wealth covered, hopefully. And we're going to talk about that today. There are only really five ways to get rich. Actually, I was speaking at a Credit Suisse ultra high net worth conference, and I saw them present thousands of individual case studies of how their individual clients made their money. Some of the wealthiest people in the world. And essentially there are five categories, and the five categories go like this. First you inherit it. Unfortunately, I don't know about you guys, but mom didn't hand me the silver spoon, so that wasn't an Option, Right. The second way is you marry into it. I got a couple problems with this. First problem is I married a Navy seal. Anybody know how much money they make? Shane, shout out to you. Marrying Dr. Lyon. Good move. That didn't work out for me either. Married for love. Weird concept. So you could also get a Fortune 500 position, right? But then you got to work with this guy, which I never really liked that idea very much. So a lot of them made their money that way. Now, you could start or run an asset management business, and I've done a few of that. But look, you guys see your faces on here. There's way too many tattoos in this room. I saw that. No ties, no Harvard degrees. When I was at Goldman Sachs, the only way you could become an asset manager there, in their wealth division, was if you could bring clients who each individually gave you $25 million. How many people at 21 years old had friends who were going to give you 25 mil? I didn't. So, okay. Now, I did do this a few times, but it's really hard, so it's not easy to do. Now, the last way is build a company. And this way, I think, is the most fun and the way that we actually do this. Build it or buy it. We'll get to buy later. Now, I've done this a lot. We have a portfolio that has 25 companies in it. We have a venture capital fund that has 17 companies in it. We've built asset management firms to a billion dollars plus. The fascinating part about that and seeing that many companies is the rules rhyme, the truths rhyme. And so my hope is I pull back the curtain a little bit, and we think about how to take your companies and your businesses and yourself as a human today. And we put it on the acceleration path, because the truth of it is, the only thing nobody can take from you is what is under contract. And the rich speak in contracts. And most of us, we learned budgeting under Suze Orman and Dave Ramsey. Like, what can anybody save Your way to billionaire? Haven't met him yet. We have to learn to earn, not learn to save. We are completely taught the opposite of what leads to real, real wealth. And so I started thinking about it with all my portfolio companies, and I was like, okay, how do we get from our first zero? Now, I know you guys are past zero, but play this game with me. How do we get past zero to our first seven, eight, and nine figures? And what we realized is there's an actual blueprint, and it's not easy. And not everybody can do it and unfortunately not everybody will do it. Most humans will sit in rooms like this even on a Sunday. So give yourself a pat on the back for even being here today. And then you'll take your notes and then Netflix will get you. And what I hope instead, because I think this is a room of world changers, is you take one or two pieces from maybe this presentation, definitely from what's happening from a wealth perspective, and you plug it into your business day to day and you plug it into your life. Because if you don't, nobody else comes to save us. All right, so here's the path. In our businesses, we have businesses that do all levels, so $0 to 1 million, which is what I call startup. Two, scale up businesses that do 10 million in annual revenue. Two, grow up $100 million in revenue. And this is a process we've seen in all of our portfolio companies. It goes like this. I only have time to go through one stage today, so I'm going to go from zero to seven. But each stage necessitates these three P's and if you don't have them, it's real hard to get to the next level. And in fact, if you're a nine figure business or an eight figure business and you don't have the zero, the startup part, you find yourself getting pulled back. You find a lot of volatility in your business. So even if you're further, you gotta come back to the foundation. So here's what I want you to think about. When we get a business. I don't know, my husband is in here who runs our portfolio. We probably get two or three thousand businesses a year that come to us and say, hey, will you invest in us? Will you buy us? We're looking to sell. And one of the first things we look at for these businesses is do they write love letters? Starting with to whom it may concern. Most businesses don't know who they sell to. They actually open your email inbox and you'll see this. You get an email from, I don't know, Abercrombie and Fitch, from Theory, from whatever company, and nothing in there is guided towards you. If you want a business that continues to make you money consistently, you have to know what's called your Persona. It's the fastest way to get somebody to like you is for them to feel like you like them. How many times do you guys want to hang out with somebody who doesn't like you? Not toxic boyfriends included? All right, the truth of it is we don't we need to make them feel like we love them. And so most companies don't actually know your name. So if you have a company today, here's one thing I would start with. We call it Avatar or Persona. And I have looked at tens of thousands of companies. I've probably seen on in 20 companies, people who start with a Persona, and those companies last for decades. I learned this from a good friend of mine, Ayman al Abdullah from AppSumo. Now, here's what my avatar looks like for contrarian thinking our media company. I name them first, which is really important. When I work in John and work in Jane, I paint them, which means I come up with some imagery of them. Never easier today than with AI avatars. And then I describe them. Where do they read, what do they watch, where do they hang, what do they do? Gabrielle Lyons says that her clients are world changers. Well, what does that look like? What is their name? Where do they hang? And the second that you have that, you can write a love letter to them. And the best way to write a love letter to somebody is to steal it from somebody else. And so what I like to do is I like to go to the best media companies that they follow. And in this instance, it's companies like my friend Sam and Sean's my first million. Maybe Tim Ferriss, how I built this. And I say, how do these people who have made people fall in love with them speak to my love, and then I steal their homework. And so you might want to start with that. Step one. Now, if you want to sell millions, you also have to remember you are not actually this. Most companies, they think that they are the hero, right? That would be like Gabrielle Lyon coming up here and being like, you're welcome, I'm here. It's not really her style. She'd be like, I'm welcome, I'm here. Here's a little shorter. Now, instead, what does she do? She shines a light on Olive. You. Because Gabrielle knows she's not Luke Skywalker. For you fellow nerds, this is Gabrielle. Sorry, she's Yoda. She is your guide. You are your client's guide. And the second that you stop thinking that you're the hero and you start realizing that you are just the guide, because everybody thinks that they are in their own version of Joseph Campbell's hero story. Every single human. We're sitting here in this room and we're operating from a first person perspective of us as the star of the show. You will never suffer from not enough cash flow when you make somebody else a hero. And that's rule number one to making money in your business. The second that I get a company to realize this is the second that they don't have to market as much. And then there are a bunch of terms we could use, but I'm going to go light on those today. Those terms meaning that they get a higher ROI on their ad spend, that they actually have to spend less money to have a higher ltv, that their basket size increases, that they have decreased churn. But it all starts from hero, not all of the other three letter acronyms that most people talk to you about. All right, so we've got our Persona. We know who we're writing a love letter to. Now let's talk about the product and the problem. The problem is really important to name. Which one would you guys rather sell vitamins or painkillers? Vitamins. Interesting. Wrong. So I used to think now in this room you guys are healthy, fine. I used to think that you wanted to sell vitamins. Why? I'm like reoccurring revenue. They're good for you. Gummy bears, Kardashians. But actually you want to sell painkillers. A painkiller means that it is an acute need for it is a need, not a should. If you think about your business, think about what's coming this year and where we already are. We're at interest rates at all time highs in a lot of instances. We're at incredibly high asset prices everywhere. We've got a really tumultuous presidential election. We've got people pulling back on household spending. We have been in a 12, 13 year plus bull market run in which people actually got convinced to spend hundreds of thousands of dollars on digital apes. That's where we've been the last 12 years. If you think the next 12 years will replicate the last 12 years, you're out of your mind. And I hope you're right. But I don't think you are. And so in this world, you have to start asking yourself questions like is what I sell a need? Do people need this? Or do we think that they want the cute little painkiller vitamin? Now this one's going to be applicable, I think, because a bunch of people in here are doctors, coaches or run agencies. Right? Raise your hand if you're any one of those doctors, coaches, run agencies. Okay, perfect. This is really important. Let me tell you why I would never buy 95% of your businesses. How's that for warmth? Was that good? Nailed it. Okay, I'm going to show you why right now. And I'm going to show you the difference between a great business that's in your niche and a not so great business that associates for all of this. This is from a good friend of mine, Jack Butcher. And his saying is build once, sell twice. Mine is build once, sell continuously most of the times. What do you do? You're a doctor, you see a patient, the patient comes in for one hour and you trade your time for their money, right? Plus add ons. I know, I'm simplifying it, right? That's an okay business, but it's not a great business because you, my friend, only have 24 hours in a day. And you can't certainly serve somebody all in that time. So what would be better? It would be better if we turned your service into a product or what's called a productized service. This is something that's repeatable, scalable and valuable to customers. I'm going to show you an example of a good versus a bad agency. I hope this is nobody's company. I pulled this off the Internet, so I don't know. So a bad agency is this. Look at this product offering list. They do everything because that seems like a good idea. There's no proprietary processes because all these words have no naming and framing on them. They have to do not an rdp, but an rfp, which is a request for proposal for every single piece of work done. They quote jobs, they customize everything. And they have variable pricing. There's not one set fee. Now let me tell you what's terrible about this. You get paid after you deliver the service. It's called negative float in a company. It's basically the worst thing you can do. Doctors, you feel this, right? You gotta go chase down insurance payments. How much fun is that? Colonoscopy, Not a great time. Literally, figuratively. And so what we want to do instead is turn a bad agency to a good agency. We bought this company and the reason we bought part of this company is because look at what they do. Built in, reoccurring revenue, monthly fees. If you do not have that on your business, you're crazy. And I think you have to focus on that immediately. Less friction for customers because click, click, buy, set process. No customization here, no RFPs. Clear example of a good client fit versus a bad client fit. If right now you have a business in which you are customizing just about anything, you're playing what I call a level two business game. It's okay. You just have a lot of upside. This business Highly sellable, previous business, totally unsellable. And the reason why is because we have no idea, day after day, year after year, what else could be coming in. This should be a top priority if you don't already have this in your business. Another thing that Jack talks about is how to earn with your time, not your mind. And it's called asymmetric upside. So we only have 24 hours in a day, which means we can never have asymmetric anything. We can only have linear. Like if I work more hours, I will make more money. We cannot have 52 hours in a day if we want it. But we have a product that we decouple from our time. We have asymmetric upside. Now, I'm going to get slightly tactical with you here because I think you can handle it. You guys have plenty of people to inspire you. I'm not your dancing bear. So what I want to do instead is leave you with something that you can go and make some money on afterwards. Get inspired by the greats, the Ed Myletts, the whoever who's going to come up here and tell you their story, but then go make some money afterwards. Okay, I think you guys seem like you're already inspired enough. There are six types of recurring revenue. I'm going to hit on five of them today because I think they're relevant for your business. How many people in here do not have at least three types of reoccurring revenue in your business today? I love the honesty, by the way. So very few people have reoccurring revenue. Reoccurring revenue is the way to retirement. As an owner, there is nothing more beautiful for when you sell and more fun for when you don't want to work than reoccurring revenue. So let's dig into this a little bit slightly tactical. All right? The first type of reoccurring revenue, you guys know this. This is long term contracts. Think your AT&T phone provider. This is a contract that you have for usually a year or multiple years. And because of that, that contract is worth a lot more. Right? And these are sort of the levels to the game. Retail, AT&T, B2B contract worth more. Which means, like I bet some of the doctors in here, if any of you guys have contracts with governmental agencies, those are worth more when you sell. If you have a contract on here, that's with another business, like maybe you have a contract with a chiropractor's office. If you're a doctor's office, that's a level two contract. This is the most valuable type of reoccurring revenue you can have as long term contracts, governmental preferred. The second type is auto renewals. So this, think about it like your magazine subscriptions, like your Wall Street Journal, right? You buy it once and they sell it to you continuously in the form of a reoccurring revenue. Then you have pay as you go. These are subscriptions worth a little bit less. But I've seen people create subscriptions for just about everything. Teeth whitening, vet visits, dog beauty, et cetera. Loyalty programs. What's fascinating actually is if you look at the airline's balance sheet, I'm sure that's what you guys do in your spare time. Me too. But if you go and look at the airline's balance sheet, what you'll find is that the most valuable component of the airlines is what the loyalty programs and sometimes the fuel contracts. And the reason why is because anytime you can decrease uncertainty in your business, you increase the value of your business. Decrease uncertainty, increase value, which is what you're doing with reoccurring revenue contracts and then simple consumables. And you know, if I'm around afterwards, we could talk about this. But simple consumables are brilliant because if anybody's familiar with, for instance, Keurig, Keurig is worth. Somebody shouted out. I think it's like nine or ten billion dollars. The company's huge. It's billions. I can't remember the number. And the reason that Keurig is worth billions is not because of the machines, it's because of what, the cups. It's because every single day you fill up your dirty little plastic Keurig cup in there and you heat that bad boy up and then you throw it out. And the premium that they get on your continuous spend is high. So this is one of the hacks to business. A beautiful part about reoccurring revenue is it creates what's called a virtuous sale cycle in business. Build once, sell continuously. Build once, sell continuously. Build once, sell continuously. Which is what we're going for in our business. Now we own a bunch of car washes. And so I think car washes are a great simple business for explaining this car wash is basically, if you want to take a screenshot of this can or a picture of it, this shows how we determine what to charge for a description over here on the right hand side. So on the left hand side it shows different cleaning options. But car washes. How Mr. Clean became worth $3 billion when they went public at IPO is because of their subscription reoccurring revenue model entirely. It's because we humans like to think I'm getting a deal. And because of that, I'm going to give you my credit card. Month after month after month, we're going to get to the last P here, which is promotion. So you've got your human that you're writing love letters to. You've got a beautiful productized service, which means that you have an asymmetric upside. You're not linear earning. Then finally, how do you get more people to buy your Right, that's what we need. Well, there's a couple things that are true that I don't think most people do. First is, are you actually selling your clients enough things? The easiest way to make your next dollar is getting your current clients to buy more stuff from. And I remember somebody put at the bottom of this tweet, it was a guy that wanted me to invest in his company too. And because of this, I said no. At the bottom of this tweet, he said, I don't know why, but my gut tells me this is wrong. And I thought, well, let me tell you why you're wrong. $0 cash on cash confirmation bias, meaning that they've already bought from you. You have recency bias. They've bought from you recently, which means they don't want to prove themselves wrong, so they're going to buy from you again. You have a higher trust level because they've already said yes to you. You have a client history and data, which means you know what to sell them. So you can upsell, cross sell, affiliate sell, add subscriptions monthly to annual plan. This is the way. And also, I'm not investing in your business because if you don't get this, you don't get the game. The game is when you write a love letter to somebody, do you hope that you know what they want to hear in the letter? Of course. Is it easier if you don't have to write 4,000 love letters to 4,000 new people? Of course. And so your step from 0 to 1 million in your business should probably start by making this weird assumption that you might never get another client. What if the clients you have right now, today are the only clients you're ever gonna have? The only clients. I bet Gabrielle Lyons business would be okay because she could sell all of us more stuff. She has a nice avatar. It's always easier to sell rich people's stuff because they pay more. And so her business would be fine, but would yours? And the second thing that is so critical to growing businesses that nobody thinks about is most people have what I call a job, not a business. And we've seen thousands of these. There's a hard truth that hopefully you guys are already passed in this room, which is if you're the only sales people, you don't have a job. You have a business. If you have one salesperson, you don't have a sales team, you have a liability. And so you actually have to have at least two humans out there selling. And a human could also be a machine. But you need to have multiple avenues for selling, because in business overall, we have a rule at my company, which is one is none. And probably we sold that to the military because I think that is a good duplicative process. Saves lives in businesses too. Now, let's assume that you have this group of clients. You can never sell them. I'm sorry, you can never sell anybody else again. They have to be the ones to sell you to other people. How many people in here have a process for referrals? Not very many. This is the easiest way to grow your business. At first kind of feels like this, maybe this would be easy. It's actually a little bit more difficult of a process. But let's break something down. I call this the 12% rule. So if you guys don't know this, but the biggest reason why somebody will buy is because somebody else says nice things about you. In fact, what's fascinating is, oh, I hate it when people do that too. Isn't that awful? People say nice stuff about me on the Internet. It happens really seldom. There's a lot of haters out there. But the most important thing you can do is build what's called a wall of success. A wall so big of the winds that you help your people, that they clear out all the ankle biters commentary. And most small businesses don't have that because it's scary and egotistical feeling. Who am I to, like, put up here all these nice things that people. Doesn't that feel kind of weird? Feels kind of tough, right? It feels like maybe that doesn't feel like you're serving the client. But then you look at the numbers. Only 12% of customers will ever leave you a review in your business. And 93% of people read a review before they buy. So if you have no reviews, how much sales are you actually missing out on? You have your salespeople, you have your Persona, you have your productized service, but you don't have anywhere for people to check you out. Oh, and oh, by the way, and how many times do you guys leave a nice review versus when you're pissed? I know the answer. And you guys are probably nicer than most. It takes anywhere from 10 to 20 positive reviews to cancel one negative review. Think about that. So if you are not out there actively getting people to say nice things about you, your business is drowning in a sea of Karens and nobody needs that. I'm sorry if anybody. We were talking about that outside. I'm like, I gotta come up with a new name. Because if that was my name, tough. Okay, now we have a whole YouTube video on how to do this. If you guys want to watch it, it's free. Go check it out. It's on how to get reviews for your business. The number one way to increase your revenue in your business and to decrease the pain in your business is to have a process for having other people to say nice things about you. Alright, so we've kind of got you here. We've got your Persona, we've got your product, and we've got your way to promote your business. These are the three steps you need to get from zero to $1 million in revenue in your business. Now let me ask a question really quickly. How many people in here have a business that's more than $1 million in revenue, that doesn't have one of these stages, if you don't mind being brave? Yeah, a few. How many people in here have a business over a million dollars in revenue, annual revenue? All of you guys have a Persona, an avatar that's named and painted over a million bucks. If you're over a million. Everyone you do. Everyone has a process for reviews and a client testimonial wall and a process for productized service. No. Okay, but how cool is that? So there are like four of them clustered. So I just picked on them. They have two of the three things we talked about. Right. What do you think? I'm just curious. You don't have to answer the way that I want to. Just answer the way you want to. How much more revenue do you think you could do? You said you don't have the productized service, right? No, I sell drug rehab. So we don't get return. Well, we try not to get return. I mean, we will if they need us, but our goal is they never return. So I really struggle with the repeat lifelong customer. Well, but they don't. Okay, yes. What's the. I don't know if this is the right word, but what's like the recidivism rate for repeat customers? It's probably pretty high, maybe not in use. 10%. We get back about 10%. Okay. So you naturally have some return customers, but you already do have a business where I assume you can't cure people in a day, 30 day, 60 day, and some sort of reoccurring revenue on that. Okay, so that might be where you add it. I really appreciate you throwing this out. So the next thing that happens when we have businesses and you were really open to this, so this isn't you. The next thing that we have when we talk to a business, you know how there's that saying, like we've always done it that way, so we're gonna keep doing it that way. We all have that because we have the scars from up, right? Like you have the scars from doing it wrong. You know your business better than any person that's outside of it telling you all this stuff. And so if there's one little tweak to verbiage I want everybody to take here in this room, it's this, how could this work for me? Not why won't this work for me? The second that you change that how to why is the second you unlock millions. So spend some time thinking about those three Ps, which ones you don't have and then how could this work for me? Not why wouldn't it? And let me tell you why. The biggest private equity companies in the world buy based on these three Ps. When you put money on the line, aka I'm going to invest a million dollars in your business and I'm going to do it because I think your business will continue to succeed. Do you think I have an emotional relation to your business or do I have a quantitative relation to my dollar and will it come back to me with friends the second. So we want to learn from other people's homework because if we don't, what happens? The big PE guys keep getting bigger and we, we end up renting from them instead of owning ourselves. So, okay, that was incredible. Thank you for letting me do that. So I thought we could do a few little case studies. Sometimes the best way to learn is called the Socratic method. Right? That's what they used to teach at the universities before they stopped teaching. And so what I thought we could do is you all with businesses out here could think for a second about I have X business and I have X question and how could we apply it? And I can give you some answers and maybe this collective brain power, which is much bigger than me individually as all of you guys can Chime in, too. And we can have some interactivity because we're later on in the day and maybe we haven't had enough of that. Okay, sound good? And I only have, like, 10 minutes left, so we can play for the last 10 minutes. That sound fun. We like that. All right. All right. So when I was at Goldman Sachs, I used to have this boss. His name was Bruce Heyman. And Bruce was a really serious guy. And Bruce was not a very political guy. He just worked hard day after day on us non stop. And Bruce made a lot of money. And then one day, Bruce left the firm. I went and did something else, and I checked in on Bruce later, and Bruce became the ambassador to Canada. And I thought, huh, weird. How does that happen? And then I looked up online and realized that in the US Ambassadorships have a cost. Do you guys know that you could buy an ambassadorship for about 1.7 million? Brucey boy bought himself an ambassadorship to Canada under the Obama administration. And Canada is a prime location because not a lot of conflict is going on up there with all those nice. Hey, how are you guys? I now have adopted Bruce as, like, one of my images in life. And the reason why is, one, how ridiculous that you can buy an ambassadorship. That seems a little sideways. But second, I wish you guys so much money, you, too could look like this guy. This is Bruce. He is just having a time as an ambassador. And I go back to this image again and again because what did I say in the beginning? I want you guys to get really, really rich. But the reason why is because otherwise, these guys run the world, and he doesn't look like a picture of health. And so my hope is that we get you guys in the game, that people in the room, like all of you, grow and become so wealthy, money loses really all definition. Because I hope that humans with a foundation like this, they actually make a real difference. There are a couple truths only these guys know. So for this time, we've talked about building businesses, because I want to tap into the fact that you guys already have them. But what do you think these guys know that nobody else does? Anybody know who these guys are? You want to shout it out? Slim. Carlos. Slim. Richest man in Mexico. My fellow Latina Sub. Yeah, that's the only way you'd know that. We got any Indians here? Dots, not feathers. There we go. Yep. Okay, then you might know this other guy on here. Yeah, there you go. Richest guy in India. What else? We got the Koch brothers, and we got the richest man in the world. Bernard Arnott CEO of LVMH so this group of humans, these are the richest men in the world. And what do they know that most people don't? They know something that Bruce knows too. And it's this, that it's easier to buy profits than it is to build them. In the US in 2022, 5.8 million businesses were started. In 2000, less than 1 million businesses were started in that year. We've had 9% population growth and we've had 500% increase in number of businesses started. It's never been easier to start a business. It's never been harder to have a profitable business that scales. It's just supply and demand, good old economics 101. And so what I want to push you to do even further is if you own a business today and you're not thinking about buying a business, I think you're crazy because you buy profits and realities, not startup dreams. And we've certainly seen that play out. This is the difference, I think, linear earn versus asymmetric buy. My goal for everything that I do. We have this vision that we want to have 100,000 small business owners who got there through acquisition in the US Because I want to have all of your faces on a slide like this to replace these. Thank you. And the problem is these guys started off just like us, and then they got consolidated and bought and went public and they lost it. They lost the it. I think bank accounts and money equal one freedom. And unless you have it, it's really hard to care about much else. How hard is it to eat healthy, to go to the gym, to do all the things if you're barely subsisting? It's not very easy, is it? And I think that's in fact by design. So we need more builders now, today than ever. And I want to tell you a story. This is Mr. Yokohama. Mr. Yokohama ran a profitable business in Japan for decades. This business was so profitable, it set his family up for generations. And yet what is happening to Mr. Yokohama today? His business is shutting down and he is selling it for $00 dollars. A business that makes money every single month, year after year, generation after generation. And Mr. Yokohama is not alone in Japan, there is a massive, massive downturn that is heading towards them from this wild idea that the next generation actually doesn't want to take the helm of the businesses that are profitable and have built up the communities around them. Why? I want to be on TikTok or something, right? Nobody wants to be a plumber. Everybody wants to be a YouTuber. And maybe that's why the military is having a hard time recruiting. And maybe that's why we need more world changers. Because I'm scared about us becoming Japan, which is why I'm here. I stand against this idea that the very, very big should continue to get bigger and we should thank them as we pay them. I don't like that idea very much. And yet what's fascinating is all around us, we're seeing communities shutter businesses during COVID 60% of businesses that closed their doors during COVID listed on Yelp. They never opened them again. Just pause on that for a second. 60% of all businesses happening all around us. So we need more owners in this country. And my idea is that you guys are one of them. But let me show you why it is because pervasively, we do not own anything in our country today. Three companies control 98% of the food market in our country today. More single family homes in 2022 were bought by institutions than they were humans. Just imagine your neighborhood and then next door to you is not Susie and Bob, but McDonald's. And the next house is KKR. Would you stand for that? And yet it is happening all around you. And in fact, it's even happening in our food supply, which probably doesn't surprise anybody in the health industry, right? Which is why we're sicker and fatter than we've ever been. Because the few own and they worship at the altar of profit. Then there's something also terrifying happening. The big companies are continuing to get bigger and bigger while the little guys close. And why do they close? Because people like Mr. Yokohama don't have anyone to pass the torch down, which is a big problem. And so I'll leave with a quote from one of my favorite books of all time, which is, and I don't like it for the political ramifications that people have associated with it one way or the other. I don't believe really in either party. But what I will say is that there are humans who hold up the world and there are humans who want to burn it down. And you all get to be the builders, not the burners, if there's enough of us. But at a certain point, we're teaching a generation of people to take and we're teaching a generation of people to burn. And we need to teach the next generation of people to build and buy. And so what I hope from this room is if you implement anything today, here's my ask for you back. Pay it forward. Take the next Young business person who looks a little bit like you and teach them the secret. Because the truth of the matter is there are not enough of us. There are not enough of you. And so your payment is to actually pay it forward. All right, now I want to get, for these last couple minutes here into questions. If you like the slides, you can get them here. It's free. I think it's just you click on it and downloads or something. Now what I want to open it up for, for these next couple questions, you could probably just shout it out because it's a small room. We can go anywhere with the questions, and we can also go for your particular business. So is that okay if I commandeer this for five minutes? Yeah. Okay. I don't want to get in trouble because that's a team guy. Wife in the background. And if you guys think Navy SEALs are dangerous, you haven't met their wives. It's very dangerous. Okay, who's got a question and wants to start? Yeah. When you buy a company, do you consider it tangible value? Because I recently tried to measure that and I want to see how you can quantify that. Yeah, so? Well, there's a funny way. There's actually like a tax specific way to answer this question, which is when you buy a business, you can either have assets or you can have what's called goodwill. Goodwill will would be intangible value, things like ip, intellectual property. And so when you're buying a business as the buyer, you want everything possible to be in the asset category. Just Uncle Sam doesn't like goodwill. He's gonna tax you a lot for it. When I buy a business, I have a couple different rules. I buy based on profits and realities today, not hopes and dreams tomorrow. I let the big boys do huge projection spreadsheet with all the things about what magic they might be able to do to the business. And I buy businesses for anywhere from 2 to 5x their current profits today. And so that's the game I like to play. As you get more sophisticated, you can make more sophisticated models. But where I see people lose money because the money's always lost in the implementation is you pay for somebody else's dream. No, no, I'm only paying for your reality and what you've created. That's a good question. Any other questions? Case studies, things? Yeah. What are your top nuggets for de risking the purchase? There's a lot to this question. In anything you do, there's risk. There's actually a fascinating study that shows that right now in the US the Youth has the lowest risk propensity we've ever seen in this nation, where we're two thirds less willing to take on risk in this country, which maybe is a reason why these businesses are going without owners. And so I don't think all risk is bad. I'm really categorized on two things, business risk and financial risk. And so a lot of the ways that I de risk businesses is in deal structuring. Have you guys, let's play an example. Somebody willing to tell me how much their business does in revenue right now? Somebody want to shout it out? 23 million yours does. 23 million? Yeah. Let's give her a round of applause. Okay. We'll see if this works with a big business. But let's say, so Your business is $23 million in revenue. And I say, I would like to buy your business for $1 billion. What would you say? Yeah, of course she'd say yes, right? Wrong. Okay. The reason why that's wrong is because there's something called price and terms. Everybody focuses on the price. What we want to control is the terms. So if I wanted to buy her business for no risk, I would say, I'll buy your business for a billion dollars. And you say, great. And you sign and you don't look at the little terms and conditions. I would say, I'll buy it for a billion dollars paid $1 a day at a time. And you would go, fuck, this is a bad deal, Cody. Gabrielle said she was nice. She's not nice. And so the way that I de risk is my deal terms and how you could do that, for instance, is things called milestones. Earn out. Tranche based investing basically means I will pay you once you validate the things that you told me to be true. When you go and buy a business, realize you are always operating at an information disadvantage. Always. Just like if you go into the doctor and the doctor tries to diagnose you because you say you don't eat anything bad, you work out every day, you have no idea why you're obese. It's just happening to you. The doctor is at an information disadvantage. You always know more. And it is the same with buying business. So the way I decrease risk is terms and humility. Okay, I think we have time for like one or two more questions over here. You think, what's the best place to find people that are selling businesses? If. If you want to buy it within a specific niche, for example, complementary companies. What's your niche? We are in fitness equipment. Fitness equipment. So maybe you'd Want to buy something in the fitness realm, potentially in the health realm, potentially. You could potentially want to buy something in advertising, maybe, because you could offset your costs. You could potentially want to buy something in sales because maybe you need a better sales force. Right? So this is what I call my core satellite investing strategy. So. So your core business, all the things you spend money on, all of your competitors are your potential satellites. So let's play another game. How many people in here. Wait, let's do this. Everybody close your eyes. Trust. Tree. Trust. Fall time. Everybody close your eyes for a second. Okay. How many people in here would sell their business and keep your hands up. Would sell your business at the right price and the right terms? Raise your hand. Keep it up there. Keep it up there. Keep it up. High, high. Okay, now open your eyes. Keep your hands up. Okay. Where do you find businesses to buy? All around you, everywhere, everywhere you go. Every owner you talk to is a potential person to sell to. How many people here are in fitness, sales, advertising, or health? Raise your hand. I don't know. It looks pretty good to me. So one of the biggest misconceptions on buying businesses is that you have to go to, like. It's like real estate. You're like, I go to the site, I plug in the thing. The beautiful part about buying businesses, it's the wild west. We haven't nailed down the process where it's become normalized. And so your best targets are probably people you already know, probably vendors you already have. And if not, I own a company called BizScout IO. You could go there and search for businesses to buy, too. All right, thank you guys so much. I appreciate every single one of you.