I Get 16M Views Monthly And Then I Buy Businesses With The Cash (FRAMEWORK) | Codie Sanchez

I didn't just jump all the way into the content game.

Ladies and gentlemen, make some noise for Cody Sanchez! The 3-year journey to build your audience from zero to where it's at now, like, how did Cody do it?

I started this when I still had a quote-unquote job. Don't create content until you have a story worthy of creating content about. A lot of people tell statistics, very few people tell stories.

Your personal mission, what is it?

We want to create 100,000 small business owners, and I want to create 1 million financial I don't think it's healthy for an economy, a community, or a country for the very few to own everything. We should have diversification of ownership and we teach others how to do it.

You talked about how the dream of retirement is basically done.

This generation knows that to be true. We will never retire as a nation going forward. We won't have our Social Security. We won't have pensions. Most humans don't own equity, don't own homes, don't have multiple income streams. The retirement part of the American dream is no longer alive.

So basically, the story here is maybe 3, 4 years ago, you were talking about building the Codie brand, right? The Contrarian Thinking brand. And the rise has been really quick, right? I'm really proud of how quickly you've risen, right? I think when we talked about this maybe a year ago, you were spending— what was it, $100,000 a month or so?

Yeah, sounds about right.

Yeah. And how big was the team then?

I mean, probably like 4 or 5. Does that sound right?

For content, right?

Yeah, I think content, maybe that was some interspersed other stuff.

How does that look now?

We have a team of 12. Some of that is, now what's happened is content has become integrated with our investment team and with our portfolio companies in a lot of ways. But, you know, we spend hundreds now of thousands of dollars a month on a mixture of content, recruiting, operating.

Yep.

Um, and I anticipate that continues to, to grow.

And when I was talking to Alex, I think they're spending around, so they've basically doubled the, the, the cost on the content side. So they're spending like around $120,000 before, now it's maybe $240,000 a month.

Yeah.

And the team's maybe 12 to 15 people. So same question I'm gonna ask it to you too, is what percent of your deal flow comes from your content?

Very little of it is like a direct DM on Instagram. But I would say what happens when you start creating content is it's easier to get somebody to pick up your phone call. It's also easier for somebody to understand who you are and getting a deal done. So like, you know, currently I'm looking at this accounting company that I want to integrate into some of our businesses. And I got a referral from somebody else to this business, but I never would have gotten that if I wasn't all over the internet talking about the fact that I want to buy an accounting And now we've looked at like 50 of them. And so direct, not as many, indirect, many.

Got it. So overall it's still like 100% because the brand helps.

I think so. Yeah, yeah. We don't do any search right now. So there's no— every private equity fund has a biz dev or a search division or origination division. We have none of that. It's all some mechanism of inbound or referral.

Interesting. Yeah. And the reason I asked this question too is because I have friends that are like, yeah, you should ask like Alex, Leila, Cody, like, does the content really help? Because like, dude, they can just go buy businesses. Like, why not just go buy it directly? Like, why even bother making content, right? And I think there's, aside from just sourcing all your deals from it, I think there's much more benefits to kind of quote unquote becoming famous. Do you want to speak to that at all?

Yeah. I mean, one, I think you have to like it. I think if you don't want to communicate with people and serve them, you probably shouldn't create content online on the internet because as you said before, people feel it. People feel if what you want is like, I wanna be famous and I want you to know my stuff and I don't really care about serving you, I don't really think that works over time unless you're an incredible character. And if you're an incredible character, then that can work and you can be an actual celebrity who doesn't really care about you, but they're just so charismatic that it works. But for most people who are business people, you're not that.

Right.

And so you either have to really have a mission and really want to help humans or just don't do it and go build a business thing. And that can be awesome.

Right.

But it's been hugely beneficial from the fact that I don't actually want to be the next Blackstone or KKR or Carlyle. If all I wanted was to have a multibillion-dollar portfolio of small businesses, I wouldn't be straight up creating content. I'd be buying them like I did for the past 15 years. Like, how else do you think I've done? You know, I have businesses that have done hundreds of millions of dollars in rev. I just keep doing that. But I realized a couple of things. One, owning hundreds and hundreds and hundreds of these is really, really hard. So once you get to a certain scale, there's a reason private equity companies only buy businesses that are $25 million in revenue above, or even $10 million in EBITDA. It's fucking hard at scale. And we saw that with Thrasio, and we knew a bunch of the guys who were doing Amazon FBA roll-ups. Great idea, hard in practice.

Yep.

So I think some of the companies out there that are trying to do that today, I think it's going to be really hard. I'm not sure it's going to work. Second, at least right now, I'm sure somebody will figure it out eventually. Second, that's like everything I stand against. I don't want to be Blackstone because I don't think Blackstone should exist in this way. I don't think it's healthy for an economy, a community, or a country for the very few to own everything. I think that we should have diversification of ownership and not as evidenced by the government, but as created by those of us who know how to do it and we teach others how to do it. And then we can have roll-ups and we can buy and sell. But I don't think it's good that 25 to 30% of every single sector in the US is owned by the top 10 companies. That's not a healthy economy.

Yeah. with education growing up. I mean, education's everything, right? I think that's true wealth. And I think the problem is we aren't taught to play the game of like finance or business or taxes, like all this stuff, right? Like, or networking. And you're trying to teach that game, right? So that is, again, it ties back to your mission. You have a background, like you were a reporter, you worked at Goldman. Like we're talking about the skill stack here, like the integration of all your backgrounds, right? So The 3-year journey from you to build your audience from zero to where it's at now, can you walk us through that? Because I'm sure people want to emulate it. There's like, how did Codie do it?

Well, I started, one, a couple things. We actually found a study that was fascinating that answered this question. Should you quit your job to go all in on the thing you want to do, your side hustle? When should you quit your job? And they surveyed 5,000 people, who decided some to quit their job, some to stay through the period of their startup. And what they found is of those 5,000 people, the ones who continued into their startup for more than a year while working a corporate job succeeded one-third more often than those who didn't. And so the reason I say that is because I started this when I still had a quote unquote job. I was a partner at the private equity fund and I had bought in, but I didn't just jump all the way into the content game. And before I was a partner at the private equity fund, when I was an employee at an exec and owned part of the other company at another finance firm, I invested in the private equity fund, like kind of putting my toe in so that I could maybe make the jump if I wanted to leave W-2 position. And so if anybody's listening to this and thinking, when do I start the content game? Should I go all in? I think you don't create content until you have a story worthy of creating content about or a skill set worthy of creating content about. So if you want to Logan Paul it, you can.

Mm-hmm.

create incredible stories and you can go super viral.

Spectacles.

Right, exactly. That's an option. But if you wanna be seen as an expert, which I think a lot of people do in their content, you've gotta become the expert first. And I don't buy into this thing where a lot of people today are saying, hey, I wanna become an expert on marketing, but I've never run a marketing company, right? And they can't compete with somebody like you who's done this for years. So I would say step one Either come up with an incredible story or become an expert on something and then go create content around it.

Also, just sorry to interrupt.

Please get in.

The you do a really good job of storytelling, right? And so, like when I talk to Alex and Layla about this, it's like the three of us, I at least for me, do not like direct a camera where I'm lecturing like you should do it this way. Da da da da da, right? But I think you've learned a lot from of storytelling. Maybe back to your reporter days, right? Is there are there any like key things? Any takeaways there that you can share on storytelling? Because I think you're just a natural at it.

I mean, practice makes perfect. My family had 4 chairs in my parents' living room, and my brother and I always joked that we eventually melted into those 4 chairs with my parents because we would tell stories continuously around them. That's the way that my family communicated, and we would have to debate our ideas, so we were very boisterous. my brother is more interested in politics, more aggressively interested in politics than I am. And so he would say a point that I thought was crazy and we'd go at him. And then my dad would have another one and then my mom would have one. We would all sort of debate. And so for that reason, I think we got good at trying to convince others of our viewpoints. I also did debate team back in the day, 'cause I'm super cool.

Yeah.

In college. But from a storytelling perspective, oftentimes, I think the answer is, if you want to tell an incredible story, you have to ask yourself, so what? And you have to ask yourself, so what, 10 or 15 times before you tell the story. And every time I think about a story we're going to tell our audience, I always think, so what? Why do they care? So what? Why did this happen? So what? Why are we saying that line? And most people tell a story because they think it's interesting, but they don't actually know the so what. And that is the difference between a story that people care about and share and one that they don't.

Do you have an example of that?

Yeah. So for instance, the other day, the difference is this. A lot of people tell statistics, very few people tell stories. And so the other day, I have a team that does research for me. So one of them was researching the difference in pay between top CEOs, and they found a trend that they thought was interesting. At the very top, of the best paid CEOs was like Peloton and another company. And then Disney was lower down and Ford was lower down. And they said, we think this is interesting because Disney and Ford are much more profitable than Peloton, who has basically burned through all this cash and whatever.

Mm-hmm.

But look how much the CEO's making. And I was like, okay, so what? And when they give me statistics, we dive down. So, so the so what is, well, the average person is gonna think that's weird. Why are these Silicon Valley companies getting this and whatever? And so I can say, so what? Well, are they funding this company versus that company? And we go down this rabbit hole, and that leads to a really good hook.

There you go.

Yeah, so instead of the story being, this CEO makes more than this, it's Silicon Valley is lighting money on fire by paying these CEOs, and you're never gonna believe how much they do. And then you go this one, you go, do you know the difference between this? And that's how you tell an interesting story, because you don't just lead with the stats, you lead with the story.

The inflection point, I guess. So when you started creating content, like, was it like Shorts, Reels, TikToks that helped you take off? Like, what was it that like skyrocketed everything?

The newsletter was the first thing, actually. And I think that's because the newsletter was the least intimidating to me. Writing is a lot easier, I think.

Because you're a natural writer.

Yeah. And video, like, requires lots of stuff and I don't know how to work any of this stuff and then I don't know how to edit it. And then, you know, there's a lot of friction there. But writing was really clean. That was when Substack came out for the first time. So I just started writing the newsletter and then I started really enjoying that. And then I started asking myself, so what, with every subject line, which is really important, and every story. And then I started getting really obsessed with growth hacking newsletters. And so that ended up growing us the most because I became obsessed with how to grow non-traditionally. And it's something that I would be curious your take on this. I get so annoyed with growth hackers these days because they're not growth hackers anymore. Back in the day, they were growth hackers. You were like in fucking Facebook groups, Reddits, doing crazy things, doing one-offs. We hire growth hackers and they're like, well, the PPC costs are— and they just, all they do is ads. And they're not even that clever on ads. You know, the ads are like, you know, kind of boring. And then when Facebook eventually kicks you out of an ad account for some reason, your growth stops. And so So the biggest difference I think between my growth and others is I just got really curious on how to grow without spending any cash because I didn't see it as a business. I thought it was just like a little blog and I wanted some more people to watch. And because I did that, I grew pretty fast. And then I realized, oh, this is a business. And then I could spend money on people eventually.

Got it. And with your newsletter, you were writing daily or weekly?

Weekly.

Okay. And did you, to spur the growth on that, I'm assuming you bought ads to grow the newsletter?

I didn't spend on ads until maybe even less than a year ago, 8 months ago or something like that.

Got it. So what caused the initial growth?

I remember, well, I was in the Hustle. Remember when the Hustle started trends?

Yeah. Oh yeah. Yeah, I saw you.

Yeah. So I would basically find communities where I thought we could add value with our stories. And by we, I mean me at the time. And I would do a post that was very value-specific, hyper-targeted, Lots of give. And then I would say, if anybody wants, I'm happy to comment more details. And then I would drop the newsletter link.

I remember that. Yeah. That's how you grew in the beginning.

You, that's how I grew.

It was a lot of hand-to-hand combat. And I don't think a lot of people see it. So, oh, like, yeah, yeah. Oh, she grew, she has a team and all that. They don't see, I'm trying to get people to understand all the work that goes in the beginning.

Oh yeah.

And it's like, maybe it could be a year or 2 or 3 years of you just getting punched in the face and getting nothing.

Yeah, it was, it was a year before I hired anybody and we didn't make a penny on any of the content. Everything was free everywhere. for 2 years.

Yeah.

And then it started costing me money in year 2. And then eventually we started charging for some things. So that started getting offset. But yeah, I mean, you're just not going to beat people if you're not obsessed with the thing that you're doing. And so I think obsessed trumps everything. I was obsessed with writing and the game of newsletters and I found it fascinating. And I love the immediate feedback loop that happens. So if you can learn to love the game, then you can just play longer than anybody else. And it's the only unfair advantage really that exists if you don't have cash.

Got it. I want to come back to that one. And so the— but would you say the newsletter is the cornerstone of your business? Because it's like you push your products in there.

Yeah.

You sell ads in there. You tell me what you do in there.

So yeah, I think it is the cornerstone of the media business. It's also my favorite asset. I love newsletters and learning through reading. And so, yeah, I mean, let's talk technical. Newsletters are incredible because they have the highest conversion rate of any channel because you own the channel. It's an owned channel, not a rented. Zuckerberg can't change if people see your stuff or not. And then second reason is it's long form. So you can really engage with people there in a deeper way. And then the third reason is that it's pretty low barrier to entry. And so if you're gonna start somewhere, you don't have to have all of this friction, but then there becomes a turning point where quality is really hard to pay for. And if you're good at it, most people do it sloppily, and so you can be incredible. Whereas video, I find a lot of friction, a lot of hard stuff up front, but the really good video people are incredible, and they're actually hard to touch. I can touch the best newsletters out there. I can't yet touch the best video. I'm not even close to touching the best videos yet.

Well, I'm gonna come back to the video in a second, but on the newsletter side, when you were growing it, Well, A, let's just start with how big is the newsletter now? How many subs do you have?

550,000.

Got it. And then in the beginning, I think in addition to the groups, you were tweeting a lot too. And like, were you— where were most of your email subs coming from?

Mostly groups for an extended period of time. And then Twitter because people could share it. But I had to be real thoughtful on how I dropped it in Twitter. You can't just drop your newsletter link. And then collabs, put in my newsletter and other people's newsletter. Those were like the first 3 flywheel segments that got rolling.

And is that like the custom collabs or you guys are using SparkLoop or?

No, we were so unsophisticated. That was like, hey, you wanna be buds? Can I send my stuff out?

Got it, I love it. How much are you spending? You can say, I don't know too, but how much are you spending per email through paid right now?

So it's bad that I don't know this, but I think that she was telling me the other day that we got, it depends on platforms. Like on one platform, I think it might be Facebook, it was like 50 cents.

Oh, wow.

Yeah. And then, but it gets turned off all the time and we have all these hiccups with them constantly because we talk about finance stuff. And so even if we're compliant, compliant, compliant, we just get kicked. And then on some channels it's like $3. But we do so little paid. Like it's somewhere where I need to get much more intelligent on.

So I have to assume you're making per email, you're making way more money than $3 per email. And so you could just turn the jets on.

Yeah, I suppose if we heart— like, I don't do a lot of ads, so we do broad-based sponsorships with sponsors across multi-platforms. And we have all these rules about why, because I don't really make most of my money on this.

Yeah.

Um, and so we'll do it. I like money. I'll do it.

Yeah.

But, uh, but you won't see one in every single one of our newsletters. So yeah, I imagine if I was set up like The Hustle and I wanted to do an ad in every single newsletter and grow my email list intelligently, I could 1 for 3 spend really easily.

Got it. And to zoom out, just so everyone understands too, the reason you do the media stuff, correct me if I'm wrong here, is because you are trying to feed the holdco, right?

That's exactly right.

Got it. Okay, so we're going to come to that in a second. Is there any—

And to be fair, The reason that I— the reason you should do media, if you're going to do it, is that you have a belief that attention in some form can be turned to profit. And so I wasn't sure in the beginning if we built this big attention flywheel, I would get more deals. Did I even want to do more deals? I had a lot of questions. I just thought it was fun. And then at some point I realized, oh yeah, I do want to do more deals. This is one way I think we could do it. And then I go through I've gone through periods where I'm like, man, actually I want to take all this attention and I want to put it towards one really big platform play and then do a platform acquisition add-on to it. And so I think it'll change over time and that's okay.

That's the struggle, right? It's like sometimes there's just so many good ideas and it's like you have to stay locked in.

That's right.

Otherwise it's just like you end up going all over the place. So how do you stay disciplined?

Well, we, I mean, I don't think, you don't see me talk a lot about our companies that we own online besides Contrarian Thinking. We have a portfolio of boring businesses. actually sold a lot of them lately just into this market. We had crazy valuations. And so then I had to ask myself, well, if I'm going to sell all these, what are we going to do with the cash? Like, where does this go next? And the answer right now is that I think that we're in for a little bit more pain.

Mm-hmm.

So I'm kind of looking for what our next acquisition targets are going to be. Um, and so I try to think about deals and revenue lines and business decisions I need to make like many marriages. They're really easy to get into. They're kind of a bitch to get out of. And so you wanna make sure that you wanna stay into whatever you're gonna do for 3 to 5 to 10 years, right? And so I don't always do that. I'll take a few, you'll see me take a few really tiny risk trades to see if I wanna do it. So for instance, I might invest, like I invested in this loosely SaaS, chat service that supports our businesses.

Interesting. I never heard that phrase, loosely SaaS.

Yeah, it's like there's probably a technical term that your friend who owns this place would know. Like, it's almost— it's not no-code SaaS. It's like a level above that, but highly powered by humans, almost like augmented service.

It's a managed service almost.

Yeah, exactly. And there's some intelligent components to it with technology, but it wouldn't blow anybody away. And, and I did this deal and then I realized, ah, This company, this will be fine. It'll be a cash-flowing asset. We'll probably eventually sell it, but it's not going to be huge. So this isn't, this isn't where we want to go. And, um, and I think it's important to try a few small bets like that because you actually see companies all the time do that, right? Like they just do it inside of one company. So you don't realize that they're taking risk, you know, small risk bets.

Got it. Um, I want to come, I want to go to the holdco section in just a second. But coming back to the content piece again, how does your week look like with the content? How much time are you putting into it? And also, there's the short stuff, right? You're doing 2 podcasts a day. It's live. It's a lot of work, right? So how much time are you putting into it? And which channels are you putting the most effort into?

Yeah, I'm pretty segmented. So Mondays are meetings. My Mondays are crazy. tons of meetings every single Monday. I like to front-load pain. So I like meetings the least. Yeah. Tuesdays are almost entirely wide open. And those are just for deep projects I need to work on, typically within the business, not content related, although I'm writing a book. So now that's stealing some of that.

Yeah.

Then Wednesdays are allowed for half-day meetings. And then the rest of the day is deep work. Again, not content related, other items. Thursday is filming. So every Thursday we typically film. And so So in the morning, I'll get a couple hours to think about what I want to film. The team will have sent me a bunch of stuff. I'll be parceling through that. And then Fridays I have leadership and financial meetings and then filming and/or podcasts or stuff like this.

Got it.

And that's not every week, but that's like my ideal setup.

It sounds like 40% of the week, probably 30 to 40% is content then.

Yeah, I think that sounds about right.

Got it. And how is the content team structured right now? Or you can just mention the key players.

No, I mean, the content team right now, I guess I try to steal a lot from looking at Disney. And so basically, I don't think you can handle more than 5 execs really well as a leader. And so you can have sort of like 5 chiefs. I've had up to 8 or 10. It's doable. It's kind of miserable. So I basically try to only have 5, which means the head of content is one of the 5 that's allowed to report into me. So, so I guess maybe it's more reasonable to say I spend 1/5 of my time on content. But this gentleman heads all of our teams. So he heads a— we channelize by segment or we segment by channel. So he heads somebody who heads all of the video components of our business. So that's Instagram, YouTube, TikTok.

Yeah.

And anything that would be video related is run by another guy. Then there's a written social team. So that's like Twitter, some of the written stuff we do for Instagram, LinkedIn. And then there's a newsletter editorial team, and that's kind of put together like a traditional newsroom. And actually, we just had a really exciting hire there, so that's cool. So we have a new head of content. And then underneath him, he also has a content ops team that just manages all the difficulties between those two.

Posting, whatever.

Posting. And is it on brand or not? And what happens What happens, you know, when we do something that we don't like and we need to get rid of it, all that jazz.

And just to be clear, um, so for like Twitter, LinkedIn, is there just one person focused on each channel, or is it one person just touching the written social platforms?

Right now, and I'm not sure this is the right way to do it, but there's just one person. And almost all of it stems from like 2 things: our newsletters and our YouTubes. And so they sort of affect everything else that we do.

Um, those are your pillar pieces, right?

Those are the pillar pieces. And then I do a lot of, not a lot, but a decent amount of news segments. So a lot of the time the research team is pulling stuff where I'm like, huh, like after today, I'm like, I wanna see what the vacancy rate is in Los Angeles right now in office space.

Oh.

And let's get real numbers. And so I'll ping them and say like, can you send that to me? You know, or when like Beyoncé and Taylor Swift stuff was going on, I was like, let's see who's actually gonna make more in their, you know, tour transaction overall and how much more per tour date did Taylor make than Elton John? previous former grossing.

And so yeah, I bet you he'd be down to do an episode here because I know you do these in-office episodes. That's a whole side thing. But, um, oh, that'd be cool. So, okay, the last thing on content then is, um, Alex and I talked about this concept of the deal box, right? So Warren Buffett has his circle of competence, but yeah, um, but also there's like a content box, right? So like, yeah, for me, it's like these long— I've realized, I've realized again, because my, my video team's like, dude, like When you do these long-form ones, it's like day and night. Your energy's next level, right?

Oh, interesting.

Versus when I'm direct to camera, I have no energy. I just do not give a shit to do direct to camera. So what is it for you? What's within your content box?

Yeah, that I like to do. Well, if you want to succeed in life, you have to figure out not what do you want out of life, but what are you willing to sacrifice to get what you want, right? And so typically I work backwards and I go, What is the thing that I want so badly that I'm willing to sacrifice just about everything else to get? And then what are the 3 to 5 activities that will most drive my likelihood of success? And if one of those things is direct-to-camera content, then fuck it, I'm doing it.

Cody, you talked about how the dream of retirement is basically done. It's gone. Can you elaborate on that?

I think this generation knows that to be true. Anybody 45 and older will probably wonder, but there's a few different ways to think about it. One, on average, our generation stays at a job for 3 to 5 years, 5 being the outlier, 3 being the norm, and we no longer have pensions like we used to. And I think in the past people thought that you spent your life in pursuit of one thing and you stayed there for a period of time until finally you were rewarded for that loyalty with some sunset cruise at these Silver Age terror period of your life. And now our generation, one, I think is sort of uninterested in late retirement, maybe curious about early retirement for a period as evidenced originally by Tim Ferriss. But my belief is we will never retire as a nation going forward because we won't have our Social Security system to stand alongside us. at current projections, and because we won't have pensions in the same way we do historically, and because most humans don't own equity increasingly, they don't own homes, and they don't have multiple income streams. I think there's a little bit of an issue in the world today. I think there's lots of solutions, but that's why I think the retirement part of the American dream is no longer alive.

Right, and we'll come back to that in a second, but I think also your personal mission aligns with this.

So just for people that don't know your personal mission, Yeah, well, we want to create 100,000 small business owners, and I want to create 1 million financially free humans. Hopefully we can do more than that, but my belief is that we need skin in the game, things that you and I have, the ability to see if we do X action at work and it drives Y profit or value to the company, we get some reward for that. And over time, we get aligned to our incentives in our company so that we have ownership in what we do. And the way I know how to execute that the best is for small businesses. I mean, I was just reading, there's a story going around that I've talked about a bit about what's happening in Japan and the fact that increasingly we're seeing small businesses sell for $0 or just shutter across the country.

And some homes are just abandoned too.

Abandoned, yeah. And because the next generation doesn't want to buy them and there's no infrastructure set up for that delivery to happen. And so I think that is already happening in the US. And in our worlds of Twitter, you know, sort of back and forth, it seems like everybody's looking at small businesses. But, you know, those people live on the coasts, like where we are right now, and they're not in cities in the middle of the country where those places are shutting down. In fact, how fascinating is it? We're in a skyscraper today, and look at this place. It's fucking empty.

Yep.

The downstairs, empty. 2 of the largest, most premier spots. We were just in another skyscraper in Burbank, And 32 stories high. I asked the guard, I'm like, nobody's here today, what's going on? He's like, yeah, Friday, it's like 100 people maybe max in this building. Think about that.

And what's the typical capacity in that building?

Oh my God, well, I mean, just one floor, this is probably what, you could probably have 150 people at office capacity in here, which means this is, there's probably 10 of these on each floor. So we're talking about a building that has, Thousands and thousands, if not tens of thousands. And we're at 1% capacity.

I want to come back to this because this building itself is an asset, right? Earlier you talked about the importance of owning assets. Why is it important to own assets? Why is it important to own equity?

Well, it's certainly true that you can't take your W-2 with you. And also the country is set up from a tax perspective to advantage those who are either 1099, which is fascinating because in California they don't want contractors. They say it's bad. It's actually better for your taxes in a lot of ways, or people who have ownership in something. And so most people, I think, who are in W-2s today don't realize— they don't realize what they're being penalized by from the government on a taxation basis. And also, you know, these small businesses all over the country, they're assets that you can invest in both with time, equity, or expertise, but they're also things that you can pass on to the next generation. And, you know, like, I don't know what you want to do with your businesses next, but you can sell it for a multiple of your profit, right? And you've bought and sold businesses and done it that way. You can't do that with a W-2. And so there's no real way to exit. So if retirement doesn't happen, there aren't pensions anymore, you are in your W-2, it's, it's not tax advantaged, and you have no ability to exit either to retirement or to selling your business, like, what are you going to do? And so I think we need to restructure the way that we have ownership And employment in this country. And it doesn't mean that everybody should be an owner, because you and I know how hard that is. Like, owning an actual business can suck. Um, but it does mean that you want to get somewhere where you can get some of the benefits of both the tax structure and the asset.

Yeah. And also, I mean, the assets continue to appreciate over time, and it's, you know, the dollars that you hold depreciate, right? Um, right. And so it's like, well, and then this is how people continue to get screwed. We— so we have, um, so I have a friend actually That, um, he, his whole thinking here is like, the only time I'm going to buy depreciating assets, like a car, for example, or buy like stupid stuff is with my, not my earned income, but my investment income. Like, how do you think about that?

Yeah, I think there's the smart rich, which was probably created, right, by Robert Kiyosaki, Rich Dad Poor Dad, but eventually essentially said, hey, I want to buy, uh, I don't know, a new house, which is $1,000 a month. In order to buy that new house, instead of just paying out of pocket, how could I acquire some sort of asset that would pay for that $1,000 a month. And it's a lovely little triangle. You know, you get the, the fun thing, you buy the asset, the asset pays for your fun thing. I try to think about it a little bit bigger than that. I feel like that's a great 1.0 framework. The 2.0 framework is we only have so many hours in the day. We only have so many talents. How can we pair the least amount of hours in the day to our highest talent for whatever our acquisition is? And so as opposed to thinking, well, I just want to cover this $1,000 payment that I have, why wouldn't I think instead, all right, if I'm going to spend time on investing in something, which means I need to understand it, I need to fund it, and I need to manage it in some way, shape, or form, what's the best way to do that for my time and talents? And so I need to think about a framework for that. But for me personally, that means that I'm looking a lot, a lot, a lot. I'm pretty disciplined and looking all over the place. And when I make a transaction, I hope it pays for 50 fucking houses as opposed to just replacing one for one.

What do you think your superpower is?

Because ideally you're spending most of your Yeah, yeah, it's something I really obsess on all the time. I think most people, including me, you spend— you sacrifice what is important for what is urgent constantly, every single day. And urgency is so much louder than what is important. Importance is quiet. It's persistent, but it's quiet. And so my unique skill, I think overall, usually is a stack with everybody, right? I can't remember who came up with that. I think that was Scott Adams, the skill stack. The skill stack.

Unique skill stack, yeah.

And so if I think about my unique skill stack, part of it is certainly that I've done acquisitions for a long time. Another part of it is media or content. Probably another part is selling people on a vision that I have so I can get other people to come along with me. Another part is probably simplifying things and getting to the core of an issue. Now, many things I'm bad at, so I'm definitely not the most quantitative mathematically. I'm not the best at like modeling and spreadsheets. I'm not the most focused I can be very highly distracted. I don't have a good memory, so I forget stuff a lot. I try to spend more time on the first and outsource a lot of the second, which I know you do the same thing. My day often, something I stole from Jay Papasan, which is the one thing. Basically, I write down what's my one thing every single day that if I did this, 80% of what I need happens and I get it from 20% of the action. If I did this one thing, how could I make everything else irrelevant? Usually that one thing is a who problem, not a how problem. It's who can I hire? Who can I go to? Who can I talk to that's an expert on this as opposed to figuring it out myself?

Can you elaborate more on that? Because I think earlier, especially people that are starting out right now, it's like, how can I become the best at this? But then you realize later that it's not how, to your point, it's who.

Yeah. Well, you are going to realize when you're trying to make real change in your life that in the beginning You want to look like you know what you're talking about, and then you want other people to think you know what you're talking about, and then eventually you don't really fucking care and you just want the answer. And so in the beginning, I was more worried about looking like I knew, and now I'm more interested in getting my answer as fast as humanly possible, and I don't so much care if somebody thinks that I'm wrong or off subject or don't know what I'm talking about. And because of that, I can find a lot of great whos. Because typically, if we weren't having a podcast, I'd be trying to ask you way more questions than you got to ask me. That's the beautiful part about podcasts, right? You're like, I don't wanna tell you answers, you give me answers, and you get to ask people questions.

Right.

And so the who is so— this is something that nobody's gonna care about if they've never managed people, never led a company. Like, I didn't care about this until 20 years too late. Like, I should have cared about this 20 years ago. But once I realized it after reading that book, Who Not How, everything I did got easier. Because when I wanted to start a new company, I would think, one, I don't want to start it, I want to buy it because I want profits from day one. 2, who could I go to that's an industry expert in that industry that could help me do the acquisition faster? 3, who could operate that company so that I don't actually have to do it day to day? And then 4, another who, who could oversee them plus all the execution of the varying companies that I have so that I don't have to be inside of each individual one? All of those, you don't hear me for weeks. once say, how do I do X? How do I run a laundromat? I don't actually know the answer to that. But what I do know is the multiple guys that I have that run them for me. And it's a win for them because they make a bunch of money too.

Right. Yeah, I want to bookmark that one, come back to maybe how you're thinking about incentives and compensation. Because again, if you're going to hire the best, like, the best also need the best compensation. It's hard. Yeah. One of the quotes I think you had, I was listening to a podcast you were on, and you talked about how you were a scaredy cat before, right? And I I think anybody that's starting out, it's like that is the default feeling. So can you elaborate on that?

Yeah. First of all, you're going to be scared all the time. I'm still scared frequently. I'm a worrier. I assume the negative usually first. I'm pretty much always convinced that I'm going to run out of money, lose money, making mistakes, doing something incorrectly.

And where does that come from?

Immigrant mentality, don't you think? You probably have the same thing. Yeah, immigrant mentality, and we have failed. You and I have both failed at businesses, and we've failed, you know, and I've lost, you know, I've had to fire employees before, and I've made a lot of mistakes. So I know only one thing, and that's that I am completely fallible. Anything else I'm unsure, but that I know. And so when you know, you also know, I guess, that you'll survive. So no matter what, none of this stuff is gonna kill you if you just keep going. And so, you know, I do think that there's some beauty in that. You realize at some point My husband, you know, was in the military before, and and his joke—he'll call me sometimes and we'll be having a really tough day and something will be going sideways—and his joke is always, "Well, is it going to kill us?" And I'm like, "No, yeah, no. We're talking about accounting software. Everybody's going to be fine." You know, the only thing that'll kill is like a little bit of your ego. Maybe it might kill a few few steps of your forward momentum, but for the most part, nothing we do in business is going to kill us unless we stop. And unless we kill ourselves. And so once you realize that, you're like, huh, the ability to persist, I'm actually pretty good at that 'cause I've done it for 37-ish years thus far. Why not continue? But the scaredy cat, I think, is what keeps most of us in corporate jobs for longer than we want, or in a job we don't like for longer than we want, or as a startup or founder for longer than we want. When we realize, fuck, I just thought that I should be this 'cause everybody said I should, but I'm actually a happier number 2. I'm a happier employee for somebody else that's awesome. Awesome. And I want to start talking about that more because I really want people to have ownership, not necessarily the burdens of being an owner. And they're slightly different.

Yep. I think people also need to just figure out, like earlier I asked about what your superpower is, right? I think it's just also, that's also partly related to being authentic. And I feel like people throw that phrase around a lot, but it is like truly understanding what resonates with you and what you like.

Yeah.

One thing, you just talked about your husband. I remember you had a tweet recently And this kind of goes into relationships a little bit, but I think it's helpful for any relationship almost. What was the phrase again? So if you guys are pissed at each other, it's like how big or whatever. Can you elaborate on that?

Yeah, the too small trigger. So basically it goes like this. I often get mad at things that are small and then realize later, oh, we just had a fight about something so inconsequential. I'm a little bit embarrassed by it. And I remember one time I was talking to our therapist about it and she was She's like, yeah, of course you do. Everybody does. She's like, literally everybody I've ever communicated with has this exact same problem. The small things become the big things because we don't know how to enable them, and they become these small triggers because of all the stuff you have in your past that you haven't dealt with. So basically, when my husband and I get in a fight, if there's a moment where one of us is able to just be the viewer and not be elevated or starting to get upset, which usually happens, there's usually one person who's upset and one person who's I was like, this seems kind of dumb. And in that moment, if we can, without judgment, go, you know, can you just rate this for me on a 1 to 5? How much does this matter to you? Like, what's happening right now? It makes the other person kind of snap out of it for a second. You're like, well, it's not a 5, because 5 is you're dead. And it's not a 3 even, because that's like, we need to have a huge talk, go to our therapist. Is it a 2? Like, we do need to sit down right now and talk? No, it's probably a 1. And so, because we have definitions for each one of those, it often snaps us out of it. Not every time, but often.

And do you find the majority of the time, it's usually like a 1 or a 2?

Yes. It's almost— now, it takes some practice to get used to acknowledging that, because what will happen is you'll get, or at least what happened for me is, I would get scared that if I was saying things are 1s and 2s too often, somebody, I would become his doormat. So then, nothing I say matters, and none of my problems are big enough, and now you're not even gonna pay attention to them if I say it's a 1 or 2, you won't listen to me.

Right.

And once your partner doesn't have that action, and instead they go, okay, it's a 1 or a 2, so can we talk about it tonight when we have like our check-in? And you're like, yeah, that's true. And then they hold their promise and they talk about it that night. The next time you're like, hey, I'm feeling something, it's not that big a deal, it's a 1 or 2, can we talk about it tonight? Yes, great adults. But I just wish I was taught stuff like that earlier, because my immediate normal reaction is more like, I like to let it sit for a long time and then have my tea kettle moment.

Yeah, and blow up.

Right, later for something that makes no sense.

Got it. And what is your daily check-in like? How does that all work?

Yeah, that one we call TEAM. That one I stole from our therapist, actually. And basically, that one's pretty easy. So say we were in a relationship and you're sitting with your partner. Usually what happens, you have little micro fights during the day or little micro incidents, like every human does. Basically what you do is you call those out in the moment, and those can feel like nagging, or they can feel like, you know, they can feel like they're stacking up throughout the day. And because of that stacking, eventually you sort of erupt. And so we found that was happening to us. And instead she said, can you just do this daily check-in for me? And I would say we do it 60% of the time, not every single day. But when we haven't done it for, let's say, a couple weeks, that's almost always when we fight. We never fight when we do the daily check-in.

Yeah.

And so basically at the end of the day, 5 or 10 minutes, down. It's called TEAM. The first one starts with touch. So I always joke when we're upset, we touch our fingers together like this, like E.T. But maybe holding hands, sitting next to each other, whatever. And then education. I'd be like, I learned this thing today. It was so sweet. Eric taught it to me. Let me tell you. And you get that novelty with your partner. And then appreciation. Like, man, you brought me food. That was so cool. Thanks. I appreciate that. You just can't repeat the same one every day. And then the last one is metric. Remember when I told you today about that 1 or 2? You were like, You know, I don't like it when you're late. Can we work on that? And because it's not in the moment, somehow the emotion gets removed from it. And so that's worked really well for us.

Cool. So the last part, the M, is almost like a clearing exercise. And then what does the T stand for again?

Touch.

Touch. Okay. Why is the touch part important?

It's important because it reminds you you're not a roommate. This is your partner. You're not sitting down having a business meeting. You're holding hands, you're reconnecting. And it's kind of hard to be pissed at somebody when you're holding their hand or sitting next to them.

You don't want to slap them in the ear.

And if the worst thing that you're going to do when you're kind of mad is you're like ET touching, it's a little funny. So it breaks the ice.

Got it.

And a lot of people, you'll get a lot of hate if you start talking about this with other couples, because often couples won't commit to doing these actions. It feels like work.

Yep. Yep. This is not a business. We're humans.

Right, exactly.

But it's like, but business is humans.

Business is humans. Yeah, it's all just communicating your expectations and desires and hearing somebody else's. And so I think it's really sad when humans won't engage on the next level. Not that it's always easy, but worth it.

Got it. And then I want to move forward to talk about the content piece and the HoldCo piece. But also before that, you kind of touched upon how we're— I mean, really, we're programmed, we're wired from our childhood, right? So you mentioned, I think in that tweet you mentioned like the Latina might come out or whatever. And I think for you, I'm sure you're much more aware of that wiring now, but have you done anything to work on it, or is it just like you're aware of it?

Yeah, well, I joke about the Latina because I think it's relatable, but I'm actually pretty much like this. It's very hard to—

Yeah, I don't think you have the Latina.

Yeah, I don't really get riled up. My husband probably gets riled up more than I do. I really am benefit of the doubt-y. So I'm like, we all are these messy little monkeys running around trying to figure it out, and I'm certainly not perfect. I've messed up so many times, and the reasons we mess up are usually because of like fear, scarcity, thoughtlessness, lack of context. Very rarely is it malicious. And so for the most part, it's hard to get me upset, but there's a problem with that too, which is people who are relatively calm and stable, usually that means that they or you push a lot of stuff down. You're probably similar. Like, I doubt you have outbursts.

No, I don't.

Yeah. But you probably carry a lot of stuff.

I get annoyed really easily, but I don't have outbursts.

Yeah. And when you feel certain ways or when you're in fights, do you typically like shove it down for later?

No, I've gotten a lot better at being direct, but I feel like probably 'cause we've worked on this type of stuff. So yeah, it's like, hey, like I'm feeling like this, I need this.

Exactly. Yeah, I think it might be like also the generalized immigrant mentality. You know, I just, I kind of didn't deal with it. And then as I've gotten older, I've done a lot more therapy to say like, oh no, in this moment my chest feels tight and I want to move around a lot, which is my natural state, which means I'm aggravated.

Yeah.

So I should probably, before I continue this conversation, go on a walk. And body awareness has actually really helped me. And, you know, some of that's If you had told me, like, Codie, it's about body awareness, 2 years ago, I'd have been like, Eric, get the fuck out of town. Felt too touchy-feely hippie nonsense. And then you realize, oh no, we're actually all just like giant receptors at all time that have fight or flight instincts. It's totally rational that if your body starts to feel tight and you're thinking fight or flight, that you're gonna react some way, shape, or form.

And did you learn that from your therapist or?

Yeah. I think also probably being in Austin with all the hippies helped. And then being a growth mindset sort of person, listening to all the stuff you and I do, having all the friends we do, being able to kind of see us all evolve at different speeds and ways and ask questions. I think age is actually a really lovely gift in a lot of ways.

I'm with you. 30 is the new 20. Can you elaborate more on Blackstone? Obviously, I mean, huge, right? And just how much influence they have because kind of the theories or maybe the conspiracy theories here are like a lot of these ESG agendas or whatever are being pushed by like Blackstone, right? So I don't know. I just read about like, oh, that's interesting.

So yeah, well, I remember when I was at State Street, we touched 1 in every $4 in the US economy because we were the custodian of most of the big companies' banks. So when I was working and part of their business, the fixed income cash business, I could actually see who was moving money where at varying points. Super interesting in retrospect. And I was at Goldman Sachs during the 2008, 2007, 2008, 2009 crisis. And so I saw Lehman Brothers fall real time. I saw my friends pack up boxes in the office and security walk them out. I had to break through protest lines to go into the office every single day.

Wow.

You know, I had my grandma call me up, ask me how I could work for those criminals, like all of the things, right? And as I watched that, realized again that the actions from those on high, whether it be Blackstone, politicians, and actually I think Goldman was incorrectly labeled there. I think they were actually doing it better than a lot of other firms. The actions from on high have huge repercussions for those of us who have no ability to affect the outcome one way or the other.

Right.

And so you saw during the financial crisis what can happen when banks fail because they're allowed to have an unfair advantage, in my opinion, based on the government allowing Fannie Mae and Freddie Mac to expand their tentacles to all of these mortgages in the US and extend mortgages to people who shouldn't have gotten a mortgage. They weren't financially ready yet.

Yep.

And the government mandated that under Clinton and continued it through multiple presidents because they thought that the American dream was owning a home. The American dream is the ability to own a home. Not that you just get a home. It's an important clarifier. And so because of that change, the entire country had to go through a massive recession. And then the government blamed the banks, but in fact the government was the trigger. And so I saw that and I think something similar is happening in the US right now with assets overall. And so Blackstone, it's not that any of these people are malicious. I don't believe in these crazy conspiracy theories where they're out doing all these wild things.

Mm-hmm.

that once you get power, you don't like to give it back as humans, and we each think that we are more uniquely skilled than anybody else at executing. And so I saw it firsthand. I met with Lloyd Blankfein when we were at Goldman Sachs, and I remember listening to them talk about what was happening and realizing that they had no fucking idea what an average American was going through because they were so far out of context. How could they? So that's what I'm concerned about in this country and why I think we need more people to get ownership. And it's not because I'm a saint, it's because I think I might be uniquely positioned to talk about it. I find it fascinating. It's a cool problem to solve. And also, if I want to have kids and I want to proliferate, I don't want them only to have Walmart, Starbucks, Burger King as options.

Now going to the holdco, what kind of numbers can you share around the holdco? I think last time you reviewed, last time, at least from what I It's like, okay, holdco does $50 million or so, whatever numbers you can share.

Yeah, we're higher than that now. The holding company overall is interesting because what I want to focus on increasingly is profit. So we could have a company that does X in revenue, and first of all, do we own 100% of that? And so I think it can be really misleading how people talk about their holding companies. Profit is most important to me. I want the holding company to be a $100 million EBITDA business.

There you go.

That's the— or we could say profit just to simplify it for people. That's the goal. We're not there yet. And so what I've thought about a lot lately, I was actually talking to some mutual friends about it the other day, is like, does it serve people to tell them the size of it all?

It's interesting because this morning So Neil and I, we both spoke at the HubSpot conference and we're just like, yeah, it's never helpful to reveal that stuff. It's also never helpful to really build in public because you just get destroyed. I see more downside than upside.

Yeah, I think about it a lot. And downside also, and then also I think it's unrelatable. And so maybe what's more relatable is why I break down some of our micro deals. Because for that reason, you can really see the growth. And I hope I get judged in some way based off of more of the businesses that we create than just what I've created, and that somehow because I've built something that's worth hundreds of millions of dollars, I provide more value. But I see both sides, so I'm ruminating on it lately, but I've been slightly more private about it lately as it's gotten bigger. And like, you won't see from me a lot of I'm worth X, blah, blah, blah. And I was more open to that in the beginning. And then it just felt weird.

It feels like, I don't know, on one end it's like, okay, marketers should self-promote themselves. But on the other end, if it starts to feel icky, it probably is.

Yeah. Oftentimes I ask myself, would future Codie like the actions current Codie is taking? And if we sell some of our companies for a huge valuation and I get to pay my employees a bunch from it, and I think we have a really cool outcome, fuck yeah, I'll shout it from the rooftops. But until then, I don't know that future Codie loves that idea.

I think it's trade-offs too, right? 'Cause when you look at like Oprah, for example, it's like, okay, she's a billionaire, right? Like, it's like, that's cool.

Or like, you know. Yeah, but she doesn't say it.

Yeah, she doesn't. Other people say it about her.

Yeah, maybe that's okay. So I'll just start leaking it. I'll just leak the financials, you know? Yep, yep, that's the way. But, but the, the holding— the part about the holding company that's interesting is like, I'll circle back with you, you know, in the next, let's call it like 6 months too. But we're making a pivot there that I think is going to be really interesting because what happens, you know, when you, when you open up your aperture and you get a bunch of deal flow, right, and you get a bunch of data in and you start creating content online, optionality comes like you talked about. So all these different things and you can either get overwhelmed by it or you can start categorizing. So we're pretty good at taking all the data and the stuff that comes in and sort of trying to categorize it to figure out what we want to focus on. And over the last year, I've been doing that, which is why I haven't made giant acquisitions, because I've watched other people do them and I'm like, I think you're going to regret that acquisition. So I'm going to wait because I don't have investors. And because of that, I have no pressure to execute more quickly than anybody else. I don't need to exit and I don't have to cash flow on any of this more than I am now. So it's sort of a nice waiting game. The person who wants it least always wins a negotiation, right? And so as I've been watching that, I've realized that there's like 2 or 3 acquisitions that if we make them, I think we can have an unfair advantage in just about everything that we do. And so over the next year, I'm narrowing down the scope from what— because I do think also what got me here won't be the thing that gets me to that billion.

Right.

And I have to change games. And you've had this happen so many times in your life. So have I. Anybody listening, like, you're going to play a 1.0 game to get from 0 to And then from $100K to a mil, you're going to have to play a slightly different game, but probably pretty similar. From a mil to $10 mil, you actually need a totally different game, I think. And then from $10 mil to $50 mil, you need a totally different game. And then I imagine from $50 mil to $250 mil, astronomically different game. And so they keep unlocking for me the more of them that I get.

Actually, so you brought up this quote in a video where you were talking to one of your billionaire friends and the Quote, and I'm paraphrasing again, was the billionaire told you, "Hey, do you think that you buying small businesses has caused you to think small?" Dude, this fucking guy Bill Perkins, and he's fine if I talk about him on the internet because he told me he literally look at look at what he texted me today.

Want to be a billionaire? And then just some link about somebody else who's doing something bigger than me.

This guy Bill Perkins.

I know he's the best. It's so good to have friends doing things so big. big that allow you to reframe the way you think. I mean, speaking of the Hormozis, I was just talking to Alex today and Leila, and I was like, I'm so thankful for you two because I'm launching a book next year and I had a plan mapped for it and how I want to do it. And then I saw you guys do this wild thing, and I'm not going to do exactly that wild thing, but damn if you didn't kick me in the shins to think of something totally different. And so every time I see a and unlock a new level of the game, I'm like, oh, this is amazing. Thanks. Now I have the cheat code and I get to level up from it. And so he's amazing because he has so many more zeros than I do that the way he thinks about the world, if all I do is—

You're talking about Bill?

Bill, yeah. If all I do is create a company that does $50 million in EBITDA, he'll be like, meh, okay. And that's wild.

Good job.

Because young Codie was like, 50 bucks is pretty cool.

Yeah. Interesting. Okay. And I think there were, but by the way, I have to ask you, so in that video it seemed like, 'cause Alex just did his launch recently, right? And there's like all the screens in the back. It's like, you know, but you were doing the same thing there too. So what was that all about?

Oh, that was me. I spoke at a friend's event.

Okay. Got it.

Well, so the funny thing about Alex's thing, and he would tell you this too. So the event that I did the week, maybe 4 weeks before that was Dean Graziosi's event.

Yeah.

Who's Tony Robbins' partner, right? And they do these every 3 months. 3 months or twice a year or something like that. And that guy is an animal. He had like 8 million people on the one he did with Matthew McConaughey.

8 million attendees?

8 million subscribers, 2 million attendees. Sorry, Dean, if I fuck up that number. He's talked about it publicly, so you could go Google it. And on the one that I was at, he had over a million subscribers Yeah. To it and more than 400,000 live.

That is nuts.

Yeah. So I'm in this, I've never seen anything like it. You know, I've come from finance. I have no idea. I walk into the place. He's the nicest guy ever. He's a pro. He's been doing this forever. And I walk into his studio and it's kind of set up like this. And there's got, he's got this huge back area full of computers and screens and all this stuff. And I'm like, Dean, how much did this cost you? And, you know, and he tells me some of the numbers. I'm like, whoa, that's wild. And then we walk into, the thing and there's like 2 screens on both sides. I'm like, how much did that cost you? And he's telling me the numbers. And then on the screen while I'm talking, there's like applause and then there's like people's faces jumping up and then there's like—

Were those applause real?

Probably not. I don't know.

I heard people laughing. It sounded like a sitcom a little bit.

Yeah. And there was like stars shooting across them. There were likes coming. I was like, this is wild. And then Jay Shetty spoke after me.

Great.

Yes. Yeah, exactly. I was like, oh great, I'm followed by a monk.

Like, this is not going Everyone was ready to go, so that's cool.

Exactly. But yeah, I think those events are really cool post-COVID. I think those have become more normalized.

And so why are you doing a book? Whatever you can talk about with the book right now, because the book is a huge pain in the ass.

Oh yeah, I know.

It's like a labor of love, right? I mean, you're in it right now, so please tell us.

Why? You know, I'm a writer at heart, like different maybe than a lot of people who write books. I started off as a journalist. I've been a journalist for most of my life, and I think best when I write.

Mm-hmm.

And so if I wanna explain something to somebody verbally, I'm not as eloquent as I am written. And so it felt to me like if I really want to have my mission, I should probably do it in the language in which I'm most fluent, which is writing. And then simultaneously, they last longer. I think a legacy written in pen is longer than a legacy in bytes on the internet. And so it feels to me Like, this is what I want to pour into. I mean, I'm pouring more time and will pour more money, I think, into the book than just about anything. And I hope it's not my last, and I hope it serves people.

What will it be about, if you can reveal it?

Oh yeah. I mean, it's probably not going to surprise anybody. It's about business buying, but with a twist. So I'm hoping this can be a real guide for humans who want to do this and a little bit of a call to arms for why it's so important. I found a lot of people in the M&A community or who talk about business buying do it from a really shallow, become really rich XYZ standpoint.

And they also hide and hoard a lot of information. Oh yeah.

A lot. Well, and I read some of the other books out there and they're by people I know and I respect, but they're shallow. So I wanted one that was only what you need to know to begin the journey, but everything you need to know.

Got it.

And I think we might have achieved that. We'll see. It's still messy, so we're working on it.

So you're going deep. Okay, so we're going to continue to go down Holdco a little more, but what do people need to— and we'll do another podcast when you get closer to the launch. Yeah. Oh, cool. Thanks. If you want to do it.

Yeah, totally. I love my studio. You got to come to Austin. Austin by then. We just bought an office.

I will come to Austin.

Yeah, yeah, we just bought an office there and we're tricking it out.

Tell us about that. So, so what's going into the office right now? Um, do you have like a— there's a podcast studio. What else is in there?

Yeah, so we're doing like, uh, it's cool, it's an old house. So it's a historic, you know, on the east side of Austin they have like, uh, uh, mixed-use, you know, funky old houses and stuff. And, um, I remember, so I mean, I was, I was corporate for 12, 13 years, something like that. I remember hating coming into a traditional office building and like, this gives me PTSD, these lights up here. Like, you know, just the fluorescent lighting in the thing. I couldn't handle it. And so when I wanted to build my own office, I was like, for the 1.0 version, while we're still small enough while we can, I want it to feel like a cool place that you go. I don't want fucking foosball and all of that, but I want it to feel like a place where somebody might hang out and really have inspiring ideas, almost like a salon.

Yeah.

So it's kind of a cool setup of a place. I'm hoping our company also is never hugely giant. I want more of the Berkshire Hathaway smaller size of business.

Head office.

Yeah, I want a head office and then I want to enable a bunch of other people to run businesses and make a lot of money as opposed to build this huge— I don't want to own an office building. And so anyway, I hope it turns out good. It's in design phase right now, which is kind of fun.

Got it. I've been talking with my friends. I mean, literally at lunch today, even with the— we'll call him the tenant for this office over here, Ryan. We're just like, man, do we go— do you go remote? Do you go full-time in office? Do you go hybrid? Like, how are you thinking about that?

I feel like good leaders are really thinking about that right now. What do you do? What is the future of the workforce? We did an analysis last week to look at trends of people returning to office buildings or not, or office spaces in general. And I do think that the era of complete remote work is over, and the data seems to support it. We're seeing anywhere from a 30 to 60% increase in return to office.

Yeah.

That being said, I don't think it ever goes back to the way it was. I don't think we'll ever have companies that are 100% in office all the time again as the norm. And so hybrid seems to me the only way And yet I don't think we'll go back to COVID levels.

It's interesting because at least what he said is like hybrid doesn't work. And he's like, you either go full remote or you go in office.

Interesting. Why?

So that's just his thesis. Mine is like, we did like a little mastermind in Turkey a couple of months ago and we were having this debate. And one of my buddies, he has like 1,300 employees, right? And he's built 8, 9-figure businesses and all he's known is in office. And then on the other side, we have another friend and all he knows is is remote. And he said the most, I guess, kind of light bulb moment thing where he was like, I've just been used to doing it this way and this is what works for me. You have done office, that's what works for you. And interestingly enough, I'm in the middle. Hybrid is what's worked really well for me. So really my thinking is it's really whatever works for you.

Actually, I think that might be true because I've always run hybrid teams actually way before COVID I've run largely remote decentralized businesses with a hub for 10 years.

Yep. So that might be the wave, but, um, it's fun.

Our biases are so funny. Yeah. Also, I do think that it depends on the type of business too, because for content, you need people here helping you, like 100% for now. Like, there— and, and there is something about creative juices for content being in the same room. Like, being on a Zoom call for writer's room is like awful.

Well, even this, I mean, like, we're creating— I mean, you're largely driving it, but we're creating together right now.

Yeah. And wouldn't this be awful if we were doing it all over Oh, I mean, it would be done way earlier too. Yeah.

'Cause I just get fatigue. It's not 'cause you suck or anything. It's just like I'm just tired.

Exactly. Yeah, your eyes literally hurt from staring at a screen. So yeah. But probably not everything needs that. And I really don't wanna try to own everybody's time, but I do think it depends on the level employees you have too. When I ran most of my decentralized businesses or remote hybrid businesses, the employees were relatively high level and they had really clear incentive alignment.

Oh yes, got to talk about that.

Yeah. If you know that if you do X, you are performing, if you do Y, you are not performing, then remote and hybrid can work. But if not, and you have to have a lot of micromanagement and oversight, I imagine it's quite hard.

Totally. Okay, so I want to come to incentives, but also a preview of the book, I guess. Like, people are probably wondering, like, okay, what do I need to do to get started to buy a business? And most of the time, like, you don't necessarily need a lot of capital. Like, I'll let you talk about it.

Yeah, you're right. I hate this, like, you know, I don't ever like the idea of like, you can buy a business with $0 down in 30 days. Like, I don't think that's real.

Hmm.

What I do think is real is that it's probably a mixture of simpler than you think it is and a bit harder to execute than you think it is. Like, it's not easy. It is hard work, but it is relatively simple. The problem with buying businesses is that it's complicated. complicated. Um, it's maybe it's similar to you when you think about talking about marketing. You're like, well, how do you market a company? You're like, fuck, that question's so big, I don't even know what to do with it.

Yeah.

I think where people start and where I like to get them to start, we have something called the Investor Operating System, which is basically like, I don't even want you to think about buying a business until you can understand the language of money. Until you understand the terms and the lingo, don't, don't waste your money because you're just gonna make mistakes. And once you understand the language of money, which I think takes I think it takes like, I'd be thinking about it like a course. You need one quarter of understanding the language of money. And if you've already run a business, you could probably skip that step because you know a lot of it, but maybe not. And then I think you need another quarter of how do I do acquisitions? Because where most people get it wrong, they're like, Codie, what's a good business to buy? I'm like, ugh, wrong question.

And just to pause for a second too, just what is the language of money? Because I remember you talked about it on another pod. I think it's important. I think that's important for people to understand.

So the language of money is basically this. It's that in finance, we earn our money by getting people to give us their money and they give us 2% of their profits. I'm sorry, 2% of every dollar and 20% of the profits. That's how we make money in private equity. There's no incentive structure for private equity people to explain to the normies, people like you and me, how to execute what they do because then you don't pay them these exorbitant, very high fees. opinion. And so because of that, we might be taught the language of math or accounting, but we're not really taught the language of money and specifically doing deals. And so if you don't understand, we have a list on our website actually. I think it's like, if you don't understand these words, don't do a deal. And it's all the things that could fuck you up in doing your first deal. And it's all the terms. And it's things like if you don't actually truly understand EBITDA, net revenue, gross revenue, vision, profit, you know, non-compete, NDA, LOI. If you don't understand these terms, you shouldn't be doing a deal yet. And then that's first layer. First layer is understanding all those terms. I think we listed something like 60, 75 terms loosely we think is necessary. And then the next level is if you don't understand what is good or bad in those terms. So I could say, well, I understand EBITDA. It's interest before earnings, taxation, depreciation, amortization. great. Now, what does that mean? Like, what is a good EBITDA number? What's a bad one? What's a good EBITDA percentage for a company? So you have to understand the language and then the context, right? Which I think of like filler verbs. So can you fill in like the filler words around the main ones in a language? And then once you've done those 2 things, then you have to know thyself, which is basically, what do I want? Like somebody today, I was talking to them, they're like, I want to buy a nail salon. I'm I'm like, why? She's like, well, I get my nails done and I want to own a boring business and I have the salon near me. And I was like, okay. I was like, why do you want to own a nail salon? She's like, you just asked me that question. I'm like, ask it again. And she's like, well, I want to make money. And I'm like, you don't want to own a nail salon then.

Yeah.

You want to make money and you just need to figure out what is the highest and best use of the way for you to make money. And so then you got to really understand what do you want? That's where we get into your deal box. So what is a good or bad deal for you? And then you understand, okay, now I speak the I understand the language. I understand the context. I know what I want. Now, how do I find a deal? How do I finance a deal? How do I execute a deal? And how do I run a deal? And once we can do all of those things, you can string them together to buy a business. And it's not really that complex, but it is hard work.

Got it. Yeah, well, we'll complete the cycle next time that we do this. But also, buying the business is the first step, right? But a lot of these people that are buying probably don't know how to operate. And so how are you finding these good Yeah, well, a couple things.

One, the worst thing you could do in buying a business or in running a business is run out of cash, right? It's the only sin you cannot commit in business because if you run out of cash, you're dead.

Game over.

Out of oxygen. And so the most important part is really understand, like, do you have a business? Can it continue over time? And can you afford to keep it running? And so that's sort of where we start. And if you can do that with enough cushion, then you can learn how to run the business, how to put in a good operator, et cetera. But if you fuck up that first part, then none of the second part matters. And so we obsess a lot on that. So how can we get people to think about doing deals that make sense for them individually where they can continue to profit? And then the second part really comes down to understanding when you do a deal, like, what are you good at? So like, I have a guy who was in who was in our academy who, he worked at a tech company, got laid off in March or May, and was quite successful, and then ended up wanting to buy a business. He was really good at marketing, actually, and an engineer in marketing, so pretty technical.

Great.

Yeah. And so he's looking at all these businesses and he finally settled on a tutoring company because he realized, oh, the company's rolling, this works, everything's growing, but they're only operating at about 30% capacity. Capacity. So all they need is leads. I can handle the 70% capacity. It's a simple business. There's not that much overhead. I could let go of people in and out as necessary. And this is really part of my lead gen skill set. And so, um, I think that that part's really important. Where there are other people that are like, gosh, I'm just really good at, um, simplifying businesses and creating operational structure. And so they might buy a business that's like pretty logistics heavy because They know they could make things cost less and they could make it more efficient and thus run the business.

So you're looking for, I think Alex used this phrase, you're looking for companies that have specific incompetence in what you're strong at.

Yeah, that's a good point. Yeah, you're looking for the— I think when you analyze businesses, you need to understand where your weight lies and then you need to understand what the counterweight is to it. So if you are a really good marketer, you know, this is where my weight lies. What would be the counterweight to that? Well, a business that has great But not a lot of leads. And so what you're looking for is how can we balance out the 2 things, my strengths with the business's weakness.

Got it. And then on the finding the good operator piece, where are you going for that?

A couple things. One, if you're a first-time business owner, I think, or business buyer, I'm biased. I think you should own, you should run the business yourself. I don't think that it's reasonable to say I'll never, I've never bought a business. I've never run a business, but I'm gonna buy a business, put somebody else in there to run it, and I'm gonna continue to do my W-2. Yeah, I just, I think you need a few more reps than that. Now you could do that if you're doing it with your partner or brother or like very close other person that's gonna run it with you. Okay, that could work, or you're gonna be a funding mechanism for them. That certainly could work. But I have a bias towards getting your hands dirty on the first deal.

Yep.

And then when it comes to operators, there's really, there's 3 types or 3 categories of operators that I like. There's proven talent. There's unproven talent, and there's experienced talent. And I'm sorry, proven talent, known talent, and experienced talent. And basically what I'm looking for ideally is somebody who's proven. So I've already worked with them in this capacity, let's say. So your CEO in your current marketing company, you've put him in another CEO company and he runs them for you. But maybe it's not a marketing company, it's something else. There's known talent, aka like I've known this person for a long time. time, they might not have run this role before. And then there's experienced talent, which is like, I've already been the CEO of a marketing company, I'm going to drop you in. In my perfect world, I want proven, known, and experienced. And in a non-perfect world, I'll usually take experienced and I'll take known.

And you just trade.

Because I want to have the devil that I know. Yeah.

Got it. Okay. And then, so that's helpful. And your, let's go to your deal box and then I want to talk about incentives. So what is in your deal box right now? Like what's required? Because I've— you have a lot of different types of businesses.

Yeah, well, my deal box right now just got really narrow, but let's say historically what would have been a good business for me. And it depends on your asset level, but there's a couple different characteristics. And we have something, I think if you Google like Contrarian Thinking deal box, there should be a specific spreadsheet you can look at. We can send it to you afterwards. So a couple things. One, you want to look at profit. How much does the business make? So for me, let's say that's $100K a year. You want revenue. So how much revenue does the business do overall? You want profit margin, byproduct of the two basically, to understand what sector or what percentage you're comfortable with. You want sector. So marketing, accounting, landscaping. You want geography. How close is it to you if it's not a remote business? You want, is this a business that you're going to own own and operate or be an investor in overall? You want financing method, so are you going to seller finance this? Are you going to use an SBA loan? Are you going to use cash for this business? Is this a platform acquisition? So you're going to just buy this as the first company and then add on, or is this a one-off business? And does this fit your unique skill set, yes or no? So I guess there's, what is that, 9 of these?

9, yeah.

that we try to make sure we have a range on. And everybody's is different, but you want to stay in your range as much as humanly possible.

Got it. And you mentioned you just narrowed it recently. Was it way wider before? And what got you to narrow it?

What got me to narrow it is that we're in that stage where I need to find my platform company. I have one particular type of company that I want to buy because I want to build on top of it. So I'm going to buy this one and then I'm going to add a bunch of acquisitions to it. Historically, I just bought businesses for cash flow. Like, you know, I just, all right, this business could net me $1 million a year and we have a great operator in it. So that was what was necessary for me before. I wanted, let's say, a $1 million profit a year business to me or my holding company. I needed a really strong operator and a second in command because I didn't want to deal with something going sideways.

Mm-hmm.

And I needed it to be in an industry that I think made sense for us to manage overseas, etc. And if it had those 3 things, then we would give it a pretty hard look.

Got it. And so, and just for people to understand, when you talk about platforms, like you could be buying a bunch of HVAC companies, rolling them up and selling them for a higher multiple, right?

Exactly. That's exactly right. So you're basically, I think acquisitions are usually more successful if you're going to operate and run them, or if you have one really strong operator, and then that strong operator you can augment with more It's not always necessary, but it's like a 2.2 way to do it.

So, um, our Uncle Charlie Munger says, show me the incentive and I'll show you the outcome. And so how are you setting up incentives for your operators? Because I think you tweeted something a long time ago about how— I thought this was interesting— where sometimes you'll give them an option to just buy them— buy you out, right? So how are you structuring these incentives? Like, what's your bread and butter typically?

Yeah. So it definitely changes, but when we do a deal with an operator, almost always there's equity in it, 3 to 5 year investing period, vesting period, so they get some percentage of it over each year that they're with us, and/or it's milestone-based. So if you hit XYZ metrics, then you get XYZ type of equity. Usually the equity percentages are somewhere in the realm of 0.5% up to 10%, depending on the company.

Plus they have a pretty decent Salary, I'm assuming.

Yeah, almost all of our operators are taking 6-figure salaries at this point, but in the beginning when you're smaller, you can skew more towards equity. Long-term, more expensive, but short-term, take less salary, that's for sure. So that's typically how it works. Like, you start out in buying small businesses and putting an operator in, you're like, take a bigger chunk of equity, but I'm not going to pay you much salary. And the only thing you want to be careful on there is that you allow it to vest over time. But the part that I've been thinking about a lot lately is you really have to explain to people the dream of where you're going when you're going to do this, because the natural predilection or the place people typically go when they negotiate incentives is if you tell somebody they're going to get 0.5% of a company, they're like, what?

Yeah.

That's nothing. That's awful. And then you have to go to Google and and go, look at what these people on average get of a startup when they are the founding member of the startup. And so you have to reframe people's perspective on what it means to get equity unless they're willing to put in a lot of cash. So I think the way to do that typically is to show them 2 things. It's like nothing is good or bad except by comparison. So typically when we're doing incentive comp, I'll say, all right, you got 2 options, 0.5% equity, $150,000 salary, an ability to earn another 5% equity over a 10-year basis if you hit these milestones and bonuses depending on XYZ. Okay, cool. Or option B, 10% equity, you pay in $1 million, we give you a $50,000 salary plus these additional bonuses. Which one is more interesting to you? Because we're essentially showing them that this value that we're giving them is real, has a real value. And you can't just make up the number. You can't just go like, this is $50 million, but you're like, oh no, this company is valued at X and Y and Z. And you're showing them some comps too. Coming into it. Yep. Got it.

And are you— with the vesting, are you doing like a 1-year cliff type of deal? Uh, 3 to 5. 3 to 5. So 3 to 5 years, but then the first year— first year is where the cliff comes. Got it. Okay. Yeah. And then, um, let's see, I had— damn, I had a really good question, but it is—

how do you structure yours? Because you've had operators for your business.

So typically there'll be a pool of 10%, and that goes to— so 10% would go towards the operator, and then 10% would be like a pool, an employee pool. Yeah, an employee pool.

And then Do you do 3 or 5-year periods or do you do 10?

It would be 4 years and then a 1-year cliff. Yeah. So they'd have to wait a year. And what percent of your operators are successful, you think?

We've had one operator that committed fraud, and so that one was not successful. And this is just inside of our holdco, not in private equity. Private equity, fuck, I've seen it all. But when we ran our funds—

People are crazy, man.

People are crazy. That's crazy. But in ours, I suppose we've only had that one guy, quote unquote, fail because he committed fraud. But we've been lucky thus far. We haven't had any of our operators leave yet. We've had some sell. And we haven't had any failures in the portfolio yet.

That's amazing. You almost need to write a book on hiring operators too, or maybe that goes into the big piece because I think that's really hard.

Well, a lot of it is not hiring. It's buying the right company that already has an operator in it or starting with the operator and then doing the acquisition. What I actually have not done a lot is find and buy a business and then go out independently and search for an operator. I haven't done that. I've done that inside of businesses.

Yeah.

I'm trying to think if I've ever done that independently in a— yeah, I guess I've done it 1 or 2 times. I usually start with the operator.

Got it. You know this Warren Buffett quote, you want to buy a business that an idiot can run?

That's exactly right. Yeah. And these operators are often incredible, but I try to not get myself into businesses that I don't understand. And because of that, since I have such a low knowledge barrier on these businesses, It means that the person who operates it has to be pretty competent as well.

Got it.

And I'm also, what I will say is I'm pretty good at the exit. So if I see that a company's not working, we will put somebody else in there pretty quickly to help stabilize and/or move to sell.

And how quick is pretty quickly?

I mean, the one that we had fraud on recently, we found that out 30 days. I was on vacation.

Oh, the worst.

Oh yeah, I was in Europe, so it was awful. And we had a new operator in there inside of 2 weeks messing around with it. And at the end of 30 days, full transition to them. That's great. Still some things outlined. Yeah, I learned from an incredible— 2 incredible operators at this company called EEC that I used to work for, Tiffany and Joe. And we had this one company actually here. If I told you the name of the company, I bet you'd know who it was in cannabis. Total fraud, this guy. $25 million He lost, um, in a cannabis company, which is an extra lot. And, uh, and these 2 flew and turned around the company over a weekend to stabilize it, and then were able to turn around that company eventually and sell it. So I learned a lot from watching them.

That's amazing.

Speed and violence of action. Yeah, like every time I think I should fire somebody, I should have already fired them. Yeah. And every time you think somebody's stealing from you, they've been stealing from you for months.

And you're 100% right. You're 100% Every time. Yep, yep. It's the gut feeling piece.

Yeah, and it's, you always wanna try to give people a second chance, but you really can't give 'em a second chance at the top.

Yeah.

And then the other thing that I learned is it also doesn't work to demote people. So, like, I've had it happen before where a head of a business is like, well, I really think I wanna do this other thing, or I need to take, like, a lower role. The second that that happens, you should help them move on to somewhere else, because that is a signal. And I've just never had it work out where they could go to a lower tier and still be a good performer.

Same here. Yeah, I think they're just psychologically out at that point, even though they say they're in. So terms around the deals that you do, I mean, I've seen one guy, he does a training on buying businesses and he has like 225 terms. What are your favorite go-tos? You mentioned kind of seller financing or deferred down payment or whatever type Yeah, I really like incentive alignment.

So if you think about it, if you go to buy a business, who has the least risk and who has the most? The buyer has the most risk and the seller has the least. They have an absolute information advantage over you of 100%, basically.

Yeah.

And your entire due diligence process or the process of buying the business, your entire thing is try to transfer that 100% information advantage from them to you. It's very hard to do because they've been running this business for years and often a lot of the information is in their head. It's not even in the finances, it's not in the taxes, it's not in their employees. And so when I go to explain to a business owner how I'm gonna buy their business, I often say like, you— I'm at your mercy. You have complete information advantage over me. And in order to again counterbalance out where we are more even, we have to take some of the risk off the table for me that you are lying to me and/or that you just don't understand something in there in your business, or I don't understand what you understand in your business.

Right.

So even if you're not a bad actor, I might be missing something that you see from your decades of running this business. And so do you think it's reasonable and fair that I should give you 100% of the cash when I have 100% of the information disadvantage?

Yeah.

And I think the answer is typically no. Now, that's not true at later-stage businesses because they're better organized, you have better risk systems, etc. But at the smaller end of the spectrum, it's almost always true. And so I find sellers to be quite reasonable for real players. What screws them up, and what I'm trying to teach people to not do, are bad actors who go in there and they're trying, you know, I want to buy your company for $0 down and I've never run this business before and I want no personal guarantee on anything. Like, no. Um, and, and also, um, the fact that some people do really silly deals and pay for stuff that they shouldn't. Yeah.

Your— well, earlier you just said kind of your Your information bar is low or whatever you were trying to say, but I think you are an avid reader. You're actively trying to learn. So what is in your learning stack right now?

This is so silly, but the thing I'm obsessing on right now the most is how to be non-reactive to things happening in your environment around you. And so I'm almost learning nothing right now. technical. And I'm rereading— did you ever read the book Untethered Soul? Michael Singer?

I've only gotten through half of the book.

Yeah. Did you read his other book, The Surrender Experiment?

No, I got through one chapter and I couldn't do it. So yeah.

Try it with audiobook the first time.

It was audiobook.

Oh God, you couldn't even do the audiobook?

I'll try it just because you said it.

Okay. Well, some books are time and place for the right person. But what I'm realizing is we're building these big things. We have all these companies. There's always stuff going wrong in the And I think the best leaders and CEOs are ones that can be sort of the calm amidst the storm always. And other people can react around you, but you have to be the one that doesn't. And that's increasingly what I strive towards.

Yeah.

Is like, if it does not help me to react to things negatively or positively, like, you know that old saying, do you remember the, I think it's a Chinese proverb where the, A father has a son and the son returns one day with a horse. Have you heard this one?

I think I know where you're going, but not completely yet.

Okay. I'll speed it up. So basically a father has a son, lives on a farm. The son one day goes out for the day and comes back with a horse and the neighbors go to the father, this is incredible. Your son brought back a horse. And he goes, maybe it is, maybe it isn't. The next day the father goes out and the son was riding the horse and he broke his leg. And the neighbor goes, this is awful. And dad goes, maybe it Maybe it isn't. And then the next day, the father comes out and the town is being— all the young men are being herded up to go to war, except those who have some sort of disability, like his son. And they're like, this is so lucky. Maybe it is, maybe it isn't. And the moral of the story is we never really know if things are good or bad, and so our reaction to them is completely unnecessary and usually unhelpful. All we can do is the best we can with the information that we have. And so I wanna try to operate like that as a leader of my companies with this idea of a vision so big it dwarfs everything else and a leader so steadfast on it that they can be a calm amidst the storm.

So you just triggered a thought. I mean, you being a leader, that means you have to be involved. Again, you can't abdicate the vision, right?

Yeah.

And I'm just noticing, like, you know, Ryan Peterson, founder of Flexport, he's back, right?

Yeah.

I'm looking at my other friend, like, he was out for 2 years at his company. He's back. And then, you know, one of my friends, Syed, he has the WordPress holding company, right? He's back in it, right? So like, everyone's kind of back in it. Like, you know, the whole like 2020, 2021, people got lazy. People are like, oh, let's try all these different things. Let's invest in all these things. Like, I'm very much back in it again, right?

Interesting.

And so it's like, you can't— in my mind, I'm like, yeah, you just can't abdicate this vision because it's a big vision, right? So the question for you here is what is the 25-year vision for Codie?

I've actually gotten pretty clear on this lately. The vision that we have for contrarian thinking is that this is a multi-billion dollar company that is the infrastructure for small business acquisition and Main Street revitalizing in the US. And in the same way that we saw companies like, let's say, CBOE, CRE, Zillow, BiggerPockets create homeownership as the American dream and enable an entire generation to easily access homeownership, that's what I want us to do. And so we are going to do that with American, I hope, small business and maybe business overall. And, you know, the real reason I think that's so important is because, you know, we've seen division in our country, obviously continuously. And, um, we've lost a little bit of that town square, right? And I think we were all yearning for it after 2020. We realized, oh my gosh, being stuck in a house by ourselves for months is awful.

Mm-hmm.

And we want to come back together in some way, shape, or form. And I'm not sure that the way we're gonna come back is in offices and work like we used to. I think it might be in our small towns, in our communities, and getting away from buying really big and going really corporate. And so, I think that's really important. And if we don't do this, then we let the people on high run everything. And we've already seen that they can fuck things up pretty royally.

Got it. Totally with you on that. I love the mission. And this will be the final segment. Yesterday we had dinner. It was like Neil was there and then the CEO of Wistia was there. And we were talking about how B2C creators, B2C marketing in general is always ahead of B2B marketing. And so you've seen B2C, a lot of B2C creators, right? But now there's a rise of B2B creators as well. And I would— Oh, that's true. Put you in that category. You're a B2B creator, I think, in a sense. Um, or maybe—

Give me an example.

So like an example of a B2C creator would be like a MrBeast. Um, and then like a B2B type of creator would be like, uh, Gary Vee or like, uh—

Why is he B2B?

Sorry.

Oh, because Vaynerchuk Media, because he sells—

VaynerMedia. Yeah. But also you I would argue that he's also B2C as well.

Yeah, but I guess he doesn't sell anything.

He's very philosophical. Right, right, right. And I think for you, you could be B2C to B maybe because you are going to consumers, but you're also trying to get them to start a business.

Yeah, that's true. Yeah. And I guess I want them to have a certain stack. Okay. Yeah. Tracking.

Yeah. So, okay, so this— there is— what do you think about how the power might shift in the next decade or so with creators? Right. Because there's people talking on Twitter now. It's like, yeah, creators will have a lot more power to operators. We're already seeing it happen, right? So.

Well, I don't think, one, I think any creator that's saying that they have more power than operators does not understand what's going on because you have, operations are the key to every single business alongside leads. And so maybe it's just the age-old, maybe it's not that much different. Maybe it's the age-old trial of the COO versus, you know, the CRO or the head of sales. And the sales guy always says sales first.

We're the best.

Yeah. And the ops product guy guy always says we're the best. And the truth is somewhere in between. What I think is interesting about this space, and we were talking about it, and you're like, can we talk about this on the pod? I was like, yeah, let's do it. Is I think you're seeing a lot of creators right now figure out different risk trades to make because sponsorships and ads are way down. And most of them made their money through sponsorships and ads for, I don't know, the entire time creators have existed.

Mm-hmm.

And then they started doing B2B or B2C products, which worked well for them, but they found that a lot of them had to go run those businesses or essentially give away a big percentage of equity in the business to run the business. And so I'm interested to see what happens. I think the mistake that I'm trying to not make there, and that I think we all have to be aware of, is just wearing too many hats. And so one of the things I'm really thoughtful about in our business is I really think about it like we're a Berkshire Hathaway. So the way I think about buying businesses is, like I said, I buy businesses with the operator in mind or already in position, and I have this Berkshire Hathaway private equity background that I've already done this before. What I get a little bit nervous about is when people are not buying businesses, but when they're spinning up businesses.

Yeah.

And we've spun up one, and I think we'll see what happens long-term with it. But startups, one, have a high failure rate, and two, your operators everything in a startup. And so if we don't have an incredible operator to execute on the velocity that I can drive, it won't work.

Yep.

So when I buy a business, I only have 3 businesses that are accelerated by our media company and only 1 business that I really talk about publicly because it can handle the scale thus far. But I can create a business overnight with mid-6 figures in MRR Yeah. With my audience and the right product market fit.

You can literally create demand. Yeah.

Right. But that doesn't mean that you can fulfill demand.

Exactly.

And so that's the big issue. So even the accounting company we're looking at now, it's like, no, you're going to have to be profitable, operational, and independent by yourself. And then we will waitlist people into the ecosystem because you can't handle $500K or $1 million in MRR right now.

Right.

And until you have more of a productized service, you might— that might not even work at all.

Yeah. I mean, to your point, I think the creator, sure, the creator is the X factor, but also the operator kind of is as well.

Oh yeah.

And so what I was talking about on stage was, hey, like, I think you're going to see a rise of creator-led agencies. And the one that you're helping, I think it was ViralCuts, right? I think there's potential there for sure. But I'm seeing a lot more of these rise. I'm just like, man, like, I think it's 2 things that will happen. One, like, the creator will drive a ton of demand. And to your point, they won't be able to fulfill and just see massive churn.

Which is awful for the reputation. And it's going to destroy brand equity.

There you go. And then the second piece is like, maybe brand equity starts getting destroyed, but then the creator's like, well, I can't let that happen. And then they just will do everything in their power to lift it up. But that's kind of my thesis. It's like, if it does, I think we'll see more failures than successes.

Yeah, they're startups. So like 100%. I think people assume that if you have sales, then you can— you're automatically going to win. And it's definitely much easier. It's like, I think the smart move is you buy businesses that already have operations, et cetera, in place. I mean, it's what we've seen all the big celebrities do. What do they do? Does The Rock go spin up Teremana? Of course not. He buys the business and has a bunch of pro operators come into this business, and then they scale up like a motherfucker. Logan Paul.

Same.

Does he start Prime? No, of course not. So they have an infrastructure that works, and they become glorified That to me is probably highly functional. And then you know this better than I, but the problem that I have with agencies is they're fucking hard. It's not my favorite business model.

Tell me about it.

Yeah. But SaaS companies, you guys know, are even harder. You just have to be so smart to do SaaS upfront, but you can start an education or a content business. You can start an agency and you can scale that first mil, but after the mil, it's hard.

Yeah. Well, we can talk about this later. I think there is a playbook for it. I think starting it is probably not a good idea.

I want to tell you my— the real play I want to make too and get your take.

Yeah. Well, anyway, we're going to do a round 2 when we get closer to the book.

Dot, dot, dot.

Dot, dot, dot. But Cody, this has been great. What's the best way for people to find you online?

Cody Sanchez and all the things and contrarianthinking.co is the newsletter.

All right. Thanks for doing this.

Thanks, dude.