Hiten Shah uses Breaking Bad to show how founders, like Walter White, start with a concrete number (Walter's $737,000) but let ego push them toward empire-building instead. The video covers why founders miss exits at their peak and how a pre-mortem can help you recognize when to stop.
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We have suffered and fled literally for this business. And I will not throw it away for nothing.
Guess what? Walter doesn't care about his $737,000 anymore. Walter wants more, and he thinks he can get it, so he doesn't want to sell yet.
Today, I'm going to dive into part three of our Breaking Bad analysis. If you missed the first two episodes about Walter building and scaling his business, you, you can catch up with the links below. But this episode is a bit different. I'm breaking down one of the biggest mistakes founders make and exactly how their mindset changes over time. Let's dive in.
State College. Adjusting for inflation, say $45,000 a year, two kids, four years of college, $360,000 provide for, say, 10 years. That's $240,000 plus 360, plus 137. $737,000. That's what I need.
We'll find out what happens to Walter. But in real life, you should have a goal for your business, which then ladders down into your success and the amount of money you can make. Whether it's, I want to build a billion dollar business, hey, good luck. But that is something more long term to think through, or I want to, you know, make a dent in the world. That's what a lot of people say. I want to change the world. Okay, I got it. But in this case, this is almost like very short term thinking that is very personal and doesn't really align with completely your business. So why didn't he just aim higher in the first place? And that's kind of what I wonder about Some founders who I hear say this, that it's like, hey, I just want to make this amount of money and I'm good and I'll be happy for this reason or that reason. It's never the case. If you ever get to a spot to be very successful, your ego can get in the way. But you might not know why. In these scenes, we understand exactly why. So hopefully we can all prevent the same mistake that Walter's making.
Mike's connection won't buy mine and Mike shares of the methylamine unless he gets your share too. He wants the entire thousand gallons.
Absolutely not.
When you started this thing, did you ever dream of having $5 million? I know for a fact that you didn't. I know for a fact all you needed was 737,000 because you worked it all out.
Like, mathematically, this is so classic. Again, it's rare to have a situation where both founders are aligned on selling the company. And it only gets real when there's an actual real offer on the table. The tip I have for you is don't get in this situation. It's too late to have this kind of discussion. Instead, do a pre mortem, which is essentially the idea of if X, Y or Z happens, what do we both care about? Because then you're not getting into these weird reminders about the past and all that. Because guess what? Walter doesn't care about his $737,000 anymore. Walter wants more and he thinks he can get it. So he doesn't want to sell yet.
We could have it tomorrow. We would be out. You could spend time with your family. No more worrying about them getting hurt or finding out about everything. Isn't this what you've been working for?
I have not been working this hard just to sell out.
It's not selling out.
Yes it is. Jesse. We have suffered and bled literally for this business. And I will not throw it away for nothing.
I don't know how to say it, Mr. White. $5 million isn't nothing.
You know, this reminds me of something very specific that I like to talk about to founders who have found success and are entertaining these kind of offers. At every startup that's successful, there are peaks of value. And if you find that peak and nail it in terms of getting acquired, you're going to win over waiting, letting the peak drop and then hoping that you can go past that peak on the next run up. And yes, this looks like a successful crypto chart or stock chart or what have you where you're down bad. Just don't get in a spot where you're down bad. Cause that's how you started. They call that round tripping. So what a lot of founders do is they don't realize they're at a peak and they end up round tripping back down to where they started simply because they didn't capture the value of their business at the right time.
Jesse, have you heard of a company called Gray Matter? Well, I co founded it grad school with a couple of friends of mine. And then something happened between the three of us and I decided to leave the company and I sold my share to my two partners. I took a buyout for $5,000. Now at the time, that was a lot of money for me. Care to guess what that company is worth now?
Millions.
Billions. With a B.2.16 billion as of last Friday. I sold my kid's birthright for a few months rent.
And this isn't the same thing.
Jesse, you asked me if I was in the meth business or the money business. Neither.
I'm in the empire business.
It's wild when you think about where Walter started as a schoolteacher who just learned that he has cancer. And then you hear this, and he says, I'm in the empire business. This is what success does to your mind. It just makes you want more. There's nothing wrong with that. There's nothing great about that either, to be honest. But this is a very classic scenario where as you start being more successful, your brain changes. Your whole paradigm of what success is or what it isn't completely changes. In his case, we now learned what he's fighting for. He's fighting for something that he wish he had, that he feels like he could have had, and let go. It's the drive of something they're missing in life, and his was very crisp and clear. It's not always the case, but it is a relatively common scenario where a founder is essentially holding so much baggage about something, and when they can unleash it and they kind of see that dream get closer to what that reality was that they might have had, they. They just go after it. So it's one of those scenarios. It's not like the most common one that happens to everyone, but it is definitely something I've seen before where you get successful. Then the real reason you're doing this comes out. The real reason Walter's doing this is not that $737,000. The reason he's doing it is because he felt like he missed out on billions of dollars.
