6 Keys to Building a $40M Business (Live Mastermind)

You guys are all amazing entrepreneurs, very successful people now, but I know not everybody started that way.

What's the thing that I should be focused on early on? And I think it's actually working on the really hard stuff. We built a service that would do on-demand parking. Every day we had people calling in being like, you guys crashed this car right into my office. If I can solve this, I can solve anything.

There's so many skills that you learn as you ladder up through these businesses. You know, I started a web hosting company that didn't go anywhere. Tried to make like a local social network idea. Revenue made $0, $0, $50, and then it builds up and then And finally, once you've got it, there you go.

I like to think of entrepreneurship as I'm a gambler. I want to look at the risk profile and odds of success. I'm playing basketball against LeBron James, against the Stanford grads, against the venture capitalists, or I can go over here in sweaty startup land and play basketball against a 4th grade girl.

Oh, and don't follow your passion. There's this grand story. If you just like follow your passion, somehow money will just fall out of the sky on you. I think you should follow your passions and you should figure out a way to make money.

I think it's really important to like the industry that you're in, at least categorically, because you don't want to be fighting all the uphill battles and also hating the people that you have to spend all this time with to do it.

I don't know.

I'm of the camp that making money is fun.

So we're hanging out here in Cabo for a little mastermind that we did this weekend, and we thought it'd be fun just to get everybody around the table and chat about some of our takeaways, what's going on in business. So you've got Curtis, who's built an amazing business, venture-backed in the financial services world. He's well over $1 million a month in revenue. Matt is our host. He's the one that brings us down to Cabo every year. D.Ava and Xavier have built Enduring Ventures. How many companies do you guys own now?

22, I think is the last count.

That's pretty fantastic.

Uh, and then Nick joined us for the first half of the conversation and then he had to jet off to the airport. He probably is the best example in the group of building an audience and taking it, you know, to an amazing level of building all of these companies. Yeah. And then I built ConvertKit to a little over $40 million a year in revenue. And it's a fun conversation.

So you guys are all amazing entrepreneurs, very successful people now. But I know not everybody started that way, right? We all started somewhere and we got to where we are today. I'd love to hear about any, like, specific stories around past businesses that you had that didn't work out and how you transitioned and really made that change to to become weaver today?

My first business I thought was a good idea. I was 21. At the college I went to, there was no food for drunk people after 10 PM at Amherst College. And I had recently saw in Paris there was like late-night crepes being sold. I was like, this is going to be awesome.

This sounds awesome. I'm already buying.

I had a dorm room. I had no like health and safety code violations. I was like, I'm going to be a traveling crepe salesman to drunk people at midnight at parties. And I prepped everything in my dorm room to be ready to go. And I was like, the way I'm gonna do this, my crates need to be powered. I'm gonna buy a generator so the generator can be portable. My biggest CapEx, I saved up $500 for a generator. Night 1, I have yet to turn it on. I turned the generator on at like 8:00 PM just to test all my equipment. It was so loud. It was basically like crush any normal— it was unusable. It was totally unusable. Anyway, I ended up buying like incredibly long extension cords plugged into like frat houses. I made it work, but like ultimately the downfall, there was like a very drunk girl with a turquoise tube top. She went for a grape. She put her hand on my—

oh no.

I was like, I gotta shut this thing down. But it did prove to me you can take an idea in your head and turn it into reality in a business. And that got me hooked on entrepreneurship for the rest of my life.

I'll say, I think the common theme is that as an early entrepreneur, I had a lot of ego. I had a lot of set in my ways. I was very sure of myself. And I think that was a blessing or I wouldn't have had the guts to do it. But the theme that I'm reading and one of my big takeaways from you all this weekend and just in general is that if you are fluid in your decision-making, you're willing to change your mind, you're willing to change the way you think about things over time, you can adjust and go after what's working. And I feel like everybody— a metaphor is there's a mountain over there. If we took this cup and we poured this water out on top of that mountain, it would take the path of least resistance to get to the bottom. A lot of entrepreneurs early in their career are like, I wanna go up that mountain. I wanna do something really hard. I wanna do something that is maybe notable. All of us here are thinking, hey, what's the path of least resistance? Like, how can I change my mind? How can I be fluid? How can I capitalize on momentum and keep doing easier and easier things that are more and more effective? And that takes a sense of humility that I think all of the successful entrepreneurs, especially you all have, is that sense of humility. I'm not gonna go after what I think is right. I'm gonna, step back, I'm gonna be unemotional about this, I'm gonna change my mind and I'm gonna be like water, find a path of least resistance down the hill.

I just wanna know if Matt knows how to make crepes still.

Oh yeah, I've got a great recipe from Corona Blue, I'll send it to you.

There's so many skills that you learn as you ladder up through these businesses. I made a list of all the companies or like attempted projects before starting ConvertKit and there was actually 10 and just going through, I was in web design early on and so of course started a web hosting company that didn't go anywhere, WordPress theme company. Then I combined those and tried to make a local social network and you just ladder up through all of these things. It doesn't work, doesn't work, a flashcards app in the App Store. But all the way along you're learning a little bit more about how things work. But when I actually listed it out, idea, revenue made, idea, revenue made, it was just like $0, $0, $50, $100. And then it builds up and then finally $1, $2 million. There you go. But it requires like actually trying things out and seeing what works.

And I don't think if we would've tried that stuff, been in those hard businesses, we would've been able to get to where we are today. I think me and, me and Steve would talk about this a lot. There's 3 really important things to building businesses, you know, the network, the capital, and the skill, like the operational chops, the ability to make decisions. If you don't practice that stuff, then it never comes.

To that point, exactly. I often get asked by founders like, what's the thing that I should be focused on early on? And I think it's actually working on the really hard stuff because it teaches you this level of resilience that you're going to need no matter what business you do. Like, the last startup that I worked on was an on-demand business. It was like in the middle of the early 2010s era where everyone was trying to build an Uber for X. We basically built a service that would do on-demand parking. So you go to a city, you can't find parking, you drop your pin, someone would come pick up your car for you, and then magically they take it away and park it. And then whenever you wanted it back, drop your pin again, they come back, right?

Logistically brutal business.

Genius magical service. Like it was like a 12 out of 10 on all the ratings. Everyone loved it. Obviously the business model was absolutely terrible. Like our gross margin was like -200%, but people loved it. And I think what it taught us was that you build something that's really, really great, people love it, and that's the first step. But just to make that service work, you had to get all of these people to show up on time to a car, pick it up, not crash it, not put the wrong fuel in, not do all of these things that are just inevitably going to happen. And I— every day we had people calling in being like, you put diesel into my G-Wagon, what are you gonna do about it? Or like, you guys crashed this car right into my office, what are you gonna do about it?

We were like, I don't know.

But I think dealing with that every single day teaches you like, okay, if I can solve this, like I can solve anything else that comes my way.

Yeah, yeah.

Because the other thing that's, I think, really worth pointing out is in the 10 things that you tried, that means, uh, there were 9 times you bounced back from it not working. And, uh, there's like an underappreciated just tenacity that, that's required that is really worth cultivating.

I guess I have a scrappy story similar to Xavier's. I was running a pickup and delivery student storage business where I had to be at a certain dorm at a certain time with the truck, with dollies, having college kids drive these things in major cities and 12, 12 places at the same time. And we couldn't spend money on AdWords, so we took boxes of chalk and we wrote big ads on the concrete where we knew our students were walking to class. Our competitors were spending money on AdWords. We were getting out at 5 AM and writing chalk advertisements for Storage Squad. Go to this website for student storage. And then at 8 AM for the 8:40 class at Cornell, they would all walk across the same bridge and they would see our stickers. And we would literally start to see people showing up on the website, showing up on the website, showing up on the website at 8, 10 AM as they're walking to class. So like, you don't always have to think of like, how is this super scalable? If you're willing to like take a step down status-wise and get out and write sidewalk chalk or go pick up cars or this stuff that's hard, you just learn a ton.

There's a version of that where often the online or the offline marketing is really interesting for making compelling online marketing. So in today's world, what you— what I would do is I would do the sidewalk chalk version, and then I would make Instagram Reels or online content of the sidewalk chalk. So I have a local newsletter called From Boise. It's got 25,000 subscribers. And so we're always trying little things of how are we going to grow this newsletter. And one thing that we did is made those like flyers with little tear sheets at the bottom, and we put those up a bunch of places and people would actually tear it off and you'd You know, we made it trackable so I can know, and that got subscribers. But what got way more subscribers was the Instagram Reel that we made about that, and people were watching it to try to learn it. So often, you know, it's like, should I buy a billboard for my business? Probably not.

If you're gonna take a picture of it.

But if you're gonna take a picture of it, if you're gonna make content about the billboard, then absolutely, 100%.

Yeah, how do you give yourself enough, it sounds like a big part of building your guys' businesses is you've just been at it for a long time, right? We're just seeing kind of the chapter 10, and we didn't see chapter 1, we didn't see chapter 2. Like, what do you tell people who are just thinking about entrepreneurship or just getting into it?

You know, I think game selection is something that I did not understand as like a college entrepreneur. Like, which game— there's infinite entrepreneurial games you can play, each with their own margin profile, level of competition, level of difficulty, level of your special skills being applicable to that. And as a young entrepreneur, you tend to, like, I think half the table or more started a college-oriented business, right? Because like all you know about in life is like, there's no food for drunk people after 10, or like textbooks are expensive, or, you know, I want to buy some notes or whatever. And like, you don't, um, you, you see, so you end up choosing the game too quickly. And then you grind at the game if you're a good entrepreneur, and then you wake up and you're like, oh, I spent my 20s playing like a somewhat mediocre game. Like, turns out Uber for X was usually like a mediocre game unless you could raise like billions of dollars. And so I think that it's really hard to find like a highly attractive game to play. But I think like I've seen everybody here actually step up the quality of the game they're playing, both in their particular ability to win it as well as the scale of the game and the— in some ways, Nick, like you said, you know, doing the self-storage stuff, when you compare that to all the other stuff you're doing now, it looked like a way better business than Storage Squad, and it was. But now the stuff you're doing now is way better because you've kept iterating on what's, what's a game I can play that will accrue to my benefit.

Yeah, I like to think of entrepreneurship as I'm a gambler and I have chips in front of me and those chips are years of my life. And if I'm going to put chips on a hand, I want to look at the risk profile and odds of success. I can have a 7-2, which means— and Matt has got an ace-ace. I'm playing basketball against LeBron James. I'm picking, I'm choosing on purpose to gamble my time to play against the Stanford grads, against the venture capital, again, playing a game where nobody's profitable yet. Nobody's proven a concept. It's like I'm playing basketball against LeBron James, or I can go over here in sweaty startup land and play basketball against a 4th grade girl. I can shoot layups over her without any pressure, or I could try to hit a fadeaway 3-pointer over LeBron James to hopefully score 2 points and still get crushed. Yeah, that's, that's entrepreneurship. You get to pick what games you want to play. Too many people are emotionally drawn towards something that's sexy, something that's fun, something that will give them status, something where they can walk around Silicon Valley in sweatpants and tell their grandma they raise money. Or you can go move boxes and second year in business make 70, 80 grand a year.

Totally.

It's—

oh, and don't follow your passion. I'm also a big believer in that.

Say more about why.

Okay, so I got thoughts on this too.

Yeah, so there's this grand story that's told that just— you just like follow your passion, somehow money will just fall out of the sky on you. And I really think that that's one of the most harmful things. Yeah, I think you should follow your passions and you should figure out a way to make money, and your passions may give you clues about interesting niches or interesting ways to make money. But just because you love guitars, the dumbest thing in the world you could do is start a guitar store and sit there all day waiting for people to walk in and buy a damn guitar from you. Like, that's a terrible business.

Turns out a lot of money lets you follow your passion. Every rich guy I know gets to go around and do whatever the hell he wants. If he's passionate about golf, he can play golf. He's passionate about guitars, he can collect the guitars. He's passionate about luxury real estate. He can buy this 4,000 square foot luxury condo in one of the nicest resorts in the world. The person who goes and starts a business against— and another thing about doing that is that you compete against a lot of other emotionally driven people who don't make logical decisions. If you're following what you love, there's a damn good chance that a lot of other people love that too. You're gonna compete against them. They're willing to make less money. They're willing to do it longer. They're willing to make irrational decisions. It's like in the restaurant business and so many others.

So you want to know the worst business in the world is the wine business. Almost no one makes profit on wine because every rich person buys a vineyard and they don't care whether they make money.

Competing against those people sucks.

The other thing about the passion thing is, is what people underestimate early is if you make a good choice in game selection and you commit to it and then you get better and better and better, oftentimes a level of passion can emerge from mastery around just becoming a better, like, crafts person in that field of entrepreneurship. And so, like, passion isn't static, and, uh, it's wise— you got to solve the financial piece.

Here's a really surprising piece of it, is that if you're doing business at a high level, you are hiring, you are firing, you are managing, you are raising capital. You're not doing that individual thing anymore. Every business owner I know in any industry, whether it's the wine business or any business, they are dealing with problems. They're dealing with workforce. They're dealing with recruiting. They're dealing— so unless you're passionate about sales, delegation, hiring, raising money, then you're going to have a hard time being a successful entrepreneur because doing business well is not drinking wine or playing guitar.

There's a really important point you made there, which is that I'm a really big believer of playing unfair games. And so when you talk about game selection, it's really important that you understand what is the one thing that I am better at than 99.99% of people. And it's usually something like sales or engineering or something like that. And you have to put yourself in a position where you are able to do the specific thing all the time instead of spending your time trying to get better at the stuff that you suck at. 'cause you're just not gonna be able to grow fast enough and outcompete people who are already good at that, right? But you combine that with like, there is some kernel of truth in the following your passion idea, which is that it helps you pick the sector and domain that you might start to pursue. And the reason why that's important is because if you're passionate about the domain you're in, you're gonna go deeper than most people will about understanding why the thing is what it is or why things are the way they are today. And if you have that passion about that space, you can uncover that earned secret or that unique insight about the space that others will not be able to actually uncover. And then you combine your superpower with that expert understanding of the space, and that's when you get outsized outcomes.

I think along those lines, it's really important to like the industry that you're in, at least categorically, or like the types of people that you hang out with. Because if we know that in order to find success in this, it's not going to be like, oh, you know, I'll be in this business for a year and then, you know, I'll sell it. It's like probably 10 years. And so when you're, you know, choosing the game you want to play or the industry that you're in, ask yourself, are these the kind of people that I want to hang out with for the next decade? If no, like, think hard about that because you don't want to be fighting all the uphill battles or headwinds in your business and also hating the people that you have to spend all this time with to do it.

I don't know, I'm of the camp that making money is fun. And like, if I'm making money in a business, I'm having fun. And if I'm leading people, my team's having fun. If I'm not making money, nobody's having fun and people are struggling to feed families. But the interesting thing is, like, when you've done it for 10 years and you have the momentum and you have the flywheel spinning, all of us get to start playing games where we have a massive competitive advantage. Xavier, Matt, Nathan Barry, Sieva, Kurt— everybody's playing a game where they know they have a competitive advantage. And if they don't have the cards stacked in their favor, they're not willing to play the game. But the fun thing about business is that you can find those advantages. You can have business on easy mode because you have an audience, or because it there's synergies with another business or there's a bolt-on to your business or there's, there's so many different ways where, wow, this is like a no-brainer. I'm gonna push my chips in because I've been in the game long enough. I've seen one. And then opportunities just start to flow. People and opportunities attract and that's when business gets really fun.

Yep.

How'd you guys discover your superpowers? Like how did you lean into that? I didn't automatically know that when I was a kid.

I think one of the easiest ways to start is by asking your friends who know you well what they think your superpower is. Because I think it is always really hard to do honest self-assessment. But if people who've been around you for 10 years plus, they'll be able to give you a lot of clarity around like, hey, you're really good at storytelling, or you're really good at breaking down complex things into really simple terms. And then that will give you, I think, a guidepost to then start to explore more deeply what it is that you can really do with that thing.

For me, it's really about trying a lot of things, you know, like I really had to go through those first 5 years. I have to I tried sales, I tried marketing. I was an intern for a politician, you know, like I tried a bunch of things and I kind of didn't give up until I started to notice things got easier. And then when things got easier, I talked to my friends, I talked to my peers, and I looked at what I was doing. I was like, oh wow, I think this is like really where I excel. And it wasn't frankly being a CEO, it wasn't being a COO. It was really identifying talent, raising capital, Putting deals together, that's really when things started to take off for me.

You know, I know I'll say that I, I've never really been great at self-assessment. I think I got lucky. Like I just got lucky that I fell into a spot where I can be a leader, I can be charismatic, I can try to attract people. Um, so it was kind of just a blessing that it fell. I think you're so right that it might take other people some assessment because I'm, I'm naturally pretty bad at assessing logically what I'm good at and what I'm not.

And peer groups are great for that. I mean, that's one of the things that's cool, right? It's like, uh, I always like learn something where somebody in one of these groups were like, oh yeah, that was really helpful that you did. I'm like, oh, interesting.

All right.

So we, we lost our friend Nick. He had to catch a plane, but we were talking about game and game selection. And I'd love to hear from you guys, like, what have we learned over the years about what is a good game? What is a bad game?

You know, the, the first business I started that went anywhere was Better World Books. From a scale perspective grew from absolute zero. We, we had $40 of startup capital, um, to about $70 million in revenue over a decade.

What do we do?

Fundamentally, we sold used books through Amazon Marketplace and other third-party channels. And why was that a good idea at that time? It was a good idea because Amazon had just opened up to third-party sellers. So we were ascent— and when something changes in the market like that, sometimes all the previous participants, so in our case, all the old used bookstores were not well set up for online sales because they were typically retailers. And so we had our wind at our back essentially for the first decade of operations, even though we made every mistake in the book. Like, I even think about like population growth or decline in a geographic area. Like, it doesn't feel like a lot in a short period, But over a decade or two decades, 3% population growth versus 3% population decline means a huge difference because if it's growing, all the suppliers can grow into it. If it's shrinking, people tend to try to stay in business. So you're fighting over fewer and fewer customers, tends to be lower prices, tends to be more competition and just a worse game to play.

I totally agree with that. What Xavier is saying here. I think one of the first things you have to be really sure about is the either velocity or size of the market you're going after. And like, you know, people call it TAM or what have you. That's so important because what it really allows you to do as an operator is have a margin of error. If you're in a small market, like, you really can't mess up. You have to do everything right because it's just not a big enough market for you to win otherwise. But you look at something like payments, right? There's like 1,000 companies in payments and like all of them are successful because it's just so ludicrously big as a market and you can find your specific niche within that market. But I see a lot of people who have a unique idea and they get really excited about it and they start to pursue it only to realize a couple years in that the market just isn't big enough to support small quote-unquote like lifestyle business. But you really want to build something meaningful. It just isn't a big enough market there. And so, and it doesn't have to be something that exists today. If you look at like Airbnb, like they created a market, but the dynamic and demand for an alternative to a hotel was always there and they just found the right way to capture it. And so you have to be really clear about either it's growing fast or the market itself is just so big. Otherwise you're gonna be playing a game that is a losing game.

Mm-hmm.

When I sold my first company, I started it, I was 25. Sold it when I was 33. And I had a little dinner with like the advisors who had mentored me. And there was a 70-year-old and I was like trying to review with them the mistakes I made. So I was making sure the takeaways. And the advisor was like, you should be much more focused on the fact that you selected an industry that had these growth tailwinds to it that allowed you to overcome mistakes you made that would frankly kill 90% of other companies. So yeah, picking, picking the game, picking the industry with, uh, a lot of growth behind you, uh, you're gonna have to have margin for error.

I think something else that gives you some of that margin for error is one of my rules is that I have to choose a business or products where I have recurring or repeat purchases. If I have one-time sales and I'm just counting on word of mouth or referrals or like the ability to reach more customers through advertising, I won't touch that market. So that's gonna bring me to something like subscription software, which I love, or getting into consumables, right? If someone has Liquid Death, right, the water, if you're buying that continually, you get someone to have that as part of their habit and to buy it again and again rather than seeking out a new a new customer. So when I'm looking at particularly creative-led businesses, people often want to go into something where it's like, oh, I'm going to make this perfect backpack. I'm going to sell that to my audience because that's what they love, but it's a one-time sale. And I really encourage people to stay away from that and to find a business where they have recurring or a repeat or return purchase.

My experience is you were sharing your book building business and book selling business, My experience was the opposite for my first two businesses. So my first business was this student note-taking business. Basically, we went to college students and they would post their college notes on our website and sell them, which at its core is not a bad idea. But the problem is that one, it's not a painkiller. You know, they talk about vitamins versus painkillers. Like class notes are a vitamin, right? They're like nice to have, but they're not the solutions to my test, right? So the students are kind of like iffy. They have to really, really want to get a good grade to buy your notes in the first place. The second problem is you're selling to college students. College students have no money. They're frugal. They're living off of ramen, and we're trying to build a big business off of that. After working on it for like 3 years, I remember I went to a family friend who was a famous investor, and I was sitting with him, and I was like, man, like scratching my head. This so freaking hard. I feel like I'm like climbing a mountain. Like, is all entrepreneurship like this? Is there like a better way? And he thought about it for a second and he basically shared what you said. You know, you can swim upstream or you can swim downstream. And he's like, you are swimming upstream. And at that point I was like, I need to stop swimming upstream. I need to pick a different business. You know, fast forward to today, we own a couple of plumbing businesses, right? And those are painkiller businesses.

right?

If you own a home and your plumbing breaks, you are freaked out, and the plumber shows up and they're ready to help you, they're ready to soothe your concerns, you're going to pay whatever it takes to fix it, right? This is your home, this is your biggest investment, and you're ready to pay for it immediately, and you're ready to pay a lot of money. And that's an example of what I think is a good business where you can charge a good margin and frankly, like, live a better life, right? Play entrepreneurship on easier mode.

I spend a lot of time with people who are teaching, creating content, and all that. And one of the rules is to teach a skill that makes money to people who have money. So that could be, you know, I'm teaching professional software designers how to develop in their career, right? Or if you go to the inverse, like a ridiculous example, like we're teaching knitting to college students, right? It's not gonna go anywhere. So skill that doesn't make money to people who don't have money. But you can also end up in the in-between where you're, say, you're teaching career skills, definitely a skill that makes money to college students. And so when you, when you find in this thing that you're teaching or selling, or if you're struggling, then what's the correlation? You know, does this help them make money? And am I choosing a market where they actually have money to spend? Because if you're focused on teaching professional skills, to professionals, then they're usually, they have a budget with them, right? When you're thinking about like, oh, I'm teaching all this content that could be learned for free on the internet, why would someone pay me, you know, $200 for a course or $500 for coaching for this? And so when you think about that, you know, it's a huge game selection thing of like, oh, if I just choose to teach a skill that makes money to people who have money, then I'm swimming downstream. Instead of swimming upstream.

I think another really key element of game selection is I think there are tiers of decisions that you make, right? So let's say just for the sake of this conversation, there's 3 levels of decisions. Level 1 is like picking the market that you choose to play in. Level 2 would be who you bring on your team to help you tackle that market. And level 3 would be like what products that we build to actually like solve the problem. Level 4 would then be like features for a specific product, etc. Then it goes down and out from there. Right? The most important decisions, and you only really make like 1 to 2, maybe 3 of these a year as a leader, are in that level 1 bucket. But if you make the wrong decisions in that level 1 bucket, everything below it is effectively irrelevant because you made the wrong level 1 decisions. And so I think a big element of game selection is if you don't make sure that you nail that level 1, then you're spending your time in the wrong area. Right?

What do you think is cool today? If you guys look, okay, we have an AI boom happening, right? That is like, could be the next internet revolution, could be an overhyped thing that happens. Probably will be both. It'll be like AI will eventually change our lives. Probably take like 10 years longer than everyone thinks. I'm just curious what you guys are curious about forward-looking, what lights you up?

I'm currently obsessed with network effects. I ran a business for a decade, you know, in the email industry where everything was very siloed. People were pulling content on social networks and connecting with other creators and all of that. And then when they came to their email list, it was entirely, you know, you're on your own island, entirely separate. And now I think the next decade of the business is all about making those connections between creators and figuring out how can they recommend each other, benefit, you know, learn and grow and meet each other. You know, sort of as we talk about like what had a huge impact, you know, for each of us is usually the people we met. And so how can we make that happen at scale? And it's one of those things that 2 years ago I was not really thinking about network effects. And then once I started to implement them, it was actually an advertising business that got me there first, realizing, wait, if I bring in a sponsor for a creator, then I can sell that same brand across 10 more creators. And 90% of the work was landing them for the first creator and it's just 10% to get them for the next 10 creators. And once I saw that, and I was like, oh, this network effect is amazing. And then we started to see it the other way as well of, wait, if we run sponsorships for all these different creators, then we have this huge amount of surface area for brands to come in and work with us. And then it just turned into like something, once you see it, you can't unsee it. And now I'm just obsessed with network effects in every aspect of our business.

One level out, what I see is the discussion's really about leverage. And as time has gone on over the centuries, frankly, our ability to create more and more leverage has gone up. There's this famous saying that I'm gonna butcher, but it's basically, you can gimme the biggest rock in the world and I can move it if you also gimme the biggest stick to stand. And that's the concept of leverage, obviously. So in the beginning, and Naval has a quote on this too, I think, you know, 3 of his concepts of leverage are capital, labor, and media, right? And in the beginning, let's say 500 years ago, maybe there was just labor, right? You could hire people to do work for you. And then eventually there was capital, right? You could get a loan from your neighbor to start a farm. And maybe 100 years ago, the concept of media started, right? And all of that is accelerating now. And I'm curious, how are you guys applying leverage to your lives, to your businesses, and where do you see this all going for you?

I mean, one thing with an audience is, as it comes down to hiring, actually, since I've built a following on X, my team actually gets annoyed at me sometimes because they'll be facing a problem and trying to figure out like, how are we going to solve this? And I'm like, I don't know, I'll tweet about it and see what happens. And I'll tweet about it and we'll get like 7 really competent people who will respond and say, hey, I would solve it this way. They go back to my team and like, how's that sound? They're like, that sounds great. But like, they're both excited that we solved the problem so easily and really annoyed that they just feel like I didn't put any effort in because they just use extreme leverage of posting a tweet to 100,000 people and then be like, oh yeah, let's go with that one. And so it definitely makes these things so much easier. And so hiring, you know, if you think about how do I get people interested in working for my company? If I'm putting out content and I have these people following, you know, they're not scrolling through a job listing and being like, I don't know this random, have you ever read a job description? They're all terrible. Even for my company, they're probably terrible.

My eyes glaze over when I read 'em.

Yeah, 'cause it's just full of nonsense. But if you're scrolling through and you go, oh, that's a company that I recognize, or I follow that CEO on Twitter, then you immediately get, you know, higher conversion right there. And then someone is like, oh, I'd love to work for this company over this company. If the offer was the same because I'm following it and caring about it. And then if you think about the leverage you get when someone already knows you and your business and your industry and they come in with ideas, it's just like being able to hire from an audience or hire from a community that follows you is a massive amount of leverage. And I think that people really, really underestimate it.

Yeah, we posted a job posting on Twitter and LinkedIn recently for an investment partner, and we had over 200 super qualified applicants that knew exactly what we do. They were attracted to our long-term holding concept, and we got a great hire out of it, and we didn't spend a dollar, right?

It was—

we wrote a short description, we posted on Twitter, it took us 20 minutes.

Yeah, we, um, I just saw this with our shareholder letter, right? So our shareholder letter went out, I think that on X it was seen maybe 120,000 times. And so I think about, I could go to infinite business conferences for a whole year. I could spend all day every day presenting to investment managers, high net worth individuals. And after the entire year, like maybe 10,000 people, 5,000 people would know more about Enduring Ventures. or like that one act of putting out a written bit of content that is shared and seen, you know, people now know who we are and what we do.

Yeah.

And how we think.

And more deeply, like I, I have personal friends in my entrepreneurial network who know I'm an investor.

Yeah.

Who texted me your letter and was like, this is so cool what they're building. Uh, uh, and you just, you just posted it.

A really simple example of leverage that if you guys aren't doing this in recruiting, I highly recommend you start doing it. So I've been working to hire a VP of product. This has been a 3-month search that I've been working on. I hired a recruiting firm as well. And so they're teeing up candidates. And what I realized is, okay, I'm gonna talk to say 20 highly qualified candidates over this time period. That's a lot of conversations where I'm setting the stage of the business, the problems that we're facing, what's interesting about the role. And so what I did is I just mapped out, okay, what's most important for these people to know? And I recorded a 20-minute Loom video and it was targeted at, you know, a VP of product who might be interested in this role. Here are the problems exactly we're facing. Here's why it's hard. And I emailed that out to every candidate before I talked to them. And it was like every single conversation started 20 minutes in. We got on, on the call and they're like, first, Every person said, I love the video. I've never seen that before in recruiting. And like, it's so fantastic. Actually, our recruiter, Riviera, said, I feel like I've just seen a step function in my career because I'm gonna do this with every single client going forward. And I had one call with someone who had not watched the video.

Instant bounce rate.

And it was just, and you know, maybe somebody was missing the email or, And I didn't wanna hold it against them because that is not a normal thing, but the quality of the conversation was completely different.

Mm-hmm.

And I was just like, oh, you know, we had to start at square one where I realized every other conversation I'd been starting super far in. So I saved a whole bunch of time, got candidates excited, and then ultimately landed a candidate that, you know, I'm very, very happy with.

That's a great example of leverage. You took a task that was gonna take you 9 hours to do basically.

Yep.

Of all these introductions, you compressed it into 20 minutes. And in your organization where you have, you know, 50+ employees, that's a lot of time. That really adds up.

Yeah, there's just like really simple concepts around leverage that I feel like it's just always good to help people understand. Like the shorthand for leverage is like, is it saving you time? Because time is your most valuable resource, right? So when you talk about like whether it's labor, whether it's capital, whether it's media, All of those things are ways to save you time to get to the end result faster. But when you start thinking about it that way, there's actually like 100 different ways that you can gain leverage in your day-to-day. Hiring a housekeeper to clean your house because you don't want to do it yourself is like one of the most simple points of leverage that can get you back, I don't know, a couple hours of your week. And I think for a lot of people, Once they grasp that concept, and then you do like— there's this thing they can do around like a time audit, right? Where you look at your calendar and say, okay, where am I spending my time? And how much of that stuff could either be automated or in some way delegated or passed off to someone where it would actually be able to free me up to do the more important things? And if you do that exercise regularly, both in your personal and in your work life, you will always find opportunity to go, I really shouldn't be I should actually find a service to take this thing off of my plate. And just constantly doing that exercise I think is a really helpful way to just always improve your quality of life. So I love Nathan's story about adding more leverage to the hiring process by giving the candidate more information upfront. Something we do that is related to that on the hiring side, but on the team training side is I found that I was, as the founder, I will always have the most, the highest bar for talent. And it would just naturally always be that way. But you have to scale that understanding of what we're looking for and assessment of talent across the whole org. So how do you do that, right? And like one of the biggest fears I have, and I know a lot of other founders have this fear, is you get dilution of talent the larger you get. So how do you prevent that with a system? And so one of the things that we started doing is we record all of our interviews, obviously with the permission of the candidate, and then we go through and we label, this was a, like we have a 4-point scale, 4 being like the best, 1 being the worst. And we go through and we have a library of like hundreds and hundreds of interviews where this is like a 4 or 3 or 2 or a 1. And then we talk about why this was a 4 candidate or a 3 candidate, a 2 or 1. And when we train interviewers, like it's a privilege to be an interviewer, right? 'Cause you're the gatekeeper for the culture. Have them watch hours and hours of interviews as part of the training. So they can just start pattern matching. Like, oh, okay, exactly. Calibrate, pattern match. And we found that to be the most effective by far. Because like most people when they interview, just like, oh, I trust you, go out there. And like, they're just, even if they have a script and they have a clear rubric of what they're assessing for, they don't understand how Pinwheel actually assesses for talent. And like that, you start to have a lot of dispersion in terms of the quality. And that's how we are able to still maintain high quality even at scale.

That's an amazing strategy. Yeah.

Yeah.

I love that.

That's really good. It's also a good example of, I mean, we've been talking a lot about the value of, you know, your own media or audience at scale, but these are two examples of like custom media that you're creating for a very specific use case internally that still gives you massive leverage. You can think about ways of using that media form of leverage, but with a very focused audience that still can be extremely powerful.

Yeah.

What is one thing that you've done either in the past year or if you want to extend the timeline out, that's fine, that you feel like is giving you the most leverage in what you do?

I've actually blocked off more and more of my calendar and made it so like my Calendly, which I have various Calendly links which I send which have more or less availability. To like various people. Like, so random person I do want to have a conversation with, I will give them this Calendly. Like, members of my team like have broader access to my time. But still, I really try to make it so there's like 2 or 3 days in the week where there's very little scheduled activity. And I actually find that's when I get any real work done.

Yeah.

I have a weird answer for this, but I would have to say hosting.

Interesting.

So like I made a conscious effort in the last year to be very intentional about hosting. This event is part of that. I've been doing it much more like, like in, in the Bay Area, like, like locally near my home. And obviously it's intentional hosting. It's, it's, you're being thoughtful about, uh, who you're inviting. But the opportunities and leverage from the opportunities from those relationships, uh, I mean, we're literally also creating media right now, uh, for that will get, that will all get leverage from from hosting. And I kind of thought that was a, oh yeah, that kind of makes sense. But I've been really surprised at the leverage it is generating.

Hosting is something that I want to do more of and figure out the system for. Dan Martell does something where I think it's every, I think every week in Kelowna in British Columbia where he lives, he does a founder's hike because he's all these people who want to meet up and all of that. And so he just combined a bunch of things where he is like, all right, let's do a meetup. I want to get a workout in. And when people come into town, I don't want to do like a whole ton of coffee meetings or whatever else. Someone say like, Dan, let's get together. And he is like, yep, Tuesday morning, 6:00 AM, we're climbing that mountain. We do it every single week. And that's something that I want to start doing because it's a lot more local community. And then it's also really welcoming, you know, a new person comes in that it's, you know, it's less of like, okay, we got our name tags, we're doing this whole meetup thing, you know, how it's just like, hey, we're going there.

And, you know, you end up meeting and talking to a bunch of people along the way. There's an interesting thing I've been thinking a lot about, which is leverage in relationships. And what I mean by that specifically is like, like we discussed earlier, most relationships in today's day and age are, I think, fairly surface level, right? And it's because it requires a deep level of vulnerability in order to actually build this trust with someone that you are then comfortable sharing the things that are really on your mind or that you are really deeply thinking about.

Matt, have you— as you've hosted— yeah, I think this is now your 5th event in the last year. Uh, what have you noticed about group selection and what have you learned as you've put together all these different groups of entrepreneurs?

It's really helpful to do some— I mean, it's critical to do some level of pre-screening because we're doing 3 days together and we have had experiences where there's just been different levels of group cohesion. And so the things that I look for up front, at least for the events we're doing at The Inflection, are a level of ambition that's high. That doesn't need to be financial. It can be impact. It can be on a number of different fronts. Positive sum mentality. I'm excited to just like help the other person who's there. Curiosity and learning. And I think lastly, like actual willingness to be vulnerable because if, you know, as Xavier was saying and Curtis too, it's like when that vulnerability starts to flow, then the group kind of unlocks. So Ideally between Sahil or myself, we've spent some in-person time with somebody before as one checkpoint and then a prescreening call.

I think the shared ambition is a really important thing.

Yes.

Because I've been in groups before where everyone's talking about, I'm accomplishing, I'm trying to get, hit this milestone. I'm trying to do this thing. And someone else would say like, but why? Like, why don't I just settle for where you're at? Like, aren't you content? And it just sort of derails the entire conversation.

And it brings the level of the group down a little bit.

Yeah.

And not because it's this striving for more and more and more, but there's this beautiful thing that happens in, can you be a better version of yourself? Can you make the world and be in a better place? And, uh, when that's happening from all the forces of the participants together, that's where it becomes more magical.

I think that one takeaway I had was frankly Nick's just gaudy level of ambition. And where I saw him last year saying, I'm going to start 8 businesses. And like I thought he was way overextending himself and was a fool about it. And I was completely and utterly wrong. And actually, like, he was very strategic about it. And he just got the infrastructure in place that he was able to do it because he didn't just go, straight to doing it. He had a content team that supported him. He had other forms of support where, and he had a really clear strategy of how he was going to put things together where they didn't consume his life.

Mine is similar of understanding the power of an audience, which on one hand is ironic because that's my entire life and business and everything, but just realizing that I can scale up the audience that I have substantially in order to grow ConvertKit. And I think I'd gotten feedback from other people in the past that, you know, why am I spending time on this when I have a much larger business? And I found myself like one foot in each world. And hearing from all of you of saying like, yep, you can absolutely do all of this, here's how to staff the team to do it, and like kind of the full permission to, and, you know, expectation to dive in and, and then the like, and keep us posted of how it you know, how it's going. That's been really big for me because basically saying all these things that I know work in a certain way— I know the leverage of an audience, I know all this, and I know that what I'm capable of— just, I've been a bit hesitant to embrace both sides of it. And so seeing what all of you are doing, what Nick is doing, it's like, oh yep, I can do that too, and I'm gonna go all in on it.

Yeah, I actually have a very similar one. So it's interesting because I sometimes feel like I am the outsider in this group in the sense that like everyone else here has like a substantial audience except for myself. Just, I find it to be a very great position because I get to see how much leverage you guys get from this audience, how much it like, I mean, for Nick, it literally drives his entire thesis of his, you know, all his different businesses. And then I sit here and I wonder, I'm like, oh, like there are things that I have to say, there are messages that I want to get out into the world and that Obviously it's a lot of work, but if you make that investment, the dividends are incredible. And I think actually the thing that I've taken away from a lot of this is I've historically underinvested in it 'cause I'm like, I wanna, to your point, I wanna focus on my core business. I wanna make Pinwheel successful. And in some way you almost feel guilty that you're spending your time trying to build either a personal brand or in some way some orthogonal thing instead of just putting all your chips on the main thing. And I think what I'm starting to realize now is that it actually, A, is additive to that core business, and B, that not everyone actually has a lot of stuff to say, but it's been encouraging for me to engage in these conversations and feel like, oh, I still have stuff to contribute here. And so why shouldn't I be investing more in that?

Well, you have to think about what culture you're a part of.

Right.

Because there's a running joke in Silicon Valley, like as an investor, as a VC, The moment your founder starts posting regularly on Twitter, right, you should just write off the investment, right? And that's the idea of like, you should build a company, not build an audience, right? And I think it's a powerful thing to be able to hold two ideas at the same time and see how they feed each other, right? And so knowing, like, as I have one foot in each world, you know, I get some of that feedback from other people like who have scaled large software companies And so realizing like, no, I can do both things and they really fuel each other.

Right.

It was actually in a peer group, uh, when I went from being in your position to actually starting to come onto the other side because I was participating in a peer group with other CEOs for like 6 months and they were like, you're contributing a lot. You have a lot of experience to share here. Why are you not sharing anything online? And I just felt like I had the distraction thing. I just didn't feel me, whatever. And the guy running the group was like, what if you just reframed it as you're withholding like hard-earned wisdom from people who can learn from you?

You would have benefited from me.

Yeah.

Yeah.

Uh, and that kind of helped got my journey started.

I'm so happy you started posting. You're a wonderful content creator. I think you have some of the best content that I follow online. So I'm glad that, that— I'm glad that you like came out, you know, and started talking about that stuff.

I needed though peer support to like nudge me or else I wouldn't have. Yeah. One of my takeaways, uh, for the weekend was having you guys hold up the mirror to me of like vestiges of my like older, smaller thinking that were getting into like my big vision opportunities. And, uh, getting unanimously told one of your ideas is too small.

Yeah.

Um, and stop that shit right now. And unbelievably valuable and grateful for that. And that's like, you know, extremely resonant with, you know, one of my takeaways.

Yeah.

Because without this type of group, and I've been there before, is I'm in my own head, I'm like, this is a great idea, I'm gonna try it. And then 2 years in, I'm like, wait, this is not the opportunity and I've just wasted 2 years. And you know, in a group like this, you can bounce it off people, you can get a couple sounding boards, you can send a few text messages and boom, you can head in a different direction. That's a better use of your time.

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