The Real Story Behind Shaan's Best Investment (Bought For $52M?!)

Okay, so the news is this. If you've been listening to this podcast, you know that Shepherd is a business that I'm a part owner in. I've been talking about it on the podcast and it's a great business. And last week news broke that there was a private buyout of a majority stake in the company for $52 million at a $52 million valuation. It was done by Nick Huber. I had the opportunity to sell my shares in that. I decided not to, not a single share. I'm holding every single share. So today we're going to talk about I guess we'll tell the story of, you know, how Shepherd even grew in 4 years to be a $52 million company, how I ended up getting involved with it, becoming an owner in the business, and why one of the owners in the business did this buyout, how they, they took $29 million and bought the majority controlling stake in the company. So that's the news. Now here's the backstory.

All right, Sean, uh, last week you guys had a big announcement. So you and Nick bought Shepherd and that's amazing.

And I didn't, I didn't do it. Nick did it. Not me. Yeah.

But you were part of it. You were part of it. You're, you're, you're one of the partners and I guess maybe I'm going to interview you at least for this first segment. Cause I want to learn all about it. Sure. I think it's amazing what Nick has done. So let's start with the beginning, explain what Shepherd is. And then I guess we'll start it in like 2020 when it started and explaining like how it grew and what happened last week.

Yeah, so there's a guy named Marshall Haas who was an entrepreneur, done a bunch of different things. I think he owns like a hotel in St. Louis. He had a bunch of e-commerce companies, some goofy one, like some emoji something something. Then he had Peel, which was like a phone, uh, phone case type of like a thin phone case. So he was in e-commerce and one of the common things with e-commerce is e-commerce is like a real business, but it's like a lemonade stand business. Every margins matter. And so what a lot of e-commerce operators do, and I did this too with my e-commerce brand, I think 60% of our staff is, is offshore, is because margins matter. You have to figure out a certain, a specific problem, which is how do I get great talent at, without paying the full cost, without paying the full cost of hiring Stanford grads and Harvard grads, or, or, you know, even just a normal median worker in the States. And so a lot of us, we go to talent hotbeds like Latin America, where you find great programmers or data analysts, or the Philippines, where you can find a great customer support team that will you know, do the job at a fraction of the cost, usually about 5 times less than it costs in the States. So 5 times less is like pretty massive. So Marshall's running Peel. He starts hiring more and more people overseas and he decides to start a company called Support Shepherd, which at the time was ridiculous.

I saw, I'm friends with Marshall on Facebook. I've been friends with Marshall since '16 or '14. When he told me he was doing this, I was like, this is silly. But then I saw the branding, the website pretty much looked the way it does now from the beginning.

Well, he uses your favorite color of green as well. And so, and so he creates his brand and you're right, like, uh, the idea of hiring talent overseas is not new. This has been going on for a long time. I remember my dad once bought this book called The World Is Flat and I was a little kid and I read this book and it was all about globalization of talent. Uh, and it was something that big companies were doing, but more and more small companies have been doing this startups, uh, and the like, especially for specific roles. Right. So anyways, he starts his company and it starts doing decently well. He's promoted on Twitter and starts to grow. So now Nick comes along.

Nick Huber from Sweaty Startup.

Exactly. Nick's got a storage company. He's in the real estate space. And what people don't know is Nick has certain companies like, he has a cost segregation business. Cost seg is basically when you buy a property, you do a cost seg study and it allows you to accelerate your depreciation. So instead of depreciating something over 30 years, you might be able to accelerate the schedule to 7 years. It saves you a bunch of money in year 1. So it's well worth the, it's well worth the trade to go pay for a cost seg study in order to save the money. So most people who do a cost seg, they hire US talent. What he does, all of his talent's like in Colombia. They do it on an iPad. You like walk around with an iPad, right?

I'll explain how it works. So the way it works is, and I'm far from an expert, the way that I understand it is basically typically real estate has something like a 30-year lifespan. But they came in and said, look, the rules actually say that your windows can depreciate in 10 years. Your roof is actually only 15 years. So what I need you to do is do a video tour with one of our people on the phone, and I have a checklist of things I need you to show me in the home. And you got to walk through and spend about 30 minutes just walking through the house. And I did that. And the person was, I knew he was, I mean, he spoke perfect English, but I thought he was overseas. And I was like, I actually don't know where you are. For some reason I thought he was in Europe. I had no idea where he was. And there was a guy on the other line as I'm like looking through the house and he's marking down what type of windows I have and things like that.

Right. And so pretty crazy. That used to be something you, somebody walks on foot through the building and has a clipboard with a piece of paper and now you've got low-cost talent in Columbia that are getting it done for you. Right. So anyways, he builds that business. So he's using Shepherd a lot. So he ends up going to Marshall and cuts an affiliate deal. I think initially it was an affiliate deal, which was just, hey, if I send you traffic, if I tell people, hey, I'm using Shepherd, it's great. Give me a cut of the fees. That you, that you generate, the revenue that you generate. Marshall says yes. Nick starts sending traffic and along the way Nick goes back and he says, you know what? Affiliate's great, but my beak's not wet enough. I need a little more skin in the game. So he cuts a deal with Marshall to end up becoming a part owner of the business. Business continues to grow. Last year, almost a year to the day, I become a partner in the business. I approach Marshall. I say, hey, same, same story. I'm a power user of the product. I have a big audience. And, um, I think I can help grow your business.

Did this all come from the place of it'd be cool to grow a company based off of your influence?

I had a lesson, which was invest in your P&L. And this was a lesson I learned the hard way, which was when I was running my startup studio. And for 6 years I was trying to make a successful startup. I was trying to be successful, make money. And what I learned in the end was that a lot of the— I would've made 100 times more money had I simply looked at our expenses in our P&L. And just knocked on their door and said, hey, can I invest? I'm a big fan of your product. I'm an early user of this product. I really understand this product. And whenever you're raising your next round at whatever valuation, do that. Maybe I can help you out in some small way. And, you know, we were, I was one of the, you know, first, I don't know, 200 companies using Slack, uh, Elasticsearch, PagerDuty we were using early on, Figma we're using early on, like all of these, like tons of them. I don't even know, like there's like 20 apps like this. And so I learned this lesson the hard way, which is you should always try to invest in your P&L. So you look at your expenses, you figure out which expense is meaningful. It's a line item that you notice, but you don't regret it. So an unregretted expense, meaning it was worth more than the cost. And so I looked at mine and I was basically like, this overseas recruiting is one because I'm getting great talent. So I went to Marshall and I said, hey, love the product. I said, I love this category too. So I said, I'm not for sure going to invest in your business. but you're my first pick and I'm gonna, I, I use your products. Let, let's talk. And so we, uh, we ended up working out a deal and it was a, a, a great deal for me. What actually I thought at the time was a great deal for me, it turned out to be an even better deal for Marshall. So he had a lot of, uh, wisdom in making that deal because I thought I was getting a fa— very favorable deal, but he understood the power of the audience and he understood the power of what we could bring to the table. And he listened to MFM. He saw what we were doing on Twitter. He had no— Nick had come on MFM before and mentioned it and it was like their biggest day in, in a year or something like that. So he kind of had a, he had enough validation to take a leap of faith. But it was still, to be clear, a leap of faith. So it turns out better than we expected. Like we had forecasted how much we thought we could grow the business. And I try to over— always under-promise, over-deliver type of thing. So I was like, look, I think we can, you know, maybe 50%, maybe 75%. We basically grew it by 300%. So the business has basically tripled in the last year, valuation grew. And along the way, different acquisition offers came up and I went to Nick one day and I was like, hey, look, there's an acquisition offer. I think this thing still got a lot of runway to run. And actually the initial idea was, Nick, why don't we, what if we bought it? What if we raised the money and we bought this thing? So most people don't know that. That was the initial conversation. And Nick's like, I'm thinking the exact same thing. Uh, let's talk to Marshall and see. Within an hour, I'm like, too much work. Nevermind, Nick, I don't want to do this. This is too much effort for me. It'd be a huge transaction, like he to buy this business. So what actually ended up happening is Nick announced, he said, big news yesterday, I acquired a controlling interest in Support Shepherd for $29.7 million. So he paid $29.7 million to buy enough to become a controlling owner of the business.

I think he said the valuation.

I think, yeah, maybe they did another one. $52 million was the valuation.

They said $52 million.

And so, which is pretty amazing because from the time one, literally one year ago, I think it was April or May that we, we did the, in my deal, that means the value of the company has more than tripled in a year. So, you know, just tremendous value growth, a win for everybody involved. My stake grew, Nick's stake grew. Marshall did obviously phenomenally well. And Nick goes and he basically raises the money. And so he raises the money to, to go and buy, you know, basically for $30 million, he buys a controlling stake in the business. Hey, real quick, as you know, we're big on ideas here. We love bringing new ideas, business ideas, brainstorming ideas for the podcast. Well, a lot of people ask, what do you do with all those ideas? Can we go find them? Is there a list somewhere? The great people at HubSpot have put together a business ideas database. It's totally free. If you just click the link in the description below, you can go download a collection of over 50+ business ideas that are from the archive listed out for you, curated. And so, uh, what are you waiting for? Go download it. It's free. Check it out. It's in the description below. All right, back to the show.

My little crew, we, we threw in a little bit.

Welcome to the team. Finally.

Yeah, we're, we're very, very, very small stakeholders, uh, amongst this thing.

It was hurting me to get rich without you. I gotta be honest. It kept me up at night a few days.

That's all right. We, we, we have a very small taste of it, but okay. So, and here's what I wanted to bring up. About 2 or 3 years ago, you and I did a podcast where we said, look, there's all these people who have created billion-dollar companies off of Instagram. They've done it off of YouTube. Um, they've done it off of Facebook. There's not really been any breakout hits off of Twitter yet because Twitter's audience is a bit small. Uh, but I was like, I think it's good. I think we both said it's great because it's text-based. You get to know people, whatever. And there's— it's a B2B crowd, a little bit more so high-value crowd. Yeah, more so than the other places. And it hasn't happened yet, but I think it is happening right now. I think, I don't know if this is going to be a billion dollar company, but I think the fact that Huber, uh, like went out and raised this money to do this, that is a big swing. And it took a lot of courage for him to do that. And it could, our prediction could be coming true as we speak.

Very ballsy move. I got to say very ballsy move to do this. And I tweeted this, I go ballsy move. I can't wait to see how this plays out. And people thought that was a negative thing, but to me, I literally just meant like, Oh my God, I can't wait to see how this ends. Like, what is the story? What is the story going to be? And I think it's going to end really well.

It's not ballsy in a bad way. It's ballsy that he took the ball in his court and he's like trying to do this thing. And I, and by the way, what I tell everyone is I don't want to bet against Nick. Nick is a really good entrepreneur. And if someone could pull it off, I have faith that he can pull it off.

You know, when you watch somebody play sports, you learn a lot about them. And I played basketball with Nick Huber. He is a workhorse. He's an incredibly physical player. He's an incredible, he comes to the pickup games with a mouthpiece in. It's like, bro, I don't know how much contact you're planning for, but it's more than I was ready for today. And so you see, you learn how he operates. Let me tell you a couple of things about this. So Nick could have been on cruise control. The guy owned self-storage facilities. Self-storage is literally a closet you lock. It's the, like, the least operational thing you could possibly do is literally put your, put your objects in this door and lock it forever. Like, that's all it is.

I think it's $100 million worth of self-storage units that he owns. So it's a significant amount. My point being is he's kind of, uh, financially, he, uh, he could have been, he could have been in a good spot.

He loves to hunt. He's got little kids. He loves to do outdoors. He loves to play sports. He could have just been chilling. Then he has a Twitter audience. So he starts, he could have done affiliate deals. He started launching all these agencies. He's like, I got an SEO agency. He's like, I got a hiring agency. I got a, um, you know, I forgot what else he has. He's got Cost Seg. He's got like 7 different agencies he started. And each of those would have brought in, I don't know, $50,000 to $100,000 a month. Enough. He could have been totally chill. He chose violence. He chose to not chill. He chose to bet his entire career, put his entire network and net worth on the line, basically, to say, this is— to take this bold bet. And you love to see it. I love to see it.

I don't think it's going to fail. I think even the worst case, it's a very survivable thing. I think best case is quite huge. It could be a very big outcome for him. And I think it's so cool that he's doing this.

Yeah, yeah, it is. And like, look, I thought we were taking a big bet when, like, when I put my name on something or Nick puts their name on something, it's got to be good because we're spending all this time, years building up a reputation, years building up a loyal, trusted audience.

At the end of the day, you got to turn over your cards.

And if you don't have, if you don't have the hand, you know, you were just bluffing the whole time and you can't do that. Nick took it to a whole new level, which is to basically say, forget all my other shit. I'm going all in on this. And I think that's, that's really awesome. Okay. So now let me tell you the big picture take. So forget Shepherd for a second. This is part of a general idea I've had for a while, a couple of years now, which is the idea of an audience co-founder. So when I started my first companies, I knew I needed, like, I myself as an entrepreneur could do part of what was needed to succeed. To succeed, you need to build a great product. You need to identify a gap, build a product that fills that gap. You have to have maybe a technical team in order to build the product. You need money. You need a bunch of things. And as a founder, you try to go do all the things. You try to identify the gap. You try to go raise the money. You try to go recruit a team. but it's hard to do by yourself. And so very common in Silicon Valley is to have a technical co-founder and a technical co-founder is, you know, that's the person who's going to do the engineering, the building, and you rely on them to do that. And you say, I'm going to do the, the, the other components of this business. Well, now I think there's a more and more common playbook, which is the idea of an audience co-founder. What an audience co-founder is, is you partner with somebody who has a, has a cheat code in go-to-market. Right? They have an advantage. They have an unfair advantage that is non-fungible, that is not easy to recreate yourself. And what they do is they essentially lower your cost of customer acquisition. Sometimes to the point of being zero, sometimes negative, but it definitely lowers it.

Which isn't new. This isn't new. You know, George Foreman, and then since the beginning of time, we've talked about celebrity partnerships.

Exactly. So they've evolved. And so that's what I want to bring up, like the evolution of these. So for example, You got the Foreman Grill, and it used to be you hire a celebrity, they hold your product, they smile, ding, buy this product, right? That was an endorsement. Then the audience people, they got a little bit wiser. They said, oh, instead of just taking cash for this, I'll take some equity too. Thank you very much. So they started taking equity too, and you're going to put my name and face on it, then that means I'm going to have to own a piece of this. So you get the Foreman Grill, you get all of these celebrity alcohol brands, you get McGregor doing Proper Whiskey. I think McGregor owned about 15 to 20% proper whiskey. You have Logan Paul and Prime. I don't know, but I think it's something on the order of magnitude of 20 to 30%. You've got Clooney doing his tequila. You got The Rock doing his tequila. You got Ryan Reynolds doing his gin. You got a bunch of people that do the sort of celebrity alcohol brand, the celebrity cosmetics brand, right? Rihanna with Fenty Beauty. But each time it's getting a little more and more tied in with the co-founder. So you go from hold up the product and ding, play the jingle. To putting my name and face on it, to actually it's named after me. Actually, I'm going to be the one creating the media that we use to market this thing. Instead of you paying me twice a year to come to some commercial shoot, I'm going to be posting every day. I'm Kylie Jenner. I'm going to be posting every day on my Instagram stories about this.

I'm Conor McGregor.

I'm going to be reposting tons of material on this. I'm going to take a bottle to the press conference. I'm Logan Paul. I'm going to take a bottle of Prime with me to WrestleMania when I'm, when I'm And I'm going to use them and crush one right before I go in the ring. And so the celebrities become more and more involved. And now what's happening is this is transitioning out of major celebrities doing major, you know, uh, consumer products to more and more it's happening in the software space, which is more new, I would say. So you have Russell Brunson do this with ClickFunnels. You have Hormozy just bought a chunk of school. And now he's wearing a school hat and a school wipe beater everywhere he goes because he tried to promote that product. And so you see what me and Nick did with Shepherd, and you see that basically these brands that are almost private equity brands, right? So we build a consumer-facing brand and then we do private equity. And the beautiful thing is that the private equity guys don't know anything about brand and the brand guys don't know anything about private equity. And if you happen to be somebody that knows about both, you have a pretty unique proposition in the market. And so I think we're going to be seeing more and more of these audience co-founders where people realize that I can either just take a bet that my product will get off the ground, that I can get out of the kind of the muck of similar products at the subscale and try to break through. And they're going to use their cap table as a tool to do this. And I narrowed it down into 3 things that I think you need in order to make this work, because I think there's going to be a lot of people that try this and they're going to fail. And here's, I think, the 3 essential things you need in an audience co-founder. The first, a large trusted audience. Trust being the key word here. There's a lot of people with an audience, but they have low trust. Meaning if they go tell people, hey, you should go try this, you should read this book, you should try this lotion, you should show up at this event, you should watch this movie. How many people actually go do it? And I'm not gonna name names, but there's a lot of people that we know that have audiences. But they don't have anything for trust, or they have audiences, but their audience is broke. And so the only thing they could sell them is very cheap things for broke people, basically. And so you have to find the right— trust somebody with a trusted audience.

So trust, that's quite challenging to measure, but large is easier. So I could tell you, so our podcast MFM, if you measure YouTube including Shorts, which you could argue, and I would agree with it, that Shorts is nonsense. We had something like 90 million impressions last year across the podcast. And then if I had to guess, your Twitter handle probably had another 10 to 20 a month million impressions. And then your newsletter, I don't know how often you said it, you said it once a week. Let's say, let's keep a round number of 100,000. So you're talking to tens of millions of people a month. Would you say that's accurate?

No, to be honest, no. I think the number of people is a lot less than the number of impressions.

Sorry, for sure, tens of millions of impressions. I don't know how many people, maybe a million, maybe more than a million.

I think we reach somewhere between half a million and a million people truthfully, right? And there's a lot of people that will exaggerate these numbers. Truthfully, I think that's the absolute ceiling of what we reach. But then the trusted audience is a fraction of that. But, um, it doesn't matter. It's, it's the depth of trust that matters. And this is the total mispriced asset in the market because the easy thing to measure is number of followers, number of views, number of impressions that something gets. A little bit better might be likes or replies, but then even better is bookmarks. Even better is how many people click the link. And then the ultimate source of truth is revenue. There's other tests that I like to think about. So another trust test is, um, and I talked to a guy who, who's getting millions and millions of views on Shorts. And I said, um, hey, if you tweeted out tomorrow that you are, um, hanging out at this coffee shop in Austin and you said, hey, I'm hanging out from 10 to 2 tomorrow or 10 to noon, 2 hours, I'm hanging out. Stop by. How many people would show up? There are some people that would have a line out the door, and then there's some people that nobody would show up for because they have a very fleeting transactional impression-based thing. They are not the focus of it. Maybe they're putting up meme content or they're putting up, you know, like canned videos that are highly animated, but they're not even involved in it. There's no trust that's being associated with them. Another trust test. If I, email my list tomorrow and I said tomorrow I'm putting out something that I've been working really hard on that it's fucking good, trust me. And I said it's, it'll be available at 5 AM tomorrow and it's going to be available to the first 1,000 people that, that try it. That's it. How many people would set their alarm?

Right, right.

There are certain companies and products you set your alarm for. Apple gets people to set their alarm and come camp out to get their new product. It's trust at the end of the day, right? That's the, that's The measurable value of a brand is trust. And so I think that's the number one variable. Number two, product to audience fit. So basically, if I came on here and I started telling you about cologne, it's not going to work. It's just the wrong product for the wrong audience. It's not what my audience wants. It's not what they trust me on. It's not the right price point given the size of my audience, right? I sell products that are worth tens of thousands each. Logan Paul sells products that are worth $4 each, but he's got a much bigger audience. You've got to find an equation that works. So product audience fit. A great example was the episode we did with Dani Austin on this podcast. Dani Austin was a woman who was, she was, she had struggled with postpartum, I think postpartum hair loss and was really insecure about her hair. She wore wigs for like a year. Then she took the wig off and told her Instagram audience like, this is what I've been going through. I feel a little bit silly. I felt insecure about it, but I'm trying some things and let's see what works. And eventually ends up creating her own line of hair care called Divi, which is a product to cure this pain point that she authentically had, that many people in her audience authentically had and trusted her for it. And so the highest, highest version of product audience fit is when you genuinely authentically experience a problem and can tell a story about it. And that story resonates with your audience because they also have that problem and they believe your story. Third one, content creativity. So how good is this person at creating an ongoing stream of content that plugs the product?

Dude, that's shockingly hard, by the way.

Very hard to do. It's very hard to do. I'm good at it.

I think you're good at it. I think Nick is exceptionally good at it as well.

Nick is fantastic at it.

I, he posts probably, I think 100 times a week on Twitter. I looked it up and he's good. He makes hits.

And you see this everywhere. So when Logan Paul and KSI launched Prime, they did a photo shoot. They did the photo shoot of them drinking, and then there's this viral image. There's this image that goes super viral, and it's basically, it's Logan Paul drinking Prime and KSI drinking Prime, but KSI was kind of like bent down on one knee, and then somebody photoshopped them together. So it kind of looked like KSI was, you know, like going down on Logan Paul. And then they printed a cardboard cutout of that and they put it in the aisle of, I forgot Walmart or wherever they were launching. So the news was we're launching in Walmart and many, okay, what does a creator do normally? Hey guys, just so excited. Uh, can't believe it. We launched in Walmart. Good for me. Um, you know, uh, go, go check it out. Please go buy our product from Walmart. Right? What Logan Paul does, he's smarter about, is he knows how to go viral around his product. He knows that it's not about patting yourself on the back. It's not about a generic announcement that doesn't mean anything to the audience. He gave them a reason to share the news, which was put him and KSI in a compromising situation, made a joke out of it, and then that image goes and gets 100 million views, right? And it's the same story, but he knew how to package it to go viral. He'll also do things like, um, he'll create content that'll be, um, I'm going to try to make this drink using these 3 flavors of Prime. So it's like, it's kind of like those Will It Blend type of commercials. But he's using his product. You know, for us, we will do, like me and Nick, we would do a workshop where we did a delegation workshop. So I was like, look, is that what most people call those things? I mean, haters will call them webinars.

Oh yeah.

But they're called haters. You call it a webinar. I call you a hater.

I knew it was a W word. I couldn't think of it. It was workshop, something like that. Yeah. It's on the web. I forget. It's kind of like a seminar.

But we would do these things and they would drive so much business for the, for the business. And so we would, we would come up with what is a value-add thing we could do that delivers so much value in 45 minutes. And at the end, we just say, by the way, if you want to do this, Shepard's a great tool, but you've delivered so much goodwill and so much value that you can, you can do that. Anyways, there's a whole bunch of stuff around content creativity. How do you on an ongoing basis create native content that is going to continue to bring the brand front and center? Or do it. We created the Thrill of the Shill, for example, to give ourselves an excuse to talk about our products. And so there are creators that are better at that and there are creators that are worse at that. We're, you know, we're good, but there are people who are incredible at this.

Who do you think is the best? Like, who do you look to besides, uh, some of the, uh, maybe some of the non-popular ones? Is there any non-popular ones you look at and you're like, that's really great?

There's a guy on Twitch named DrDisRespect that I first noticed is incredible at this. And I noticed it because majority of Twitch streamers get a ton of blowback if they ever mention a product, a service. The chat immediately, sellout, sellout, sellout. Oh my God, whatever. DrDisrespect created a brand that almost allowed for it. And he created so much humor and content. It's like, you don't want to be in the middle. So either you just never sell out or you try to sell product, but you're trying not to sell out. You're sort of hedging and the audience can sniff that out in a second. And they will pounce on you. Or you go full, you go full sellout. At Twitch, we even did this when Amazon wanted Twitch, the company, to promote Prime Day. It's like, oh, how are we going to do this? Our community is very sensitive to us promoting something, especially promoting a big corp, mega corp like Amazon. And so they created a campaign called Twitch Sells Out. And they made a face.

Yeah, you got to make a joke out of it.

Twitch sells out. And that was the whole campaign was, well, today Twitch sells out. And they basically like, they leaned into it. Dr. Disrespect would do this. He would do a promo with Old Spice, and then he would create a full content series around this thing, around Old Spice. And he would do it in such a way that by the end of it, the whole chat was looking forward to the next Old Spice— if I already called it the Champions Club or something like that. He would create all these little things around it because he was a total character. He knew how to do it. So I could see how much money he was making. He was making way more money per viewer than the average Twitch streamer because he knew how to monetize that audience.

Do you remember we had Justin Meyers come on and he told us about his new company called, is it TrueMed or True Medicine? TrueMed?

Yeah, TrueMed.

So TrueMed, um, I, how do you explain it? Is it HSA spending? So it's like a, a kind of a boring topic, but basically like you could spend your insurance money. Anyway, his co-founder is this guy named Kaylee Means, and Kaylee Means Is, uh, I guess he's a, I think he's a doctor or a former doctor, but he's like obsessed with metabolic health. And I followed him on Twitter and he is indoctrinating me on like healthy eating.

I bookmarked his thing yesterday.

Same.

It was like the 4 points, 4 things, like, you know, basically he's like, America has like, you know, a 20% obesity rate or something like that in young kids. And like other countries have 4%. Here's the 4 things we should do effective immediately to turn this around. And I was like, Sir, yes, sir. You know, yes, I've never met this guy, but goddamn, he's convincing.

He is so convincing. And so his company, and he does it in such a good way because his company is a very specific thing, HSA spending, and you could buy like healthy stuff. I think you could buy like an Eight Sleep mattress or whatever using like your insurance, something, something like that. But anyway, he'll, he, his whole crusade is on like processed foods and over being overweight and things like that. And so he's like, uh, a renegade and a champion for like healthiness. And it just so happens I have this thing that I, that you could actually use to like buy me some of these things. So like he tweeted out the other day, he's like, America's super obese. Here's 4 points. Like you shouldn't be able to use, um, uh, food stamps on soda or, uh, I, uh, pharmaceutical companies should not be allowed to advertise on TV. And he had like 2 or 3 more things and I get obsessed with it and he's starting to change my opinion. And then I'm slowly starting to think about TruMed.

We should have him come on, by the way, because I've seen him now do a couple of these rants and each time I am so convinced. I am so convinced that I actually schedule time on my calendar to look up opposing evidence. Because I'm like, before I just fully bathe in this Kool-Aid, I need to hedge myself. I need to create some firewall where I go see if this guy's full of shit because he is very convincing.

He's very convincing. And this is a really good example. I asked you for a non-popular example. I guess I had one. Caylee Means is a non-popular example of a, uh, well, I guess he's, I mean, he's not like mainstream popular, but he's somewhat popular in our little circle. Of, of a B2B product and he is selling it wonderfully.

Absolutely. Yeah, I think it's, uh, I think it's amazing. Uh, there's a bunch of these, by the way, Liver King, Nick Bare, like a lot of guys do this. And I think the interesting thing now is it used to be celebrities hold up the product and endorse it, or it would be the celebrity creates the company themselves. What I'm finding now is this interesting new, new variant of this, the new strain, which is company that already exists. Finds an audience co-founder to accelerate growth. And by the way, if you're trying to do this, come to me. I want to do this again. I want to do this one more time. The Shepherd thing went so well. Uh, and I tweeted this out. I go, if you have a cash flowy product that is genuinely a great product, like it has to be a great product. Otherwise, I'm not going to put my name on it. Um, and you are bootstrapped. You are not on the venture path. Hit me up, sean@seanpurry.com. I want to do this one more time.

You have this thing on here about the curse of family riches, and I want to talk about that. But before we talk about that, I want to tell you a story about someone I spoke with recently. So there's this company called Simple Modern. Have you heard of Simple Modern?

Of course.

So Simple Modern is a website that sells basically mugs, but I think they sell a ton of stuff. So like Stanley mug competitors, tumblers, they sell a ton of stuff. I talked to him the other day and he gave me his annual revenue since they started the business along with the profit from some of the recent years. And he said I could talk about it. And so I listed it here on this document.

So when people give you their revenue, do you just go, mwah, do you just like evil laugh or what do you do?

Well, whenever I talk to people, I'm like, hey, before we have a conversation, just so you know, I'm not saying any of this.

Um, and then in our 20s, we try to get girls' numbers. In our 30s, we try to get guys' numbers. Yeah.

Yeah. I want to know people's, uh, people's income. But then at the end of the conversation, I was like, dude, this is so fascinating. Can I share this or not? And he was like, yeah, dude, I don't care. You could share. And so anyway, he started this company in 2015. In 2017, they had $10 million in revenue. '18, they had $20 million. They grew it. And I'll just, I'll skip a few years up at '21. They got $80 million, 2022 at $95 million, '23, this most recent year, they did $180. This year they're expected to do $225 million selling these tumblers. It's mostly tumblers. And he started the company with like $200,000 in his 30s. And so he's a bootstrap company. He owns half the business because he gave away a lot of the business to employees. And I was asking him about it. And by the way, in 2023, they did $180 million revenue and $45 million in EBITDA, in profit. And so he's been able to make like a significant amount of money. But the reason why Mike was so fascinating to me is he's based in Oklahoma. So he's this like real soft, sweet, wonderful, nice guy. He's, uh, I'm sure he's aggressive in business, but when you're just hanging out with him, he's like a sweet man. And he was like, I started this company because I wanted to do two things. One, I wanted to just build a business that I could hire people who I admire being around. And number two, he, uh, he's like, I just wanted to give away a lot of money. Like, I feel like it's my mission to like give away money. And so this guy, since the beginning of the company, the company has pledged to give 7 or 10% of their profits away to charities. And the people within the company vote where the charity goes to. And so he actually doesn't have control. He set it up so everyone's allowed to vote. But in the meantime, he's been giving away all his money. And so he's giving away something like $100,000 a month of like the Beckham family money. And he like said what is He's like, I've been able to save up like $4 million, but I'm still giving away something like $1 million a year right now. And I don't know if my $5 million liquid net worth is going to go up a significant amount because I intend to give as I go. And he's been giving since the beginning. So he's like, when it started, I was giving away $5,000 a month when I was making, he said, what did he say? He was like, when I was making $200 grand a year, I was giving away $5,000 a month. And my intention is to continue giving. So when I die, I don't have a lot left. I've given it away as I've gone. And he was like, basically like, I kind of wanted to be generous when I was alive, not when I was dead, which is what a lot of people do. And I don't know if I'm going to leave any money for my family or not. Maybe I'll leave them enough that they have a little bit of something, but we're going to give away most of this. He's like, my net worth right now is probably $200 million based off the value of the business. I'm giving it all away. And I was so fascinated by this and it really actually inspired me, not enough to take action because honestly it's still, it's still a bit fearful if I'm being honest. It's like I'm still quite fearful of it, but he seemed so freaking happy talking about this. Do you give away any money at all like this?

Uh, a little bit, yeah. Not like this. Um, sounds like he's giving away 20% of his liquid net worth per year, something like that.

Yeah, like a significant sum. And, and his liquid net worth is growing because he was like, this is the first year that the business He's like, we're going to do $45 million in EBITDA. It's the first year where like, we don't have any new ideas within the business. So we're going to take a big fat dividend and I'm going to end up giving most of that away. And I'm just going to give it away as I go.

Two parts of this are impressive. One is money where your mouth is. There's a lot of people that, that talk about, oh yeah, I want to be able to give things away. And then they live their whole life and they're like, it's like the Sam Bankman-Frieds of the world where it's, did you give any of it away? What happened? What happened to that? He was giving as he goes. I think that's really, really really great. Some of the happiest people I've met in life are the people that give the most. Some of the most successful people I know in life are people that give the most. And the more interesting thing is of the people that give the most, they've been giving from the beginning. I think that's the real takeaway is like the fallacy that when I have enough, then I'm going to give. And it just creates this like internal fear of, you know, giving away, right? You know, this year, last year we did, when we had Scott Harrison on, I did the thing where I gave away my birthday. So I basically said, I'm turning 35. I'm going to give $35,000 to Charity Water. I'd set it live on the pod so I can, I can say that out loud here. And then I encourage people, hey, if you want to give me a gift, go to the Charity Water thing, donate the gift there.

Do you know how much that raised?

I think it raised like about another $30,000 or $35,000. I think it raised $30,000. So In total, this pod gave, you know, audience people gave $30,000. I gave $35,000 and it was an uncomfortable give. Like, not that, like, it didn't change anything in our life, but I, when I went downstairs, I told my wife, I was like, yeah, on the pod, I got kind of inspired and I committed to giving away $35,000. And she was like, she's a punch you in the stomach really hard.

Yeah.

She was like, what are you doing? I was like, I'm helping people. And she's like, help me. And I was like, what? And she's like, take out the trash. I was like, okay, sorry. But you know, just in general. It was an unfamiliar, it was unfamiliar territory to just like that on a whim commit amount of money that's, you know, meaningful. That's a car, you know, that's like something. And I really like the feeling. And every year I try to do that. I try to get to giving away in a way that's meaningful to me. So the other thing we did was when Tony Robbins came on, we pledged to give away, I think it was 40 or 50 tickets. Each ticket's, you know, $500 to $1,000 basically. So that's another, you know, sort of $25,000 to $50,000 that we'll give. But I'm like giving away an experience that was really meaningful to me that I think could help a lot of people. And so, by the way, I need to go pick the winners for that. That reminds me. So if you've been waiting, you didn't miss out. I didn't pick the winners yet. There's like 1,000 people to go through and I just left that pile of, you know, 2,000 applications. I was like, I'll get to that when I have some free time, but I will do it. But the idea is give an amount that's slightly uncomfortable for you. I think that's a a good practice that I'm just now doing. Last 3 years, I think I've done that and probably should have been doing it earlier, to be honest.

I've not, I need to do it. And the reason it kind of interests me, and I was like, Mike, is it okay to be selfish about this? He's like, well, yeah. So I was like, do you get tax advantages? He's like, yeah, like you could, like you, you can, like, there is some stuff I can capture.

You're trying to find the other reason to do it.

Well, he was like, it's like, he's like, I'm not going to not take advantage of something like, but that's not, the reason why I do it, but it is a nice like cherry on top that I can take. But I was talking to him and I was like, you know what's crazy to me? So he's religious, but not in a way where like we disagree on anything. Like he's very kind about his shit. And I was like, dude, if you're telling me that you're put here on earth to like please God by giving away money, I never want to bet against you. That's like the best motivation on earth. You know what I mean? Like who wants to bet against that person? Like I don't want to go against you. You're going to like destroy everyone. You've got the best motivation. And so what's this thing on here about curse of, of, of, uh, oh, was it, it was familiar riches. I read it wrong. I said family.

I didn't know when to break it to you that you thought I was saying family riches, but it says familiar riches. Here's a transition. You talked about giving away money. This is the greed side of it. This is about making money. Okay. So I have noticed a pattern in myself and in many others. And I call it the curse of familiar riches. And here's how the curse goes. You grow up thinking a certain amount of money means you're rich. For me, that was always $1 million. That's why this podcast is called My First Million. I used to play games with, you know, my sister, whoever it'd be. Would you rather, would you cut off your pinky for $1 million? Would you? And it was just like escalating what-if scenarios.

That's an easy, yeah.

Yeah, exactly. That was a starter. Yeah. I never even asked about $10 million. Never thought about a billion dollars. I never even heard, honestly, I never heard the word, like, I never even heard people talk about billionaires. Never knew a billionaire when I was growing up. It wasn't even on my radar as a thing. I thought a million dollars was like all the money. So you have this idea of like what a ton of money feels like, but even a million dollars wasn't my goal. It's not like a million dollars was what the rich people have. That wasn't what I thought I would have. And so I thought making six figures. $100,000 was like the goal. That was the you've made it line.

When I met you and you were making six figures, I thought you were the wealthiest person I knew.

It was a great feeling. I enjoyed being the wealthiest person you knew.

Yeah. I was like, 150 grand a year. Oh my gosh. You have a driver?

So anyways, I, I get the curse of familiar riches is you have, you start with this amount of money that you think is a ton of money. And it is a ton of money to you at the time. It's all relative. And then you get, you do it, right? So I graduated from college. I think my first job, well, my first thing was a startup and we were paying ourselves nothing. We were living off of, we made $25,000 of prize money from a business plan competition. We lived off that, 3 of us. So we were, you know, $8,000 a year or something. But then I got, I, we got kind of acquihired. I ended up getting a job and my job was paying me $120,000 a year and I was laughing. I couldn't believe that they were paying me that much And once I was making $125,000 or $120,000, my brain, this is why it's called familiar riches. My brain could think of many other ways that I could make $120,000. I could get another job doing this. I would maybe hear about an opportunity. I could realize that I could stitch these two things together, and if I did those two things, it could be like $125,000. And so there are, once you get to a certain level, whatever that level is, it's quite easy and familiar to come up with one or two other ways that you could make that same amount of money.

And by the way, that exists at every level.

At every level. This is the, this is the problem. This is why this is the curse. And so the easy thing to do then is when you get to $100 grand, you realize, oh, I can go get this other job that would pay me $100 grand or even $120 grand or $150 grand. But it's basically between a 1 and 2x of where you're at. So you, you can figure out how to make about what you're at. 50% more or just double, but your brain breaks after you say, awesome, how do you make 5 times more?

Yeah.

And I remember hearing at the time, like, there's a guy who makes $500,000 a year in salary. And it was stunning to me. I was like, he's stealing the money from the company. There's no way anybody could create that much value that they're making half a million dollars per year. He just gets paid that. That's insane. And if you ask me, Sean, what's the pathway? You're at 120 now. How do you get to 500? My brain would short circuit and break. And so what I did for many years was I did things that were very familiar and I found a way to 1 to 2x my earnings. And then when we got acquired by Twitch, whatever, and I got my package, the, the, here's your upfront cash. And I sent it to my dad and my dad, I think the most he ever made was $300 grand in his life and a year, a salary. And, um, so I sent him the offer. And he called me and he's like, it just keeps going.

I go, what?

He goes, I thought the first line was the total amount. I was so excited. And that was the signing bonus. He's like, and then, then the next thing he's like, then they get, what is the RSU? What are these things? What are they giving you? And he's, he couldn't believe it. He emailed me again 3 days later. He goes, I just read it again. I still can't believe it.

And he like thought it was like a menu where you like pick one of the options. Turns out it's more like a, like a, it added all up.

And so, and my brain broke too. So what am I getting at here? After that, I started to ask questions. I started to realize, wow, there are people, forget making $500,000 a year. There's people that make $2 million a year. There's people that make $5 million a year. And so I started to use as a thought exercise, how does, how would I make 10 times more than I'm making today? And at first, again, the brain broke. There was no answer. I sat down again the next day and I said, How do I make 10? How do I make 10 times more than I'm currently making? Well, I guess if I was going to do that, and I've, and then you start to get creative. You're like, is there anybody who makes that? Of course there are. What do they do? How do they do it? You start to reverse engineer some things and then you add time into the equation. I remember we came on this podcast because I had a brain-breaking conversation with Nikita Beer. We were like, Nikita, what are you up to, man? You're sitting at Facebook. You're just been 4 years. You're just rotting away over there. What's going on? He goes, yeah, I'm thinking about for the summer, how do I make $10 million in 90 days? And I was like, what? I never even heard somebody ask a question. Oh, no, it wasn't $10 million. It was, how do I make, it was like a million dollars, $3 million. I forgot what it was. It was millions. Yeah, it was not $10 million. It was more like, how do I make a million dollars in 90 days? And I was like, I don't even know. I don't know. What do you, that timescale breaks all the existing answers I have. But sure enough, there are answers. And that, that summer he created the gas, that app called Gas. And I think he made $7 million in revenue and then they got acquired by Discord. The son of a bitch did it. And I was like, what the hell is that? And so I started asking myself better questions and I've just noticed this and it's just a prompt for the world. Anybody who's out there, you don't, you don't have to do this. It is absolutely wonderful to be completely content of where you're at and to focus your energies on other things besides making money. Probably healthier. And if you're doing that, more power to you. But if you're slightly broken inside like me and you don't go to therapy and you think that money's going to cure your problems, this is a good exercise to actually do it, which is to absolutely refuse any option that's going to make you 1 to 2x your money. You have to completely say no to anything that is a 1 or 2x where you're currently at and only think about what would it be a 10x. And then let your brain short circuit every day until your brain starts to come up with answers. And it will, it just takes like 5 to 6 days of doing that every single day to get to, to start generating some answers.

So I want to give two points to that. One, I actually think there's good news. The good news is, is that, you know how they say money doesn't make you happy? Um, I actually think it does make you happier. So the good news is, is there is a threshold. I don't know what that threshold is. It's different for everyone. It could be tens of millions. It could be a certain amount of a year, uh, per year. But that $70,000 study, uh, that's bullshit. If you zoom in on that graph, it continues going up. It just doesn't go up as steep, steep. And that study is also like 20 years old, so it's totally outdated. But there is, there is some number I think where it will make you happier. The bad news, I know a lot of rich people. You and I know a lot of the same wealthy people. We know people who are billionaires. Um, we know people who are hundreds of millions, millions of millionaires. I am just about 100% positive, and I can tell you that this is based on my personal experience. It's never enough. It is never enough. You and I have a couple friends who it is enough for a very small group of people, but for 8 out of 10 people, it's never enough. And that whole 2x idea, it always exists. And so it is a challenge, but it's imperative that we— it doesn't matter if you're making $100 grand a year, it doesn't matter if you're making $500 grand or 50 million a year, that we have to figure out how to be happy and present and enjoy ourselves along the way. Because once you just automatically get that outcome or whatever you get, it doesn't change a significant amount from like where you were the months or years prior.

What's the Jim Carrey quote? He goes, I wish everybody could be rich and famous so they would know that that's not the answer.

It's absolutely not the answer. I think it can make you happier, but it doesn't necessarily make you happy. Let me tell you one, for all the finance, personal finance nerds out there, what I used to is, so money's kind of a weird thing because when you like sell your company or something like that, it's just like for the first few weeks, the only major change is when you log into chase.com, the number, like the digit, like the screen looks different. Like if you think about it, that's like the all, that's like, and that is awesome, but that's like, it's kind of weird that that's like, there's some weird psychological thing where that's the only like meaningful difference is that number is different.

There's people that have come on the pod and said they used to just go to the ATM and just click print receipt, like, tend to just like do a random withdraw $10, print receipt, please, just so they could see the number.

So I'm going to explain how I hacked that. So they told me that I heard that as well. And so about 2 years before my exit, I used to use this thing called personalcapital.com, which basically mint.com, whatever, whatever you're using could work. I, you can create a manual account where you can add in manually where it's not connected to your bank account. You could just add in numbers. I put in like $15 million in the manual account. So it said that my net worth on paper was at least $15 million. And so I saw that number and then I sold my company and I got the money and I went and deleted the $15 million and I, and then I saw like the real number and I was like, well, I've already seen this for the last 2 years. Like this isn't really like that different. You know what I mean? And it did a shocking amount of stuff to my brain to like see that number leading up. And so you almost get used to it. It's very strange. And it kind of ruined that like initial deposit. 'Cause I was like, I was like, these numbers are kind of like the same.

But by the way, I gotta be the counterbalance to this because I've heard, I've listened to many podcasts, YouTube videos, and I've heard many people say similar things that, you know, money doesn't make you happy. There's never enough. You know, that day after it happened and, you know, nothing really changed. You know, I just kind of felt a little, I didn't know what to do. I kind of actually almost had a little bit of a depressed period afterwards. And I'm not saying that they're lying. I'm sure that's true for many people. I had a very different experience. I had what I had exactly what I would have hoped. The more money I got, the happier I got, the more free time I had, the less bullshit I had to deal with. Sure, I had some new problems, but they were way better than money problems. And then when I saw the number in the bank account, I said, fuck yes. And I was so excited and I had such a great day and I took my parents to dinner that night. And I was so excited and they were so excited for me. And I bought a bunch of socks and those, like, these socks make me happy because I got a bunch of matching socks with the highest quality and the highest, highest kind. And then I felt amazing. I felt better and the money made me feel better. And so there are people out there for whom this happens.

Don't, don't misunderstand me. I said it makes you happier. It made me happier. But if we didn't, but we still want more, right? We're still having conversation of how do we 2 or 3 or 5 or 10x. Because if we were truly content, we wouldn't be asking that question. And so what I'm saying is we still want more and it does make you happier, but it's, it in itself is not always, it's not like the answer. It is potentially part of the equation.

Right. And I guess the thing that I'm talking about right now is really just a question of leverage, meaning for the same inputs, can I get more outputs? Okay. So, uh, so all I'm saying is that if you just change your brain To say, you know what? I am familiar with many ways to get this amount of rich now because I've done it. I know other people have done this. I've been doing this for a little while now. I am comfortable at this level and there's more levels that I would love to be at, you know, without 10x-ing my input. Can I 10x my output? I'm always interested in that. If I could get 10 times more people listening to this podcast without having to record 10 times more or prep 10 times more, that'd be awesome.

You do it.

That'd be awesome. I would do that any day. And I think even you did this when we were talking about growth for the pod. It was like, here's some low-hanging fruit. And then you were like, is there anything we could do that would just get like a million views per video? So he's like, let's just, shouldn't we just like ask that question at least in case there's an interesting answer? And that's kind of what I'm saying, which is you want to ask that question because it, it fries your brain for a second and it forces you to think a little differently. You may, you may decide that you may never come up with a great answer or you may decide I don't want to do any of those things or I'm totally comfortable with that where I'm at. But I just think that there is a curse of familiar riches, which whatever level you're at, if you're making $10 million a year, you probably now know a bunch of ways to make $10 million a year, but you'll have very few ways to make $100 million in a year. And as a thought exercise, I think it is very valuable to say, let me say no to all things that do the, that are at the level I'm familiar with. And let me only think about and consider options that would 10x where I'm at. And then see, then you could decide afterwards whether you want to take any action on that or not.

Let me ask one question as we wrap up.

Yeah.

You're talking about earning. Would you spend 10x what you're spending now in order to get used to that life?

In order to get used to it?

Yeah. In order, like, you know, like, like, um, you know, the act is it. So I've got friends who will say like, uh, you know, this is going to work. Therefore, I'm going to just behave as if it works and I'm going to spend because I like burning the boats and feeling this and I have to make it work.

I am totally into act as if, but not by spending. That's not the, I don't, I think that, that, that perverts the spirit of act as if or living from the end. So what the way I do it is act as if means, um, to me, I'm like in decision-making, meaning I'm willing to say no to doing certain things that come from a scarcity mindset. So maybe I would have said yes to some speaking gig. Cause it gives me money. But if I had $100 million, I wouldn't say yes to that. I wouldn't go travel, leave my family, go to this speaking gig in Duluth. You know, I would, I would just, I would just say no. And so, so I use it in order to just put myself in a more of an abundance mindset in order to make decisions that are more aligned with who I really want to be. Those aren't like, oh, let me go buy a tiger in order to increase my burn rate in order to add the pressure to me. Like, I just think that's a completely unhealthy way to go about it. Or the other version is, How would I, you know, a lot of people walk around with a lot of anxiety, a lot of stress, or in a big rush. They rush through their day. They're constantly feeling a lack of time and they live again in the scarcity mindset, lack of time, lack of ease. And so they act as if that I'll try to do is put myself in a place where, what if I was, what if it was all figured out? What if I knew what I was doing? What if I had already done it? What if, What if, you know, what if X was already done? And it allows me to just walk through my day with a greater sense of presence and ease and joy and less stress, less anxiety, less of a rush. So I'll use it in those areas. I will never use it to be like, hey, how about I just like increase my burn just to see how it feels? It's like, you know, it's like, aren't people into like dripping hot wax on themselves before they like, you know, do, do stuff? Like, not me. I'm good. Don't need to do that.

And if you live in Duluth, You can kiss my ass.

Is Duluth even a place? I just said that.

I had a, yeah, there's a Duluth in Minnesota, but there's probably a Duluth in a lot of places.

Shout out to the listener who just caught an absolute stray in Duluth. There's your lucky day.

If you live in Duluth, just comment in the YouTube and let us know, but you could still kiss our ass. All right, that's hot.