This Changed My Business FOREVER! | Courtney Reum

I really think mentors are one of the most important things that it's not that people don't talk about, because they do, but I don't think they talk about them with the right gravitas. I mean, I think I kind of grew up around a paradigm of trying to be successful and achievement and all good things for the most part. But I think as I look back, the other thing people don't talk about, it's probably even starting out, it's a little less important where you are, but more what you're doing and who you're doing it with. Like I would trade working at more of a brand name firm for working for someone directly who's actually really teaching me things, instilling things, like I'm getting a better experience. That is a huge part of that. You figure out your unfair advantage. Part of your unfair advantage is figuring out what you like and what you don't like. And so that's a big part of it to me.

Man, I've been wanting to talk to you for a long time. I'm very fortunate. I've got some folks that obviously help me pick the best guests we can possibly put in front of our audience. And you and your brother have done tremendous work from startups to scale ups to even owning your own firm. Now that kind of does a little bit of this, a little bit of that with scaling up businesses as well. And it's, you know, as someone who is built their organization from the ground up and unfortunately I didn't have the Harvard background or something like that. It was just grit and tenacity kind of thing. And there's a lot that I did wrong that I, that I've heard you talk about that I could have got right the first time. So I want to talk come out the gate with what do you think is probably the number one error that most startups make in trying to build their organization?

I think the number one mistake they make is probably looking at the wrong indicators too early. You know, I mean, it's just human nature, right, to gamify everything. What gets measured, gets managed. You're looking at your sales or you're looking at some kind of vanity metric when you really need to be looking for, you know, some little product market fit or some, some kind of what seems like tertiary insight. It's really probably the key insight to build on. I think that's what, you know, most people end up pointing the metal detector, if you will, in the slightly wrong place and then you just keep going down that rabbit hole. Versus, you know, early days. It's so much less about, it's more about the learnings and the iterations and the moving than anything else. So keeping that aperture open.

No, I think that I actually, I would agree with you. I actually had a good buddy of mine who built a. He ended up building a sizable business, which is fantastic for him. But he told me like in the first two years he really struggled and he struggled because they were, they were selling like crazy. But their attrition rate was terrible. So as they were filling in the front of the cup, it just had a big hole in the bottom of it. So they did a cash flow analysis and realized that they were actually fast tracking to red in a hardcore way. What types of metrics do you feel like should be like key indicators? I'm a big believer in data driven decisions. So what are types of indicators you believe in?

Not so much now, but back in the day we were involved with tons of D2C direct to consumer brands and you just hit the nail on the head. What happens with a lot of them. Seems like you're selling like crazy. So everyone's looking at the top line, kind of trying to keep an eye on your burn, but nobody realizes. I've been a part of multiple companies where we didn't quite understand, you know, churn rates and everything else. And then you start to factor in things like free shipping and all that. Next thing you know, the more you sell, the more you lose. So yeah, I kind of always look for, you know, positive, positive unit economics. I think we're in an age of like, you don't have to be profitable, but you have to be either on the cusp of it or ability to kind of turn on that spigot. So it means that you're figuring out how to be, you know, maybe not profitable on the first sale, but lifetime value or unit economic profitable so that you have the option but not the obligation.

Yeah, that's one of the things that I actually talk to my entrepreneurs about all the time is like as you're trying to build your business, like think through it from a perspective of creating lifetime value, not a transaction. Like what are your bolt ons? What is your, what is the experiences they're going to have in doing business with you? How can you continually innovate and make your product better or service being better and better and better? Those have been big ones that I've seen as well that a lot of the unicorns, if you will, or the ones that you've worked with that have Done very, very well. It seems like there's a constant need or desire to want to innovate and just be better and better and dominate their marketplace.

Yeah, I think like you just said, you hit the nail in the head. I mean, I kind of call it the difference between platforms or true companies versus products. You know, a product is I saw some quote unquote as seen on TV thing and I'm like, oh, the grill Flipper meister Master. That's great. I could use one of those. That's just a one off purchase. Right. It only becomes a company if you can sell me all the grilling assets I need and there's some other thread that binds and so, you know, we always try to start platforms or things that give people both the reason to have an emotional connection and a journey. So I'll give you one quick example. We started a brand through our kind of studio called LaunchPad M13 about 18 months ago with Tony Robbins off the back of his last book called Lifeforce. Yeah, I think to the naked eye it could be like, oh, you're selling supplements, but it's really about selling whole vitality journey. It's everything from blood tests to diagnostics to telehealth visits to performance coaches. So I want to sell you, I want you to, I don't even want to sell you. I want to share the experience with you and keep you on that journey so that you're engaged and hopefully making progress.

Well, not only that, it's. I've been a benefit of some of those products and services from Life Force, specifically myself. I'm sure since you're connected with Tony, you also probably know a good friend of mine, Randy Garn, because obviously he serves on the board as well. Well, with one of the organizations and he brought it to my attention and one of the things he brought to my attention was this. I guess the early stage of it is the full body MRI scenario where you're like you're getting complete diagnostics on whatever it is. And I unfortunately, myself and a lot of other folks lost a good friend this week, that young enterprise. And from our perspective, great thought leader. She was really high in the network marketing industry and did really, really well financially and seemed to have it all and unfortunately passed this past week from something she just discovered like six months ago. And it makes me think it's like services that are a complete holistic journey from start to finish. The benefit a lot of times is greater than the investment.

Do you feel like a lot of products, goods and services need to Be positioned in such a way that the marketplace can foresee or can see themselves that is greater than the investment of the price or service of the product.

Yeah, absolutely. And, you know, sorry to hear about your friend. I think, I think that is, you know, we're in this age of. The business you're actually talking about is a kind of an adjunct business to Lifeforce called Fountain Life that Tony and his co author, Peter D. Man, just started that, you know, does full body MRIs, kind of like your executive physical times times 100, and they have four or five locations going to many, many more. But yeah, I think we're in this age. I think if, if there's a few luxuries I've hopefully earned, it's. It's, you know, the idea of do well by doing good. Like, I only want to start companies, I don't want to start companies that sell a bunch that I don't think are helping people. And so to do stuff like this makes a big difference on my end. But on the other end, obviously, it just kind of creates that. That emotional connection. And, you know, I think you and everyone who's close to the person you mentioned will probably think twice about something like this or your mortality or your longevity. So I think, yeah, I think people always want to see the value. People, you know, like, I'm big in the sustainability. I always joke, like, yeah, people want to do the right thing and get sustainable products, but they ask themselves, what, what can green do for me? Right? I need to believe that the light bulb lasts longer or I'm, yes, I'm making a choice for the environment, but it's also kind of helping me in some way. Whether that's, you know, a myriad of ways, but internally, externally.

Yeah, no, it's good. It's good stuff. One of the things I was just thinking of too is, and don't short your.

Shortcut. Your startup that I picked up on at the end of the. At the end of it, which was interesting to me, which is one of my biggest lessons that I learned in business. When I went to go build my first business, I had, I was not thinking about the end in mind. I was thinking about my daily routine, what I had to get done that day, my checklist and stuff like that. I will tell you, I wish I had been thinking about what I wanted to do 10 years from then, 20 years from then, 25 years for then I would have built it completely different. Completely different. So talk to me about the importance, a little bit of building your organization with the End in mind.

Yeah. And you know, this all credit goes to my parents, my late father, he was really big on, you know, you don't have to know what you want to do in life. But he's like, life is all about options. It doesn't make you any different than anybody if you go to this school or work at this place. But it probably does preserve some option value. And the more you kind of have options, the more you can try different things and keep other doors open. Now, I think unlimited option value indefinitely is probably not a good thing. The old paradox of choice. But having some options, especially as you're figuring it out.

Is a really big thing. And so with building with the end in mind, it's all about option value. I think people get shocked when I say if you think there's even any chance you want to sell your company to someone down the road, you should make every decision from the jump as if you're going to do that.

Yeah.

Not because you have to sell it, but because if you don't, I can almost guarantee you'll either not have the option or you'll have a lot less options than you would have had other ones. And so it's just a, you know, it's just a decision tree of giving yourself that option value that I think a lot of people just don't, don't think about.

Yeah. Well, and again, I was, it's one of the biggest mistakes I made. Like when I started looking at the different options that were in front of me, I had to go back and retool a bunch of things to reset dominoes up in my favorite. And then have the. Call it, the, the time frame of waiting where you're waiting for those, those fixes, if you will, corrections to even take shape. Right. Which, you know, when you're. I, I find that, I find that when founders are ready, they're ready, you know, they're, you know. So I say all that to say that if you're a founder and you're ready and you haven't built the infrastructure properly, or you need to go back and retool things like it's super duper important, or you can do what you teach, which is build it with that in mind and then just have the option at the end of it. Right. So I have a philosophy called, I think there's five phases of a business in general. So startup, obviously of the testing phase. You're testing to see what works. Investing, you know, you're trying to figure out what you're Investing in, what ERP system, etc. The scaling phase. Okay, everything's now working. Now we, now we can pour gasoline on it. But then the, the final one is the operator cell.

Yeah, right, yeah, absolutely.

But to me that's a, that's a big, that's a big component of building a meaningful organization.

Yeah. And I think, you know.

Probably one of my favorite personal quotes from our book Shortcut yout Startup is I know how hard it is when you're in the grind and you're in the trenches, but it's that the good entrepreneurs have a microscope in one eye and the telescope in the other eye. And I don't think if you're doing a good job, everyone has the microscope in their eye. Right. Because you're in all the minutiae. You're doing every job, you're learning it, but trying to keep that telescope in the other eye and zoom out and see, you know, what, what's on the horizon or what you need to do to build this, to sell it. Because the, the one other thing I'll say on that note is, you know, I've been a part. I actually don't think I've personally, I've co founded a number of businesses. Some, you know, and some have been a little more off the radar. But I don't think I've had one business where everyone was banging down the door to buy it. And I've had a couple where no one was banging down the door to buy, but I've also had a couple where people were interested in it. But at the end of the day, unless you start the AI whatever that everyone wants to have now, you know, most of the companies I've started that are mentioned in the book and some that I've started since they're kind of what I would call nice to have, not need to haves. So if it's a nice to have, yeah, they're interested, but they're interested kind of. You kind of have to leave, as I say in the book, the breadcrumbs the right way. Right. You have to position right. You have to put it in a way where they're like, huh, I never thought about that as a bolt on or oh, that could make sense. Because the reality is, you know, most people are not banging down the door to buy most things. You kind of have to put yourself in harm's way of being purchased, if you will.

Yeah. Well, to that point, if it's a want to have, not a need to have, does that typically.

Discounts not the right word, but does that typically lower your multiple if you do go to sell?

I don't, I don't think so because it's not about.

It all depends. It's all. This is all a game of kind of positioning, right?

Yeah.

If, if they just didn't know they really want it and they like want it but don't absolutely have to have it. I think if they want it, they want it. I mean there's a bunch of things where I've said kind of this is the price and if they get comfortable, it's kind of, you know, it's kind of binary. But no, I don't think it lowers the price. It's just all in the art, art of the deal, so to speak of how you get people interested. Because it's. I don't mean it kind of how interests are the day they're buying it. I'm going to hope if it's, you know, it's not a heck yeah, it's a no. So I only want people to buy my businesses if it's a heck yeah because that prime means they're going to do things with them and there'll be some legacy. But it's. I meant that more beating down your door to kind of like start the process and the diligence or, you know, not look too available yet secretly. I want them to buy the brand.

Yeah. Yeah. No, that's awesome. Well, that's why I wanted to bring that up because I feel like that, you know, sometimes we can short, shortcut ourselves and how we position businesses or how we look at businesses, how we understand our own value of our own businesses kind of scenario. I know one of the things that you've mentioned recently is you from, if I understand you correctly, you spend less time looking at the business and you spend more time looking at the founder, the entrepreneur to kind of figure out if they have the goods to take the business, you know, to the, to the really the long run, essentially. Talk to me a little bit about that and what you're looking for in entrepreneurs and businesses that you're looking at yourself, you and your brother looking at.

Sure. You know, again, we're all kind of products of what we learned. I'll invoke my dad again. I mean it is. The ideas are cheap. Execution is dear. So it's. It starts as simply as I would much rather take what seems like a pretty good idea with what I perceive to be a 10 out of 10 team versus what I perceive to be a really good idea with a 7 or 8 out of 10 team, like, yeah, I'll take my chances all day. Based on my experience of pattern recognition. The right team will have exactly the traits, you know, you espouse in the beginning. The grit, the resilience to either do it or figure it out or do the proverbial pivot or at least an evolution, if not a revolution, figure it out. Like, I will always take that team and those qualities. So I think it's a lot about the people involved. I, as, I've, as I've said a lot of places, I think this area, era of the, what I'll call the benign dictator, maybe a founder, like a Travis at Uber back in the day, that doesn't really work anymore, you know, for a lot of reasons, whether it's kind of the court of public opinion, whether it's regulatory. I think I like the founders where he or she knows, you know, knows what they know and know what they don't know. It's like it's literally being president of the U.S. nobody knows everything. Nobody can be briefed on everything all day, every day. So it's all about the people you put in, different positions and cabinet members and that they are, you know, experts in their field. And so I really love people who are more vulnerable or are more open about going here. Here's what I know I'm killer at. Here's where I know I'm, I'm the best in class, trying to get to world class. Here's where I know my blind spots are. Can you help me?

Yeah. No, I love that because at least for me, building my first business, one of the things that I used to struggle with because being the, the, the early day founder, right? The, the gritty person that had to create something out of two nickels and just put it together and figure out a way, right to all the way getting to about 10 years in, probably 10 years in, before I realized that I was doing all the talking at the management teams at the management meetings and a subtle shift began to happen and our, and our growth skyrocketed when I was the last person to talk, not the first person to talk, and I got to hear all the other perspectives of why something is good, not good, working, not working, delayed, advancing, etc, and you get to the end of it and then you have to answer five questions after you've heard the brilliance of the room. So it sounds like to me when you're looking at management teams, you're looking for that unified behavior where everybody is operating their sweet spots. What if.

You got 75% of complete buy in from a management team and maybe you got one or two folks on the management team that are, they're capable but they're learning, meaning they you, five years from now they'll be excellent on that team. Is that a, is that a team you would invest in and just, and spend some time mentoring along those, maybe some of those weaker team members on the executive team?

Little hard to say in a vacuum because I think it all depends on, you know, what, what the, what the company is, what the proposition is. If it's something like AI, where you know it's going to take a couple years to germinate anyways, I think the, the industry and the proposition can probably grow alongside them. If it's something where, you know, it's a, it's a land grab and they have to figure it out in the next year. Sometimes you can't be patient for that. I, in general, you know, our approach at M13 is really to, you know, we're 80%, my firm is operators really hands on. So I don't want someone who is deferential to us. But we only take on people who are open to our feedback and see that we can add really unique value. So that is a big part of it is that some people, you know, are different stages or things we vest in early. But we can only do so many of those because you're, you're building the plane as you fly and I think.

Which could get scary at times.

It's scary and I think, you know, potential is a dangerous word, right. Like it can work to your advantage and to your disadvantage depending on how much stock you put in what situations. So I try to be mindful that there has to be that right mix of potential with enough here and now to still, you know, get, you know, what done.

Yeah, no, I think that's awesome. I think the other thing that I've heard you say too, that I think is brilliant and true as I've looked at investing in smaller organizations is honesty. Like be. What was the term? I think it was be as honest with your investors as you are with your doctor or something like that. Like be, you know, be honest like if you're gonna miss your, if you're gonna miss your projections, like hit it on the front end. Don't wait six months to kind of do that. So talk to me a little bit about that.

Well, yeah, I think it's more that like again, I think we're unique. Most people at my firm, M13 and that we've all been part of the founder, journey and operators. So I've been on both sides of it. Right. I've been on the side where the investors grilling you. I've been on the side where I'm grilling. I've been on the startup side. I think it's just, it's. They consider us truly like a partner. Friend is a little bit of a trite term, but I want them to feel like they can, they can call for anything and it's just like, you know, same as any, any close relationship. I'd rather them head off the bad news at the past rather than kind of find out because if they just come clean, come up front and say, hey, we missed this, here's why. Whatever. Thanks for your, your patience. Hopefully we can figure this out. What can I say to that? You know, I could. Yeah, of course. I mean, anyone who knows me knows I'd be disappointed. But yeah, they're just, I want them to be disappointed too. And if it's the right person, they're hopefully more disappointed than, than we could be. So then it's more just about. They've taken the wind out of the sails of like, oh, the. I got you. Like, you're not, you're not sharing everything. So it's just about, I think, going first and doing that proactively.

Yeah, no, no, I, I 100 agree with you. Like, again, it's a lot of times business deals are built on honesty and the moment you realize that somebody's being dishonest with you or being deceptive in general, you want to start distance yourself as quickly as possible. You know, you guys have managed and.

I think, I think I'll just say that not many, not many people that I deal with, thankfully, I don't think are dishonest. But that's still a little different than the absence of the truth or not being forthcoming. Right. So it's really about. More about just being kind of proactively forthcoming with good and bad news than it is about being honest, hopefully. But honesty is certainly a green speed.

Yeah, for sure. Well, the other thing too is I was thinking of you. You guys at M13 with the organization have done really well at picking call them calling your race horses your winners or whatever you guys have done. Your, your batting ratio is pretty high. What do you, what do you, what do you think is. I guess, what do you, what do you think is at the secret sauce of that? A little bit that you can share. Obviously we'll give our competitors stuff, but, you know.

Yeah.

Yeah, we, you know, we we are our, our first fund kind of in 2015, 2016. I think we've had something around 10 companies that became unicorns and you know, seed investors and things like Ring. We put in some of the first million dollars that sold Amazon for 1point billion. So some of these are the earlier, the early. And I wish I could share something that's. There's no trade secret because some of it's just pattern recognition. Every situation is different, but it does come down a lot to the founder. I'll take for example, Jamie Simonoff, who founded Ring. We had known him as a friend, you know, he had done some other things. He started a company called. What's it called? Phonetag.com it was like Google Voice before there was Google Voice. And he actually sold the technology for that to Google now, not for some massive outcome, but something that you and I would still be very happy with. But he was like in his late 20s and he had a couple other things like it where he hadn't hit the big one. But I was just like this, this is the kind of guy we want to back. His, his kind of incubator was called Edison Jr. Like as in Thomas Edison. He really had that tinkering mindset. He really had that mindset of he was always starting three or four things at once. And when something became the most promising, like Ring, he pursued it and just said, this is the guy that's going to create something. He's already come pretty close with two other things that were again successful, but just not successful with a capital S. And then of course he hits Ring. So makes us, makes us look good.

So it worked out.

It is, it is a lot of that, you know, because when he started Ring, he had these other ideas for portable chargers at bars and restaurants. If I showed you the original, it's called Doorbot. I mean it, you know, as they say, if you're not a little bit embarrassed with the first iteration of your product, you know, you waited too long to launch it.

Embarrassed by the first iteration. But he, you know, people still like that up that he saw something there and just kept improving on it and iterating it.

Yes, there's, there's, I guess there's still a little bit of a feel to it then. Like it's almost like, almost like instinctual maybe.

Yeah, there really is like, you know, there is definitely a pattern recognition of instinctual. Like I just, I just see this and, and that's, I find usually for the softer qualities, not like, oh, you worked at investment bank and you Must know financial be good at that. Or, or interviewing a Chief Technology officer. It's more around the softer things, but the things that, that matter, right? The grit, the resilience, the, the tinkering, the kind of curiosity. I mean, that, that temperament for the leader, all, all those things. Like, I don't have a scorecard for those, but I probably run through a dozen of those trades pretty quickly when I spend time with the founder.

Yeah, no, that's why I want to bring it up is because I feel like.

I feel like there's a lot of really good entrepreneurs that don't have a full appreciation of who they need to become as an entrepreneur to get the right kind of attention, to build the right kind of meaningful thing, to have it be acquisitionable, if that's even a word kind of thing.

I like acquisitionable.

Let's do it.

It's much easier now to get words approved in Merriam Webster. So I think if you apply for that and I second you, and then I get, you know, I figure out who did my Wikipedia, we're onto something.

All right. We can make it happen. That's good. Curious. I believe that the, the best businesses solve a problem. Some of the problems are unknown. Some of the problems are existing. When you, when you guys started your first business that you exited, what problem were you guys, what problem were you solving? I know you guys had lots of Red Bulls and vodkas at a, at a cocktail lounge, so. But what were you trying to solve?

Well, I'll start by saying whatever problems I think I'm trying to solve at 27 or hopefully different problems I'm trying to solve 37. And yeah, eventually when I get to 47. But yeah, in your mid-20s, it did seem like giving people a better drinking alternative felt like a solvable problem story we told ourselves. But I believe it to still mostly be true when something like this like prohibition didn't work. People are going to always drink. Let's give them a better option, both as a product in the bottle and as a company. And I was shocked. I just moved to la and you see all these people who are vegan and surfing and going to CrossFit, and then they're drinking. I won't even name names, but like artificial synthetic, you know, vodkas, it's like a Twinkie. It lasts forever. Like, what's, what's natural about that. So, yeah, we still were serving alcohol, so make no mistake about it. But I think we did a lot around, you know, organic ingredients, better, better filtered water, interesting ingredients, like acai ingredients like prickly pear that when consumed in moderation, will give you less of a hangover. Yeah. Even 10 years later, I have to give that to disclaimer because people think I got really drunk. I'm like, well, what happened? Like, well, I usually only drink two or three drinks and I had six. And I'm like, huh, Maybe we should just, you know, stick to the two or three and then do Apple's taxes. But we also did a lot around, you know, as a company.

We.

We got tax credit credits, build the first distillery powered by renewable wind energy. We gave a dollar from every bottle back to different environmental causes. So we give millions of dollars a year for a company that wasn't. Wasn't properly profitable. We were carbon neutral. We, you know, the first spirits brand members of one percent for the planet. So I could bore you to tears, we started a program called the Treatini, where every cocktail you bought, every. Every bar or venue that had this tretini if you bought one, we planted a tree on the back end. So, you know, none of these are perfect things, but they're all things that made us feel like we're. We're doing well by doing good. And so I think we're a little bit ahead of our time. But it was fun to do something that taught you all the basics of branding and positioning because, you know, for clothes, you and I wear lots of clothes from different brands. For. For alcohol, it's more of a binary choice. Right. The. The spectrum of. I've heard of Viv. I've tried Viv. I like Vee. I occasionally drink Viv to Viv is my drink of choice. That is a big spectrum and it is one of the hardest things to move people along that spectrum because they tend to be less promiscuous, if you will. They're drinking. Yeah. Kind of study in your habits. Whereas shop all different places or do different workouts. So it was fun. But make no mistake, that was still probably the hardest business I ever started because it was interesting. A lot of fickleness of consumer behavior, but trying to be predictably fickle. And just like I said, it was pretty binary outcomes. So proud of the fact that we got it from literally bottle zero to about a million bottles when we sold it. But every one of those is pretty hard earned. Yeah, it's.

Well, it's good stuff. I would argue that it also set you up for M13.

Oh, for sure.

You probably learn all the intrinsic touches and the, you know, the. I don't know. The. I don't Know to me, I can tell you that building the first business that I built has made me a, a 10 times better entrepreneur with the next build with the next businesses I'm building.

Yeah, for sure.

You know what I'm saying?

Because you can't, you know, you can't get away in spirits with some of these loosey goosey things because it really is about having a better product. But then it's just so much about the execution. There are many great products out there that you will never ever see at a liquor store or your local bar. And that's just the nature of the beast. So there's a lot of really kind of simple lessons on what goes into that mix well and that that talks.

I guess pivots a little bit into maybe something else. Top of mind for me is that was a very in theory. Well, not a theory to me, it's a very saturated market. Alcohol sales in general, creating alcohol is very saturated. But yet you did very well. You've obviously got endorsed deals that do very well as a rule of thumb. What I mean, to me, I would have put that. And this is where my entrepreneur kicks in, right. I would have put that more on the riskier startup phase than maybe tech or something. Talk to me about it. Like, how do you, how do you kind of look at it from a risk perspective?

Yeah, no, I mean again, my, my ability, I think now one of my brother and I's superpowers and a lot of people M13 is his ability to, you know, assess risk reward and try to create an asymmetric risk reward. That's a really important job of what we do in terms of creating things and investing things. But thought process pretty different in the mid-20s. It's like any good entrepreneurial bias. Had I known then what I know now, I never would have started. That is for sure the case because spirits is something where, you know, almost everyone starts one, your family did it, your dad did it, you know someone who did it. You have some. As I talk about in our book, having figured out what your unfair advantages are, kind of had no real unfair advantages or the ones we had were not that pronounced. Say so. Yeah, I would. Nothing's easy as you know. But I would say in some ways other things we've done that have seemed a tad easier or seemed like, oh, we're better at this or things that we're really good at, like marketing and direct sales. You know, you can't really even do those with spirits just given how laws work. So yeah, there was, there was not many reasons, reasons to believe. But that certainly kind of, kind of humbles you when you go from Goldman Sachs to doing something like that. Because we did it right before the Great financial crisis of 08. So few people be like, oh, you must have seen it coming. And I was like, you know, I remember my dentist said something like that. I'm like, if I saw this coming, you think I'm going into spirits. I'm like, just gonna do what John Paulson did, short the market, and then I'd be retired. But no, I had no, no recollection of what's coming. Oh, man.

Well, look, I mean, I, the, the shortcut. Your startups is definitely a, it's definitely a book for someone who is either building or scaling a company. There are a lot of really, really good tips in there that, had I read them 10 years ago or 20 years ago when I was building my business, would have saved me millions of dollars of, of errors and lots of frustration. Probably saved a couple of relationships along the way as well, to be honest. I want to talk about the unfair advantage.

That was something I hadn't heard somebody articulate before, but it makes complete sense to me. But what doesn't make sense to me is the process in which you can maybe distill, if you will, no pun intended, your way to your own unfair advantage in your organization. What are tips and tricks and things like that that maybe we could use to, you know, better understand what. Understand what our unfair advantage is?

Yeah, I think, let me start by saying I believe that everyone has some unfair advantage when they're starting. Having said that, let me be clear. Not all unfair advantages are created equal. And that's life. Maybe that's easy for me to say. So I'm not saying that's a throwaway, but the opportunity of the unfair advantage or the magnitude of the unfair advantage is not equal, but everyone has something. And so I think, like I said, my unfair advantages at 25 are really different than my unfair advantages at, you know, 35. And so it's about cultivating those. I don't really have a great, It's a great question. No one's ever asked me kind of how to, to discovering yours. But I think it's, I think, you know, the hardest thing to do when you're starting something is kind of be. Have a little stoicism and sit still and sit with it. And I think if you're someone has a good gut and intuition, you'll start to kind of have it come to you. But I also think this is where like sometimes people close to you, you know, sometimes better, you know, yourselves, just ask people, like, just say, what do you think are my superpowers? What do you think I could be really good at even if I'm not today? I mean, I think it's, it's, it's not one source, but it's looking at, it's, it's trying to triangulate between three or four things like that. There's certainly, you know, people put together exercises and little quizzes that you could look up to figure out your unfair advantages. Different people call it different things. But yeah, it can be everything from those personality tests to we use one called Acumax, which is really great because it's a little more, I find kind of relevant, hands on to kind of the workplace versus a Myers Briggs, which is a innate personality test. I don't care what my personality is. I mean, I care, but I care for how I show up at work. So something like Acumax is really good for that. So I think it's about taking all those tools, putting it together and either you or you with like some mentors or people you recruit, it's about synthesizing that. And that's probably one other thing I should say is I really think mentors are one of the most important things that it's not that people don't talk about, because they do, but I don't think they talk about them with the right gravitas. I mean, I think I kind of grew up around, you know, a paradigm of trying to be successful, achievement and all, all good things for the most part. But I think as I look back, the other thing people don't talk about, it's probably even starting out, it's a little less important where you are, but more what you're doing and who you're doing it with. Like I would trade working at more of a brand name firm for working for someone directly who's actually really teaching me things, instilling things like I'm getting a better experience. Like that is a, a huge part of actually figuring out your unfair advantage. It's part of our unfair advantage is figuring out what you like and what you don't like. And so that's a big part of it to me.

No, that's awesome. I was just thinking too, as even on the mentor side, like I would not, I would literally not be where I'm at today without a lot of like really instrumental key mentors along the way. Probably three or four that were like just, they just Moved the needle in a big way and then a lot of supplemental ones along the way as well. You know, you and your brother have managed to not just build one business together and exit now building another great company together. How do you do that? Because a lot of family in business together is dysfunctional and stuff like that where it doesn't, it doesn't allow for scaling, it doesn't allow for growth. You know, there's too much going back and forth. At least I see it a lot in the businesses that I've seen that a lot of times the family dynamic does causes the business to struggle. Have you guys been able to figure that out?

You know, my brother and I are always best friends growing up. Obviously we grew up together in Chicago, sports together, went to the same schools, both worked at Goldman Sachs. So paper we've been really close and we always have been. But I will tell you it's not there. There are some pretty dark moments because people say what's it like being in business with your brother? I kind of say it's a little bit like Charles Dickens Tale of Two Cities. You know, twas the best of times was the worst of times. Because when it's going better, there's nothing better. And when it's going poorly, it's kind of like accentuated times, times two or three. Because you know, at one point we were living together, we didn't really have money for an office so we had people working out of our house. So imagine like we're kind of rolling out of bed some days a little earlier, some days a little later. Especially when you're the adult beverage industry, there's always sitting at your, around your kitchen table sampling sort of thing. So yeah, you know, we used to read the stories about the family blow ups and go, oh my gosh, that's crazy. That's so sad. That would never be us. But I think you always have to be vigilant because I don't think we're ever like really close to some kind of real separation or nuclear blow up. But you know, things happen and we got closer than I ever thought we could ever get even if we weren't that close. And now it's really about, you know, we've, we've spent a lot of money on great executive coaches and people not, not because we needed them, but more just to proactively kind of keep growing. And I think one of the biggest insights that because my brother and I style, we were not like, we're not like, oh, I'm the marketing guy and he's the tech guy. And so it's kind of a complimentary thing. It's actually a weird kind of substitution thing where we would generally agree on 95% of all things. The other 5% makes the world go around. We're still working on how to agreeably disagree and have discourse on the other 5%. But, like, when we would be doing something at one of our first startups, we would. He would be working on something, then he'd get really inundated and say, oh, wait, I had this meeting. Can you just like jump in, follow up and handle this? Or vice versa. And so we'd kind of have this unsiloed thing where we both knew each other was doing enough that we could kind of hop in and just hopefully have one plus one equals three and get. And get more done. So that's kind of been how it's happened. But then one of the biggest learnings is, you know, when you kind of do some stuff with coaches and like, just remember you are not your brother Carter, and your brother Carter is not you. He is not in charge of filling you and making you happy and vice versa. And, you know, I think as we've. We've gotten older, we have a ton of stuff in common still, but we also have a few things not in common. And it's just as simple as that sounds. It took a while to just keep reminding myself that, like, I'm going to show up how I want to show up. I'm going to present myself. I want my present myself. I shouldn't have invested interest in how my brother presents himself. I can maybe give him a little feedback, but not really because he's my brother. And so, you know, it's, it's. Now we have a big enough organization with enough variation activity that we spend a lot of time together and we spend a lot of time apart. And I think that's good for both of us.

Yeah, no, that's awesome. I think. I like that. I love the fact that it's, it's, it's. It became a proactive, A proactive benefit. I think a lot of the founders that I've worked with, obviously that have been family dynamic, then it was last thing of their mind. You know, there was everything else in front. And then let's see if we can work on a relationship, which I think is, which I think is a key point. You know, as you're kind of looking at stuff, I just, I don't know. It's, it's a, That's a really cool Thing a lot of entrepreneurs, like, one of the questions I get all the time is, hey, I want to start a business. Do I raise money? Like it happens all the freaking time now? I don't know what to tell them because I didn't start my business, my first business with money. I started my first business from a construction trash pile. So I don't know what to tell them when it comes down to that. I'm like, well, go knock something over and earn some money at that, and then take that and invest in your thing is kind of what my advice has been. I don't know how great that advice has been, but that's. That was my experience.

Is there ever a time to bring an investor in or acquire or. Or start entertaining investors versus a time that is not appropriate?

Yeah, I mean, I'm sure a lot of people have talked a lot about all the different ways to find money now, even though I realize that some of them are not. Not very easy. I think, to your point, I agree with what you said. The longer you can go without taking on an investor or investors, probably the better. Makes you. Makes you scrappier. Makes you treat every dollar like it's your own, because it probably is, or you've made some little profit that you're reinvesting. So I'm always a fan of that. I think, you know, once you kind of start taking investment or, you know, more and more investment, I mean, it's kind of once you're. Once you're using the house as money, you probably have to keep going back to that. Well, depending on what kind of business you have or the number of people. I know that it's a very small percentage of people that take a little bit investment. That's all they need. Those are. Those are great ones. But in those cases, a lot of times I would question whether you actually even needed it, looking back, because I know some people had thought they needed it. Took a little money, but easy to say after the fact. So I think go as long as you can by doing creative things, then take as little as you can, because early on is not the time to optimize for valuation. It's not until later when you probably had a second or third round investment, that you might try to kind of push that valuation based on where the company's at.

No, that's awesome. I just jotted down a couple notes. Go as long as you can and take as little as you can. Which I think those just in two principles are. Are phenomenal.

Yeah. But I think once you take Some probably have the mindset that you're going to take more because it almost always behooves you once you take a certain amount to, to keep doing it. If you're kind of starting to move from sailboat phase, speedboat phase, as we like to call it.

Yeah. Well, one of the things I heard you mention about in this category, which I thought was really interesting and I didn't actually realize it was a thing, but structuring the deals in such a way that the investment can be temporary, like there's, there's already kind of like an exit strategy for the investor without them necessarily riding the coattails of the whole business for the next 25 years.

Yeah.

How do you determine, like, what makes sense? Because to me, if I'm gonna, if I'm gonna bring on an investor, unless it's somebody that I get. So for me, and I've never, I've never yet taken money from an outside investor in any of the organizations I've built thus far. I just, probably because I don't know any better, to be honest.

But the things that I always said that I would do is one is I would only take what I, what I think I would need and I would approve that with data. So kind of in line with what you've already said. And the second is, is they have to be able to offer more value than just money. Expertise, connections, scalability, things like that. Right. When you, when you look at those parameters all together, it seems to me that there is a time and a place to potentially look, you know, kind of look at the money. But at the same time, you never know if there's going to be a breakup. You know, all of a sudden, you know, we got, I think this happened to Jobs when, when their first investor in Apple, like they, they got along great and then next thing you know, it all went to pot. Right. Like, so how did you come up with the idea? Or is this something they taught you at Harvard? Is this something that you guys just did instinctively where you guys, you know, have done a couple of deals or at least looked at deals where there's a temporary surplus and then an exit strategy on the front end?

Yeah, I would still say it's kind of the exception, not the rule. Because in a perfect world you find a really good partner and they're a long term partner, whatever that means. Maybe it doesn't have to mean a forever partner, which I can touch on, but it's a long enough term partner that helps you get where you want to go, adds more value than just money. But I do think if you try and view too many of these things as temporary, you're going to end up making decisions you would have made versus if you said this is like a bedfellow of mine for a pretty long time, I better really, they better pass the airport beer test that I'd have a beer with them at the airport, so to speak, or whatever, whatever the case may be. You know, sometimes we see something we love and it's really early, so we'll say hey, we'll put in something now. And then we have the option to put in more in like a fairly short time frame, like six months. Because you can always kind of tell what at least you can't tell if the business is going to be successful necessary. But you can probably tell the ways of working and the dynamic. And then also I think, you know, you just have to keep in mind different, different constituencies endgame, right? You might take some money someday. I'm glad you haven't. I would still recommend not doing it. But you might for some reason take money someday for one of your businesses. But pretend you want this business to last 25 years. Almost no investors, especially professional ones can have a 25 year time horizon. I'm in the business of taking people's money, investing it, making more exit, flipping around. So maybe you go, hey, you know what, thank you for this. It helped me. I'm going to give you, I'm making up the numbers but three extra money. Most investors be happy tripling their money and in the appropriate timeframe, less than 10 years. Let me buy you out because I want to keep this thing going. And then someone goes great, I got a great return. It was a win win. And then Steven gets to have his business as a legacy for his kids or something that you do part time when you retire, whatever the case is. So just about understanding that, dude.

Absolutely love the conversation. You were one of a kind of can't wait to see what all, what all you guys continue to build and stuff like that. Where can everybody find out more more about you guys? M13 yourself Etc.

Yeah, thank you so much for having me. It's been a lot of fun. I am, I am an original as you said because there's not another Courtney Ream that I'm aware of. So as long as you spell my name right, easy to find me on LinkedIn, Instagram and then of course it @m13co. So check out what we're doing there, brother.

Thank you so much again man. I really appreciate you. Big time.

Thanks so much for having me. I hope you liked that video.

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My ability to help people was always kind of there. And what I'd gone through was awful, but I knew I had the strength to help other people.