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Episode: The #1 Most Underrated Quality in an Entrepreneur

Author: Hubspot Media
Duration: 01:06:08

Episode Shownotes

Get our Business Monetization Playbook: https://clickhubspot.com/monetization Episode 660: Sam Parr ( https://x.com/theSamParr ) and Shaan Puri ( https://x.com/ShaanVP ) talk about founders who have rage as an unfair advantage, Bill Ackman’s takedown of Harvard, and a ruthless PE rollup. — Show Notes: (0:00) Revenge businesses and other green flags (5:55)

Chips on shoulders = chips in pockets (19:38) Bhutan's Gross National Happiness (34:48) Ruthless PE rollup: International schools (43:58) IDEA: $500M YouTube University (54:11) Bill Ackman Breaks down Harvard as a business — Links: • How To Lose Weight in 4 Easy Steps - https://tinyurl.com/2x67a7jc • Nord Anglia Education - https://www.nordangliaeducation.com/ • Full Sail University - https://hello.fullsail.edu/ • University of Austin - https://www.uaustin.org/people/joe-lonsdale • Veritas? - https://pershingsquarefoundation.org/wp-content/uploads/2024/10/Veritas.pdf — Check Out Shaan's Stuff: Need to hire? You should use the same service Shaan uses to hire developers, designers, & Virtual Assistants → it’s called Shepherd (tell ‘em Shaan sent you): https://bit.ly/SupportShepherd — Check Out Sam's Stuff: • Hampton - https://www.joinhampton.com/ • Ideation Bootcamp - https://www.ideationbootcamp.co/ • Copy That - https://copythat.com • Hampton Wealth Survey - https://joinhampton.com/wealth • Sam’s List - http://samslist.co/ My First Million is a HubSpot Original Podcast // Brought to you by The HubSpot Podcast Network // Production by Arie Desormeaux // Editing by Ezra Bakker Trupiano

Full Transcript

00:00:00 Speaker_01
Josh Wolfe has this phrase where he says, chips on shoulders equals chips in pockets. Basically is when you meet an entrepreneur who's got an uncurable, unhealable, you know, identity wound, that ends up being somebody who ends up doing really well.

00:00:21 Speaker_02
Let me fill you in on some things that I saw this week that I just want to get your opinion on. Sam Lesson. So Sam Lesson, I think he was an early Facebook employee and now he's an investor. He says a lot of interesting stuff.

00:00:34 Speaker_02
So he did this tweet where he talked about revenge businesses. people who have started stuff because they want to get revenge. And an example of this is this guy named Parker Conrad.

00:00:45 Speaker_02
Basically, he started this company called Zenifice, which was fast growing company. It kicked ass, whatever, he gets fired because it was like a bro culture.

00:00:54 Speaker_02
There was like, people caught like having sex and like the stairwells, like people doing drunk dumb shit. Like there was also like some compliancy issues of like, not everyone was like compliant. And so he got fired.

00:01:04 Speaker_02
And so we started this new company called rippling, which has taken off like a rocket. And Sam Lesson, I guess, invested in it. Same with Palmer Luckey. Guy got fired from Facebook. He started Oculus. Now starts... What's it called? Andrel?

00:01:16 Speaker_01
Yeah. Andrel.

00:01:17 Speaker_02
Yeah. And so anyway, Sam Lesson has this really cool line. He says, If you have in your diligence checklist, is this company a form of deep revenge? The answer is yes. Cut the check.

00:01:30 Speaker_02
And the reason I'm bringing this up is because oftentimes, you'll talk to someone and they'll say, hey, man, you got a lot of hate in your heart. You got to let that out. You can't hold that in your heart. You can't live with that.

00:01:41 Speaker_02
I've taken the opposite approach for the last handful of years. I actually think that hate, if you have in your heart, it can be really useful. Revenge and rage is a very useful feeling. So is shame.

00:01:52 Speaker_02
People will be like, why are you guilting someone into doing this or that? I'm like, well, guilt is a wonderful emotion to improve. And I wanted to get your opinion on his take here.

00:02:02 Speaker_01
I mean, I think it's honestly kind of genius. And I think people don't like to say things like this. But there are a bunch of heuristics for investing that sounds so stupid, or sound inappropriate, but are actually true and useful.

00:02:20 Speaker_01
So, you know, for example, And you can frame these different ways. But I have a friend who was like, you know, Paul Graham talks about he wants to invest in fierce nerds. And a fierce nerd is basically it's a nerd who's like overly competitive.

00:02:36 Speaker_02
And also like a little bit of a shithead.

00:02:38 Speaker_01
Yeah, exactly. You know, doesn't, is looking to sort of break the system, beat the system, is overly competitive, maybe unrefined in certain other areas of their life, but that's what you want.

00:02:50 Speaker_01
And my friend was like, yeah, I look for fierce nerds who love money. He's like, specifically the for love who love money is a multiplier on the fierce nerd concept. And, you know, we've joked on this pod before about like,

00:03:02 Speaker_01
You know, if in your pitch deck, I'm like, okay, went on a Mormon mission or like, you know, grew up in, you know, a Slavic country, Eastern Europe. I'm like, you know, little plus points are going off in my head. These are green flags in my head.

00:03:16 Speaker_01
It's not a for sure. Yes, but like. I'm not stupid. Like eventually you realize, God damn, these people from Utah can sell. Or wow, these programmers from this area of the country are pretty badass.

00:03:28 Speaker_01
Or when somebody is, you know, it's like being a Harvard dropout is a stronger signal than being a Harvard graduate.

00:03:35 Speaker_01
There's all these things that sound silly but actually end up being true because if you're the type of person who can get into Harvard,

00:03:40 Speaker_01
and that has enough conviction and an idea to drop out of Harvard against the social pressures of Harvard, that actually turns out to be a pretty good filter.

00:03:46 Speaker_01
Now, of course, these things can be gamed if people realize that these are the signals you're looking for, right? Like people showing up to pitch meetings and acting a little extra autistic. It's like, OK, we kind of know what you're doing here.

00:03:57 Speaker_01
You're trying to fit some pattern that this investor is trying to match against. So all of these things would be gamed. But it's great when you can figure out signal that is not yet common.

00:04:09 Speaker_01
And so this one of is this person, you know, is this a revenge company is a great signal. It's a green flag signal.

00:04:20 Speaker_02
All right. So when I ran my company, the hustle, I think we had something like 2 million subscribers and we made money through advertising.

00:04:26 Speaker_02
We didn't actually make that much money per person reading the newsletter because advertising in general is kind of a crappy business model.

00:04:33 Speaker_02
And so I remember sitting down and I'm like, what are all the different ways that I can make money off the hustle that aren't advertising?

00:04:39 Speaker_02
And so to make sure that you don't make this mistake, Sean, me, and the Hotspot team, we went and looked at a bunch of different ways to monetize your business.

00:04:48 Speaker_02
And we put it all together in a really cool document where we lay it all out along with our research. And we call it, very appropriately, we call it the Business Monetization Playbook.

00:04:58 Speaker_02
Go to the description of this episode and you're gonna see a link to that Business Monetization Playbook. It's completely free. You just click the link and you can see it. Back to the episode.

00:05:12 Speaker_02
Have you seen the Ted Turner documentary that recently came out on HBO?

00:05:15 Speaker_01
No.

00:05:16 Speaker_02
Everyone should go and watch this. So Ted Turner has been one of my heroes for decades, because his biography was so good. And basically, his story is that he inherited a billboard business from his father.

00:05:27 Speaker_02
And it was a great billboard company, like it was in the South and it was thriving. He took the money from that and he started a local TV station. He eventually bought the Braves for cheap. He bought the Atlantic Hawks for cheap.

00:05:38 Speaker_02
Then he parlayed all of that and bet all of his money in CNN and was constantly on the brink of bankruptcy, not because his businesses suck, but because he was just like, pushing it 100% all the time.

00:05:50 Speaker_02
And so there was this great line, it said, this is about one of his employees, he was Ted had a great sense of paranoia within the company, a sense that we were the little guys fighting for our lives against some big unknown guys.

00:06:03 Speaker_02
And the truth is, is that we are one of the biggest billboard companies in the South, one of the biggest in the country. But we wanted to make everything seem more important than it probably was.

00:06:11 Speaker_02
And in fact, he insisted on taking his telephone calls outside on payphones because he wanted everyone to believe that his phone was being tapped. And if you watch his documentary, he does all these amazing things.

00:06:24 Speaker_02
Like for example, he's like, I had to launch CNN because Americans at the time, CNN was the first ever 24 hour news network. He was like, we owe it to America. Like Americans need to have an option to know what's going on in the world.

00:06:36 Speaker_02
Like everything had this grand sense of like, we have to do this for America or like they're trying to crush us. And it's like, who's they? We're the best. And that was a big takeaway from Ted that I loved.

00:06:47 Speaker_02
And this post kind of reminded me that same lesson posted about them.

00:06:51 Speaker_01
There's a couple of things that come to mind on this one. Travis Kalanick is kind of like this. So he had he hadn't gotten screwed in his first startup, literally, I think, by Michael Ovitz and others. Basically, it was like during the LimeWire

00:07:08 Speaker_02
Well, the background is Travis Kalanick, the founder of Uber. Before Uber, he started Red Swoosh, which was some type of LimeWire competitor.

00:07:14 Speaker_01
Like a file-sharing service. Yeah. Peer-to-peer file-sharing service. And he ends up not making a lot of money from it. By the way, Naval, same thing. Naval's first hit. Naval's now this wise, sage, billionaire type of dude.

00:07:28 Speaker_01
He was kind of like an angry, vengeful dude when he started ePinions back in the day. The VCs kicked him out of the company. I think ePinions ended up going public during the dot-com boomer. It had like a kind of a big exit. He got nothing.

00:07:39 Speaker_01
He got screwed by his own VCs.

00:07:41 Speaker_02
He didn't make anything from that?

00:07:42 Speaker_01
No. And he ends up suing them. So he does the thing that normally in Silicon Valley, the founders are very afraid to fight back against the VCs. He publicly sues his own investors and ends up creating venture hacks

00:07:55 Speaker_01
which is a blog dedicated to helping founders not get screwed by VCs. He's like, dude, I didn't know how to read these term sheets. And I didn't know what these contracts meant. And they just kept telling me the dangerous words.

00:08:07 Speaker_01
Oh, don't worry, it's all standard. And he goes, there's nothing more dangerous than something that when a lawyer or a VC tells you this is standard, don't worry about it. And he goes, well, standard ended up getting me screwed.

00:08:17 Speaker_01
So he starts Venture Hacks, a blog. And that leads to AngelList, which basically took the power away from, in many ways, the VCs and gave it to angel investors, the founders, it created a marketplace.

00:08:30 Speaker_01
So it created more transparency, more liquidity, more competition in that marketplace, and Angelus becomes a multi-billion dollar company. Elon is on a revenge tour right now.

00:08:39 Speaker_01
Literally, the Democrats were attacking him or demonizing him, suing Tesla and SpaceX and all of his companies and adding more and more regulation. And so he just flips the script, goes all in on Trump. Doe goes on a revenge tour.

00:08:55 Speaker_01
Now he's basically like a, you know, de facto president. And he's now going, now he's going in with Doe. He's trying to like rip out the guts of the bureaucracy, right? Like these, these revenge tours are really, really strong.

00:09:07 Speaker_01
Josh Wolf has this phrase where he says, chips on shoulders equals chips in pockets.

00:09:12 Speaker_01
basically is when you meet an entrepreneur who's got a deep chip on the shoulder and it's sort of a, an uncurable, unhealable, uh, you know, identity wound, um, that ends up being somebody who ends up doing really well.

00:09:24 Speaker_02
That's a 10 out of 10 phrase, by the way, tips and shoulders and chips and pockets. Yeah, that's a beautiful, he, he knocked that one out the park.

00:09:32 Speaker_01
It's a good one. And I've actually had trouble with this. I used to go the other way. We would meet somebody, and they would say something that just sounded like, oh, dude, there's a part of you that's broken inside.

00:09:42 Speaker_01
You're really carrying this revenge against somebody. I used to try to A, convince them that they shouldn't hold that. or be like, this person, they're not mature, they're not wise to it. And I immediately missed out on several big opportunities.

00:09:58 Speaker_01
And again, in that moment, my reaction is to either A, judge, which gets you nowhere, or distance myself and say, all right, this person's not as, they're not like-minded, they're not seeing the world the way I'm seeing it.

00:10:11 Speaker_01
And now what I've realized is, no, no, no, I need the exact opposite reaction. You go really close to that person and you hand them a check and you say, can I be a part of what you're doing?

00:10:19 Speaker_01
I'd like for your crazy psychosis to be to my financial benefit. And so like, I'll give you an example. So I'm very close to this person and they have basically made. They had a bankruptcy back in their 20s, late 20s, I think.

00:10:35 Speaker_01
So they were doing really well, got to like a $25 million net worth, but were overextended. They're in the real estate game. Were a little bit overextended. They were doing development on behalf of this person who was expanding.

00:10:46 Speaker_01
There was like a guy who was expanding a bunch of locations. So he's like, cool, you're going to do 15 locations? Great, I'm in. I'll go buy these and I'll develop them for you. And then that guy got in trouble, that guy went to jail.

00:10:56 Speaker_01
So now he's holding the bag on these 15 locations that could only be used for one type of business.

00:11:01 Speaker_02
And so you're saying like, it was like some guy, let's say it's like a fast food franchise was like, I'm going to be creating like 50 locations or whatever. Well, you you go develop them and I'll meet you there.

00:11:11 Speaker_01
They did deal one, it was great. Deal two, it was great. Deal three, it was great. And so he goes, awesome. You want to do 18 more of these boxes? Great. And he goes and gets them permitted for this exact thing.

00:11:20 Speaker_01
He does exactly what he's supposed to do as a real estate developer. But then that guy got in trouble for tax. He hadn't been paying his taxes or whatever. He can no longer do this.

00:11:28 Speaker_01
So now he's on the hook for like, whatever, 18 payments for a business he can't run. And he can't use for any other purpose. And he can't really sell it because it's distressed. And this happened right in 08 when the bank crisis happens.

00:11:39 Speaker_01
And so nobody's investing in real estate anymore. So he gets like, basically, this series of events ends up going bankrupt. Well, he has a traumatic experience and he goes bankrupt.

00:11:50 Speaker_01
Not only he goes bankrupt, he was, I think he was engaged or just got married. And all of a sudden he's back in his childhood bedroom with his wife. They've had to move back to his parents' bedroom. He's sort of ashamed of that.

00:12:02 Speaker_02
And he had a $25 million net worth before that?

00:12:05 Speaker_01
Yeah. And, you know, buying like a million dollar engagement ring, like that kind of thing. And they turn off the lights to go to bed. And he's like, he's telling her, he's like, you know, I promise you, I will figure out a way.

00:12:15 Speaker_01
Like, I don't care what the hell I have to do. I will fight back. I will figure out a way to make this right. Give me nine months.

00:12:20 Speaker_01
we're gonna be here for nine months in this room and like whatever and he gives her this inspiring speech this like gladiator speech and then he turns off the lights and like he had like the stars from like you know there's like sticker stars on the ceiling the neon ones that they start glowing and they just crack up laughing and he's like oh my god where am i

00:12:37 Speaker_01
And so, and then he starts basically his revenge tour.

00:12:40 Speaker_01
In the 10 years since then, has built up like a billion dollar real estate portfolio using only his own money, no outside investors, probably has, you know, I don't know, something like four or five million of his own equity in these deals.

00:12:52 Speaker_01
And has, you know, really come back strong. And so I, for years, have been looking for a good way to invest in real estate. I looked at, should I buy my own property? Should I have some rental properties?

00:13:02 Speaker_01
I think I kind of should take this internet money that I'm making. I'm all in on the internet. And I think I should take 10%, 20% of it and have it in hard rock, tangible assets you can go touch and feel. That seems like a smart thing to do.

00:13:13 Speaker_01
But I never knew how. Should I do it myself? I'm a beginner. And that takes time. And I don't want to go fix broken toilets. Should I give it to one of these funds or syndicators?

00:13:22 Speaker_01
And then you would like meet them and you realize these guys are just fee monsters. They make all their money on the buy. They don't make any money. You can, good luck on the sell. They make their money on the acquisition fees and management fees.

00:13:33 Speaker_01
So I didn't like them. And then when I met, and then when this guy was like, Hey, you know, like, do you want to do a deal with me?

00:13:40 Speaker_01
I was like, I'm all in because the chip on this guy's shoulder of proving his dad wrong and coming back from that bankruptcy and all of this, even though today he's super wealthy, he'll never stop.

00:13:51 Speaker_02
If you're a grown man who knows what it feels like to sleep with your wife in a twin bed, that sticks with you. The feeling of exposed ankles, of blankets that don't cover your ankles stays with you.

00:14:03 Speaker_01
If you've ever had to call top bunk with your wife, You've experienced a trauma that I would like to invest in.

00:14:09 Speaker_03
Yeah.

00:14:10 Speaker_01
When we were selling the Milk Road, I remember talking to, I think I could say this, I remember talking to some of the potential buyers and was like, wow, you've been really successful.

00:14:21 Speaker_01
And I was like, what, and I'd try to get to the root, what was the motivation? Like, why did you even go this path? Was it just, you had an idea and, or you had, you wanted to solve this problem?

00:14:31 Speaker_01
And I talked to two people and one was like, no, this girl rejected me in ninth grade. And I just remember thinking like, F that, like, I'm going to become somebody. I'm going to, and he's like, yeah, I know it sounds stupid.

00:14:42 Speaker_01
And like, it was stupid, but it was effective. And the other one said the same thing. He's like, I was trying to live in a house We had six friends, and we were all like, hey, let's live together next year.

00:14:53 Speaker_01
And then we found this awesome house, but it was a five-bed house. And they were like, hey, man, it's only five beds. I realized I was in the bottom of my group, and I was like, F those guys.

00:15:05 Speaker_01
Every night they're having fun in that house, I am going to be building an empire. And I remember just thinking like, really? First of all, that was like 20 years ago, 15 years ago. That still motivates you?

00:15:16 Speaker_01
And don't you feel kind of silly that that bothers you so much? And they were like, no. I feel they were silly for ever counting me out. And I was like, wow, OK. I am not wired like these people.

00:15:28 Speaker_01
I am not fueled by the same rage and kind of revenge instincts. And I'm not saying that's the only thing that motivated them. But the fact that that was there still 15 years later was very surprising to me, and I've now learned to bet on it.

00:15:41 Speaker_02
I think that I'm not surprised that you've never had issues because you're I've said this a bunch of times you're very emotionally healthy.

00:15:50 Speaker_02
Dude, I use rage and like guilt and like I want to nicotine I want to end you know and I want to get back against some like there's times that I remember my big brother like saying something smart aleck to me and I still feel that like

00:16:05 Speaker_02
I'm gonna prove you wrong. Like I still feel it. Yeah, that shit runs deep, but it is pretty helpful. It makes you pretty miserable at life, but it makes you like fairly productive.

00:16:17 Speaker_01
I'm not gonna lie. I'm kind of jealous about it. I think on the whole is probably good. I don't have that. But does seem kind of badass when I hear it.

00:16:26 Speaker_02
It takes like it's crazy what happens. So you know how I hate flying. I went through like 10 years of therapy to figure out why I don't like I'm so claustrophobic.

00:16:34 Speaker_02
It comes down to when I was like, in second grade, my brother put me in a full Nelson, you know, like a full Nelson with like, and he dipped me underwater in our pool. And he was like, you know, like, teasing me, but I sucked in a little bit of water.

00:16:49 Speaker_02
And I legitimately felt like I was drowning. I distinctly remember like, I'm dying right now. I'm about to die. And he kept dunking me. And I was like, you fucking asshole, like I'm dying right now.

00:16:58 Speaker_02
And like, it's crazy how little moments like it since then, by the way, I cannot stay in elevators. I don't like taking subways.

00:17:04 Speaker_01
You'll swim. You just don't hit you.

00:17:07 Speaker_02
I don't like anything where I'm constricted and I can't escape. It's rooted in like, I can't escape. So if it's like a boat that you're gonna go on and you can't see the shore, it's like, no, I'm not doing that shit.

00:17:17 Speaker_01
Is this what the hypnotist unlocked in you, or you're saying you figured this out through therapy or something else?

00:17:21 Speaker_02
Therapy and hypnotherapy, yeah. I've spent so much time and money to figure out the root cause and how to overcome this, all from a 60-second interaction with my brother, where he was a kid too, he was being innocent and just messing with me.

00:17:35 Speaker_02
Isn't that crazy how the things that happen as a kid can impact everything?

00:17:40 Speaker_01
By the way, does it help when you figure out the what the root cause or Yeah, like, does it go away a little bit?

00:17:45 Speaker_02
No, a little bit. Like, I guess like, there's this like idea of like, getting over the stuff. It's called like walking to the gallow, where like, when you get panicky, it feels like you're dying.

00:17:55 Speaker_02
And in order to overcome that, you just gotta be like, fuck it, I'm gonna go die. Like, I'm going to like experience this thing that I'm fearful of. And you just have to do it. And it's like, it's pretty, it's pretty bad.

00:18:08 Speaker_02
And like, so you have to tell yourself all these stories to help get over it. And one of them is like, I only feel this way because John did this to me long ago, and I was fine. Okay, I was fine. I will make it through this.

00:18:18 Speaker_02
And so you got to like walk to the gallow, you got to like tell yourself all these stories. And so that's like one of the many coping mechanisms. But it's just all happens because of a small thing when you're a kid.

00:18:26 Speaker_02
So it could have been like some girl said this, some guy said this to you, right? And it like, it's crazy. It just shapes like 50 years of your life.

00:18:33 Speaker_01
Dude, what a sick phrase, walk to the gallow. Wow. What a what is a gallow even?

00:18:37 Speaker_02
Like, that's where you get hung. I think it's where you get hung. It's like, so the gallow is like the structure where you have to get hung. And so like, by the way, I tried to break this the other day.

00:18:48 Speaker_02
I went on the subway for the first time ever in New York. I was like, deathly afraid to go to the subway. And I'm like, we're just gonna go one stop. And I was like, fuck it. We're walking to the gallow.

00:18:57 Speaker_01
There's also, this isn't just for business. This is also like, you know, revenge body is a thing. And remember that Medium post we both love, how to lose weight in four easy steps. And it's like, portion control, you know, avoid beer.

00:19:09 Speaker_01
And then it's like, have your heart broken, not just broken, shattered into a million itsy bitsy pieces. And it talks about basically it's the heartbreak that's like the fuel for the gym. Like in the same way that like,

00:19:20 Speaker_01
You know, if you want Adele to go triple platinum, she just needs a bad heartbreak, right? It fuels artists, it fuels fitness, it fuels business, and I think it's sort of undeniable. I don't know if it's healthy, but it's definitely effective.

00:19:35 Speaker_02
Taylor Swift wouldn't write hits if she had a successful, wonderful relationship.

00:19:40 Speaker_01
Well, we'll see. Travis Kelce.

00:19:43 Speaker_02
She hasn't had any new hits yet. You know, she has hits for a reason. All right, so a while back, we had Gary Tan. He's the president of Y Combinator, which is the most successful incubator of all time.

00:20:00 Speaker_02
We had him on the podcast and he said that the future of businesses is creator-led. And that's why I'm interested in the podcast Creators Are Brands. Creators Are Brands explores how storytellers are building brands online.

00:20:14 Speaker_02
They're going to cover the entire creative process. They're going to talk about navigating brand partnerships. They're going to talk about what you need to know about growing your social media platforms.

00:20:22 Speaker_02
Everything you need to know on this topic, Creators Are Brands is the pod. So, check it out wherever you get your podcasts. Again, it's called Creators Are Brands with Tom Boyd. All right, back to the episode. All right, what else you got?

00:20:37 Speaker_02
All right, so something a little bit happier. I saw this on 60 Minutes, I think, two weeks ago. I cannot stop thinking about this. So let me fill you in on this story. So there's a small country called Bhutan. Bhutan is in between India and China.

00:20:54 Speaker_02
So it's between these behemoth countries. And because of that, A lot of people don't know about it. And it's tiny, half the size of Indiana. It's tiny. I think their stock market is 18 companies.

00:21:06 Speaker_02
And the total market cap of their stock market is $800 million, which is 170,000th the size of the US stock market. So it's like the super small country. In fact, I read that in 1999. That was the first year they got TV. So it's like this tiny country.

00:21:21 Speaker_02
Well, In the 70s, the King of Bhutan did a diplomatic trip to India. According to the story, this Indian reporter goes, Hey, King, we're neighbors, but I don't know anything about you. What's your deal? What are you about?

00:21:38 Speaker_02
In fact, what's your gross national product? Tell me. What are you guys known for? He goes, Gross national product? What? What are you talking about? GDP? What are you saying? In Bhutan, gross national happiness is more important than gross national product.

00:21:53 Speaker_02
And it was this offhanded comment that he made saying their biggest export is happiness. We care about happiness. And that totally hit. It went viral. Everyone was like, this little country, they must be the happiest place on earth.

00:22:07 Speaker_02
The king says that they care more about gross national happiness than money. And the king was like, oh, people really resonate with that. Let's make that our thing. And so over the next 5-10 years, they actually implement this and make this their thing.

00:22:24 Speaker_02
And so in this country, Bhutan, to this day, every five years, surveyors travel the country, and they ask the people about education level, salary, and material possessions, so a lot of normal stuff.

00:22:36 Speaker_02
But then they also say, do you have negative thoughts? Do you have positive thoughts? how much time do you spend working? How much time do you spend praying and sleeping?

00:22:45 Speaker_02
And the data that they get is factor in to a lot of the rules and things like that that they make. And I thought it was a great story about how you can care about things that aren't seemingly important happiness.

00:23:03 Speaker_02
And I had... Well, you know what I mean? It's like, we care about money.

00:23:07 Speaker_01
Foster. Yeah, the touchy-feely.

00:23:08 Speaker_02
Yeah. And there is a few critiques, which is like, according to the World Happiness Report, Bhutan is average. It's not kicking ass. But I don't know if that's a matter of different ways of measuring, things like that.

00:23:23 Speaker_02
Because happiness is a way... It's hard to measure happiness. Is it that fleeting moment that you feel in the 30 seconds after you've eaten a good meal? Or is it like, I feel contentment, whatever. But I thought it was cool for three reasons.

00:23:34 Speaker_02
One, the king just said some shit and it hit and he ran with it. Like... Been there, bro.

00:23:42 Speaker_01
I feel that. Yeah. It becomes a thing, right?

00:23:45 Speaker_02
Yeah. It's like wearing a certain outfit in fourth grade and you're like, I guess this is my identity.

00:23:50 Speaker_01
I guess I'm a high stock guy.

00:23:51 Speaker_02
Yeah, like I'm a... The chain wall is my guy. Like, I'm a chain wall guy. Like, that's just my thing. Because the teacher said that.

00:23:57 Speaker_02
The second thing is that I do think it's pretty fascinating that in a culture that you and I are part of, and America's particularly because we're such hard workers, it's all about work, work, work. But that's not really the point of all this.

00:24:09 Speaker_02
It's to be happy. So I thought it was cool that they're measuring that. But another third and final thing that makes this interesting, have you ever heard of a pairing metric?

00:24:18 Speaker_01
Yeah, basically two metrics that let's say you have revenue on one side, but you might have profitability on the other in order to make sure that like, if you over optimize on just revenue, you might totally nuke your profits.

00:24:30 Speaker_01
Or if it's about growth, you want, you know, NPS score, make sure your customers are happy. Is that what you mean?

00:24:35 Speaker_02
Yeah. And so when Tim Ferriss invested in the hustle, I got to hang out with him for an hour or so. And I was telling him about how many subscribers that we were growing by.

00:24:42 Speaker_02
He's like, Well, you need like a pairing metric, you need, you know, not just top line, like subscribers, email subscribers, but like, are they engaging?

00:24:50 Speaker_02
Are they opening whatever, you have to have a pairing metric, otherwise, it kind of ruins the whole thing. And that was like, kind of fascinating to me. I never heard that phrase.

00:24:58 Speaker_02
And I didn't think about having a pairing metric with like government policy or, you know, like anything other than business.

00:25:04 Speaker_02
And this is like a really great example of a pairing metric where it's about GDP, traditional metrics, but also, you know, make sure that your people are happy along the way. So I thought it was pretty cool.

00:25:17 Speaker_01
Yeah, I love this story. I think I was telling you before this. I think we both somehow the odds of us both having Bhutan on our list are so Weirdly low. I think maybe we both saw the same thing. I saw the 60 Minutes thing a few weeks ago.

00:25:30 Speaker_01
What did you think? First of all, it's so funny when you watch 60 Minutes, 60 Minutes looks so old, dude. It looks, and 60 Minutes is basically just a YouTube channel. It's great though, right? It's great, but why does it look so old?

00:25:44 Speaker_01
Like literally the person on there is old. The clock they use for the 60 minutes thing is so old. All of the editing is so old. They don't know what a jump cut is. It's insane.

00:25:53 Speaker_02
I think it's a fun fact. I'm almost positive it's the only TV show without a theme song. It's literally just tick, tick, tick, tick, tick, tick, tick, tick. Yeah, exactly.

00:26:03 Speaker_01
It's crazy. So when you watch 60 Minutes, it's interesting to just look at it and be like, what is this, dude? Anyways, here's a couple of the things that stood out to me about this. So first, why am I interested in a country?

00:26:14 Speaker_01
I'm interested in a country because

00:26:16 Speaker_01
In the same way I'm interested in companies that are run in interesting ways, or if a company had a unique mission or business model or a unique way of doing things that'd be interesting to me, countries are just big companies.

00:26:26 Speaker_01
And I found this pretty interesting if you looked at it like a company, where it was like, oh, what's our main metric? It's not revenue, it's happiness.

00:26:33 Speaker_01
So it's like, instead of the GMV, they're looking at how much happiness they're producing in their own economy. And I like that they measure their own. And like, did you look at their happiness index, kind of zero to one and how that all works?

00:26:47 Speaker_02
Yeah, it's like a weighted score, right? And what were all the metrics?

00:26:51 Speaker_01
It's basically, it's a weighted score. Then they sort of, they ask people a bunch of questions about their, you know, psychological wellbeing, their health, their time, you know, their education, all these different things.

00:27:02 Speaker_01
And they end up with like, you know, basically, There are 7.781 on their scale, which is pretty good. And they measure, oh, that's up 3.3% since last year.

00:27:13 Speaker_01
And basically 9.5% of Bhutanese people are deeply happy, 38% are extensively happy, 45% are narrowly happy, and 6.4% were unhappy, according to them. And what I thought was cool was that, a couple of things.

00:27:26 Speaker_01
Number one, it's one of the very few cases where someone in power gives it up. So they had a king, and he voluntarily is like, you know what? This could just go to my son, but we need a democracy.

00:27:38 Speaker_01
And the funny thing is the people there were like, no, no, king, stay king. He's like, no, no, no, we need a democracy. They're like, democracy? You see, India's a democracy, Pakistan's a democracy. Look at those places. They're always at war.

00:27:48 Speaker_01
It's violent. Forget democracy. We don't want it. We're happy. And he was like, well, if I just keep giving this power down by birth, this won't end well.

00:27:57 Speaker_01
So I thought seeing somebody relinquish power in their crime is so rare that you just overlook it when you're on the surface. But if you actually think about that deeply, that actually is like a really noble, and very cool and very unique thing.

00:28:11 Speaker_01
How few, Biden didn't want to give up power and Trump doesn't want to give up power. Nobody wants to give up power. Power is one of the most addictive things in the world.

00:28:19 Speaker_01
And so I just thought that was really noble and really cool of him to voluntarily go to democracy at a time of peace, which is not usually what happens.

00:28:25 Speaker_01
Usually if a democracy happens, it's after a time of violence or war, people need change or the Western country comes in and helps and tries to force a democracy on them. So I thought that was cool.

00:28:36 Speaker_02
Did they say that was the only time that's ever happened that way?

00:28:39 Speaker_01
It's the only one I know of. They kind of referenced that that's never really happened before. That it actually happened in a time of peace voluntarily.

00:28:47 Speaker_01
Also crazy that just like, you know, until the 70s, like in 1974, there's people listening to this podcast that are born before 1974. They didn't have a currency. It was barter. Even up until 1974. That's crazy, right?

00:29:01 Speaker_01
And the crazy thing was, even though there was barter, they still had to pay taxes. And it was like, you could pay your tax with giving the government like a cow. Or if it's like, oh, you don't have livestock, all right, do labor then.

00:29:12 Speaker_01
And so then they built these amazing buildings because your taxes was basically community service. It's like, hey, I'll go donate like, you know, a hundred hours of labor to pay my tax for the year.

00:29:21 Speaker_01
And then because of that, they built these really cool buildings. Side weird note, you know, our friend, Sheil, friend of the pod, Sheil went to Bhutan.

00:29:30 Speaker_01
I think he posted this thread, it's a thread of him going there, he like meets the king, because he's like, it sounds crazy to meet the king, but like, he's like, I was at a bar and I was talking to this guy and that guy was the former, like whatever, he was the former like prime minister or whatever.

00:29:44 Speaker_01
He's like, now he's a surgeon and he's just drinking at this bar. And he's like, oh, you want to meet the king? Yeah, I can introduce you. And so he meets the king. And so he's like, he's talking about his experience there.

00:29:53 Speaker_01
One of the crazy things he points out is like, a lot of the buildings have penises painted on them in like artful ways. So. A little bit of Superbad mixed in there. I like that. The other crazy thing is the Bitcoin stuff. Did you see their Bitcoin stuff?

00:30:07 Speaker_02
I know they own more Bitcoin than the total market value of their stock market. It's like a billion dollars in Bitcoin.

00:30:15 Speaker_01
Yeah, they basically have made themselves wealthy for life. They use their vast nature. So they use hydroelectric mining to mine Bitcoin. And it's believed that they have a billion dollars of Bitcoin.

00:30:29 Speaker_02
But I think that was reported eight months ago. So it's as if they have double that now. You know what I mean? They've had a great run.

00:30:40 Speaker_01
The US has it because they seized the Silk Road, right? So they have, you know, the US has 20 billion. China has $20 billion. UK has $6 billion. El Salvador, which has been buying and holding Bitcoin, has $6 billion.

00:30:57 Speaker_02
And the guy on that 60 Minutes show, he did a great job of saying, he's like, we're human. We still want to be rich. And we want stuff. And we want all this other stuff. We also want to be happy.

00:31:08 Speaker_02
And so because people were like, well, so if you're just about happiness, why are you buying Bitcoin and all this? He's like, well, I still want nice shit.

00:31:15 Speaker_01
Yeah, yeah. The more prosperous we are, the happier we'll be. The other thing that I thought was cool, you know, they do free education, free health care, all that good stuff.

00:31:22 Speaker_01
But they also were like, hey, 60% of the land is going to be like dedicated to nature. But there's no, I think they don't allow mountain climbing. They like have these amazing mountains because they're in the Himalayas. Yeah. But you're not allowed.

00:31:33 Speaker_01
And he said this great line. He goes, nature is not meant to be conquered. He's like, man has this thirst to just conquer everything. Oh, there's a mountain. I got to climb it, put my flag on the top. And they just had a different attitude.

00:31:46 Speaker_01
It's like nature is beautiful. It's meant to be enjoyed, meant to be, it's sacred. It's meant to be sort of revered and not conquered. And I just thought, man, these people roll to a different, a different beat. And I respect it.

00:31:57 Speaker_01
I'm glad that these little experiments live.

00:31:59 Speaker_02
I had the exact same feeling, which is I saw him talk and they sort of fit a lot of the stereotypes that you would have with like a Nepal, the Dalai Lama like this, like rise because and I think they're like, they have like a national outfit or something like that.

00:32:13 Speaker_02
And it looks like the boot and they are Buddhist, but it looks like that, like whatever the Dalai Lama, like the shah or whatever he wears. So they like jeans. Yeah. Yeah, the national sport is grinding.

00:32:29 Speaker_02
They had this like cool vibe of like wisdom and shit. And it was very shocking to see that because I'm like, watching this on a Sunday night as I'm gearing up to talk about money and gearing up to get after it crush the week.

00:32:42 Speaker_02
And then I see this guy who was like, talk about happiness and shit. And I was like, this is incredibly refreshing. It was pretty cool. It seems like a great country. I think by the way, there's all these like other downsides.

00:32:53 Speaker_02
I think she'll even said he was like, It's a pain in the ass to get there. I don't even think they have an international airport.

00:32:59 Speaker_01
The roads are not very developed. There's other things. When you prioritize happiness above all, maybe your roads kind of suck.

00:33:06 Speaker_02
Yeah. So it was pretty sick, dude. I thought it was great. I was very inspired. So I wanted to bring up Bhutan.

00:33:11 Speaker_01
Well, there is one other piece to it, which I guess a bunch of young people are leaving the country. Did you see that part? I didn't follow that. But they were then going to build a new city. in Bhutan, the mindfulness city.

00:33:24 Speaker_01
And it was going to be like they launched like 100 million dollar bond.

00:33:28 Speaker_01
And then they're basically trying to make it a city where it's like walking and cycling and green spaces for meditation and mindfulness based education and ecotourism, like all the shit biology talks about with like a network state or like the practice guys are trying to do these.

00:33:42 Speaker_01
Bhutan is building a new city with like its own cultural values, trying to use that to attract people to the country.

00:33:48 Speaker_02
Well, you want to hear a funny story is Biology is in a lot of these crypto guys are in on this new thing called American classes. It's that monument that they're proposing that they build in the Bay Area.

00:34:01 Speaker_02
I don't know if it's it will never get built very likely. But the same architect who's on board with that is doing there is that was the guy in the 60 Minutes episode. He's the guy who's building Bhutan's new city. And so there is this like weird

00:34:15 Speaker_02
crossover of the crypto guys and these people who are like, let's what's in it? What would a new city look like? And right on?

00:34:22 Speaker_01
Yeah, it's pretty inspiring. Honestly, it makes you think bigger, right? It makes you think about things that you just take for granted. They just seem set in stone. They seem like they were just, they were already here. They'll always be here.

00:34:31 Speaker_01
It always was this way. It'll always be this way. And then you hear about somebody, you know, these people who are trying to like, shake that and you realize, oh, wow, it's all the whole world is more malleable than you thought.

00:34:41 Speaker_02
Yeah, and they also were approaching it in an interesting way with their new city. I forget the quotes, but he said something about how he's like, we know that this is like a 50-year project.

00:34:54 Speaker_02
We're going to go slow because we don't want to hurt the environment. And the guy was like, but you're going to be dead when they do that. And he was like, Isn't that awesome? That's something that will outlive me.

00:35:05 Speaker_02
So if you're listening to this, it's on YouTube for free. So Google Bhutan 60 Minutes. It was an awesome segment.

00:35:17 Speaker_01
Hey, Sean here. I want to tell you this little story about Winston Churchill. So Churchill once said, first we shape our buildings and thereafter they shape us.

00:35:26 Speaker_01
And I think this is true not just for the buildings we see in cities, but also for the building blocks you choose in your company. For any company that I start, I use Mercury for all of my banking needs. Why?

00:35:35 Speaker_01
Well, it was built by a YC founder and you could tell. This is built by a founder who understands the needs of other founders. Second thing is it's modern. It's clean, easy to use. The design is really nice. You'd never have to drive somewhere, park,

00:35:46 Speaker_01
put coins in the meter, get out just to do one simple task. You can do everything in just a couple of clicks. They got bill pay, checking account, savings account, wire transfers, everything you need, they got it.

00:35:55 Speaker_01
I use it for not one, but actually six of my companies right now, and I actually even have a personal account with them. It's kind of amazing. So if you're ready to operate in the future, head over to mercury.com, apply in minutes.

00:36:05 Speaker_01
Disclaimer, Mercury is a financial technology company, out of bank, banking services provided by Choice Financial Group and Evolve Bank and Trust members FDIC. Thank you to Winston Churchill for that little ad segment. All right, back to this episode.

00:36:16 Speaker_01
All right, now that we talked about Bhutan and happiness and how there's more to life than money, can I tell you about one of the most ruthless capitalist, bloodthirsty moves that I've seen in a while.

00:36:32 Speaker_02
You know how in boxing they say, steal the round, because in the last 10 seconds, that's what judges remember. They don't remember the first 120 seconds, but they remember the last 10 seconds.

00:36:39 Speaker_02
Whatever you say last is what I'm going to be most inspired by. So sit down, Bataan, you had your moment. Yeah. Now tell me how I can go cut some fuckers. All right.

00:36:54 Speaker_01
This is a private equity roll up in the education space that I found pretty interesting. All right. What does that mean? So I went to high school in Texas for the first two years, and then my mom and dad came to me one day and they were like,

00:37:09 Speaker_01
check this out. Doesn't this look like a cool house?" I'm like, yeah, it looks pretty cool. And they're like, we're gonna live there. And I was like, okay, where? And they're like, it's in Beijing. And then my family moved me to Beijing in 10th grade.

00:37:19 Speaker_01
And so... They went too? Yeah. Yeah. It wasn't just me. That would have been super cool. They moved me there and they moved themselves. So they were like, hey, you know, all those friends you've had, like, You're not going to see them anymore.

00:37:33 Speaker_01
And so they also lied to me and said my dog couldn't come and told me that China doesn't allow dogs. And later in life found out that was a huge lie. So, you know, that's maybe that'll be my revenge to her, dude. That's it. That's the thing.

00:37:46 Speaker_01
Wait, so they leave the dog? Yeah, we sold our dog because, oh, dogs can't go to China. I was like, what? Oh, my God. Stupid. There's no Google at the time. They got to. This is pre-Google.

00:37:58 Speaker_01
So I finished high school in China, and I went to this school called the International School of Beijing. And it was actually an awesome school, and it turned out to be great for me to move. And all these awesome things happened to me there.

00:38:08 Speaker_01
But as one of these things, again, I just, I go to the school, I just take it for granted. There's a school here, I don't know, schools are part of the They're just like from the land. I don't know, God put it here.

00:38:16 Speaker_01
I don't know what puts these international schools here. And now, I'm like in my 30s and I'm reading up and I realize, oh shit, these international schools are an absolute juggernaut of a business.

00:38:28 Speaker_01
And so, I'd like to tell you about this roll-up that happened called Nord Anglia. Have you ever heard of this?

00:38:35 Speaker_02
Yeah, my friend Anand from CB Insights is obsessed with it.

00:38:40 Speaker_01
And so here's what these guys did. So the founding story is back in the 70s, you know, things like 50 years old, there was one school in the UK or there wasn't even a school.

00:38:49 Speaker_01
It was like making materials for other schools to teach English as a foreign language to people who are trying to learn English in the UK. And then they expand that into Eastern Europe or whatever. And then they start their own school.

00:39:01 Speaker_01
They're like, oh, we'll do our own school for teaching international people. And we'll teach them in a sort of English second language kind of way.

00:39:08 Speaker_01
And over time, the thing grows, and it goes from one school to multiple schools, and they create this business that eventually becomes a $14 billion conglomerate of 80-plus international private schools. Can you say the name one more time?

00:39:28 Speaker_01
Nord Anglia, N-O-R-D, and then Anglia is A-N-G-L-I-A. So what do they do? And by the way, remember when IMG sold? IMG, which is like the Sports Prep Academy, and it sold for a billion dollars. We're like, wow, Nord Anglia bought it. So this bought IMG.

00:39:46 Speaker_01
And the reason they bought IMG, they're like, IMG is a really cool sports-focused brand, but it's all in the US. We know how to basically create international schools.

00:39:55 Speaker_01
that the richest, wealthiest, or expats living overseas want their kids to go to to be able to get into maybe US colleges.

00:40:05 Speaker_01
So they bought it for a billion dollars, being like, cool, we're just going to take the IMG brand, and we're going to pop it up in China and India and all these different countries in order to get those types of students who are sports-focused, whereas their schools are more teaching the IB curriculum, which is like the kind of international baccalaureate,

00:40:24 Speaker_01
The equivalent of AP in the United States is IB. So like I took the IB program. And so, but the cool thing about this business is actually for the first 10 years, it was just a slow burn. And these businesses fascinate me.

00:40:36 Speaker_01
Like I don't even really fully understand how you can go from kind of like a consultant selling teaching materials. At one point they had a daycare, like a nursery built in. It was like just this slow, sleepy business for like 10 years.

00:40:47 Speaker_01
Was it like a family run thing? Yeah, it was like privately owned. And then they hired the CEO and then they start their own schools, they start expanding. Then they start buying other school like chains.

00:40:59 Speaker_01
So they bought like a sixth school chain that had like a presence in let's say France. And then they buy another one that has a presence in Latin America. And they're just rolling up as many international schools as they can buy.

00:41:11 Speaker_01
They buy five schools in India for $200 million. And so now they got five international schools in India. And basically, this company ended up going public, and then had to take private offer, and now is valued at $14 billion, which is pretty wild.

00:41:29 Speaker_01
And there's one PE firm, this Swedish private equity firm, that has just made an absolute killing, it's called EQT, on this entire 20 year run of this business. So, you know, let's say 99. Here's the timeline 1970s.

00:41:44 Speaker_01
It's teacher training language programs 1990s. So now this is like, you know, 20 years into the business.

00:41:49 Speaker_01
They pivot to owning and operating their own international schools 2008 now another 18 years goes by the Swedish PE firm comes in gives them a bunch of money to rapidly go expand and acquire schools. 2014, they go public.

00:42:02 Speaker_01
2017, they go private again for $4 billion. 2024, it's acquired $14.5 billion. And 2008, when they did the private equity round, they were at $40 million in EBITDA, and about $200 million in revenue.

00:42:18 Speaker_01
And so these things trade at like 8.5x EBITDA, basically. And they only own like 10% of the international school market. Still, 90% of the international school market is fragmented and not owned by anybody.

00:42:30 Speaker_02
Well, now they do a billion in revenue, it said.

00:42:33 Speaker_01
Yeah, now they do a billion in revenue with hundreds of millions in EBITDA. And actually, I think it might even be even more than that. But just to give you an example, here's a slide. But this is one of their schools.

00:42:45 Speaker_01
So they show the profitability of a school. This is one of their case studies. So it's like Dubai. They opened an international school in Dubai. They opened it in 2014. It took $7.5 million to build it and open it.

00:42:59 Speaker_01
And then basically they break even in year two slash year three. And then it's basically making 55% net, you know, cash on cash once it's at that mature level, once they get the enrollment up to like 1,400, 1,500 students.

00:43:13 Speaker_01
And so you could see like the enrollment basically by year three, they're at almost 1,400 students, almost at capacity.

00:43:19 Speaker_02
How do they convince parents that they're worth it? Because like with school, it's tradition usually is what like, you know, gets people to buy in.

00:43:29 Speaker_01
Um, yeah, so it's kind of the same thing. So if you go look at their pitch, it's basically that, um, you know, we have, we have the best run schools.

00:43:38 Speaker_01
Our kids get into top tier colleges and, you know, uh, X percent of them, you know, a huge, like 90 something percent of them graduate. They do better than their peers on, um, you know, the, the standardized testing, things like that.

00:43:51 Speaker_02
It's basically like when Chick-fil-A started expanding to New York and all the New Yorkers were like, finally, you know what I mean? Like people like know this, know this brand.

00:44:00 Speaker_01
Like in Beijing, the school I went to, right, like we probably had like 100% graduation rate. There's like no dropouts. Everybody graduates and then like 98% went to college.

00:44:09 Speaker_01
So there's like, it's like compared to like a normal school, the school I was going to in Houston before that, probably was like 75% graduation and less than 50% would enroll in college the next year.

00:44:20 Speaker_01
And so, and then the school I went to, you know, that's like a first grade through 12th grade school. And every year you're basically paying college tuition.

00:44:27 Speaker_01
It was like 40 grand a year to go there as a first grader and as a second grader and as a third grader, as a fourth grader. But like the way my parents afforded to go there was the same way that many students did, which is

00:44:38 Speaker_01
when companies bring you overseas, let's say, my dad worked for a company, they wanted him to relocate to build up their business in China, then the company basically pays for your kid's education as part of the relocation package.

00:44:50 Speaker_02
And that's like a really good perk.

00:44:52 Speaker_01
That's the perk. And so these schools, basically, it's kind of like US schools, how they make their money is because the government will give student loans to anybody. Anybody can get a student loan.

00:45:02 Speaker_01
So you can get $200,000 of debt to go to the school, whether you're gonna be able to pay that off or not, doesn't matter. So the schools are like, great. That's why tuitions keep going up because they're like, awesome.

00:45:10 Speaker_01
The government will just keep paying for this. This is amazing. International schools work largely the same way, which is it's either very wealthy people there who want their kids to go abroad.

00:45:19 Speaker_01
Like if you're very wealthy in Indonesia or China or India, you want your kids to study in the United States. And you're probably, you know, like very, very rich.

00:45:26 Speaker_01
And so you're happy to pay, you know, 40K a year for like elite education or the companies are paying for it. So this is a beautiful business model where you're only catering to that top kind of 1%.

00:45:37 Speaker_02
And interestingly, I think that there's actually a blue zone in America. Because when you think of a for-profit university, I think of University of Phoenix. Yeah. I think bad. I think they're the ones who let everyone in.

00:45:50 Speaker_02
And they just buy all the Facebook ads and Google ads, and it's slimy. But for some reason, when I look at these schools, I think prestige. I think it can be done well. Do you know what I mean?

00:46:04 Speaker_01
You know the one I want to do or like I've been very like tempted to do is the modern day film school. So like film schools exist in the states and that you know you can go to USC or UCLA. These are like the famous ones that you can go to.

00:46:20 Speaker_01
Media and content has changed dramatically from when those schools were founded, right?

00:46:24 Speaker_02
And credentials are less important, I would think.

00:46:27 Speaker_01
And credentials are way less important. And back then, you know, let's say you were a student in the 80s and you wanted to work in film someday. Well, when you were in school, you really had no shot.

00:46:37 Speaker_01
You could go be an intern somewhere, maybe hold up, you know, you're holding the lamp, you know, in the back and you're holding the light. And that's like all you would be qualified to do.

00:46:45 Speaker_01
Today, let's say you want to be good at creating films or content or music or whatever. You can literally be publishing on YouTube, on TikTok, on Instagram, on Spotify. You can be publishing everywhere and actually like, you can be in the market.

00:46:57 Speaker_01
You can be a player.

00:46:57 Speaker_02
Yeah, the day you have the idea to do it, you can be published that night.

00:47:01 Speaker_01
You could be 14 years old and you could be the best in the world at doing Twitch streams or whatever it is, right? And the number one dream of young kids is to be a content creator.

00:47:12 Speaker_01
It's the number one aspirational profession, which you could judge and say that's stupid or whatever you want. The dream is the dream. That means there's a lot of demand for people who want to learn this. Why don't I go to Mr. Beast?

00:47:21 Speaker_01
Why don't I go to Jimmy and say, hey, Why don't you create, with your brand, a university that is the modern day, like, content creation skill stack? So it's all the things you need to know, right? Videography, photography, script writing, editing.

00:47:39 Speaker_01
sound production, music production, all the creative arts, basically, but do them in a way where it's like a two-year program. It's like a business school. So it's two years, and it's all project-based.

00:47:49 Speaker_01
So you go there, and you have access to all the equipment, which you normally can't afford as a young person, like the best cameras, the best recording studios, the best editors, terminals, all that stuff.

00:47:59 Speaker_01
animators, and then there's people who have different disciplines.

00:48:02 Speaker_01
One guy wants to be an animator, one guy wants to be an editor, the other person wants to be a talent, whatever it is, and you work together on projects, you create content, you actually put it out on the networks, and you get judged based on the number of projects you create, the quality of the projects you create, you're getting real feedback along the way, and then you have mentors or teachers, like a Mr. Beast or like others, who are gonna like drop in and basically teach you some of the fundamentals of maybe storytelling or different things that actually you need to do.

00:48:27 Speaker_01
And I think if you did this, I mean, just the math of this stuff is pretty crazy, right? You get 5,000 or 10,000 people coming to your school, and it's 25K a year for two years.

00:48:39 Speaker_01
That one batch of kids, 10,000 people in a class, if they're paying 25K a year for two years, that's 500 million in revenue.

00:48:52 Speaker_02
What stopped you from doing this? You seem pretty hyped up on it, and it seems like a very logical thing.

00:48:57 Speaker_01
Um, well, I had the idea of like four days ago. So, you know, that's probably no, you've been talking about, uh, specifically the media thing. Like I've always been interested. Like, what would you do if you did a new school?

00:49:07 Speaker_01
I always thought of it in terms of entrepreneurship, but I actually think a more like trade school style school is better for sure. Because you can only, you know, teaching entrepreneurship is hard because A, there's not a class for business really.

00:49:18 Speaker_01
Business school doesn't teach you business, it teaches you management. Like, what you think of as Harvard Business School is actually a, you know, middle management to senior management. training program, right? That's what that is.

00:49:31 Speaker_01
So I think when you actually learn a skill and learn a trade, that's good. The skill of business takes a lot of time and it's not one skill. It's like 15, it's a bundle of like 15 skills.

00:49:40 Speaker_01
You got to know a little bit about strategy and negotiation and marketing and building and managing all these things. So I think this trade school style is much better. There's an interesting example of this, by the way.

00:49:50 Speaker_01
Do you know what Full Sail University is?

00:49:52 Speaker_02
Yes. So I'm looking up ITT Tech, but I'm also looking at Full Sail. I know a few people that went to Full Sail, and they had great things to say.

00:49:59 Speaker_01
Yeah, so Full Sail is kind of at that scale. So 25,000 undergrads, it's $26,000 a year. It's a private for-profit college. So you just do the math, by the way. 25,000 undergrads, $26,000 a year. So that's like the annual revenue.

00:50:15 Speaker_01
Let's do some public math because big numbers are an exception. That's $600 million, $650 million a year of revenue that they're generating from like a four-year cohort.

00:50:26 Speaker_02
My friend, Chris, have you heard of the company Linode? Yeah, yeah. He bootstrapped and sold it for, I don't know, like $800 million. He's from Nashville. And I knew him when I was younger. And he went to Full Sail.

00:50:38 Speaker_02
And that's how I learned about Full Sail.

00:50:41 Speaker_01
But they have... If you look at... Jason Citron, the founder of Discord, he's one of the alums.

00:50:47 Speaker_02
Yeah. And so I think they do more than just... Like I knew it as that's where you'd go to get like a like if you want to become a music engineer.

00:50:57 Speaker_01
Yes, it was like game design was one. That's why Jason went there because he wanted to build video games. They have music and then they have the Dan Patrick School of Sports Broadcasting. So he liked it that much. a TV broadcaster.

00:51:10 Speaker_01
They had their own little program, a sportscaster degree program.

00:51:14 Speaker_02
But how does it work since it's not a normal, it's a for-profit university? Does Dan Patrick actually get paid to use his name or he didn't donate?

00:51:22 Speaker_01
It's a licensing, a royalty. That's crazy. That's great. That's what I'm saying. If you're Jimmy, you're Mr. Beast, why are you selling chocolate? We should do this.

00:51:30 Speaker_01
And we just need to find an operator and do it with a physical campus and do the whole thing. Make the whole thing happen.

00:51:36 Speaker_01
There's like an enormous talent economy that needs to be made, not just for people who themselves want to be a famous YouTuber, but every single company has to create content. Content is marketing.

00:51:47 Speaker_01
And so any company that needs, you know, go look at every corporation from, you know, like Nestle down to your, you know, nearby eyebrow waxing place. They're all got an Instagram. They all got a TikTok. They're all posting content on there. And so,

00:52:01 Speaker_01
every company needs media creation talents. And nobody teaches you that. Today it's something you learn on your own outside of school using your own social media as a testing ground. And I think that's a little bit crazy given the value of this thing.

00:52:15 Speaker_01
And so I think, you know, it's the type of thing that could be built

00:52:18 Speaker_01
and be a multi-billion dollar business within three or four years easily, getting 5,000 or 10,000 people to enroll is not hard for something like this, because it has tangible value too.

00:52:33 Speaker_01
When you walk out, not only will you have these hard skills on actual content creation, the bucket of content creation skills, but you're highly employable.

00:52:41 Speaker_01
So whether you become a creator or you go get a job, you're highly employable with a set of skills, especially if you make it elite. Like, don't make it University of Phoenix.

00:52:51 Speaker_01
Make it more like Harvard, where it's like, oh, where do the talented people go, right? What's it, like Juilliard? It's like, make it more like Juilliard, right? So this is where the most talented people go and build that reputation.

00:53:00 Speaker_01
I think that's the key to get this right.

00:53:02 Speaker_02
This is an incredibly compelling pitch. Thank you. I want to know what the downsides are, which I don't even know if you know at the moment, because you're 72 hours into this career transition.

00:53:14 Speaker_01
Well, accreditation can matter. So if you want accreditation, you can do that.

00:53:18 Speaker_02
Does that matter? Does accreditation matter? I guess it does for optics, right?

00:53:22 Speaker_01
No, it matters for funding. Got it. So, how do you get funding from the government? How do your students get loans? If you're an unaccredited school, students can't get loans. They got to pay for it out of pocket. Understood.

00:53:33 Speaker_01
And so, you want accreditation so that you're eligible for loans, which would let students go there, you know, who don't already have the money plus, you know, It's much easier to spend money the government gives you when you're 18, 20 years old.

00:53:47 Speaker_01
So, you know, you want to be eligible for that. But you can get accredited or you can buy a school with existing accreditation. So, that's not a blocker. It's just like a thing you got to do.

00:53:56 Speaker_01
The hard part is actually running it and like doing it well and like actually providing quality education, right? You don't want to be University of Phoenix. So, you got to have some soul. You got to have some energy.

00:54:03 Speaker_01
You got to have the entrepreneurial energy. So, why am I not personally doing this? Because I personally am not going to be the guy running this.

00:54:09 Speaker_01
I want to kind of make it happen and find an operator who wants to create something like this and I can connect all the dots of how do we get the capital because this takes a lot of capital, you know, like Joe Lonsdale started a school in Austin.

00:54:21 Speaker_01
I don't know how much he how much that costs, but I think it's like a. I wouldn't be surprised if that's a $50 million to $100 million project of investment required. What is it called?

00:54:29 Speaker_02
University of Austin?

00:54:31 Speaker_01
Austin.

00:54:31 Speaker_02
Austin University? Yeah. That's crazy. I mean, yeah, that's pretty wild.

00:54:36 Speaker_01
And if you look at... So billionaires have put $200 million into funding that school. So yeah, it's a big CapEx lift to do it when you have a physical campus. And I wouldn't do it remote. I would do it legit. I would do it with a physical campus.

00:54:51 Speaker_01
And I would just try to make it like awesome. And it's the same thing like we talked about the Bhutan thing. It's a 50-year play. Like, you want to build prestige and legacy like a Harvard or a Stanford, where it's the reputation.

00:55:01 Speaker_01
The reputation and the brand is the value. You want the best people to pay top dollar to come to this thing and get the best education. Then you want all the companies you want to hire to value the label that you have.

00:55:11 Speaker_01
So to do that, you have to assume you're going to be, you know, you want to do something that peaks, you know, like 50 years later in terms of brand prestige.

00:55:19 Speaker_02
Yeah, that's an interesting thing, by the way. So there's been a lot of times where people will sign up for a university. And the goal is that after 10 or 15 years, the brand name has elevated. So you bought the price before it was full.

00:55:35 Speaker_02
It's just like investing in a stock. And then there's other times when a university level... Yeah, where a university will have a protest, or something will happen and it hurts the brand.

00:55:47 Speaker_02
And you're like, for example, let's say you graduated from Columbia, you're like, shit, like, it's a controversial place right now is my I bought this brand is that now worth less than why I was anticipating.

00:56:01 Speaker_02
And so there's this weird that is like an interesting way to look at

00:56:05 Speaker_02
building university brand like I have to increase the value for, you know, so I can I can justify the people buying they actually bought it when it was cheaper as opposed to what it is worth in 20 years.

00:56:17 Speaker_01
Dude, did you see Bill Ackman did a presentation about Harvard? Did you see this? No. What'd he say? Oh my God. All right. Well, I know we're supposed to wrap up, but this is honestly incredible.

00:56:27 Speaker_01
Jim Grant asked me to give a talk on Harvard, buy, sell, or hold, in the same way you would do with a stock. I think the Harvard motto or slogan is Veritas, and the title is Veritas? Because he's on this anti-Harvard crusade right now.

00:56:40 Speaker_02
What's Veritas mean, forever?

00:56:42 Speaker_01
Truth, I think. Truth. And so he breaks it down like it's a company. Yeah. The business of Harvard College is providing education to students. And then he has like a graph. It's like enrollment has been flat over the last 20 years.

00:56:53 Speaker_01
Faculty growth has been modest, you know, growing at half a percent, but administration growth has grown by 40% in 20 years.

00:57:00 Speaker_01
So he's like, basically like, oh, you're not growing students, but you're growing your admin, your OpEx on the back end, right? And analyzing it like a business. This is amazing. And the cost has grown. Basically, the cost has doubled in 20 years.

00:57:11 Speaker_02
He says, you're growing by increasing prices, not by increasing the number of customers served.

00:57:15 Speaker_01
Exactly. And then he breaks down the P&L, he breaks down where's the revenue stream, so how much is coming from donations versus tuition, how much of your faculty has diverse viewpoints.

00:57:26 Speaker_01
I mean, really, obviously his agenda in this whole thing was to basically be like, Harvard has gone too woke and the administration has gone like rogue and you're ruining the brand and the mission of Harvard.

00:57:35 Speaker_02
He says, the operating margin would be a negative 40% without distributions from its endowment.

00:57:41 Speaker_01
Yeah, and he says, in 1643, that's how old Harvard is, in 1643, Harvard's first mission was set up simply as Veritas, or truth. And he's got this old screenshot of like a hand-drawn logo of the shield.

00:57:55 Speaker_01
And then he reads like the laws, liberties, and orders of Harvard College. And it's like this handwritten document about, you know, the goal was to encourage Harvard students to seek wisdom.

00:58:06 Speaker_01
And he's basically saying like, you know, then he shows how the mission charter has changed. So in 2020,

00:58:11 Speaker_01
It was, instead of about seeking truth, it was like, it removed a bunch of references to the 1650 charter and basically left it as more of like a DEI style mission. And he's like, you know, paying attention to that.

00:58:22 Speaker_01
So, you know, he's like, what, you know, what happened to new ideas? What happened to the truth? And then he goes and he just breaks down like, also like even in the faculty growth, he's like, cool, is it growth in computer science teachers?

00:58:34 Speaker_01
Or is it growth in African-American studies, which, you know, he basically shows that African-American studies grew like crazy compared to economics or computer science.

00:58:42 Speaker_01
But then he's looking at the number of degrees that people are getting, and that's not growing. So he's like, your supply is not meeting the demand of the consumer. Your supply is growing arbitrarily, not to match demand. Like, I think there was only...

00:58:58 Speaker_01
What was it, like, there was one degree recipient in 2023 in African American Studies and 57 faculty?

00:59:05 Speaker_02
This is wild. And you know, if you go down all the way to the last slide, his verdict, he says, is Harvard a buy, sell, or hold? and his verdict as of now is Harvard is a hold. It still has many positive attributes.

00:59:20 Speaker_02
It has a strong brand, 400-year operating history, $51 billion endowment, and huge real estate. But it has many challenges. The quality of the education has deteriorated. There are so many competitors.

00:59:32 Speaker_02
Many talented people aren't going to traditional universities. They've missed allocated resources, and the endowment has been a chronic underperformer.

00:59:39 Speaker_02
This is a very interesting way to look at many, many, many different decisions in life that are beyond just money. How awesome is this? This is the greatest. This is a fantastic way to think.

00:59:50 Speaker_01
Yeah, this is so cool.

00:59:53 Speaker_02
All decisions, I think, every big decision I have in life, I need to put together a PowerPoint like this. We did this with our child's name, by the way.

00:59:59 Speaker_02
We put three names in a PowerPoint and Sarah presented them and argued in her favor which name we were going to choose.

01:00:06 Speaker_01
Okay, hold on, hold on. What is that? What is even in the slide? What do you say?

01:00:10 Speaker_02
So the way that we make decisions in our house, oftentimes it's like one person will present three options and then the other person can select the one option that they want. And so if it's like Cheesecake Factory, Chipotle.

01:00:25 Speaker_02
Yeah, so it's like, if I'm selecting the three, I will select three that I'm at least okay with and then she could select the one that is of most interest to her.

01:00:35 Speaker_02
For baby names, it was like, she was like, I want to select a three and then you could select the one. And so she made a PowerPoint and it explained, here's the three names. Here's the background of the name. And I had parameters.

01:00:50 Speaker_02
I was like, I want something somewhat traditional. I prefer it be in the Bible because everyone in my family was named for someone in the Bible, whatever. And she's like, all right, here's the three that I like. I'm cool with all of them.

01:01:00 Speaker_02
Here's the background of each name. Here's what it means. Here's famous people named that. Here's where it ranks on the popularity list.

01:01:08 Speaker_01
Here's trying to persuade you towards one or it's a completely neutral like pros and cons of each.

01:01:15 Speaker_02
In that case, it was neutral. But yeah, oftentimes there there is an underlying persuasion bit. But the if you're the person who selects the three, you should select three things that you're you like. Because that's what you could do.

01:01:30 Speaker_02
You could select three things that you like, and then I, as the final decision maker, will select something, and you're happy no matter what. It's a great way to make decisions, I think.

01:01:37 Speaker_02
And so she did this big presentation on three different names, and I selected the winner. And that's how we got our baby's name.

01:01:46 Speaker_01
Last podcast, you said every month we sit down at the end of the month at our table and we review the month's budget, financial decisions, key financial decisions that were made. We discuss unresolved issues that might be lingering.

01:01:58 Speaker_01
I'm kind of into the par corporation. Parcorp is probably one of my favorite corporations to learn from. And I think the way you run your marriage like a business partnership is both effective and hilarious. We did that. Great combo.

01:02:15 Speaker_02
Before we got married, we did that, by the way. We said, this is going great. We really love each other. We like each other. It appears as though marriage is in the cards. We said it was six months into dating.

01:02:26 Speaker_02
Write down where you want to be in 10 years. What do you want to do? How do you want to raise a family? Where do you want to live?" And we made sure that our wants and our interests were like, Alright, we disagree here. But that's okay.

01:02:37 Speaker_02
I'm malleable there. But here's a deal breaker. What do you feel about that? So for hers, it was like, I want to raise children in the New York area so I can be around my family. That's a deal breaker. And I was like, Yeah, that's cool.

01:02:47 Speaker_02
I could fuck with that. And so yeah, we do this type of stuff. It feels cold. I don't even like talking about it because people think... Because It feels cold. But dude, this shit works.

01:02:57 Speaker_02
These type of discussions where it's like, all right, now's the period to discuss this. You have the floor. That stuff is so effective, I think.

01:03:06 Speaker_01
Yeah, it's great. Before you guys go to bed, you just shake hands instead of kiss. It's just nice like to just keep everything on the up and up and as calculated as can be.

01:03:15 Speaker_02
That's why I talk about it because people think that everything's like systematic. It's like no, like there's like two hours a month where like this is set aside to like have these like relatively formal discussions. But it's freaking awesome.

01:03:27 Speaker_02
I think that I think if you like have a lot of kids, don't people do like family meetings? I know I saw it in like TV shows growing up, but it's not a thing.

01:03:36 Speaker_01
Yeah, family meetings are a thing. I think you guys just really take it to that next level. You guys are the McKinsey of family meetings, right? Like vows.pdf before your wedding. You had it all set up. It's good. I like it.

01:03:48 Speaker_02
It works. I suggest everyone at least try it. It definitely works, I think. All right.

01:03:55 Speaker_01
I think that's a killer episode, to be honest.

01:03:59 Speaker_02
I feel hyped up. I have energy.

01:04:01 Speaker_01
To be perfectly honest, with a heart age, that was a great episode.

01:04:05 Speaker_02
Alright, that's it. That's the pod. Hey everyone, a quick break. My favorite podcast guest on My First Million is Dharmesh. Dharmesh founded HubSpot. He's a billionaire. He's one of my favorite entrepreneurs on earth.

01:04:43 Speaker_02
And on one of our podcasts recently, he said the most valuable skill that anyone could have when it comes to making money in business is copywriting. And when I say copywriting, what I mean is writing words that get people to take action.

01:04:56 Speaker_02
And I agree, by the way. I learned how to be a copywriter in my 20s. It completely changed my life. I ended up starting and selling a company for tens of millions of dollars and copywriting was the skill that made all of that happen.

01:05:07 Speaker_02
And the way that I learned how to copyright is by using a technique called copywork, which is basically taking the best sales letters and I would write it word for word and I would make notes as to why each phrase was impactful and effective.

01:05:19 Speaker_02
And a lot of people have been asking me about copywork. So, I decided to make a whole program for it. It's called CopyThat. CopyThat.com. It's only like $120 and it's a simple, fast, easy way to improve your copywriting.

01:05:31 Speaker_02
And so, if you're interested, you need to check it out. It's called CopyThat. You can check it out at CopyThat.com.