Encarta | Asking Syed Balkhi How He Went From $0 To +$100M Before Age 30 (#486)

00:00

Yes. In the early days, I saved everything. I mean, I did I did not buy a bed until I got married, dude, just to put in perspective. Would you believe we were dating you?

00:09

No. There was no bed.

00:21

What up, dude, this is a long time in the making episode here. I think we've been talking about you for, like, two years.

00:28

I think you told us you were like, hey, hey, guys. Don't put me on blast like this.

00:32

We were like, you gotta come on the show. You're like, nah. You're just gonna ask me how much money is in my pocket right now. And I don't know if I wanna do that. But somehow,

00:40

Some way, we convince you to come on, Saeed Balky. You're here. First, why did you just change your mind? How did you decide to come on? You know, I was talking with Sam over Twitter DM, and that's how it happened.

00:52

Well, what I told you, a lot of people

00:55

think that Sean and I are, like, really aggressive about questions, but what they don't realize is, like, we'll ask an aggressive question. But if you say, I don't wanna talk about that, we just go Alright. Cool. We'll we'll move on. Like, we don't we're not, like, digging that hard.

01:08

So hopefully that changed your opinion.

01:11

That did. That did. So side, you're kind of an amazing guy. So let me just set the table here for people. Let me just give you a little let me just tease everybody with the appetizer.

01:20

01:21

I think you are one. You've done something that I don't even know five other people on earth who have done what you've done, which is that you've basically

01:29

bootstrapped

01:30

a unicorn. You've bootstrapped

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a billion dollar company.

01:36

You've done it. You're only thirty two years old. So you did this by thirty two.

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You also didn't, like, invent

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the next big thing. It's not like you did this because you're

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super genius. You know, you're not you you didn't you're not like, you know, vitalic, you know, and you're creating ethereum on the blockchain or something crazy like that. Like, you just did a very

01:56

specific

01:57

set of, like, prudent smart actions, and it just added up in an amazing way. We're gonna talk about it.

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But, also, I didn't know shit about you. Sam's known you for a little while. He brought you up on the pot a while back.

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He goes, I know this guy. I met this guy. He's really interesting. He does this word press stuff. Have you seen him? And I was like, no. We went to your personal website. I don't know if you ever got this clip, but, like, way back in the day, went to your personal website. We were talking about you, but we didn't know too much.

02:22

Then

02:23

we do Camp MFM, which is my my basketball fan camp. We invited, like, twenty five other founders. We had an NBA guy come, basically, treat us like we were, you know, pretend we're a pro for the weekend. And,

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When we were there, there's so many people to get to know again. I I didn't really get to know everybody at the same time. But then mister Beast did something amazing. So one night, we were all in the kitchen. Basically, we're all hungry after basketball.

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And mister Beast just sets a chair in the middle of the in the middle of the room. And he goes, I don't know who any of you guys are because he's like, you know, we've been playing basketball all day, and now I'm curious. Like, Who the hell are you guys? You tech nerds, basically.

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And he's like, sit out of this chair. You sit down, and then he would just interrogate that person and be like, alright. What do you do? Who are you?

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How does that work? Is that big? What's your dream? Okay. Cool. And then he would, like, go to the next person.

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And I think you were maybe the third or fourth person in the hot seat, and I was oh, this is great. I actually don't know too much of science story.

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And then you just blew us away.

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You blew us away. Your story was so good. Mister Beast was while using terrigating you. I thought,

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it was just, like, the perfect interview. If we had just recorded that podcast, I would have been happy. So we're just gonna try to recreate that moment right now. Well, inside, you you were the one of the quieter

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more humbler people there.

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And probably the most impressive in terms of, like, traditional business,

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accomplishments. And it was very fascinating what you've done. I basically heard about you. You're my friend, Neville Madora,

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And what I know about you is that you had this blog called WP Begin, which wrote really

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a ton of articles, some of it really simple. Like, how do I set up a WordPress site?

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And I think that ended up getting or it still does has a ton of traffic And then if I remember correctly, and this is just from an outside perspective, you'll have to tell me if I'm right or wrong. You basically started buying

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different WordPress plugins

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that I imagine you saw were popular on your blog. So it was like, how do I set up,

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a form to capture emails on my WordPress blog? You probably got lots of traffic and you're like, oh, I should just go buy one of these. Or here are the best here are the five best plugins

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for this thing, or here's the five best themes And if you put your cursor over the links on WPBeginner,

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you'll see which of the links are affiliate. And I just I'm guessing that, like, of the top five,

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let's say, forms for WordPress based off the URL. You own, like, three of the top five. And through that, you've, like, built this into a business By the way, you've never told me. I'm just guessing

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that makes high tens of millions of dollars in revenue. No. No. No, Sam.

04:58

Not tens of not tens of millions.

05:01

Nine figures of revenue, over a hundred million dollars of revenue. Oh, I did not know that. Okay. Wow. So just to paint the picture here, you have

05:09

WP engine, and we'll talk about how or sorry. It's WP beginner. So WP beginner, and we'll talk about how you got to that. But that's the content site. That's just providing free, help, you know, content to other people like you who were trying to make sites in a WordPress ecosystem.

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That's the the mainstay. And so I'll draw an analogy here because, we've had Andrew Wilkinson on the pod. I don't know. A dozen times or something. He's probably one of the most famous guests and most, favorite

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guests of the audio, of, of our community. So

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You have a business that's a lot like his. He's got a portfolio of companies. You've got a portfolio of companies. He had Metallab, which was kind of his, like, core business, cash cow thing that allowed him to buy these others. You had your, your WordPress site, that was the the the content site that was your core engine.

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In but I think you've actually done I think your model actually might be a little bit better. That's no knock on Andrew. It's just to get people excited here. So, basically,

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you,

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I think, have a more, like, one ecosystem, you're like, okay. I'm gonna, like, dominate this WordPress ecosystem. And the good thing is that WordPress, I think, powers, like, thirty or forty percent of all websites. So it's you know, it's huge, basically, like, you know, a huge chunk of the internet.

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And then all your stuff fits together. So you, you know, you have one customer. They're trying to, you know,

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make a successful website and grow and and solve other problems. You're like, great. I have

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the content that will help you. Then I have the tools that'll help you. And you either buy them or you build them. And you've created this portfolio that now does, you know, nine figures of revenue, probably worth a billion dollars, You own the whole thing yourself with no no outside investors. You're only thirty two years old. You know, you you've built kind of an amazing thing. So that's the just to sketch out, like, the the blueprint here for what what you've done.

06:51

Sam, does that would you add anything to that description?

06:54

Well, then there's all his side

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hobby stuff, which, like, I read his annual report, and he's like, I bought a gas station or I bought like eight or ten gas stations. So that's like a whole another conversation, but yeah, that's that's that's not it. Quick thing on the on the origin store. So that people people have it. You told me once on the phone, you said, I think you were doing consulting or something. You had, like, a agency. You're like, oh, I was helping people make websites. And I was building, like, CRMs or whatever for them. And then WordPress came out and I was like, oh, this is way better. They should use they should be using WordPress. You started helping You just were a service agency. Right? And then you started then WordPress became your your core service, and then you're like, okay. I'm just gonna help people make WordPress.

07:32

Sites for their business. Is that right?

07:35

Pretty much. So remember,

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the very first websites that I built were online proxies. Because I wanted to play games in school.

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And I was making ad revenue on proxies and some arcade turnkey sites, and I was helping small other, you know, local businesses set up their websites. I tried making my own CMS,

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with PHP. By the way, I can code. I'm not the best at it. I would say, now I probably suck at it. And what age? What what what age was this? Thirteen, fourteen.

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08:06

so I would I would build these websites super cheap. Call it, like, two hundred and fifty dollars, three hundred dollars that will make you a website,

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back in the day. And

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but what happened is that these clients would always rely on me to make changes to it, changes to the websites.

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And as I started doing consulting at a bigger scale,

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I didn't want to do this,

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the small end small end things. So and I discovered WordPress around this time. This was two thousand

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six

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and I said WordPress was only an inception for three years. So WordPress started in two thousand three. So I discovered it in two thousand six. To put it in perspective,

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I've been I'm thirty two now. I've been in WordPress half of my life. You know, this is the result is compounding in one thing for half of my By the way, you're you're thirteen, fourteen doing this. Are you, like, at the dinner table at night being like,

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my clients are pain in the ass right now, mom, like, you know, What what are you saying at home? And and, also, how are these people finding you? Are they coming to your middle school and you're handing out flyers? What's going on?

09:05

No. No. No. So we moved from Pakistan to US when I was twelve. Okay? My data, the mechanical engineering degree,

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but it did not validate when he came to US. So he was working sixteen hours a day as a gas station clerk attendant, you know, just swiping things. Sixteen hours a day. Could you not every day? Monday to Friday, the weekend, he had his third job. So I didn't really see my dad.

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My mom was busy because there's three of us and the fourth one on the way. Right? So my youngest brother was was born in US. So there was not many dinner conversations happening.

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I wanted to figure out a way to have some chunk of change in my pocket so I can buy junk food, like mountain dew and kid cat and sneakers and all all the shit that you buy with you in high school.

09:52

Dude, your dad was at the gas station, man. You had the hookup. You just, you just needed to ask.

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He was he was not cutting you any any breaks there.

10:01

No way. No way. My dad would never do that. By the way, you went to high school at age twelve also. Right?

10:07

Yeah. I started. So I moved here. I had just finished seventh grade in Pakistan,

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and I came here in March. So there's there's two month gap. The school system is like, well, we can put you in eighth grade. Bars case scenario, you'll repeat eighth grade because that's where you're supposed to be in anyways. But our education system in Pakistan is far better than the one we have here in US. So they're like, you can go to high school. So I'm like twelve

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in high school, the youngest person in school. I did not speak English that well.

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I would say probably very little English. It was I knew how to read English because we were taught Alphabet and such, but my communication skills were not there.

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So, yeah, that that was that was a pretty challenging time for me. And I spent most of the time in the library. During lunchtime, I was in the library. And I wanted to play games because I'm like, I can't talk to humans. So

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I I would just play on the computer. And those game sites were blocked. I'm like, how do you unblock this thing? And that, you know, drove me down. In terms of how I was getting clients, it was through these forums online. Right? So you had forums, like,

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deanform digital point, name pros, bunch of these, you know, OG communities online,

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the way you can get you know, business. And my cousin got me into one of those they don't know you're thirteen. You're just a guy in a forum. No. Well, like, so we had, like, a family friend who needed a I mean, you know, they had a bit local business. They knew how old I was, and they're like, oh, you can do it. And I'll pay you three hundred dollars to build my website. I'm like, okay. Sounds good. And then, you know, that that's how that that funnel started. So you do insights. You're trying to make your own CMS. You discover WordPress. You're like, oh, this is way better. Here's the CMS out of the box.

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What's what becomes the aha moment? And, when do you create the blog? So had had discovered WordPress moved clients over, I had affiliate sites. I was doing affiliate promos at the time. I was discovering this.

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I had directories that I was telling you about earlier, that,

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11:58

I wanted to get more traffic. So I had these I created these myspace profiles. They were fake profiles,

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and got hundreds of thousands of followers, and I would send bulk you know, DM's equivalent, which were called bulletins on myspace. Right? So I just wanted more traffic, and I went down the rabbit hole of SEO,

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which brought me to WordPress and

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And then because WordPress was dynamic content. So I added the blogs to the directories, started using, WordPress for the clients,

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And I had these social media profiles,

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on dig and stumble upon that were super power users and such. And

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essentially, when I wanted to get rid of this business, the consulting business, I wanted to figure out how how do you do this? I asked other agency owners, and they're like, Well, you know, we just have these pdfs that we give to our clients. And I'm like, put WordPress updates all the time. How do you keep those pdf updated? Then they're like, Oh, no. We,

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we update the pdfs. I'm like, that's dumb. You should use WordPress to update those documentation.

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So, essentially, w e beginner started that way. It was the unofficial documentation

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for WordPress. Now WordPress had documentation, but it was it was written for developers by developers. Nothing was for business owners. And began And what year was this?

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Two thousand nine. Well, one good point here is that that's now six years after WordPress started, and you're making the beginner site, and there really wasn't a great one.

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Most people, I think,

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there's a lesson I've seen many, many times as we talk to different guests, which is sometimes you feel like you're late. But you're rarely ever actually late to the wave. And,

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Kevin Van Trump told us this one time, he goes for all the best things. You always get a always a second turn to get on the train. Like, You feel like you're late. You feel like you've missed it. But often, you're not you're not that late, actually. Don't talk yourself out of it. There's there's almost always another another another chance to hop on.

13:44

It look according to similar web, right now, you get, like, two or three million visits a month. The early website shockingly doesn't look significantly different than how it looks now. No. You kinda nailed it right off the gate. It's like it was a simple website,

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where you just have articles about picking the right name, how to install word wordpress, selecting the right theme, picking the right web hosting, but were you writing stuff because I know your English has a second language person. So would you are where are you actually writing these articles? Because a lot of them are long. Like, look, look, fifty five of the most wanted WordPress tips, tricks, and hacks. Yeah. Like, these are, like, pretty, like, in-depth articles as well as you're playing the game of SEO and, like, you clearly understand, like, English. Yeah. No. By by this time, I was already in college. Right? So I I started high school at twelve, started college at sixteen.

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By that time, my English had gotten, much, much better. So I was writing,

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these articles in if you begin, or I had a team,

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of two other people that were helping me, with with with the website.

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The website looks similar now and what it was in two thousand nine. There was a period when when I changed it, and that was a mistake.

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People were, you know, I changed the color scheme too much and the audience were, like, they didn't resonate with it. So I changed it all back, and haven't changed it since then. Because the big lesson was, you know, big companies don't really change their stuff because they know if it's working, don't, you know, break it. It's not broke, don't fix it. Don't interrupt compounding unnecessarily as Charlie Munger says.

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So I made it go back to what it looks like, and it's been that way since two thousand twelve.

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And what tools do you use to figure out? Well, because I I imagine most of these articles are you're writing them based off of what people are searching for. Is that right? Yes.

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It's a combination of that and what they're asking us through our contact form, what they're asking us in our Facebook group, I think our Facebook group has probably over ninety thousand members,

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and support requests are coming. So, yes, we have our own keyword generator. If you go on w three beginners, kinda hidden on the free tools page, is a keyword generator, and you can put in anything in there, like, work president will tell you what we go to searching for. And do you have a lot of comments early on? June, in two thousand ten, a year or two after starting, you already had twenty six responses on just, I just clicked on a random article. So you're like getting traction. Yeah. So couple of things happened that that worked out for me. One,

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do do you guys remember Dig dot com? Yeah. It was it was really popular. So I had a power user profile there. So what I like, if one out of two articles that I would submit would hit the front page.

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So, of course, I used that to my benefit, and I used that network to my benefit. So how did you get a power user? Profile because, there was legitimate ways and illegitimate ways to do that. I'm curious. What how did you end up having that? It's just a social circle. Right? So there there's these engagement pods that that you go on and back back in the day was on MSN Messenger. And, well,

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aim, so so we just had the engagement pods. So if I submit something, like, you know, with a group chat and everybody would jump dump their items in there and you would upload it. So, so yeah, it was engagement pod. And And what year did this did WP beginner cross a million in revenue, in annual revenue? How long did how long did that take Maybe a year and a half or so?

16:56

Oh, damn. You crushed it right away. Yeah. Yeah. So, you know, we had a good revenue stream.

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Let's let me take a step back. So there was this business and, listicle business. So collectively

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passed a million, in in a year and a half. So about two thousand

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eleven,

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down twelve.

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And so your early twenties, basically, at that stage, you're a millionaire.

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That was my first million. How does that feel? You said you grew up your parent, you know, your dad worked. I you told me you were like, yeah, my dad worked at a gas station, and I thought Fox Daddy guy says gas station. You I know you own gas station. I was like, oh, so your family owned gas station. You go, no, no. He sat in the gas station. He were he swiped the cards in the gas station. And you were like, everybody in my family, I knew. You were either you worked at a gas station, or you're like, oh, you're you're real smart. Like, you're you get to be a bank teller. And that's all you knew in your bubble. So Tell me two things. How did you

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get because you gotta kinda see the possibility

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of being a business person and being wealthy before you're gonna even do it.

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So how did that happen? And how did it feel when,

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like, the name of the podcast is my first film? I'm curious how did it feel when that first happened? What was do you remember your reaction? Yeah. So I'll tell you how it how I knew it was possible.

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So I used to play cricket, which if you have a lot of listeners in Pakistan and India, you know, they love cricket. We love I love cricket. So I was playing cricket and there are many leagues in US and South Florida. There was one, and there's many now too.

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I met this Pakistani

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gentleman, and he was a sponsor for our team. He's a crazy cricket fanatic, and he became my mentor and now he's a family friend.

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But back then, I just see this pack as any guy, you know, driving a

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s class And, you know, just super humble, super nice. And I'm like, what do you do? Are are you, like, born a new money? Or what what's the what's your spiel? I was pretty blunt as a kid.

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So so he's like, no, I have real estate. I came to the US with, like, five hundred dollars in my pocket or a hundred dollars in my pocket. You know, those typical immigrant story

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And then he, you know, after we would win the games, he would take us out to eat. Sometimes he will invite us all to his house, which is like, you know, big mega mansion, right, you know, fifteen eighteen thousand square foot house.

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And his kids were my age. So we'll just kinda go over to his house, hang out. Sometimes it would go over to his house. To watch cricket games because they're happening on the other side of the world. So time zones are different.

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And in between breaks, I was the one who took interest in his business. You know, and his kids were all roaming around, but I was I'm like, tell me how this works. Tell me how this works. Right? So he would tell me stories, like, oh, this is how I took over a Burger King for free. Or this is how I did this, and this is how I started. So I I absorbed a lot of the earlier lessons on business

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finance just hustle

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from him. Right? And he was always super encouraging. He'll ask me, how's how is this going? How you know, and I felt like I could talk to him about it. So that's

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that was the early stage of me knowing, or this is possible because nobody in my family, had any any wealth.

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They were just working at gas station. All my own goals, everybody. And if you're really smart, you were working at the teller at the bank.

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So so that was a motivation part.

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In terms of how it felt when

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I hit my first million,

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you know, you would think it would be, like, the joyous moment of, oh, my god. Look at this.

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I was more scared

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than

20:16

than than anything because

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I was is this gonna is this gonna last That's the question that you have. You know, in your twenties, you're like, you come from nothing and you have this thing. You're like, is this going to last forever? Like, what what is the what am I supposed to be doing? I have no guidance. So there was, like, this inherent fear. So I always lived

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below my means, like, way, way, way below my means. So when I was in college, I,

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I did not buy any furniture. I just slept on a on a floor, on a on a blanket, because, I mean, that's how I grew up in Pakistan. So I'm just, like, I'm not gonna buy any furniture. Why why why waste time and money with this. So in my in my apartment, I had,

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a blanket, and I got a desk from goodwill. So that's what I worked on.

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And

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and, I mean, what's amazing is

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you said I I would have thought the first million came sooner than two thousand twelve. But because in ten years, you've grown that from one to a hundred plus or whatever it is,

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when were the inflection points

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where you're, like, alright, blogging is cool and it's working. Yes.

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Let's get beyond.

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Yeah. So I launched optin monster

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in, two thousand thirteen, list twenty five and twenty eleven.

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These things started really cranking. I had some really sweetheart affiliate deals with certain companies,

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that worked out really, really well for me.

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And

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so that was good.

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In that time, you know, we were coming out of the economy, the recession.

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So real there's still, like, some real estate deals to be had. So I bought my gas station

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The first one, primarily because I wanted to offset,

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offset expenses

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with an appreciating asset, which was a lesson I learned from my mentor. Right? Yeah. Let let let's talk about that one real quick. So just do a quick quick little monologue on

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why did you buy a gas station when you found out you're having a kit?

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So one of the things I learned from a mentor early on, I was like, how do you how do you, like,

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justify buying a Mercedes? Because that's a depreciating asset. And he's like, yeah. But, you know, when I drive it in this, people think of me better. Like, you know, there's the impression game, etcetera, and how I justify it is I buy something that's an appreciating asset, like, real estate, and I just use the income from that to us, pay my lease payment. So my principal never despairs. And I was like, That's a good idea. Your principle continues to appreciate, and you're using something,

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you know, the income from it to offset.

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And it also helps you stay disciplined because you're not gonna go, you know, overspend your money because normally when you get a raise or something like this, everybody just thinks in monthly payments. So this takes you away from that monthly payments mindset into thinking a little bit bigger.

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So when I was about to have my son,

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I was twenty

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six.

23:00

By this time, guys, like, I was I was doing alright. You know, I I had I had all these VC firms reaching out to me, you know, I I could I could have had a a solid eight figure exit, like, you know, to a high eight figure exit. I had offers for that at the time. And I'm just, like, high eight figures as in as in ninety?

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As in seventy as a time. Seventy.

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For the for WP beginners? No. No. No. I had Optin Monsters at the time. And I had,

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the gallery solution at the time, and I had,

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I had WB forms, I had analytics. So do you were you close to taking it, and how did you decide not to? Yeah. I I I I definitely thought about it, but then I was like, what would I do afterwards? Like, my son is gonna you know, grow up seeing me not work. Because I'm like, I'll be saving that money. Right? Like, I I would not I would not go to anything.

23:49

I mean, if you have ten million dollars, twenty million dollars, you you put it in the bank and you're like, hey, this this is it. I want But you're gonna have a lot more than yeah. I was gonna have a lot more than that. That's that's what I'm saying. Even after paying taxes,

24:00

I I would have a lot more than I would be set. So

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the the the the the factor that my wife and I talked about was what instilled

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my work ethic was watching my dad work,

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and I wanted my son to at least see that.

24:15

Right? So What was the what was the multiple on that for to get to seventy million, is it as high as ten x multiple?

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At that time,

24:23

No. It it it it was lower than that. So so you turned that down

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and I turned that down. You turned it down

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was it really you've turned it down because you were, like, I want my son to see me work. Yeah. And, also, I didn't I I wasn't ready to give up my baby. Okay. And,

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okay, so fair enough. So you you,

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Basically, so here's the thing. So so at this time,

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my son is about to be born.

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And I'm like, okay. How much does a baby cost?

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Right? Like, what what what are the cause of this baby? And they're like, okay. Well, you know, you're gonna have diapers. You're gonna have, you know, schooling and this and that. And I'm like, well, no. If I buy something that gives me at least five or six grand a month net net net net,

25:05

and then the baby costs are covered for. So, like, you know, it's gonna give me sixty to seventy thousand dollars a year.

25:12

And now I don't have to think about and my family is taken care of no matter what happens to me. So, yeah, that's that's that's what I I got for baby shower. Most people take the money they make, and then they're like, alright. That's what I have to spend, and they spend it. What you do from your mentor is you take the money you make, that has to now go to buy an appreciating asset that will spit off cash flow,

25:33

you and then you could spend whatever that one makes. So it's kinda like a a a savings program, basically,

25:40

So you you you spend what the you go by the gas station. The gas station's gonna pay you, and you're like, that will pay,

25:46

for child. You know, like, I'm gonna provide my I'm not gonna provide my for my family. This gas station is gonna provide for my family. I'm gonna put food on the table. Dude,

25:54

It allows me to one sleep better at night and two be more bullish in the deals that I'm doing. How many gas stations you own now? Ten. And you own a bank too.

26:04

I I bought a big gold. Yes. In Wells Fargo.

26:07

Wells Fargo? Because I you have a cool blog post where you're like, I used to go to this bank all the time. And I decided to buy it this year. Yeah. I should ride my bicycle around it. I couldn't go to the bank. I didn't have a bank out of time. I used to ride my bicycle around the bank because there was a sports already there and office depot there. I'll just, like, ride my bike into that, and then I bought that building.

26:25

What amazes me is is how

26:27

like, I I don't know if you're a similar web estimates are right, but can do do you say what your monthly traffic is on WP beginner?

26:35

No.

26:36

But, you know, it's it's it's in the millions.

26:39

Okay. So let's just let's just assume that similar web is roughly correct. Two to five million. We'll give a huge range a month. That's a lot.

26:47

That's not that much. Like, what's crazy to me is that I mean, that's high intent traffic. It's likely people who are coming for to buy something, like, they wanna an email software. So they're coming for a review. It's just amazing to me that that much traffic has created

27:02

so much value. I think when you start,

27:05

your online business,

27:06

most people think about maybe a CPM model of monetization

27:11

or a CPC model of monetization.

27:13

There's far

27:15

there are other and better models of monetization.

27:19

Right?

27:20

You can have CPLs. You can have CPA. You can have a combination of CPL CPA. You can have recurring, you know, commission. So you're talking about do,

27:29

CPM, meaning just,

27:32

thirty

27:33

ten dollars per one thousand visitors for a display ad. Versus cost per lead or cost per acquisition, which is someone buys something, they give you a hundred dollars per month if it's a Mailchimp, someone's paying five hundred dollars a month, they'll say, alright. You get a hundred dollars per month while they're a customer. Correct. And there are verticals that are not available on W should beginner. Because remember, I was telling you, I, I did a lot of affiliate marketing as well.

27:56

There are articles that will pay you on a lead basis

27:59

and hundreds of dollars.

28:01

Just for a lead, not for not for commission, like, as an affiliate, not like you made a sale, just a lead will get you hundreds of dollars. And and so so I did a lot of those.

28:11

And I still do. So that that's that's a good cash cow.

28:15

So those verticals are available where you can go and promote something and get over a hundred dollars in a lead. Has the WP beginner revenue grown, like, the rest of the business, or is that just, like, you're, like, I'm I'm perfectly fine with it just being a steady

28:29

ten or fifteen million dollar a year thing, and I use I bet you it's super profitable. I'm looking at your team page. I would bet you make fifty percent profit or something crazy. And you're like, I'm just gonna take that profit and buy more stuff. And I'm okay with that being steady.

28:42

Pretty much. You know, on on a content business, you cannot compound it as much.

28:47

You know, eventually, what what happens is you will hit the traffic mask that you hit.

28:52

And you can

28:53

unlock as many levers as you can, but it the compounding will stop because it's a reoccurring revenue. You know, like the person that I referred this year or something, it's not gonna compound next year. I'm not gonna get that plus new customers. Which is what happened in a software business, which is recurring revenue.

29:09

So, yes, your assumption is right that

29:12

while WP beginner has grown. It hasn't grown at the same pace as the software companies. And that's, like, a very big, you know, mental shift in, between recurring revenue and reoccurring revenue for all the creators that are listening.

29:24

Because

29:25

once you understand that, you'll start thinking about your business a little differently. So I I took all of our profits and

29:31

invested in,

29:33

you know, software and tools. I I still have niche tools that are not even related to WordPress.

29:39

That I bought off of FlipPA and sometimes just private outreach because I knew those verticals were gonna be lucrative because I had a better offer than they were promoting. And I paid, like, one guy, I think, like, fifteen thousand dollars,

29:51

upfront. And in the very first month, it made me eighteen grand. And now every month, it makes me over ten grand. Like, and it's pure profit. Nobody touches that tool. Right? So I think about that just as good as a gas station, because Like, my hosting cost for that tool is maybe, like, eight dollars a month.

30:08

Right? Maybe ten.

30:10

Is and and that's it. So so you can have these cash flow income streams that come through, and that's how I was able to buy the businesses that I did without any outside financing

30:21

without any outside debt. I was also in a market that wasn't fully mature.

30:27

30:28

So, like, there there was that advantage that, you know, those shrewd PEs and VCs are not in in in the market. They didn't understand the market.

30:35

And I could see what the potential of a business. So I I might buy something and

30:41

you're you're saying, well, this this has no revenue. It just has user base And I can come in and say, yeah. But if I do this and this, it can it can be a seven figure business. So I might buy something for, like, you know, six figures And then in two years, that thing will make seven figures in profit. You told me something once that sounded almost like a real estate.

31:02

Philosophy. So, like, in real estate, they always say, some people say, you make money on the buy, not on the sell. Meaning, like, you should buy something knowing

31:11

that it has both a margin of safety and that you have the plan for what it's gonna how it's gonna be different than what the current owner values in it. I think you had a similar thing. I've I forgot what the example was, but it was sort of like, like, let let's say, for example, you're like, great. I buy this company and they're paying three and a half percent on their payment things, but I have a contract with that same payment provider because I have more scale.

31:32

That's at two percent. So now I know I have one point five percent off just off the gross from day one because I I have this contract.

31:40

And you kinda have this principle of, like, almost like you make the money on the buy because you already know. Well, I have I know I can throw this much traffic at it maybe from w p b beginner. I know I can renegotiate these payment terms because I already have the contract with the paperwriter or the affiliate contracts.

31:55

With the companies on the other side. Is that,

31:57

is that accurate? A hundred percent. A hundred percent. So this was one of the lessons I learned from from a mentor. Right? If and who had a real estate background so the philosophy is very much derivative of real estate. You make money in the buy. You have to be. Otherwise, if you're paying a high multiple thinking based on future. I mean, yeah, that might work out, but it has a bigger risk. So from my perspective,

32:20

you know, I wanna have heads I've been tails that don't lose much. And I got that, you know, formula from reading Monish Bob Bryce's book. I was a huge fan of his. Now we're friends,

32:30

but oh, yeah. So that's very much finding margin of safety. Explain that more. Heads, I win, tails, I don't lose much.

32:37

What what does that mean and what's an example? So a good example would be the if if a business in your perspective,

32:43

intrinsic value of it, is a million dollars, and you end up paying seven hundred thousand dollars today.

32:53

Heads, you know, you're gonna win if this business continues growing.

32:56

Tails, you know, you you'll still have so much of upside

33:00

that, you know, because you you pay three hundred grand less, thirty percent less than market value,

33:05

that in case something don't doesn't go right, it has to be, like, forty percent doesn't go right, and you still only lose hundred grand in that in that situation.

33:13

So you need to be able to look at the deal and say, what are my downs you have to invert the situation,

33:19

think about, like, how you're gonna die in this and then don't go there sort of thing.

33:26

Our software is the worst. Have you heard of HubSpot?

33:30

See, most CRMs are a cobbled together mess, but HubSpot is easy to adopt and actually looks gorgeous. I think I love our new CRM. Our software is the best. HubSpot,

33:40

grow better. You you sort of have this like

33:43

pay attention to the cents and the dollars will follow type of vibe where, like, you're

33:49

really not

33:50

You're not I guess I'm surprised at how maybe I don't know if it's still the same way. I'm surprised at how small some of the

33:58

things that you do.

33:59

And yet,

34:01

because you own thirty or forty of them, they're really accumulating. Exactly.

34:06

So, dude, when you come from nothing, you have you have to have a good sense of where the money is gonna go. Right? And you have to be very conservative to not lose it all. Because I came from nothing. I don't wanna go back to that. So I I'm very, very cautious.

34:19

The funny thing about compounding

34:21

is And if you compound it a healthy rate, and I I have a very, very good compounding tractor,

34:26

what what is it? I've I've been compounding it of in double digits in for for past

34:32

seven eight years. What's that mean? Twenty percent? Like, what would what would be considered good? Like, you know, like, for for for you, you're, like, alright. Thirty percent or forty percent. That's, like, I mean, that's amazing. You can't get that in any normal investment. Right? Exactly. So, ma market compound to what eight percent. Yeah. Private equity might gives might get you in teams. Right. You know, I I'm way way I'm double private equity, more than double.

34:55

so that's and that only happens when you can identify a mismanaged gem.

35:01

Okay?

35:03

When some somebody has a, has a business,

35:06

and they might only be thinking about monetizing

35:09

from one angle then thinking about it from a full perspective.

35:12

So I can look at it and say, well,

35:15

yes, this is the current revenue today, and I'm getting a bargain on today's revenue.

35:20

But here are my contracts that I have with so many different partners and vendors and such that I'll be able to unlock extra revenue here, here, here, here, here, here, So I turned this business that has one revenue stream, having, like, multiple revenue streams.

35:34

And, and that's how you take something

35:36

that was doing, like, no revenue

35:38

to or or very little revenue to having,

35:42

you know, five, eight, ten million dollars in revenue.

35:46

And you do it enough times and you just let it compound. Like, these businesses are not rocket growth. Right? So this is not a,

35:54

business that's gonna hit

35:55

one business is gonna hit a billion dollar in revenue. That's not what's gonna happen, but these business are gonna consistently compound because

36:03

more people are gonna need websites.

36:05

The web presence just keeps growing. You you had a tailwind, which was WordPress was just gonna keep getting more and more and more popular. Right? That's huge tailwind. That's like a generational tailwind.

36:14

That's huge. This is already, it's gonna grow

36:17

faster than, like, an average growth rate because of that. Then you can do things smart operationally.

36:22

But

36:23

I gotta ask you a question. So our buddy Moises has this phrase. He goes, the two sexiest words in the in the English language are distressed

36:30

asset.

36:31

And you just said mismanaged

36:33

gems as a as a catchphrase of something you look for.

36:37

I like that idea,

36:38

but also I'm kind of a lazy motherfucker. And when I hear distressed asset or mismanaged gem, I think work. Oh, I gotta go clean up. I gotta manage this better.

36:48

Isn't that gonna take a bunch of work and a bunch of mind share to turn things around versus It's kinda like the Buffett cigarette butt companies versus, like, just buying a beautiful business that's already working and letting it letting it grow for a long period of time.

37:01

Am I wrong? I must be wrong about the the amount of effort that goes into fixing a mismanaged gem or a distressed asset. What do you think about that? So I think distressed asset from a real estate perspective, I would say slightly

37:14

different than what a mismanaged gem is. My real estate buys, Sean, that I did,

37:20

in in the early days were distressed assets.

37:23

Okay?

37:24

But it was just the banks needed to get get this off their books. Right? And I was a cash buyer.

37:30

You know, I'm not looking to finance anything. I'm a cash buyer. I had the right contacts. So I was able to buy some of those gas station properties. They were already leased out to,

37:39

triple at least out to, like, PushStar, the Canadian multi billion dollar company that owns Circle K. All I had to do was just give cash to bank and take take the, you know, d door.

37:49

So those are distressed asset and I I got lucky. I mean, I bought a gas station,

37:54

when it was all said and done, I paid ninety grand for it. And you're like, holy crap. How'd you do that? That was a distressed asset because you had to do environmental cleanup on that Okay? That was work. So so those are distressed assets.

38:07

When you're thinking about a mismanaged gym,

38:11

this is a property where somebody maybe due to the lack of effort or lack of experience have not fully

38:17

understand the potential that is there. What are the commonalities

38:21

of not realizing potential or common mistakes? So, you know, you might you might be creator and you have a lot of user base and you just haven't think about monetization

38:30

for, you know, all the different potential monetizations

38:34

that that that can be had in the in that one business. We have a friend that was doing this. They were just looking at businesses on Flip or they're like, you know, websites, you know, products to buy, companies to buy. And they were like, yeah, I just want an owner who just cared a lot about product.

38:46

And care to thought ninety five percent of the brain just had the word product stamped all over it. And then you're like, cool. So what were you doing for marketing? And they're Well, it's word-of-mouth. And they were so proud of the word-of-mouth.

38:57

He's like, great. As long as their answer isn't Facebook ads, then I'm just gonna start doing Facebook ads. Or even if their answer was Facebook ads, like, what's the budget? Like, oh, you know, like, eight grand a month. It's like, why eight grand? That's like, you know, I don't wanna spend too much. He's like, I wanna spend eighty grand on Facebook. You know, like, and basically, that was his whole entire,

39:15

like,

39:16

you'd think, oh, this person made twenty million dollars. Wow. They must be a genius. And it's like, no. I just found a business, which was so common. Somebody makes a product, and all they think about is product, and they really care about product, don't spend much on marketing. It may be none because they don't know it or a small amount because they're just kind of like they don't think what like, they don't ask themselves the question. Why don't I ten times more on Facebook ads. What would that take? And that's literally the only change they, that they did. That's the good barometer. The other thing that that worked in our favor,

39:46

was the ecosystem effect. So if I buy an analytics software, I can cross sell up and monster and vice versa. You know, if I if I buy member press, then I know that all the people who are creating a course will need to buy Optin Monster to have lead generation

40:03

or it will need analytics to track all the things. So the synergy effect,

40:07

compounds, and and that that was a big,

40:12

big up for us. And I read somewhere that you said something like I don't buy whole steaks anymore. I don't buy one a company anymore. I try to buy forty nine percent because I can't

40:23

I have too many things. I can't run all of them. And then in the pre call, they do it, Sean, you have this really cool line. It's in quotes. It says, how I manage a billion dollar portfolio without stressing out.

40:33

And,

40:35

well, I guess He didn't say that. Who do I die? Oh, really? Glad to get a quote. When I met him, he was like, he said something like you were like, I travel. I was like, what are the, you know, what do you do with Like, how are you spending your time? And you were like, oh, I love to travel. My family, we we go travel. And I was like, I thought you meant, like, you know, like, I don't know, LA or, you know, like, we go to see the Grand Canyon and like, we're going to Egypt. And then we're going to, like, the serengeti. And we're going to, like, I was, like, oh, okay. This guy's, like, doing, like, exotic travel every month. That's cool. He you said something, like, I don't know if this is exactly right, but my brain heard

41:08

you basically stack a bunch of calls with your kinda operators

41:11

in the last week of the month. And, like, that's your only time to, like, stress out or think about, like, those calls. And then the rest of the month, you're not thinking about those things you're reading. You're playing basketball, you're doing other things. And,

41:23

so a is that accurate and b, like, I interpreted that as, wow, this guy's managing a billion dollar portfolio, and he's not stressed out. That's awesome.

41:31

Yes. That is that is fairly accurate. Now it now it didn't start that way. I wanna I wanna emphasize that. It didn't start that way.

41:39

I didn't figure this out up until maybe

41:42

two years ago.

41:44

Okay. So just just to put in perspective.

41:47

In in terms of, like, me being as

41:50

chill.

41:52

What was like? What were you doing before that? Know, I I would have to go in, sometimes clean the business and, you know, like, oh, this this is not doing right. I would get get involved too much. Were you a hard ass? Depending on who you ask. Yeah. Sure.

42:04

According to me, no. According to everyone I ever worked with,

42:10

Like, you you seem like you have a ruthless side to you, even though you're polite and kind, you seem like you could be ruthless. I I was sad. I could be very disciplined.

42:18

Ruthless might not be the right word. Did that sound so ruthless the way you said that? That was awesome. Yeah.

42:23

That's a ruthless thing to say. It's like a ruthless thing to say. I love it.

42:28

So so the trick is, you know, like, it proves that how good people get out of the way. But that sounds easier than it is. So we use EOS in our companies, and some of your audience might be familiar with it. Others might not be its entrepreneurial operating system.

42:43

And as transparency and accountability.

42:45

Oftentimes when, you know, I found I've sometimes bought businesses from the founders who who started delegating they really abdicated.

42:52

And then the business went down. And then, you know, that now they're, like, they're really checked out. So now they're, like, ah, this this thing sucks now I'm back in the business and it's a mess, and they will come and exit to us. That's a mismatch gem, by the way, because all what you gotta do is put those accountability things and maybe put a right team member, and this will this will start, kick starting again. So you have to delegate, but not abdicate. So the EOS scorecards and good P and Ls,

43:19

monitoring will help you with that accountability piece. So the P and Ls for all of our companies,

43:26

are managed by my finance team at the HQ level.

43:30

That's cool. So you,

43:32

wanna talk a little bit about ideas. So,

43:35

you've built this amazing thing,

43:38

and you've been basically kind of like building cool stuff, making money since twelve to thirty two. So you've had this run.

43:46

I'm curious, you know, one of the questions we always get

43:49

is alright. Well,

43:51

you know, now it's easy for you. It's easy for you to just keep doing what you're doing, but, like,

43:55

I'm not you so that you know, it's inspiring, but it's not entirely helpful.

43:59

What would be more helpful is, like, what ideas or opportunities do you see that, like, somebody else could do? You're too busy to do them or they're too too small for you now.

44:08

What ideas or opportunities do you see that other people can do?

44:11

I think about

44:13

cash flow.

44:14

So if I had nothing,

44:16

you know, of course, it's a lot easier for me now. I can say, hey, Andrew. I wanna spend I wanna invest in tiny. I wanna go do this. I can do a lot of those with the means that I have now. But if I was starting all over, the first thing would be to go build cash flow again. And the easiest way to build cash flow is services.

44:33

You, you know, agency business.

44:35

Right now,

44:37

content agency, since I know content well, using AI

44:41

I would crush it, you know, because I already know that brands like Shopify, etcetera, are are using AI agencies to create top of the funnel content. Of course, there's some human that they need involved, but this changes the game. Because if an article used to take maybe four hours to write, now you can do it in forty five minutes. Right? Because you get if if if you know the game right. So

45:03

a hustler younger version of me, that's what I'd be doing. Content agencies, copywriting agencies, all AI powered plus human review,

45:11

I would I would use, like, tools like, clay dot com. I'm not sure if you if you've seen clay dot com. But it helps you automate your sales outreach.

45:20

You dump a profile and it finds all the data on on that person. You can write you can use GPT to write emails to them and then just hit them up. Right? Just cold outreach, cold outreach, cold outreach, because

45:32

some not everybody, but a small portion will, you know, take take you up on it,

45:36

deliver great service, go above and beyond with them, watch the word- word-of-mouth take you places, you raise prices,

45:43

And I think that's,

45:45

that would be the way to go for me. If I if I wanted to start all over again,

45:50

step one build cash flow, then figure out how I can take this cash flow to build some recurring revenue stream because in agency, you're you still only have reoccurring revenue stream.

46:00

And so,

46:01

then you would,

46:03

would you buy versus build from there and talk about that distinction because you started off as a builder, You've now bought, like, I don't know, thirty companies or something like that along the way. Yep. And I think you studied

46:14

not just Charlie Munger and and Warren Buffett, but also,

46:19

Mark Leonard at Constellation. And he had told me something like you read all his annual letters, and there was one thing in there that really stood out to you about building versus buying? What was that?

46:28

Yeah. It was one of his earlier

46:30

letters, maybe

46:31

maybe, like, a third one or fourth one or something something like that.

46:35

Where Mark talked about that there was three types of growth that constellation was experiencing.

46:41

One was growth through organic. Is just your your business growing organically

46:45

in their case, maybe seven, eight percent, whatever.

46:48

The second part of revenue growth was coming from acquisitions

46:52

where they would just go buy revenue.

46:54

And the third one was initiatives.

46:56

And initiatives would be dinks, like, new bills. I have this product, and I'm gonna build a second product. And

47:02

he was like, these turned out to be very expensive

47:05

because it required more resources and time that you plan for it takes away time of your senior people,

47:12

and you're not even counting those things. So they're distracted.

47:15

And he's like, you know, I'm a capital allocator. And from a pure capital allocation perspective,

47:20

the return on invested capital

47:23

isn't always great

47:24

because bills have higher risk. So if it doesn't work out it's crap.

47:29

For the first year or so when you're building, there's zero percent return on your investment in that time. So the compounding return is lower.

47:37

And this this was my take was, you know, you can have ad spend of three years CAC at that point. Might not just go buy a company that has guaranteed revenue and then you can cross promote.

47:47

So so that sort of took me away from the initiatives idea. So most of our focus and all of our focus is on,

47:55

is on buying. One thing that

47:58

I I I imagine Sean is a little bit like this, but I'm definitely, like, this where

48:03

creating products

48:04

and,

48:05

new businesses is is part self expression where, like, it's just exciting. It's fun to do that shit. And I'm not, like, the most disciplined person when, like, the reason I don't like real estate is I'm, like, dude, I I'm not very great at just looking at this Excel sheet and unlocking value. Like, that's not that's not what I'm skilled at. And I don't know if I even particularly like that. Where did you learn how to, like, unlock, like, find value that you could unlock? And what are some of the, like, common themes that you see,

48:31

with that? I don't know, Sean. Are you like that too? Yeah. I am.

48:35

But then

48:37

I'm also a short, a natural shortcutter.

48:40

I like to find simplest path to the solution.

48:44

And that so, like, while creating like, you you had this thing you said on the pad, those hilarious. You're like, I'm an artist, bro. I'm just an artist. I gotta create I definitely feel that. I have a creative itch to me, but I also have a,

48:57

path of least resistance itch to me where I'm like, oh, there's a beauty in just finding a simpler a simpler way to win.

49:03

You know, like I agree with that. I also think it's fearful or it's it's fear to to out, like, to to pay, like, with the internet, you could start with nothing and spend time and you can get something. Yeah. But I think that's Or you could He's like, you could build something new.

49:17

High chance it's just not gonna work. It's a zero. It's also gonna take a long time. If you're buying something that's already working,

49:23

yes, you outlay cash, but are you actually taking more risk? There's difference between putting out cash and putting out risk. And I think what he's saying is that But that's what I'm asking is the difference between I'm I'm asking the difference between

49:35

putting out cap, like, how do you make that gap small?

49:38

49:39

I'll I'll I'll say this. So when I started Sam, I was very much an artist like you. I enjoyed my creation. I enjoyed putting my, you know,

49:49

finger frame, footprint, whatever you wanna call it on those. So when if you were looking at the early days of Optin Monster or those products, you would have my footprint on them. And Then you had, like, a twenty thousand dollar bill to Sarrangetti with your family of five.

50:03

No. They're like, sir. I I I was not doing Sarrangetti when I was building the business. You know, not doing very good even though I was building the business. I was very, very much involved.

50:11

But a big mindset shift that happened in my career, which has led to, I would say, a tremendous growth for automotive

50:18

is the mindset of going from a creator and operator

50:22

to a capital allocator.

50:24

Right? And this happened when studying,

50:26

Buffett, Munger,

50:28

Monash, etcetera.

50:29

Buffett says I'm a better investor because I'm a business man, and I'm a better businessman because I'm an investor. Now you you read that and you're like, okay. Sounds good too. Right? But when you think about that from a first principles point of view, what's the commonality between the two is that both investors and the businessmen

50:46

are resource allocators or capital allocators. So when you can when you tie that together, that was a moment for me when I when I think about, okay, if I start this new thing, yes, I will make x. But if I buy something, if I if I shortcut it, let's say I buy something that's doing two million dollars in revenue, I, you know, twenty percent or thirty percent of two million is always gonna be better than, you know, percent or thirty percent of hundred thousand or hundred

51:08

percent of hundred thousand for that matter. You see what I'm saying? What's the biggest what's the biggest deal that you've bought? You don't have to say which one, but, like,

51:15

what checks out? What check made you sweat? What check made me sweat?

51:20

None of them because

51:22

I'm not buying like, I'm I'm not putting eighty percent of my net worth or my cash in any any one of those deals. But have you bought things for tens of millions?

51:30

No. No. Have not bought anything

51:33

in the tens of million dollar range. But these are So single digit millions and then the million, single digit million. That is fucking insane that you've built that much value with, like, these little small, like, what's that whatever Sean said, the cigarette butts. Like, you've made the cigar with it. But,

51:47

and are you doing all cash up front? Or I there's no way you do that. You're you're you're way too sophisticated.

51:54

Mostly, mostly all cash upfront.

51:57

You do do that.

51:58

There there might be some pieces of, like, salary financing

52:01

But one one of the advantages that that we have,

52:06

compared to somebody offering, like, a higher evaluation is that we can make the process really seamless for for the seller.

52:13

That also allows us to have get get a better and a more attractive valuation.

52:18

But, you know, you, you know, if if you try to ever sell to, like, a private equity or a VC mostly private equity,

52:23

you you'll be on in on the hook for, like, six months and still be dragging you asking you for all sorts of nonsensical stuff. And by the time the entrepreneurs is burned out, and this is just a shitty feeling.

52:33

With us, you know, you send you send me a message over the website and my assistant sorts through it. I'll look at it and say, okay, yeah, this is good.

52:41

We we'll, like, look at it and ask you for the P and Ls. Within, like, a week or week or so time, we'll give you an LOI, and then we can close in thirty, forty days after that. Holy shit. Are you the only decision maker? Yes.

52:53

That's insane. I I I I like to think that I'm the chief risk officer of the company.

52:58

You told me a story about risk. You because I I was like, okay. You buy all this stuff.

53:03

Like, how much debt do you have? You're like, no debt.

53:05

And you're buying, you know, with a margin of safety, and you were like Even with his mortgages, says no mortgages. No mortgages. And and look, like, there's gonna be a lot of financially savvy listeners here. And I have many, many financially savvy friends who are billionaires,

53:20

and they disagree with me on this, you know, but but the way I was raised and

53:25

and impacts any culture

53:27

That is considered bad. It's considered taboo.

53:30

And short leverage can help you grow faster, especially when you're using a smart way, but

53:36

it also takes away the margin of safety, which in troubled times can really destroy your autonomy if you're not being careful. So you know, I'm okay with getting rich slowly.

53:46

And I think I've done all right

53:48

for where I am. I see myself with a turtle in a rabbit race. Bro, you're a thirty two year old, like, pretty much billionaire, dude. Yeah. You didn't go that slow.

53:57

You know, in in sixty years, I think I'll be okay.

54:01

It helped me sleep better at night, be more bullish. I don't know. Sean, Sam, do do you know about,

54:06

Charlie and Warren's third business partner? No. No. Tell the story. See, nobody knows about a third business partner.

54:12

So they did have a third business partner. His name was, Rick, Right? Rick Gordon or something like this. And it was just as smart as them, but wasn't a hurry to get rich. And Monish asked Warren about what happened to Rick at one of the lunches that he he had. And this is public. I'm not sharing with you anything. Warren's like ricks a bitch.

54:30

No. No. No. No. War Warren said

54:33

something along the line, but, like, Charlie and I always knew that we would become, like, you know, incredibly wealthy. But we were just not in a hurry to get a penalty. We knew it would just happen. Rick was just as smart as us, but he was in a hurry. So, like, in seventies, like, seventy three, seventy four downturn,

54:49

what ended up happening was that Rick had margin loans. He was highly levered, and the stock market went down seventy percent. So all those margin calls happen, and he had to sell his Berkshire shares to Warren.

55:01

And

55:02

Warren bought him for, like, forty bucks a piece. Right? So now the same period, like, half a half a million plus. I'm gonna get a frame picture of this guy, Rick, on my wall, and it's just gonna be a reminder every day. Don't be in a hurry to get it'll happen. Don't don't be in a hurry. I that's going on my wall.

55:18

Sean, I cut you off. What were you gonna ask him?

55:21

Oh, I I wanted him to tell that story, but also, wanted to go back to ideas. So you had given us the

55:26

first move. If I needed a cash flow right away, I would do service agency, maybe something around creating content for brands using and use AI for leverage or generating leads for brands and create a lead agency using AI for leverage.

55:40

Okay. That's the get started plan, but you don't wanna be in the service business forever, and you wanna you you wanna get a that's just the get, you know, the the escape from broke jail. Print plan. Okay. Now you've done that. What are what's kind of, like, level two type of ideas or opportunities you see?

55:56

I I would look into the quick cash cow of tools. Right now, they are these AI wrappers. Right? So you think, like, upload your PDF and we'll turn this into a chat There's several of those out there right now,

56:09

but you can make it vertical focused. That's what I would do. I'd like chat JPD for lawyers, add all of your internal SOPs, and now your team can just talk to it.

56:18

Real estate, internal processes, you can do this. My team builds this internally in about a week. It's not very hard to build. You can pay somebody on somebody on Upwork to do it and then work with the different,

56:29

AI influencers on TikTok, IG, etcetera.

56:32

And this can easily get you to ten k plus a month. I know, as a matter of fact, like, several kids that are making ten k over ten k a month and some even over hundred k a month,

56:43

doing justice, just the AI wrappers.

56:46

So I think that's,

56:47

that that's that's pretty easy.

56:50

I would I would look at how I can,

56:53

leverage the

56:54

Freedom of Information Act to my advantage

56:58

trying to go into the student businesses. Are you familiar with it for you? No. What is that? Okay.

57:03

So, basically,

57:04

in the United States, this works only if you're in the United States. We have such thing called a Freedom of Information Act that allows you to request any kind of data from any government

57:15

run,

57:16

you know, authority.

57:18

So usually journalists use it. So we use it at the hustle all the time. So, like, when big stories break, oftentimes, it's because a journalist did that and they, like, un uncovered some, you know, controversial fact. So now now you can you can get creative with it. Right? So you can you can go and say,

57:34

to a government agency, maybe a university or whatever.

57:37

Hey, I wanna see the contracts of your last three or five construction projects that you undertook.

57:43

And that that will give you an advantage,

57:45

in terms of how to approach terms and pricing that was approved before. So when you're submitting your bid, it's it's better. So but you can get really creative,

57:54

like that. I remember I was talking this this was a while ago.

57:58

I was talking to a guy, he was in Atlanta area,

58:01

And he would request

58:03

student informations from universities, so public universities,

58:07

and he was targeting, like, nursing school graduates and so on. You were coming out of nursing school, you know, he he he wanted your information, then schools have to give it to you and you might pay them, like, a processing fee of, like, hundred dollars or something like but you'll get the whole graduating classes, name,

58:21

email, address, the, you know, their physical address that the university have on file. They they give they give that to you.

58:27

And then he would send those students an affiliate offer for student loan forgiveness program that was passed under the Obama administration.

58:36

Right? And so the affiliate offer was for a company that would

58:40

fill out those forms for you.

58:43

Right? And they would charge charge you, like, I don't know, five five hundred six hundred bucks, and they would pay this guy. And he was like, I just send one email. I make six figures and I move one. So I I would find arbitrage

58:54

opportunities like these to build up more cash flow.

58:59

And then I would go invest. So but, you know, Sam, when you're when you're talking about in the earlier days, you're very focused on the WV beginner, but there was a lot of creative things that were happening like this. That was helping my cash flow,

59:12

grow,

59:13

and that allowed me

59:15

to invest in software. Or some fun creative cash flow things you were doing I I'm not gonna talk about this.

59:22

There's gotta be one prolific one that that is. I've heard a

59:26

bunch through friends of friends. I'm not gonna mention any of them, but I've heard I've heard some of your things. I mean, like, the space that you're in, everyone starts, sometimes Blackhat

59:35

gray hat. And then as you, like, start making real money, you're like, alright, I gotta go legit.

59:39

But I've I've heard some crazy stories about what you used to do.

59:43

Justin Mary's had a good phrase he goes, do whatever you gotta do to make your nut and then go on your noble mission.

59:50

And,

59:51

I was like, I don't know if I agree with that, but I like the way you said it. Let me put it that way. And I know several people who have done that, where it's like, okay. What were you doing before this? So I was running,

01:00:00

you know, this dating, dating site, affiliate, you know, affiliate ad network is like, okay. Cool. Plenty of fish. Like, you know, this is not really where you wanna hang for too long or, like, these poker,

01:00:11

you know, poker arbitrages, poker affiliates,

01:00:14

those one guy ringtones with subscriptions.

01:00:17

There's a guy who emailed me that was like, I think he said you could say this on the pot. He's like, yeah, like, I go on sports book. Every sports book has a welcome offer. So he's like, I go on sportsbook a, and they have a welcome offer of, like, they'll match up to twenty percent of your deposit up to whatever, a thousand dollars on And b has the same welcome offer. And I go max out both welcome offers, and I bet on the same game for team a, team b. I lose the small rake, but I take the whole welcome offer. And I just do that again and again

01:00:44

and I was like, I love it.

01:00:47

This is so simple and so funny that you do this.

01:00:51

What are you have you ever had liquidity from selling a business or is the majority of your liquid wealth come through annual cash flows? And are you pulling out a significant chunk from the from the business?

01:01:03

Yes.

01:01:05

I'm pulling out

01:01:06

massive chunks from the business.

01:01:09

In terms of liquidity event,

01:01:12

yes, I sold,

01:01:14

two two businesses

01:01:16

relatively small, you know, seven figure exits on both of those. One was the YouTube channel business and another was a was a software, photography software business.

01:01:27

In terms of the cash flow, you know, we we operate with a very healthy cash flow. So I moved that out to the to the holdco level,

01:01:37

and then use that cash to invest,

01:01:40

you know, in a private businesses, as well as in real estate and public markets.

01:01:45

If you had a pie, a good question Sean always asks is, what do you do with your money? If you had a pie

01:01:50

of your,

01:01:52

net worth, what's that allocation looking like? Pie chart. Not just a pie. A pie chart

01:01:57

or a pie. Yeah. Or a pie.

01:01:59

It's so heavily skewed

01:02:01

towards

01:02:02

my business, the online business portfolio. Extremely, extremely heavily skewed.

01:02:08

I would say then a good chunk is in the in the public stock market,

01:02:13

and then I have cash do you actively manage your portfolio? Or are you, are you just doing boring shit?

01:02:19

Big chunk of it is boring. And, you know, dollar cost average index.

01:02:23

I have begun to play with, you know, a little bit of money to,

01:02:28

to see what I can do with it. I've done I've I've done alright. Like, stocks or other stuff?

01:02:34

No. No. Stocks. Stock. This is only I'm only talking about public investments because real estate is separate.

01:02:38

You

01:02:40

You talked about, like, kind of coming from nothing, literally sleeping on the floor,

01:02:44

because you're like, why would I buy furniture? I should not buy furniture, even when you had money.

01:02:49

Yeah. But I believe two things. A, money is a tool. It's not the, like, end goal. It's a tool to to enable you to do something with it. And, b,

01:02:59

There's no point to money except for to, you know,

01:03:02

you know, enhance your lifestyle, other people's lifestyle, you know, and improve lives in some way. Right? It would be a shame to just,

01:03:08

have the money and never use it. Have you and and spending money and spending money is as much of a skill as making money. You just, you know, you just start it later in life.

01:03:16

Have you learned how to spend money and,

01:03:19

what have you learned? What what can you teach us?

01:03:22

Yeah.

01:03:23

Yes. In the early days, I saved everything. I mean, I did I did not my buy a bed until, like, I'm married, dude, just to put in perspective.

01:03:33

No. There was no bed. I

01:03:36

Ladies, find you a man. Find you a man with no bed.

01:03:40

So so, you know, I I I met my wife in high school.

01:03:44

So so as she's known reasons, I was broke and, you know, her her parents weren't that well off either. So,

01:03:51

so, yeah,

01:03:52

in terms of learning how to spend the money, yes, now I have. Right? For me and the culture

01:03:59

how I was raised,

01:04:00

we take care of family first.

01:04:03

And my first thing was to ensure my parents are retired. Because my dad worked really, really hard when, you know, when we moved to US. So my my parents are retired. I mean, they go to Pakistan, maybe, like, four times a year, they're in Pakistan, you know, like, right now, for example.

01:04:17

So,

01:04:18

so, yeah, so that that that that was first thing first in terms of making that impact.

01:04:23

In terms of traveling, I I I realized that I get a lot of creativity and joy out of just going and seeing new places.

01:04:32

And

01:04:33

I spend the money on those those things. Are you giving equity to your, people? Like, is the structure where is there, like, a hold code that you fully own And then the whole co owns eighty percent of this company, seventy percent of this company?

01:04:46

Yes. In the early days, that's what I did. Now I don't do that.

01:04:50

Now you don't give equity to the operators. No. Do you regret giving equity?

01:04:54

No. I I enjoy working with those co founders. And I don't think I would be able to do what I did without them. What now? You're only thirty two. Like, what are you gonna like, how do you get up in the morning, feel motivated? You know, what do you what's what's driving you now? I want to build a generational company. Sounds like you're there though. No. I think it's generational when, like, you know, when my kid's kids are older and grandkids are around, I I'm I'm probably gonna be doing this till till I'm dead.

01:05:20

I enjoy the game. I enjoy the fun of it.

01:05:23

I know Sam doesn't get excited about, about buying a business and fixing it up and growing it. I I get I get a thrill out of it, you know, because for me, that's the opportunity. That's the hustle. Like,

01:05:35

finding

01:05:36

finding the edge, getting that deal. You you can say in in some sense

01:05:46

to just just getting an unfair advantage.

01:05:49

But but

01:05:50

knowing those tricks, knowing those tactics, giving me a head, like, you know, like, if you play basketball, I mean, we all play basketball, and I sucked at it. Right? But there were some people, like, Alex was amazing, right, because Alex had been doing this for a long time, and he had a tactic that he could just cross you over, whatnot.

01:06:04

I like having those tactics in in the business. Yeah. What's crazy is you might be,

01:06:09

like, probably in the top fifty richest.

01:06:12

Maybe maybe top one hundred, top two hundred richest under forty year olds in America.

01:06:17

I've kept a very, very low profile. And the only way this would be validated

01:06:22

is if I was ever to race around or if I was to exit. Right?

01:06:26

So right now what I can see in looking at

01:06:29

our our our numbers and what similar companies trade at and and, you know, exit at.

01:06:35

My assumptions are based on that.

01:06:38

But it actually doesn't matter to me one way or another.

01:06:42

I'm pretty uncomfortable. This model of buy don't build and

01:06:47

of becoming a holdco and having a portfolio. Like, there's a whole bunch of people who I know that are trying to do this right now. I'm sure you get a bunch of questions. I think I've called you asking you a bunch of questions about this.

01:06:57

What do you think,

01:06:59

they get wrong? What's the common mistake or trap you think smart people can fall into?

01:07:05

Trying to do this path, or what's a misconception

01:07:08

that smart people have when they come into this? One thing that I've I've noticed

01:07:13

no, there's several things, but this is this is the primary thing, is that the excitement takes them away. So they they'll overpay on a deal. And then regret it later on when when they find out because

01:07:25

oftentimes they have taken investors money.

01:07:28

They are on a timeline

01:07:29

you know, most of them are trying to raise a fund. You know, your typical ten year plus two years, whatever. So they have they're they're not disciplined enough

01:07:38

to wait. And I have no rush. Like, you know, if I don't buy a company this year,

01:07:42

you know, doesn't make a difference.

01:07:45

But, you know, so so it allows me to be more measured and disciplined in in the deals that we do.

01:07:50

And that's that's probably the biggest thing. Yeah. And

01:07:54

and or underestimating

01:07:56

the problems that exist in a business?

01:07:58

The first interview that I saw with you was it looks like it was on Mixerjee, our friend Andrew Warner, It looks like it might have been two thousand fourteen, but

01:08:08

I think it was even before that. And Andrew

01:08:11

was like, how much revenue do you do you do? And you go, you go, Andrew. I told you. I'm not gonna tell you this. And,

01:08:17

it was pretty funny.

01:08:19

And then I asked you to come on here, and you're like, I'm not telling you these numbers.

01:08:24

You've told us a lot of shit. Like, it seems like you're you're you're in a different,

01:08:29

sphere than you were before where you don't mind talking about some cool stuff. And I think that that's neat because

01:08:35

you're, like, maturing from, like, this hacker, probably gray hack hacker from, you know, twenty years ago, fifteen years ago to, like,

01:08:45

Kind of a tycoon.

01:08:47

I think, you know, when when I was younger, I was afraid,

01:08:52

you know, just from a taboo things, but also

01:08:55

I didn't I wanna fly under the radar, and I still do, but I wasn't very vulnerable.

01:09:01

I struggled with vulnerability.

01:09:03

And that that change as my network changed

01:09:07

as as I continue leveling up,

01:09:10

you know,

01:09:11

with But, I mean, now my my form is amazing and with IPO, but it's not a IPO form, but everybody's in IPO.

01:09:18

And the those kind of, you know, groups really, really help you

01:09:22

mature and find your blind spots and things like that. So

01:09:27

so I I'm, you know, definitely appreciative of of the friends that I have who call me out on those things, and

01:09:34

they have helped me become better. I'm gonna have to use that little clip for my new company as an ad. Thanks.

01:09:40

We use AI to replace which the company you said with him. I got him in there. No,

01:09:49

man. I think by the way, if your goal is to have a low profile,

01:09:54

I have a feeling that's gonna change when the headline of this of this podcast comes out because,

01:10:00

I I don't think honestly that he's trying to keep a low profile. I just feel like you care about being humble and and, you came across a lot of humility. You know, and not false humility. You know, false humility is basically like,

01:10:11

I'm gonna downplay everything and not tell you anything.

01:10:15

And,

01:10:16

that's actually, like, a different form of sort of, you know, I don't know, arrogance or narcissism.

01:10:20

The the non flex flex. Yeah. The non flex flex. Right? Or the sort of this closed the door behind me on the on the way in. So, you know, I'm in, but you can't get in because I'm not gonna really do anything. Like, you know, I think the best people are the ones who sort of become the person they needed when they were younger. And I think that, like, you know, the younger version of you, if you heard something like this, it's like, alright, this guy came from nothing, moved here for parties and didn't speak English, was, like, sitting in the library because he did not make friends in the school. It was, like, alright, I wanna play video games. The library hit a firewall. So his first business was creating a proxy to get around the firewall. And they started giving that to other kids as a boat both a way to, like, make friends and make a little bit of money. And then he took money, and, like, he was like, okay. How do I get more customers? And it's not like he's some Business Savant. He just kept asking, how do I get my customers? Oh, what if a directory posted about me? How do I get them to do that? What's in it for them. And, like, you don't use one foot after another. So I think you,

01:11:13

yeah, I think you did a good job of basically, like, without,

01:11:17

putting yourself in a position where you said something you're uncomfortable with, you know, you you did share stuff that I think's, you know, for me, at least pretty, pretty inspiring. You're somebody that you know, I gave Ben a list of, like, five people. I was, like, you know, who are the five people that we've met? Because we met a lot of people the last two years. I said, In the last two years, who are the people that we've met that were kind of the most inspiring, they seem to have a blueprint

01:11:39

for life, not just business that was working for them. Their business part of their life was working, but they were also, like, content. And they weren't, you know, like, in the first five minutes of meeting them, like, weirdly bragging about stuff or, like, saying something that revealed some, like, weird insecurity that's driving them still and they haven't gotten over it. It's like, I don't know. Those people are their their characters are fun to be around, but, like, I'm not trying to be them. You know, like, somebody who's, you know, has a family life that they actually care about. So we put you on that list,

01:12:06

and I'm glad you came on because For sure. Don't think most people even know your story, and that's a shame. You know, like, I think more people are gonna know your story now after this. Where should people like, follow you, or where do you wanna send them to,

01:12:19

go from here. Really quick, Sean. Before we wrap up, I wanna tell you something. So he has this website. So Google Syed's

01:12:25

So it's, I want the listener to Google list. So s y e d, and then his last name b a l k h I, and then Google that and then the word net worth.

01:12:35

He's got this hilarious blog post. Oh, this is yours. What does Sam told me about this? Yeah. Yes. Where it says,

01:12:42

what is what's science net worth? The first line, you're probably thinking and so his his his website comes up first, and it's a blog post. You're probably thinking that I'm some sort of narcissist writing about my own net worth in third person. Quite the contrary. I was looking through search traffic for my blog, and I noticed that I have a lot of type in traffic for users simply searching my name,

01:12:59

and then the term network. And then he goes on to explain that it's, like, it's always changing, but it's not but knowing someone's net worth is not gonna help you succeed, and he's got those hilarious host. Eddie, Eddie,

01:13:10

and it was really funny. And, that you also I wanna give a shout out. We talked a lot about money and shit. You've got,

01:13:16

amazing posts where you do an annual wrap up. I've been reading that for years. I think you started in twenty seventeen. Fifteen, twenty fifteen. Twenty fifteen. You put a big emphasis on philanthropy. So, like, you have a school. I I think you're big on schools. Right? You build schools. I I forget where in Pakistan. I think And you, like, are giving away,

01:13:33

you you put a lot of emphasis on, philanthropy, and then it's you and your wife and your kid and a lot of these stuff, and you have your own foundation. You're giving away a lot stuff. And so,

01:13:42

I think it's awesome. I think that it to to reiterate what Sean said about being, like, a, you know, he has this joke about being a total man about in in a way that's kinda like what you are is, like, you're, like, a holistic person in your your personal website. There's a really good job of explaining that.

01:13:58

Yeah. You know, I I started doing those write ups when my son when we found out we're gonna be, you know, we're gonna have my son.

01:14:05

I was like, okay, I should start recapping this

01:14:08

Well, we we start trying to have a kid. I'm like, I should start recapping,

01:14:12

what's happening in my life. So that way,

01:14:15

because I'm gonna forget it. And at some point, you know, I I may wanna tell him, oh, check this out, check this out, and that's how those year end reviews

01:14:22

came about and I enjoy writing them, and

01:14:26

a lot of people love reading them, including you, thank you, Sam, for reading it. And in terms of education, I do believe that levels the playing field. And that's why we're, you know, we do what we do. Well, I was gonna say Sam gave you a compliment. I'm gonna make fun of you. The homepage

01:14:40

needs a revamp. You go entrepreneur

01:14:43

investor and marketing extraordinaire

01:14:45

with extraordinary intellect. And then there's

01:14:48

a a photo of you with the the headset. The Bono Mike. The Ted the Ted The Madonna Mike. You got the clicker, and you're doing the hand gesture talking about, you know, you gotta start with why. And, you're above that now, bro. You've you've elevated to tycoon status. Now you gotta have the super minimalist

01:15:05

thing where it's like

01:15:07

yay, all white, and it's like, you know, we buy we buy companies

01:15:12

of all sizes.

01:15:14

Please inquire for sale. Yeah. Like, if you have a company for sale,

01:15:19

I like to buy it.

01:15:21

If you if you if you if you go to awesome web site, I I really want people to know about awesome motive instead of me. Right?

01:15:27

If you go on my website, I barely spend any time. I write once a year that the year end review. And it's that's really more for me than for anybody else. But if you go to awesomeotive dot com or a m dot c o,

01:15:38

That website, you should, it says

01:15:42

helping small businesses grow and compete with the big guys. Now that's what we're talking about. That's a good one. And it has all the companies that you've you've had that letter in under the umbrella.

01:15:51

Dude, this is a lot of Do you wanna come, do you wanna keep coming back?

01:15:55

You gotta keep coming back on. You're you're fun to talk to. That's Samsung. That was pretty good for me. Was that good for you, question?

01:16:02

Yeah. No. You're fun to talk to. I enjoyed it. Enjoyed it and happy to come back. I told you. We're not we're not we're not assholes.

01:16:10

No. I loved it. More importantly, are you in for CampM FM part two, that we're about to host in a few months. I I'm in. Alright. And that's the pod.