The Exchanges

Q go all in on creating content on Twitter, TikTok, Instagram, YouTube, like, and you have leveled up the production value of your content a ton. Like, I watched your most recent YouTube video, and I felt like I was watching, like, a mini doc at a movie theater. So, Why are you spending so much time on that when you could be using that time to buy more boring businesses?

A Because the level 10 game is content. And I think, you know, what I've realized is content is really just a word for audience arbitrage. It's just, can I get people's eyeballs? And we are in a war for our attention. It is becoming the most valuable commodity out there. Not capital, because we're printing it like crazy. Um, it's not, you know, historically what it used to be, which is product. It's attention. And so Um, so we, I realized this a couple years ago when I started, and I've only doubled down and bet on it more and more because my audience, if I can create an audience of, right now we have three million, uh, followers and we do 60 or seventy million views a month. If I can create an audience of real humans who are bought into what we're doing, then alongside them, we can do just about anything. We can launch funds together. We can launch products together. You know, we can make real money together. We can have like Fun and experiment without having a ton of overhead together, and so I think it's the most important aspect that there is today is having a content engine.

AI assessment note: “Because the level 10 game is content. And I think... content is really just a word for audience arbitrage.”

Q One last question about your business is, What have you learned about yourself as a manager? So are you a good manager? Are you a bad manager? And what are a few of the biggest lessons you've learned to entrepreneurs who are listening to this that want to be better people managers?

A Oh, it's such a, it's man. I, if I could go back and learn one skill earlier, I already learned deal making early earlier. I wish I would have learned. Leadership earlier and really leaned into it. I always thought it was kind of fluffy. Um, so I think I'm a bad manager in many ways, such as, you know, I'm a chronic optimist, so I'm late all the time. Not a good move. Um, you know, I over, uh, I over, I think I can do more stuff than I can. And so I miss deadlines. Um, those are two really important things to not do for your team. So if I could change two things, it would be that, um,

AI assessment note: “I think I'm a bad manager in many ways, such as, you know, I'm a chronic optimist”

Q don't, and you don't have to naturally walk through the whole deal, but I want you to get an image of what the best deal was in your head, because I want you to talk through kind of like, as you play it back, what are the things that you did that you think are lessons in negotiation that people should take from that experience you feel really good about?

A Yeah, it's a good question. I mean, um, you know, let's just talk cash. So there's something called seller financing where the seller will pay you from the future profits of the business to buy their business. So when I think about one, uh, one of, or some of the best businesses that I've bought, it's because I had zero dollars at risk and I was able to buy a business based on how much I had shown that I was capable of running and being a steward for their business. An incentive aligning them on like, Hey, I'm gonna run this business really well. We're gonna make a bunch of money. And so you're gonna make more money by having me take over than you right now. Plus you're like miserable and tired. So why don't you give me the business for basically zero dollars? If I mess it up, I'll actually just hand the business right back to you after 12 months and we decide what mess it up means. Like if I don't grow by X or Y or Z. Um, but you're gonna give me this business and I'm gonna pay you back Uh, from the profits of this business over a five year period. And so what that allowed me to do is the business owner got an annuity, right? They got like a check in the mail every single month from the business, but so did I. So I started getting a check that was, you know, a five figure check the first month that I closed the deal from taking over this business and running it. And some of th…

AI assessment note: “incentive aligning them on like, Hey, I'm gonna run this business really well.”

Q Yeah, no, there's something beautiful about the local coffee shop and the feeling of community it creates. You have grown on every platform rapidly, um, and there's just such virality around boring business content, which, by the way, before I get into YouTube, why do you think boring business content is so viral?

A People are tired of, listen, actually two things. Corporate trust has shifted to individual trust. People are tired of, uh, working for big corporations. And so they're tired of, you know, being, uh, consumers of big corporations. And there's a feeling of, man, like nobody at the top is kind of looking out for us anymore. You know, it, there's a difference in a feeling between when you go into, you know, A mega store, and when you go into a normal store, and I think in every aspect of our lives, when we were locked up for two years, we basically realized, man, my community matters a lot, especially if I can't travel around. Man, my job matters a lot if I'm spending all this time at it, and I can't be distracted by the foosball tables at the office, and you know, the, the things that I spend my life doing have a real impact, and so I think boring businesses get people excited because like, ah, I don't have to start the next Tesla in order to like make money and have an incredible life. I could just take over a boring business. It seems reasonable and it seems like noble work and it seems like something they can do.

AI assessment note: “boring businesses get people excited because like, ah, I don't have to start the next Tesla”

Q Who sent in a selfie video. They're an early stage entrepreneur. We're going to listen to it, and then, uh, let's opine. Hey Alex, how does a startup get attractive benefit packages at competitive rates before they hit a large group head count? Okay, Jesse, you said, um, off cam that you've dealt with this recently, so how do you think about benefits in the early stages of a business?

A Yeah. I mean, a couple of interesting things, you know, there's certain state laws that are different for different places. So one cool thing about California is they have to, they force you or whatever they provide for, you get the same benefits as any small business of a certain size. And that's actually a requirement from the insurers. So if you're starting in California, that's a benefit in Missouri. That's not the case. I don't know what the case is in New York. When we first started, we just did normal insurance as a small business. Cause we were starting in California and that worked this time around. We've, You know, and we looked at PEOs and what PEOs are, I don't even know what it stands for, but they essentially take your employees onto them as, as if they're their employees. The famous one is Trinet. It's like a big publicly traded company. And they, by aggregating a bunch of small businesses, they basically can negotiate and get as good of benefits as a big company. Now the process at Trinet used to be a total disaster. They had to like, they were on their payroll. They legally weren't your employees. They sent the paycheck and they were employees. It was like this really messy things. I never did it before, but now these newer companies like Gusto and Rippling have made it basically seamless and made like totally like a white label. It's like employees don't even …

AI assessment note: “by aggregating a bunch of small businesses, they basically can negotiate and get as good”

Q Sophia, was that how you thought of nasty gal? Like, did you see a problem or did it come more organically than that?

A I saw only the, you know, with Nasty Gal, I reverse engineered a lot of what other people were doing, and then I did it differently, and I did it differently enough to where it stood out. There were, all of the eBay sellers selling vintage were selling, like, hippy-dippy, you know, lady in the dust, you know. It was all very, like, 19 sixties, and I showed up and I was like, I'm gonna call it Nasty Gal. And I'm going to make it edgy. And there was nothing like it. And the models were edgy and the styling was edgy and the, you know, selection was edgy and it felt really different. And also, you know, when you're building on a marketplace, what's especially hard is to create a brand. And that was something that made nasty gal stand out in a way, uh, just among the pack. And that's something that I think people, a lot of people don't think about even on these marketplaces that they have the ability to do. And once you have a brand, you can take it everywhere with you. You can take it to other platforms. You can build that on social media. You can launch your own website, which is what we initially did, but it was really only with that, with that marketplace that we were able to do that. But I took it and I used every, I was coding templates and uploaded, uploading images into FTP servers for on the eBay platform for For my listing page with graphics that I designed and really crea…

AI assessment note: “I reverse engineered a lot of what other people were doing, and then I did it differently”

Q So you, you told, you told employees, like, if we do not hit X revenue target by Y date, we will have to let people go?

A Yes. Like, this is how a business runs. It won't be responsible for us to retain staff. Our greater responsibility is to protect the business and the business's longevity. You know, this is something that everybody should understand, even about their personal finances. Um, and people thanked us, like, would we had to make layoffs? I got thank you emails, and there's just like nothing better than having to make a decision that hard, having your team understand The entire context and appreciate the graceful, you know, dismount that you are able to give everybody with a sense of dignity. People just want dignity. And if you treat them like a human resource, that's when they sue you. That's when they come back and say, I wasn't treated like a human, like your company has money. I'm going to try to take it from you. And I've had that happen as well. And that is, uh, real hard.

AI assessment note: “Yes. Like, this is how a business runs.”

Q We got, we got to get a sign on your wall. Um, so let's, uh, let's get into your story. I want to hear the rundown on money with Katie. Where did your passion for personal finance come from?

A Well, I always joke that it came from a mix of just general confusion and greed in the sense that when I got my first full-time job in marketing, I obviously started receiving full-time paychecks, and after about six months, I kind of sat back and I was like, I don't really know what to do with any of this money, like, aside from paying my rent and paying for my car and my food and, like, The things that normal twenty-three-year-olds are paying for, I didn't really feel like I was actually getting ahead with that money. It just kind of felt like I was on a bit of a hamster wheel, and it wasn't like I wasn't saving. I knew I was saving because there was always money left over at the end of the month, but that money wasn't actually working for me or doing much for me, and so I would talk to typically my male friends about finances from time to time, and They all seemed to know how to invest. They were investing. They were talking about making money in the stock market, and I was like, wait, like, who taught you how to do this? Where did you learn how to do this? And a couple of them sent me some very preliminary resources, and it really just sent me down the rabbit hole of all rabbit holes. Um, I became kind of obsessed. I would listen to personal finance podcasts, read the books, Stock the bloggers. I mean, and at this time, this was 2017, 20 18. It was not as popular as it is n…

AI assessment note: “it came from a mix of just general confusion and greed”

Q Tell me, how was it for you? How hard was the process of not drinking anymore after, you know, a few decades of it being a very effective tool?

A It was much less difficult than previous times when I had tried to stop drinking as much. I tried to slow it down previously a lot, like many times. And I tried to, I was like, okay, I need to like drink one drink only, or like only drink beer or only drink on weekends or whatever it was. But like that never worked for me. And then I, there were times when I was like, okay, I need to dry out. I got like way too fucked up this month. I need to like dry out. So I'm going to like, Take 30 days off or like a hundred days off or whatever. And every time I'd be white knuckling it because I was kind of like looking to get to the end of that sounds like a very addicted, uh, situation. And so I quit. I just said, I'll, I'll, I'll just put on Twitter, I'll quit and tell all my friends. And then like the, the peer pressure will keep me on the path. And that was part of it. But the part of it, I think more of it was just like knowing that there was no, like, Something to wait for at the end of the tunnel. Like it was just like, oh, this is the way it is the new normal for the rest of my life. That was my commitment made it way easier. So after like a month or something, I didn't, you know, I stopped thinking about it. And after two months, it was like, it's fine, you know, and then I haven't really thought about it since then. So it was, it was pretty easy for me in a lot of ways.

AI assessment note: “It was much less difficult than previous times when I had tried to stop”

Q Is there anything that, that's surprising to you that as you entered sobriety that you've learned or you noticed that you weren't expecting by being sober?

A Um, well, there's a lot more hours in the day than I thought there were. Like, I, you know, now I can, I like work out every day. I can, I have, you know, spend time with my family every day. I have like, uh, a lot of productive hours, like much more, many more productive hours. And I think that's like, you know, before I didn't realize I was like wiping out like a pretty substantial hours of my week drinking. So that's one thing. You know, you can go out at night and then have a productive day the next day, which is incredible to me. You know, I never thought that was like possible. And then also like, I, you know, I just learning, like I can go and like do stuff, like have fun and like dance sober, which I never thought it'd be like, you know, it's like a confidence builder to be able to just like be out there in the world and like not need this crutch, you know? So for me, I think all those things were very surprising.

AI assessment note: “well, there's a lot more hours in the day than I thought there were.”

Q build another business because you genuinely want to? Or are you going to build one because that's just what people want you to do? And how do you know if people want you to do it or if that's what you actually enjoy doing? For Justin, when he starts to ask these questions of himself, there are things that he falls back on to guide him on his next steps.

A I think a lot of it is just thinking about like, what is, what is my joy every day? Like, what's the, what are the things that I'd love to do? And if no one was watching and it made me no money, you know, and like, how do I just do those things every day as much as possible? And the ironic thing is like, for me, a lot of things are the same things I was doing before. People saw me like building companies and investing in companies. And it's like, well, before I was doing them from a scarcity mindset, I was like, oh, if I don't, I need to, Be somebody and make this company successful because if I don't, and I'm like, no, one's going to love me. And today it's more from a, it's the same activities mostly, although maybe I focus a little bit more on the things that I like to do, but same types of activities. And it's like, well, I love to mentor people. I love to learn new things. I love to do deals. Uh, I love to learn about new spaces, you know, and industries. So For me, kind of incubating companies, investing in companies, that's like a vehicle to do that, and if I just focus on the reason, you know, coming from a place of joy instead of coming from a place of scarcity, life's a lot better.

AI assessment note: “what is my joy every day? Like, what's the, what are the things that I'd love to do?”

Q that was connected to my experience, and like being sober and dancing, I didn't equate as like, that wouldn't be fun. Just tell me, from your experience, what it's been like to like, Go out, whether it's with people from work, whether it's like Fractal, or Goat, or Quest, or any of your other businesses, or just like personally, and engage in social situations without alcohol. What is it like?

A I mean, it's, it's fine for me. Like, it's great. Like, I, I, I don't get peer pressured into drink. I mean, I'm old now. So like, I don't get peer pressured into drinking, right? Like people aren't trying to be like, oh, you gotta take a shot or whatever. Um, but then it's also just like, instead of leaning into, like, I've got to get twisted to like, enjoy myself. I kind of just like lean into like, oh, what are the things that are enjoyable about this moment? You know, I think I connect with people a lot more deeply and more genuinely, you know, I'm more curious about people. I like to learn about people. Like that's one of the reasons I like entrepreneurship, you know, I love to learn about people. And so, you know, I just like really lean into that and that's, that's great.

AI assessment note: “it's fine for me. Like, it's great. Like, I don't get peer pressured”

Q really enjoy. You're actively investing, and you're starting this, you co-ended this new gaming NFT business, Fractal, which the product hasn't come out yet, but there's a ton of appetite and a huge community around it. Do you think in kind of this part of your life where you are now sober, where you haven't drank in two years, that you are significantly better equipped to, to build this thing?

A Yeah, I think so. I think I'm more, it's, it's ironic because like being able to be more like in the state of like, I don't need the world to show up any kind of way. Like I'm just accepting of whatever's happening. You'd think like, I have a lot of friends who are like, oh, well, you're going to lose your edge and you're not going to work as hard. You're not going to care as much. I think it's different. It's more like in that state, I'm less reactive to the world instead of the world coming in and being like, you know, like something happening, like I don't discord server goes down. We can't add people to the server or something like that. Or like the product breaks the first day we go out instead of like the old Justin would have been like screaming at the world and then like, Fuck. This is like, everything's breaking. It's not going to work. And like spitting myself up about like how I'm doing the wrong thing or I'm not good enough or quit or whatever. And today I think I can just be like, oh, well, that's interesting. You know, that's obviously a detriment to us being successful, but like, what can we do to make it successful? And we're just going to try our best and maybe it won't work. I don't know. Maybe it won't work, but like, we're going to try our best and see what happens. And it's a lot calmer. And I think it's like, it makes me want to give up, let's put myself i…

AI assessment note: “Yeah, I think so. I think I'm more... less reactive to the world”

Q spoken a lot. One way I would describe you is you're just a very confident person. You were a, you were confident in written, but it like it as in like you, you give off an energy of confidence. Like, you know, your abilities, you know, your success and not in a cocky way, but like, you just know what, what you are capable of. Did you always have that?

A I like to like redefine confidence, which is great because I am very confident in my abilities. I'm glad that comes across. But for me, I think what makes it so easy to exude confidence is that confidence for me is not maybe a previously overly masculine definition of confidence, which is I know what I'm doing. My confidence is a humble confidence. I know I can figure it out. And there is a big difference, big difference. And I, you know, we've all worked for those people who are always, I know what I'm doing, I know what I'm doing, even though the world is moving so fast that no one can always know what they're doing, and I will forever stand behind people who say, I don't always know what I'm doing, but I know we, you know, not I, we can figure it out, and that came from early responsibility as a child. I didn't have the roadmap. Everything wasn't working the way that my mom said that it would, but We figured it out. It wasn't always a hundred percent, but the girls were alive. They were relatively happy. I think I only tied my youngest sister to a tree once or twice, and then the same thing happened when I was opening franchises around the world, right? Nothing was perfect, but we figured most of it out, and those experiences of being in new environments often And still having to deliver some outcome. We're so formative to create this, to create or shape or contribute to thi…

AI assessment note: “and that came from early responsibility as a child. I didn't have the roadmap.”

Q So how do you think about when it makes sense, A, to have any sort of recruiting help, right? So to go from being a founder or a manager that's literally pounding the pavement, doing outreach yourself, to having Call it an internal or external recruiter. And when does it make sense to definitely have a full-time employee in-house that is your in-house recruiter? How do you think about that?

A For your first question, before going ahead and just having a recruiter and having it outside of yourself as a founder, I think it's good for like the beginning stages and that will be up to the founder to define what beginning means to have like your founding people, your initial people. But once you get to a space where one, you may want to start recruiting more senior executive level Professionals. External recruiting might be a great avenue for you, because they already have the network that the founder may not have, and they already have a vetting process that we were assuming is tried and true, because if they have their own success metrics, which you can ask them what those metrics are, that can be applied to your own business. I would strongly recommend doing internal recruiting if you have a big emphasis on Culture. Because at the end of the day, an external recruiter will probably have multiple clients. So the same type of attention an internal recruiter will be able to give to just your positions only because they're here in a full-time capacity, permanent capacity. That special touch and attention to detail will not be found as much with an external recruiter. And then plus, there's nothing better than learning something new than by being immersed in it. So having a recruiter being a part of the onboarding process, because they're a part of your team now, So they kn…

AI assessment note: “I would strongly recommend doing internal recruiting if you have a big emphasis on Culture.”

Q seem like they're only in it for the money. If they talk about it too late, They worry that, did I just waste an entire interview process if I end up finding out that the company is looking to pay something that is totally out of what is realistic for me? When is the right time to talk about comp, and what is the right way to talk about it?

A The answer to that isn't a textbook answer. It really is just on perspective, so I, I can only speak on what I think, and for me, I'm, I'm a person I would rather have the conversation earlier than later, just because I know that although you don't want to seem like you're being led By conversation of comp, but it's a, it's an important factor. It's kind of weird that people try to pretend that it isn't. It may not be the most important, but it's certainly probably your top five and not top five. So if you're nervous about speaking directly to an exact number or what the total comp could be, if that's being a question posed to you earlier on, you can always flip it back to the recruiter and say, I'm comfortable in learning more about what may be budgeted based on The total comp and what's marketable right now for the range of this role. Um, or if it's later on in the, the, the conversation of interviewing process, you probably should speak more directly to it. Cause if you're a final candidate, you want to make sure there's alignment there. But me personally, I would rather it sooner than later.

AI assessment note: “for me, I'm, I'm a person I would rather have the conversation earlier than later”

Q very much in the weeds, I think it's important for companies to think about. Does it ever make sense, say to your point, you bring in an internal recruiter because you think culture is really important, and you want someone whose full-time job is recruiting people that embody the values of the business. Does it make sense to ever hire an external recruiter, even when you have an internal recruiter?

A Oh no, because if you have an external recruiter, they could be a supplement. To the internal recruiter that you have. And then also a recruiter is not only there internally to serve in the tactical perspective of just filling in roles and making sure your days open for a role decreases and all that stuff. When you have the right kind of recruiter or someone in talent acquisition, they are also supporting the strategy of having a great recruiting process overall. So whether it's like making sure that the interview scorecards are well, making that, making sure that DEI is a metric, That is being pushed and accountability is being there. And sometimes to allow an internal recruiter to do that would offer the opportunity for an external recruiter to come in. And it's just based on what you need. So the great thing about external is that you could pick it up, pick it down based on what the business need is and what that makes sense. And you still have your home base with your internal recruiter back at the workplace.

AI assessment note: “if you have an external recruiter, they could be a supplement.”

Q But one thing I'm just really interested in is the law school experience. Like, as you look back Do you think that it was worth your time going to law school? Do you feel like you leverage any of the ways of thinking you were taught in law school in the work you do today? Do you think it was a waste of time? What are your thoughts on that?

A I'll start with the law school part, and then I'll talk a bit about why I think right now we're sort of in this golden age of entrepreneurship. Law school taught me, at least, how to find solutions to problems. It didn't, didn't give me solutions, but it taught me how to go deep on something. One of the things that you have to do, um, at least in your first year of law school, what they call L-one, is you're given like 3000 pages to read, and you have to pull out the one legal maxim, or the, what they call the ratio desidenti, which is a legal term, excuse me, a Latin term, which is like, what is the thing? What is the lesson that this particular piece of case law teaches you? And that ability to sift through tons and tons of content, but pull out the most important piece that can be applied to other Anecdotes, or stories, or situations. That was really important. I wasn't a great writer. I went to a really great high school, public high school in the United States, called Spanish River. At the time, it was one of the best high schools in America. I didn't learn how to write very well at that school. When I went to college, went to McGill, I didn't learn how to write very well either. I mean, I was okay as a writer, but I was not nearly as well written as I needed to be. Law school taught me how to write. Law school taught me how to write concisely, how to say the thing, and sa…

AI assessment note: “Law school taught me, at least, how to find solutions to problems.”

Q Do you think it should come from what people think right now, or do you think it should be intentional and you should pick what the value of listening to this is?

A I think it's a combination. I think what we should be doing is asking our listeners, why do you decide to listen to this? What, like, you say it's valuable, why is it valuable to you? And just see thematically, Like directionally, why are people deciding to listen to this over everything else that they could be listening to? And also understanding when, in what form do they like consuming it best? Do they like the live recordings on LinkedIn? Cause they like this feeling of tune in and engagement, or they like the podcast format because they can do it on their own time. I don't know any of the answers to that, but I would say that we should at least know these things to inform whether we agree with it to chart the content strategy moving forward.

AI assessment note: “I think it's a combination. I think what we should be doing is asking our listeners”

Q flowing in or being hit up by reporters because the build time for the product was necessarily way longer. And so my, what I'd love for you to break down now is what is the product market debt, uh, product product, market fit definition that you came across that kind of set off the light bulb for you. And how do you now think about actually using that in practice?

A Absolutely. So it's probably helpful to contextualize the timeline, and then we'll jump into the definition. It was actually the summer of 2015 that we started, much like any other software company, to write code. And in the summer of 2016, a year later, we were still coding. And in the summer of 2017, we were still coding. And so I felt this incredible, intense pressure to launch, both from the team and also from within myself. After all, my last company, you may remember Reportive, had launched, scaled, been acquired in less time, and here we were two years in, and we still had not launched. But deep down inside, I knew that no matter how intensely I felt pressure, a launch would go very badly. So in other words, I did not believe we had products market fit. And although I knew it, I couldn't just say that to the team. It was obvious to me, but these are super ambitious, hyper-intelligent engineers. They've pulled their hearts and souls into the product. And so what I needed was a plan. And in the April of 2017, That's when I really started this search for the holy grail, for a way to define products market fit, for a metric to measure it, and then for a methodology to systematically increase it. And so I searched high and low. I read everything I could find. I spoke with all the experts and I came across this guy, Sean Ellis. Now he ran growth in the early days at Dropbox, L…

AI assessment note: “You just ask your users this. How would you feel if you could no longer use the product?”

Q Absolutely. One other question before we move on to step two is, can you just share a little bit more context on why these four questions? The first question is obvious, right? Like, that is the question that gives you the score that you're going to work off of. But why are questions two through four in the survey important questions to ask?

A The product market fit engine. And as we'll see, we should probably just jump into the steps. The answers to these questions will create this roadmap that increases the product market fit score. So for example, let's take step two segment. Now we want to understand who are the people who really love our product. And for this, I like to use the concept of the high expectation customer, which is a concept that I found from Julie Supan. Now Julie led Early marketing at Dropbox, Airbnb, and many other great companies. The HXC is the most discerning person in your demographic. They will enjoy your product for its greatest benefit and will spread the word. Most importantly, others want to be like them because they seem clever, judicious, and insightful. For example, the Dropbox HXC wants to simplify their life. They're very trusting. They're technically savvy. They're looking to save time, and at the end of the day, they want to know that somebody has their back when it comes to their life's work. I'm an example of the Dropbox HXC, and I'm sure many of our audience are also. The Airbnb HXC does not simply want to visit new places, they want to belong. For example, they want to experience Paris as if they really live there, and Airbnb's early success came from focusing on these influencers and these tastemakers. So the question is, how do you create your own HXC? Take the users who wo…

AI assessment note: “The answers to these questions will create this roadmap that increases the product market fit score.”

Q on most DTC brands and why it's gonna be very hard for them to survive, especially if they're not creating organic content. So we'll talk about that in a minute, but okay. So you went from wholesaler, worked with sourcing agent, Who was working with the factories to make your own swords? And then when, basically when was the, the massive inflection point in the business? When did that happen?

A So basically I did something very sneaky. When you're growing really fast, you don't have cash. And if you're like a nobody like me, nobody's going to give you cash. Right? So I had this massive issue where I needed to fund swords, custom swords, which are really expensive to make, uh, without having any product. So what I did is I made one A single one after, like, the happiest sample I got was the one sample I used, and I pre-sold it. I pre-sold 300 units for, like, 150 bucks or something, and I included, like, a free item in there just, like, as a gift for the pre-sale. My customers waited four months for me to have a product, but I managed to, like, fund the entire first purchase order with that. And that's like what really changed my business. So instead of like borrowing money from, you know, high risk lenders or, or whoever, like that's what I ended up doing.

AI assessment note: “I pre-sold 300 units... managed to, like, fund the entire first purchase order”

Q of opinions on this next topic as, uh, robots, uh, surrounding Sophia and that is executive coaching. We've talked about this a little bit in bits and pieces in past episodes, but I want to get to the heart of it. So I'm going to just start with a very simple question, and we'll start with Sophia. Have you used an executive coach, and do you believe in executive coaching?

A I absolutely believe in executive coaching. I have only worked with one, and I've worked with him actually for the last seven, eight, nine years, from the very beginning when my company could afford it, when Nasty Gal could afford it. Um, he was a big expense, nowhere near the expense I'm about to take on with Dave Cashin, who Jesse so generously introduced me to, who's the coach I'm gonna have my first call with in the next couple weeks, but what I got out of him Um, The executive coach I've had is very, like, has leads with heart, but for the most part has led with advice on how to manage people, how to think about, you know, when I was putting together my thesis for what was really going to serve me after I left Girlboss, my second company, thinking about, you know, I've talked about this before, business class feels like a project because we launch it twice a year. It's not something that's on every day where there's just this, like, onslaught of stuff and, you know, with Girl boss. We were doing brand deals. We were hosting conferences. There was such a like human capital lift. And so he helped me clarify that I wanted to do things that felt more like projects and less like an undertow of business. Um, when I had issues with executives, you know, or with management, for example, like my nature is to like run to the fire and fix things. I'm not avoidant. Like it's a problem…

AI assessment note: “I absolutely believe in executive coaching. I have only worked with one”

Q Yeah, what, what are we looking, what are we looking at in this screenshot?

A This is my Wells Fargo bank account that combined both my personal, I have a business checking and savings account, I have a personal checking and savings account, and then I got a 2500 dollar credit limit, and I've saved literally a million dollars cash out of the back of an 87 Volvo. And, uh, you can see in my personal bank account there's 9000 dollars, and in the business bank account there's 900,000 dollars. So if you want to ask how much to pay yourself, I can also show you the The place that I lived, which was, um, 500 dollars a month rent, and I had a hot plate, and, uh, my office was my kitchen, and I washed my dishes in the bathroom sink. I think I'm going to be there.

AI assessment note: “This is my Wells Fargo bank account that combined both my personal”

Q next Business was video for it, which was like your aerial stock footage business. Before we get into that, what were one or two of the biggest lessons you learned in that first venture with REP, whether it relates to how to build a great service business, how to find like your early customers when you had no reputation as an entrepreneur, like what were some of your biggest learnings?

A I think the coolest thing about that entire experience, Alex, is it was almost by accident because it started when I was in school. And so it forced me, I was doing these things as, as a homework assignment and it eventually became my master's thesis. And so what I was doing and I didn't realize it back then is I was practicing in public. And one of the things that you do that, like, I admire so much is you post prac you're practicing in public with the plunge, like you're posting the stories on LinkedIn, you're posting stuff about it on Twitter. And that is probably the best thing that you can do when you're an entrepreneur to start. If you just start practicing in public, you're naturally going to get feedback from people. And you don't have to, you don't have to accept the feedback or the criticism, right? But you should listen to it because it's coming from a place where you actually hit on something. And I think if you can practice in public, I think that's the best way to start. And so when you go out, talk to customers, you get it on camera, you post about it, you tell people about your business, like you practice in public. I, I honestly think that's the best way to start a business and just from there you can figure it out.

AI assessment note: “what I was doing and I didn't realize it back then is I was practicing in public.”

Q Right. But, but so how did you scale that? How, how are you able to scale it if you're not just going to basically try to internally recruit everyone?

A Yeah. So I, I think then you start saying, well, what was I actually noticing about these people that led to the conclusion that was accurate internally? And then how could I have ascertained that from strangers that I was meeting for the first time in an interview, you know, at some events, et cetera. And that helped calibrate. Second was one of the advantages of people you work with or in the building was Is you have shared context, and you have more data points. So one of the other advantages to say, hey, look, it is really hard to identify undiscovered talent in a 30 minute interview. You may need more data points. Like, that may just be true. Like, you know, you have one data .1 interview. You can draw an infinite geometry, infinite number of lines through one data point. Get five data points. The lines should be pretty easy to draw. So, usually you have to make a decision with less than five data points, but maybe you can get two or three and find ways to do that. And so, what I have had some success with, or, you know, real success with, is people that I had more exposure to Even if they weren't, like, literally working for me, or literally working in the same organization, but I had many more data points, and soon, with your identity, accurate, and that proved to be true, then you try to develop formulas for random interactions with people. When people you meet for the …

AI assessment note: “how could I have ascertained that from strangers that I was meeting for the first time”

Q Love it. You, you talked about it briefly, and I actually want to spend a little bit more time on it, which is, like, Ikigai, which is kind of your reason for being. What did you find as you went through that exercise was your Ikigai? Like, what were the things you plugged in for yourself?

A I do believe that business, I believe it as a very, it's a very spiritual thing to me. Um, because I think that it's like this, it's like the ultimate Maslow hierarchy of need, like the self-actualization thing. And so to me, it's like an exercise of like turning dreams into reality. I find that to be incredibly intoxicating and, uh, fulfilling like spiritually. Um, so for me, I loved sharing. I loved like creating information and I love just like sharing and I love getting, I like getting feedback and I was like obsessed with like the dopamine of like seeing my Google analytics go up. And seeing comments on the blog posts and moving really quickly. The cool thing about content is you're not creating a physical product. And so every single day you could iterate. And I just like obsessed over that. I also felt like I kind of understood human emotion and understood how to get a rise out of people. So I understood how to make people feel sad or happy or angry. Like I, I understood how to like capture people's attention. And I, and I really enjoyed that. I also love working with like weirdos, like people who are kind of like freaks. And I, I think I'm a little bit of a weirdo, and so I really liked the idea of hiring oddballs and working with them, and content people tend to be like that.

AI assessment note: “so for me, I loved sharing. I loved like creating information and I love just like sharing”

Q Yep. And so when you were thinking about launching Hampton and you thought about like, Your goals, your Ikigai, like, how did you know, like, this was a bet that you wanted to take?

A Well, so I, like, knew that I knew how to do community with trends, and I, and I knew that I messed up a ton, but I got a lot of parts of it really right. I knew I wanted a business that could get to, like, at least a hundred million in revenue, although I think this could be a lot bigger, and so I just was like, well, YPO does that. Vistage does a hundred million plus in profit, so, like, All right. I know the market's big enough. And that was basically it for sizing the market. Um, and then I was like, I think I'm good at it. I have got an audience that matches those people. I think this is a problem that needs to be solved. I think that, um, I talked to a bunch of, uh, members of all these other communities and they told me, I wish I had this or this or whatever. And I was like, all right, there I've, I've spotted the opportunity. Now I just need to execute. And that's what we did. And then I can give your audience like a more real-time example. Yeah, let's hear it. This one hasn't proven itself yet. So it's called Sam's List, samslist.co. And what I've noticed, so when we are, you probably saw this at Morning Brew. Dude, these B to B advertisers crush it. Like they would get so many clicks and they could pay a lot of money per click or whatever to acquire a customer because their, their products are Tens of thousands or more a year versus like a deodorant brand, they can on…

AI assessment note: “I knew that I knew how to do community with trends”

Q When you're looking at annual reports to kind of reverse engineer business opportunities, what are the, the few parts that you really focus in on?

A So this, again, is where I was envious of you and Austin, was like, I, like, I didn't know how to read these, and I never really truly, I don't truly understand them. Like, I can't, like, I've taken classes recently on how to read the financials, but I'm not great at it. But there's like so much that you can read just in the text. So like in terms of like, uh, the financials, I basically look at the cash flow statements. I look at operating income and that's honestly it. Like I'm very rudimentary and not good at the financial part, but, and like the outlook, they'll tell you like, what's like, what sectors, like, for example, I remember for trends, like one, 800 flowers said succulents are growing amongst our millennial customers. And in trends, we wrote, all right, well, someone's going to create an online retailer focused on succulents. And then like Bloomscape and like three other companies raised like tens of millions of dollars like a year later. So like the reports, they'll tell you like what's happening. Like we're, we're facing headwinds because, uh, young people care more about this than that. You know what I'm saying? Like, it'll tell you like what's going on. And my opinion is like a company that has billions of revenue or is a public They have so much data and intel on, like, where the world's heading that I can just piggyback off of their intel.

AI assessment note: “I basically look at the cash flow statements. I look at operating income”

Q series B. The, the next snapshot is June, 2016. Revenue is 160, uh, 176,000 dollars for the month. Net profit of 10,000 dollars, and this is, you know, post layoffs. What does the business today Like, what is the story you have around the business today? Meaning, what does it mean to your identity? Like, what kind of, what's the, what sort of attachment do you have to your business?

A Yeah. I mean, I think of, I think of Gumroad like a dragon now. I feel like it's its own living thing with its own agency, and it pays taxes on its own, too, as a C Corp., you know? It's truly considered, like, a person in law, uh, And so I, I find, I don't know, I think of myself like really honored that I get to work on it and make it better. Uh, but at the end of the day, it has its own basically desires and its desires are to fulfill this need for its 10 or 12,000 creators. Right. And do that better and better. Um, and I try to sort of like be its muse or like, you know, whatever. I try not to get too obsessed about like, oh, I need Gumroad to solve this problem for me. Um, it's like, no, like if I, as a company, it can, because it has cashflow. So I can sort of point it at certain things and say, Hey, we can take, you know, a million bucks in cashflow and like experiment with building a new product called Flexile and do dividends here. And like, we can, we can, we can sort of play around with it, but only so much because at the end of the day, like the core, like there are a lot of stakeholders in Gumroad because it's its own. It's a little, it's a dragon. It's like much more powerful than like a single human. So like the public deserves some level of control over it. You know, it's, it's people who've invested in the past totally deserve some level of control or ownership…

AI assessment note: “I think of Gumroad like a dragon now. I feel like it's its own living thing”