The Exchanges

Q And life sort of lost its meaning. Can you talk to me about that and what was happening?

A Yeah. So I'd had this very strange last couple of years where, um, you know, it was COVID. I hadn't really talked about what I did. So we had kind of quietly been building a company up here in Victoria, Canada for 15 plus years and been very quiet. You know, we had a few people, uh, who knew what we did, but I never talked about it publicly. And I started going on podcasts and tweeting because I was bored and I ended up Going down a total rabbit hole where I was, um, becoming like an influencer. Like suddenly I was posting every single day. I was comparing myself to other people with more followers on Twitter. I was beating myself up for not writing a tweet a certain way. I was getting misinterpreted on Twitter. Like just everything was, uh, was about that. And, uh, I also took a company public, uh, Uh, raised a fund. Uh, had to make a bunch of really difficult decisions around personnel, hiring and firing people, and I just kind of hit a wall. I woke up, uh, one day, uh, like August first, twenty-twenty-one, and I just didn't want to get out of bed, and it wasn't that I was depressed. It was like an ahedonia. Like, I just, all my usual tricks didn't work. Drinking a cup of coffee wasn't pleasurable. Going for a walk wasn't fun. Uh, you know, playing video games wasn't fun. I couldn't find anything I liked on Netflix. My phone gave me no pleasure, and I was like, I have no idea…

AI assessment note: “It was like an ahedonia. Like, I just, all my usual tricks didn't work.”

Q We were talking last night at dinner, and one of the things that you said was the things that make you successful also prohibit you from enjoying that success. Do you want to elaborate on that?

A Well, I think it's exactly that thing, right? It's that need to James Dyson. I read, um, so James Dyson is the guy who started, um, the Dyson company. They make fans and hair dryers and vacuums and all sorts of stuff. He has this great quote. He says, I'm perpetually, 20% dissatisfied with everything, right? He's 75 or something, and he still feels that way. And I think I always feel that way. I always want everything to just work better. Whether it's my house, you know, does, how does the dog get fed in the morning? Can I make a system to make sure that happens without me having to remember it? Um, to a massive business, you know, and AeroPress going, can we make the box 30% smaller so that we can ship it more cheaply? I just like systems. I like making things work better. And so if you have that desire, then it's hard to just be satisfied with your day to day life.

AI assessment note: “if you have that desire, then it's hard to just be satisfied with your day”

Q One of the things I want to explore with you is sort of the difference between hiring a CEO at an established company like Aeropress or a startup like Supercast. How do you think about the skills necessary, and what lessons have you learned from hiring hundreds of CEOs?

A Yeah, I, I think, um, Think about a business like Chipotle. So, um, there was the person that created the original burrito, right? That was the innovator. And then there was the person who said, oh, um, we should take the burrito, and we should do that in a fast, casual style. That's the founder of Chipotle. Then there's the person who says, um, hey, we should take this to, instead of five locations, to a hundred locations. That's a profile of someone who's aggressively going to take a concept, take an ember, Pour gasoline on it and scale it. And then there's finally the kind of steady state CEO who takes over and they kind of slowly grow it from there. And so those are the different profiles. Um, I think that a later stage company, you really just need to implement best practices. So what I look for in a later stage company profile is I say, I want to hire someone who's really kind of done this before in a similar or adjacent industry. And they've run a business that's at least double the size. And so, for example, when we bought AeroPress about six months ago, um, we hired the CEO, former president of SodaStream, and, you know, he had scaled that business to over two hundred million. And it's a very similar, it's different in some ways, but very similar consumer packaged goods business. And so, as I talked to him, I just found myself nodding along with all of his assumptions,…

AI assessment note: “what I look for in a later stage company profile is I say”

Q There's several rabbit holes we're going to go down here. One is why restaurants? Which are notoriously not great businesses.

A So I have this whole thing about, um, you gotta hire the right, the wrong person before you hire the right person, and I've always been fascinated by restaurants and food. I started my career as a barista and working in restaurants, and I've always loved them, and I think every, you know, originally I was a designer, and I think every designer loves the idea of creating a Physical space. If you've spent your entire life building ephemeral websites and apps that disappear after two years, the idea of building something tangible is really appealing. And so, um, maybe about seven years ago, I started a restaurant with a friend of mine, and it was a directional thing. I knew I wanted to do it. Uh, everyone told me I was going to lose all my money, and I did. I lost almost a million dollars, and I hired the wrong people. We had, you know, managers that were Some, one of the managers was sleeping in the restaurant and, you know, drinking all of our beer and employees were stealing and, you know, the concept was all warped and our lease was bad. We made every conceivable mistake. But, you know, Chris and I like to joke that we take forks and we stick them in electrical sockets and then we learn and we start calibrating. And so what happened was I started learning the best practices of restaurants And then about two years after that, I got approached by a guy who owned a bakery and del…

AI assessment note: “I think every designer loves the idea of creating a Physical space.”

Q And you're never done, right? This is the curse and the blessing of the entrepreneur, right? Like there's always room for improvement. There's always something you can be doing when you're not at work. You're always thinking about, oh, I could be working. I could be doing something. I could be getting better.

A Well, and it's, it's what's fascinating. Like I, um, I like to say like most successful people are just an anxiety disorder harnessed for productivity. And I'm certainly that case, right? I wouldn't say I'm a dysfunctional, anxious person. I'm somebody who has a lot of anxiety, and then I harness it by ticking off to do's, and about a month ago, I was sitting with my wife watching a movie, and you know, it was a Sunday night watching one of the Oscar movies or something, and I'm sitting there with my fists balled, going, oh, I didn't send that email, and I need to do this, and you know, what about that project, and then I'm going, oh, my wife's gonna be mad at me, like, you know, there's a lot of anxiety, and so recently I've been going, You know, how do you turn that voice off? Can you ever turn that voice off, right? Can you do it chemically? Can you do it via exercise? Can you do it by changing your goals? I don't know.

AI assessment note: “most successful people are just an anxiety disorder harnessed for productivity.”

Q How did you come out of that and not go back, like, fall right back into it?

A Oh, I did. I mean, like anyone, I mean, I, it's like anyone who's ever quit sugar, right? You go through three, four days of difficulty, and then it's totally fine for six months, and then you have one bite of ice cream, and your brain just starts firing off, and every single time you're in a restaurant, you say you'll look at the dessert menu, and you start ordering chocolate cake all the time, and what ends up happening is that If you eat chocolate cake once a month, it's really pleasurable. If you eat chocolate cake once a week, it's pretty good. If you eat it daily, it's okay. But then your brain starts demanding it hourly. And if you do that, it's just miserable. And I think we all do that with phones, devices, food, drugs for some people, anything. And too much of a good thing is always a bad thing.

AI assessment note: “Oh, I did. I mean, like anyone”

Q the advantages to being in Victoria, Canada. When people think of, um, building a company or, or thousand employees or a holding company or something like that, this is not the first place they think of. And yet, here you are in Victoria, and similar to Toby, who's in Ottawa, people don't think of building, you know, Shopify coming from Ottawa. And so, what are the advantages to being here?

A Well, the two main advantages. One is, I was, I had no access to capital, which sounds like a very negative thing, but it forced me to operate with a lot of discipline. So when I ran my first business, I didn't have venture capitalists pursuing me. I didn't have access to venture debt or bank debt or anything. I couldn't even get a credit card. And so it forced me to actually run a profitable business. And it's amazing how most fortune, 500 businesses, traditional business, everyone understands having a profit. But for some reason in technology, it's this very foreign concept where you raise massive amounts of venture, you take all this risk, five percent of them work, and then maybe 1520 years down the line, you have a profit. And we just started entering, um, areas of technology where we could run profitable businesses where nobody thought you could. And so, and I didn't know that was unique. I didn't know what I was doing. I didn't start my business with an MBA, um, Had no idea that I was even starting a business, like the wood chopping example. It was a thing I did. And, um, that gave us a lot of discipline. So even today, we, we only focus on profitable, um, technology and now some brick and mortar businesses. Um, the other thing that's been great about it, going back to the idea of mimetic desire, the people that I'm surrounded with are mostly people who have chosen to li…

AI assessment note: “Well, the two main advantages. One is, I was, I had no access to capital”

Q So, so you take this a bit to the extreme though, like you monitor everything. At what point does that hinder your health? Like you wake up and you're like, oh, my sleep score is only 60. I'm gonna have a bad day today, even though if you had not looked at that, you would have had probably a decent day.

A I think it's a double-edged sword. I mean, I, doing all that stuff, last night we had dinner, and because I'd had ice cream recently, I said, oh, let's look at the dessert menu, and I ate two things of ice cream, and I woke up this morning, and I didn't feel great, and when I looked at my blood sugar, my blood sugar had spiked all night, my heart rate had spiked all night. So to me, I might have woken up and gone, I don't know why I don't feel good, and then I might have eaten ice cream again tonight. Because I had a bad sleep, I go, okay, I'm gonna correct that behavior. So I think that's the good side of it. The bad side is exactly what you said, where you get obsessed, and you say, oh, I didn't take my, my vitamin D supplement today. I wonder if I'm going to get cancer, right? It's, you know, all that stuff. I think, um, a friend of mine put it well. He goes, the right amount of, um, science reading and podcasts is eighty-twenty. Spend, you know, an hour a month reading all the summaries, and then don't think about it again.

AI assessment note: “The bad side is exactly what you said, where you get obsessed”

Q Would you change anything about that? Like, what have you learned through that process as you think about taking companies public or running a public company? And by running, I don't mean sort of like the day-to-day CEO, but obviously you're on the board and you're a major shareholder.

A I think that, um, Charlie Munger has been fascinating to watch, um, from a distance with the way he runs Daily Journal, where he doesn't overdo all of the, um, you know, crufty public company stuff. He really just focuses on allocating capital well and buying great businesses. And so, you know, we, we've focused on the same thing. And I think in the early days, just like my example of starting the restaurant, Um, we had a very successful reverse takeover IPO, um, but we had no idea what we were doing. I mean, we were learning on the job multiple times. Bill kind of grabbed us and was like, what are you guys thinking? Like, of course you have to do it this way or communicate it differently and stuff. So, um, when you do something for the first time, it's just incredibly stressful. Now we're working on other go public opportunities. We have a playbook. We know what kind of, um, CFO we need to hire. We know how to structure the board. We just have that That rep is kind of done. The muscle is built. Um, so it's more, it's more that, you know, if I could go back, I'd tell myself all this stuff to do better, but overall, I actually think it's gone very well.

AI assessment note: “Now we're working on other go public opportunities. We have a playbook.”

Q Do you have any forcing functions in your life that sort of put you on the path to success? Like what are the little things that you do that sort of like guarantee that you have a good day or put you in the best possible position to succeed? Hmm.

A I think the biggest thing that I look for now in anybody that I work with, uh, that made, made things work for me was a crazy sense of pace. So I have a lot of habits, but you know, one of them, so I just did it on camera, is asserting to friends, hey, I'm doing this thing, right? So if I have an idea, I will actually just start talking about it. That boutique hotel idea, I started talking about that three weeks ago. It's still a PDF, and we have an architect kind of going through plans. I'm going to start talking about it because talking about it makes it real. Um, giving something a name, making a logo. I'm very good at that kind of zero to one and pushing that forward. Um, and that's been incredibly helpful for me. Um, I also think this idea of hiring the wrong person first, right? I see this so many times with young entrepreneurs where they go, ah, I need to hire a VP of marketing and they, you know, labor over it for eight months. And I just go, God, you should have just hired the wrong person first, and then you can learn, you know, you can let them go if it's not a fit, but just get moving. So many people, um, they try and use that saying that carpenters use measure twice, cut once, but they just end up perpetually measuring.

AI assessment note: “one of them, so I just did it on camera, is asserting to friends”

Q Yeah, you and me both. Um, you mentioned Pixel, so Pixel became WeCommerce, but like, you sold it, and then after that, how did you feel? And tell me the story about reacquiring it, and then walk me through going public.

A Yeah, so, um, I was on a walk in 2013 with a good friend of mine, and I was just saying, you know, I'm overwhelmed. Every day I wake up, and there's, you know, a million people grabbing me, and I, I just have endless problems. And he stops me on the path, and he just says, look, why don't you just sell a business? And so, I said, well, I've never done that. I don't know how that works. He ended up introducing me to an investment banker, And we ended up selling, um, the business to a family office in Vancouver and the family office in Vancouver, uh, took over the board. I kept 20%. And so I kind of stayed involved in the business. I helped them choose a new CEO who I really, really love this guy named Ben Moore and Ben did an incredible job. He just kept growing the business and the family office decided that they wanted to get out of owning private businesses. They kind of signal that to us. And so Uh, two years ago, we said, look, we love the business. We, you know, we obviously know it intimately. We would love to buy it back. And so we ended up buying it back from them. Um, and we started a new holding company called WeCommerce. So WeCommerce owned Pixel Union, and then we started making more acquisitions there. And the thesis was very simple. You know, we're not macro traders, but we knew that, uh, e-commerce was on an upward trend that was just very obvious. To us that it …

AI assessment note: “we said, look, we love the business... We would love to buy it back.”

Q Um, coming out of the rabbit hole a little bit here, and going back to sort of wealth, let's talk, how do you raise kids with wealth?

A Yeah, I think it's a really difficult thing, because they talk about this idea of immigrants to wealth, so I'm, you know, I, um, my extended family, um, my mom came from a well-to-do, uh, family on the west side of Vancouver. Vancouver is very affluent, and she came from a wealthy family, but the money was kind of gone by the time she was an adult, and so she, uh, Liked that world. She knew all of the players. She liked living on in a nice neighborhood, but she wasn't rich anymore. And I think that was really difficult. So what my parents ended up doing is even though my dad was a struggling architect and had a very small income, they bought the worst house on just the outside catchment area for the best public school in the city. So I ended up going to school with all these really, really rich kids, and, um, that That made me, I was like, I was a secret, I, I knew how to speak the language, but I was kind of an immigrant. I didn't have any of the things they had, and I wanted all those things, and then I fought for it, so I, you know, I, I went out, started all these businesses, uh, was hyper-focused on getting all the things I thought I wanted that all the rich kids had. I got those things. My kids will be those rich kids, and I don't know how to create in them that same kind of feeling of, um, Of drive or hustle yet. And I think at the end of the day, um, you know, as we tal…

AI assessment note: “the idea of making your kids work to achieve things”

Q Yeah, they're, they're really turned on. What do you do for your, your public investing? Do you, are you okay disclosing that? Like, what do you, What do you do outside of sort of the companies that you own in the public markets?

A Yeah, I mean, I, it's really funny. So, um, so I started Metalab. I took the profits from Metalab, and I started a variety of other businesses. And one in particular worked really well, which was Pixel Union, which was a partner to Shopify. I met Toby and Harley from Shopify. That now today is a public company. But a lot of the businesses I started failed. So I mentioned Flow, lost ten million bucks. Um, I started an online DJ school, a cat furniture business, a skincare company, all sorts of silly stuff, kind of sticking forks and electrical sockets and learning. Um, and then, uh, what ended up happening was in 2013, I sold my first business. Um, I was kind of burnt out. And a friend of mine just said, Hey, look, why don't you just sell one, take some money off the table, uh, de-risk a little bit. And so I did that. And suddenly I had, you know, over ten million dollars sitting in my bank account. I had businesses that were spitting out profits. And I started reading about Warren Buffett. I didn't really know anything about him. I just knew that he was a smart investor. And I'd always thought stocks were boring. You know, it's gambling. Didn't understand it. And when I read about Buffett, Everything just kind of clicked for me. The idea that you could be one of the wealthiest, most successful people in the world, but you could delegate out everything to CEOs and managers, uh, …

AI assessment note: “I started considering, you know, really acquiring businesses and investing in the public market.”

Q But how do you think of like spoiling them and the opportunities available to them and sort of like the type of person they become when they're surrounded by so much?

A Well, I think my greatest hope is just that they, when I was growing up, I didn't have a love of learning. So when I went to school, I wasn't inspired by the teachers. They, they, they all seemed kind of miserable, right? They all seemed a little depressed, and they didn't really explain to me why I'd want to use the tools they were teaching me. Um, and so I really hated school. I kind of stopped reading in high school, and Only by chance, I kind of started, when I started getting into business, I picked up a book again, because I was so desperate, I was so clueless about what I was doing, that I started reading. And thank God I did, because I ended up having a love of learning, and realizing I could read about anything I wanted, and going down that path. And I was always very, while I started my business at, you know, 19, um, I, I do have a regret of not getting to go to, uh, university, and having that kind of knowledge vacation that so many people Got to have. And so I hope that my kids can love learning in elementary and high school, and maybe go to college and have those four or five carefree years learning whatever they want. And then if they want to be, you know, a Greek scholar or something, they can do it because they don't have this subsistence farmer whipping on their back where they're, they're thinking they have to make money. Um, but it's, it's, it's a fascinating…

AI assessment note: “they can do it because they don't have this subsistence farmer whipping on their back”

Q me behind the scenes. Like, I remember at the final stage, you had two very different candidates, uh, in mind for the business. You, you ended up selecting the, the person that you have now, but like, what questions did you ask? How did you determine which CEO you were going to go with? Because that was a fork in the road, right? You had two very different final candidates.

A So I had a really, I've gotten really fortunate to get to know Charlie Munger over the last couple of years. And I was on the phone with him, uh, about a year ago, and I, I kind of told him a few stories about different experiences we'd had with CEOs. So in one example, a CEO came to me and he said, hey, I want to spend a million dollars, and I want to try building this new revenue line. And I said, I think that's a bad idea for all the following reasons. And I, I'd had that experience. I'd actually tried to build a similar business. And he said, no, I I really think this is important. I really want to try it. And in that moment, I had a choice. I can either be the dictator and say, no, I have majority control of the business. Uh, sorry. You're not doing that. He resents me. Maybe he builds a narrative that he didn't hit his growth target because I disallowed him from doing it. And so I actually had to let him go and light a million dollars on fire to go do that experiment. Now, fortunately it was a large business and that didn't really matter in the grand scheme. And he built scar tissue. That was awesome, but I've learned, and so I relayed that story to Munger, and he said, I've never ever had any luck changing anyone's mind in my whole life. People come to their own conclusions, and they have to go and have those experiences, and I've found that to be true, and so when I'm t…

AI assessment note: “when I'm talking to a CEO candidate, the number one thing I'm looking for”

Q What's been the toughest negotiation you've ever been part of?

A Well, The, the hard ones are not always the ones that take a while. I always think that, um, when there's good people at the table who are just emotional, that's fine, right? What's hard is when you have people who are acting in bad faith and manipulating. And so, you know, we've had negotiations where, um, there was a, you know, it seemed like a good deal, but it was with bad people. And it was more just dealing with bad people, dealing with the cognitive dissonance of somebody lying to you or something. I find those very uncomfortable. But for example, I just did a deal with a founder and he was very emotional and he snapped at me a couple of times. Like there was moments that were quite strained. Um, and people on my team said, we shouldn't do this deal. And I said, no, no, no, he's a nice guy, but this is his baby. And he doesn't want to sell his baby to someone who's going to mistreat it. And you know what? We should have followed through on our word. You know, we had said we'd deliver him something by this date. It took us a little longer. He got angry. That's okay. That's good faith. Um, what's hard is when somebody is manipulating you, acting in bad faith, obscuring numbers, going legal, you know, all that kind of stuff. And I've had enough experiences with that stuff that, you know, Munger has that great saying when you Uh, when you find yourself over a stinky sewer, j…

AI assessment note: “What's hard is when you have people who are acting in bad faith and manipulating.”