Mar 17, 2022 · 1h 2m · startup-ideas
How to Get Rich Building Boring Businesses | Codie Sanchez, Contrarian Thinking
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In this episode, hosts Sahil Bloom and Greg Isenberg interview Contrarian Thinking founder Codie Sanchez on building long-term wealth by acquiring, financing, and operating cash-flowing small businesses. The discussion also explores modern remote lifestyle optimization and evaluates user security risks in decentralized web3 ecosystems.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Greg holds 19.3% of the talking time here. How this is scored →
Greg as informed peer 3.3 Guest teaching 3.2 Guest disagreement 1.3 Greg pushing back 1.3
speaking balance: gold is Greg, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 27:22 Codie questions Ethereum's autocratic fork
Codie challenges the crypto orthodoxy by questioning the decentralization claims when a single founder like Vitalik can alter blockchain history.
Hardest push from Greg ▶ 8:32 Greg defends internet-first productivityGreg rejects the traditional geographic hub dogma, arguing directly that being internet-native provides far superior time efficiency over physical presence.
Biggest teaching moment ▶ 35:38 Codie breaks down SBA loan mechanics and cash flow underwritingCodie explains how individuals can purchase profitable cash-flowing businesses with little capital down by underwriting against business assets rather than personal wealth.
Greg holds their own ▶ 25:53 Greg explains the technical history of the DAO forkGreg demonstrates deep Web3 knowledge by walking through the exact historical mechanics of the 2016 DAO hack and the resulting Ethereum fork.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Greg as informed peer | Guest teaching | Guest disagreement | Greg pushing back | Why |
|---|---|---|---|---|---|---|
| Pre-Show Banter and Athletic Caffeine Habits | 1 | 0 | 1 | 1 | Greg and Sahil engage in casual pre-show banter about caffeine intake and sleeping habits alongside an ad read. The tone is light-hearted and conversational with zero adversarial friction. | |
| Welcoming Codie Sanchez to the Show | 3 | 2 | 2 | 1 | Greg welcomes Codie and frames her work on unsexy businesses against traditional SF venture capital paths. Codie lightly teases the tech crowd for complaining about San Francisco's decline despite voting for local policies. | |
| Internet-First Productivity vs. In-Person Serendipity | 5 | 2 | 2 | 3 | Greg shares his personal transition from Canada to San Francisco and presents his contrarian view that being internet-first and remote is far more efficient than physical presence. Sahil offers a counterbalancing view on in-person connection. | |
| Remote Lifestyle, Deep Work, and Distributed Hubs | 4 | 1 | 1 | 2 | Greg refines his position, advocating for burst-style meetups like conferences rather than full-time urban presence. Codie agrees, citing how distributed hubs like Costa Rica and splitting time enables uninterrupted deep work. | |
| Infrastructure for Remote Living and Personal Branding | 3 | 1 | 1 | 1 | The conversation shifts to Starlink infrastructure and personal routines around deep work and public branding. Codie playfully jokes about Sahil's drinking persona while Greg relates his own deep work schedule. | |
| The OpenSea Phishing Incident Explained | 2 | 1 | 1 | 1 | Sahil introduces the recent OpenSea phishing incident and sets up the technical breakdown of how the exploit unfolded. The hosts and guest explore the security vulnerabilities inherent in self-custody. | |
| Firsthand Reactions and Crypto Security Risks | 4 | 1 | 2 | 2 | Greg shares his firsthand stress during the OpenSea scare and emphasizes that crypto adoption requires reliable link safety. Codie notes that traditional banking has similar phishing problems that tech won't entirely eradicate. | |
| Social Engineering, Deep Fakes, and Web3 Vulnerabilities | 2 | 4 | 2 | 1 | Codie explains how deepfakes and spoofed accounts make social engineering dangerous across Web3. Sahil points out the critical distinction between traditional FDIC-backed fraud recovery and immutable crypto losses. | |
| Sahil's Personal NFT Scam and Blockchain Fund Recovery | 2 | 2 | 1 | 1 | Sahil shares a self-deprecating story about losing funds in a mobile spoof scam, prompting Codie to question whether cybercrime units ever recover assets. Sahil references the Bitfinex recovery. | |
| The DAO Hack, Ethereum Hard Fork, and Decentralization Philosophy | 5 | 3 | 3 | 1 | Greg demonstrates his Web3 background by explaining the 2016 DAO hack and the resulting Ethereum hard fork. Codie questions the decentralization claims if single leaders can rewrite blockchain history. | |
| Transition to Real-World Cash Flow and ATM Models | 2 | 5 | 1 | 1 | Codie transitions to real-world asset investing, recounting how she escaped Wall Street burnout by acquiring service and cash-flowing businesses like laundromats. Sahil and Greg listen and prompt her background. | |
| Understanding SBA Financing and Small Business Arbitrage | 3 | 6 | 1 | 1 | Codie explains how buying private businesses offers valuation arbitrage compared to equities and outlines how SBA loans work with low capital down. Sahil elaborates on how loan underwriting uses future cash flows. | |
| The Power of Seller Financing in Small Business Acquisitions | 3 | 6 | 1 | 1 | Codie details seller financing mechanics and acquiring equity by leveraging sweat-equity and media reach. Sahil reinforces the structural tax and return benefits of seller-financed notes. | |
| Scaling Down to Micro-Businesses and Holdco Strategy | 4 | 5 | 1 | 1 | Greg asks Codie for tactical advice on expanding his holding company Late Checkout through M&A for community businesses. Codie advises looking at unsexy professional services rather than hyped digital properties. | |
| Creator Equity: Leveraging Sponsorships for HoldCo Growth | 3 | 5 | 1 | 1 | Codie explains her creator holdco model of taking equity and warrants alongside sponsorship deals, which Sahil notes would optimize his own newsletter cash flow and tax strategy. | |
| The Hard Realities and Nightmare Deals in Acquisition | 3 | 5 | 1 | 2 | Greg and Sahil ask Codie to describe the unglamorous side and failure modes of small acquisitions. Codie shares a visceral horror story about an aborted dental manufacturer deal with $2M in misstated financials. | |
| Operating Complexity and Execution Risks | 5 | 3 | 1 | 2 | Sahil and Greg highlight the brutal operational realities and human capital friction of operating small businesses. Greg cautions buyers that entrepreneurship involves repeatedly 'getting punched in the face'. | |
| Risk Mitigation and Operator Structures | 3 | 6 | 1 | 1 | Codie outlines risk mitigation strategies, such as acquiring businesses adjacent to one's core competence and structuring deals with non-recourse debt or profit shares to avoid catastrophic personal risk. | |
| Greg's Takeaways and Peter Lynch’s Investment Principles | 5 | 2 | 1 | 1 | Greg and Sahil synthesize their primary takeaways, emphasizing grassroots deal-sourcing and Peter Lynch's philosophy of investing in everyday, understandable businesses before wrapping up. |
Statements from this episode (27)
Sahil Bloom: Founders no longer need to live in the Bay Area
“If you want to be a founder or you want to go build something, you don't have to be in the Bay area in the way that you had to, I think, 1015 years ago.”
Sanchez: Tech workers' voting records caused San Francisco's decline
“I know that if I looked up the voting record of you guys, most of the people in tech are the reason why it is where it is today.”
Isenberg: StumbleUpon CEO offered to buy startup at a party
“One of my first trips to San Francisco, you know, I was at a party and I ended up meeting the CEO of a company called stumble upon. And you know, he was like, I want to buy your company basically at the party. Like, That only happened in San Francisco at that …”
Sanchez: Default lifestyle will be living in vacation spots, commuting for work
“I think in the future we're going to we're going to live where we used to vacation and we're going to just go work where we used to live. And that will be the default mechanism.”
Bloom: Short-term rentals remain too expensive for average remote workers
“Right now, short term rental is still very expensive. It's hard to actually manage as a lifestyle for most people on most kind of living salaries and wages.”
Isenberg: OpenSea was not hacked in 2022, users were phished
“OpenSea wasn't hacked. People were being phished.”
Isenberg: Crypto won't go mainstream until people can safely click links
“And crypto is not going to be mainstream until people could click links period.”
Sanchez: Phishing scams will persist regardless of cybersecurity advances
“So like, my take is like, that will always exist no matter how intelligent the software gets. And in fact, I think it'll probably just get more and more difficult.”
Bloom: Recovered funds sent to fraudster through FBI and institutional recourse
“I I've had that happen actually. Like I I've gotten like sent a wire to someone that, you know, did a, like asked for a wire and it was the wrong wire and you get the money back and like the FBI gets involved and it's, there's like real due process around it”
Bloom: Lack of recovery recourse is decentralization's major downside
“There's actually no way to get these NFT back, NFTs back in like a traditional way, right? And so that's the challenge is like, it's not FDIC insured. It's the kind of the downside of decentralization in some context is that you are self-custodying all of this…”
Bloom: Josh Fabian's Metafy is a $100M+ business
“Josh is the founder of this really cool business medify. He's like, you know, it's a hundred million dollar plus business.”
Sanchez: Allowing hacks is better than centralized blockchain rollbacks
“I'm not sure that I would want if what I want is decentralization and not having, you know Autocratic tendencies an individual to be able to do that either. And I know there's this critique already about Ethereum and I don't know if it delved from this origina…”
Sanchez: ATM route investments break even for first three to four years
“Because how these models work is you really make no money for the first three to four years. You basically break even. And then after it, you can start to have a pretty nice little return.”
Sanchez: Small business acquisition returns remain high due to lacking standardization
“Over time, what happens is those arbitrage opportunities or the difficulty of doing something decreases, which means the return typically decreases too. And so this has happened in stocks. It's happened in real estate. It will happen in crypto, but I think we'…”
Sanchez: Business acquisition loans are underwritten against target's cash flows
“When you go and buy a business, they do it kind of the same way. They buy, you buy a business based off the future cash flow of the business or the assets of the business, not you.”
Sanchez: Bought a laundromat generating $67k cash flow for $100k
“That laundromat that I bought, the cashflow is 67,000 dollars. We bought it for a hundred K”
Sanchez: Average small business acquisition price is 2x to 3x profits
“The average price when you buy a business is two to three X profits.”
Sanchez: 60% of small businesses are sold with seller financing
“60% of small businesses are sold with seller financing.”
Sanchez: Bought 40% of $150k-profit video production company for $10k
“I bought into a video production company with 10,000 dollars that does 300,000 dollars in revenue a year and about a 150,000 dollars in profit. And I bought 40% of the business for 10,000 dollars.”
Sanchez: Austin hair salons can be acquired for $80k at 1x profit
“You buy a salon for like 80 K here in Austin that does more than 80 K in profit.”
Sanchez: Alex Hormozi sold 40% of Gym Launch for $40M-$60M
“He just sold like 40, this is public, but excuse me if I fuck up the numbers, he just sold like 40% of his company for something like either 40 or sixty million dollars to a PE firm, and it was called Gym Launch, and what it was is Education platforms to scale…”
Sanchez: Buy unsexy community businesses to avoid inflated hype valuations
“Don't just look at the sexy community businesses because those people are going to over inflate the value. And you might be buying into a hype cycle. But I would say look at a lot of like the unsexy community. What about like the dentist, the accounting firm, …”
Sanchez: Demands equity in sponsorship deals to build media holding company
“And one of the things that I'm requiring from people that we do sponsorships is one, I want to invest in like whatever it is that I'm doing. So I'm trying to get equity for every deal. I do sponsorships with if at all humanly possible so that my content creati…”
Bloom: Newsletter has roughly 72,000 subscribers as of March 2022
“I have my newsletter smaller than yours, Cody, mine goes to right now, I think like 72,000 people.”
Sanchez: Discovered $2M accounting discrepancy in Chicago dental manufacturing acquisition
“We almost bought this dental manufacturing company in Chicago... They basically were either fraudulent or their books were so horrifically trapped. That every single dollar amount that they told us was wrong to the tune of like two million dollars. And so they…”
Sanchez: The best business to acquire is adjacent to your current work
“I think the best business to buy is the adjacent business to what you already do.”
Bloom: Venture and crypto returns get squeezed by overcrowding
“This is an area that has opportunity because not many people are doing it. Thinking about it or want to spend time on it. It's like super sexy to invest in venture, growth, crypto, whatever. So returns get squeezed. Zig when other people zag and like do the th…”