00:00:00
That is the stupidest thing you can ever do. What is the most important thing for someone who's just trying to grow their money?
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So, I learned this from my mother and I actually built a whole company around it. Yeah, there she is. So,
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I haven't seen that picture in a while.
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Damn. I mean, what she did, the performance was extraordinary. And with that, she put my brother and I through
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college. She took care of her family when they fell on hard times. When I saw
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the results, I said, "That's it. That's how I'm going to invest for the rest of my life." So, talk me through this. I want as much
00:00:40
detail as possible. Okay, let's start with this. Kevin Oly aka Mr. Wonderful, is the
00:00:45
self-made millionaire and investor who's built and sold companies for billions. There's a lot of people don't
00:00:50
like me for my blindness. I don't care because there's people that don't think ahead and find themselves mired in debt
00:00:56
but then pissing away money spending $28 for lunch. I mean that's just stupid.
00:01:01
What about a house? The mistake that people make is they buy too much house. Never let the mortgage
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and the cost of maintaining the house be more than 1/3 of your income. Now how much does the person that you
00:01:12
fall in love with have an impact? You kidding? It's everything. And I did some research and most marriages can
00:01:18
survive infidelity. They can't survive financial stress. But if everybody that's listening does this one thing,
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you will have over a million and a half dollars. Kevin, can anybody be an entrepreneur? No. Only a third of people can become
00:01:31
successful entrepreneurs because there's a couple of things that you must achieve to be successful. First,
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[Music] Kevin, I'm going to ask you to do something which is quite difficult because I'd find it quite hard if
00:01:43
someone asked me to do this. But before we get into the detail, can you give me a 30,000 foot view on your
00:01:52
entrepreneurship and investing career? Just the just the three bullet points that are most pertinent before we dig into those specifics.
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Every entrepreneur I've ever talked to um that finds himself where I am today has has a defining moment where they are
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pushed into this path. It's it's something they can remember and they remember it in perpetuity. And I'll
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remember my moment getting fired in an ice cream store. That simple. First day
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on the job, asked to serve and scoop ice cream. And um I did that all day. But
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when people sample ice cream, they get a taster and they take their gum out and they throw it on the floor. Somebody's
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got to scrape the gum off the floor at the end of the day. I only took that job because I was very interested in a girl
00:02:35
who's working in the shoe store and I figured I could, you know, hang out with her afterwards. And uh I saw her waiting for
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me and the woman who owned the store said, "You've got a scrape to come off the floor." And I didn't want her to see
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me on my knees with a scraper. Bad for my brand. I was in high school. And uh
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she said, "No, no, you have to do it." And I said, "You know, you hired me as a scooper, not a scraper." She said, "Um,
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how about you're fired?" And I didn't know what that meant. And it was the defining moment for me because I
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realized there's two kinds of people in the world. There's people that own the store and there's people that scrape the
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[ __ ] off the floor and you have to decide who you are. And I'm not saying being an employee is a bad thing. Not at
00:03:19
all. But for me, um, it it hit me. It just hit me. Kevin, there's a present for you. We
00:03:26
give a present to all of our guests. Really? Underneath that black Can I open it? You can open it. I just take this off.
00:03:32
Oh, look at that. You've heard the story. That is exactly how it looked except it
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was black gum and that was exactly the tile. It was just like that Mexican tile. That's really freaking me out.
00:03:46
So you were asked to scrape gum off a Mexican tile just like that. And in order to do that, you got to get down on your knees and do
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it. And um I just couldn't do it. And I and I and then you know the rest of the
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story. I eventually could afford to bulldoze the whole mall if I went to. when we went back to meet her and thank
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her for her pushing you off the treadmill into that direction and she
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was gone and there was a bodega there instead. You said there that you realize that there's kind of two people in life.
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There's the entrepreneurs, the person that owns the ice cream parlor and there's the person that scrapes it off the floor. Yeah.
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That provoked a question in me which is do you think anybody can own the ice cream parlor? I do you think anybody can be an entrepreneur?
00:04:26
No. I've tried to teach it. Um and I mentor out it all the time to the CEOs
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that I work with. Uh there are some attributes of people that can do this. A
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certain element of risk tolerance, uh a certain element of focus.
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And then the other element which I've really started to believe in of late is karma, luck. You need to be lucky. You
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need It's like Napoleon was once asked, "Who are your favorite generals?" and he said, "My favorite generals are lucky
00:04:59
generals. My lucky generals." And I'm starting to think that in life, um, particular entrepreneurship, you look at
00:05:06
the difference, the path of success and failure, and I nobody's exposed to it more than I am in terms of how many
00:05:12
investments I may have made over the decades.
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I think if you want a percentage, you know, I teach these cohorts at Harvard.
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I'm an executive fellow there. I'm very proud of that work. You get a class of 120 people in a room,
00:05:30
twothirds of them want to become consultants. That's why they're there. And lead a life of mediocrity and never
00:05:37
make a decision of consequence in their lives. And after 24 months, they are tainted with that disease forever.
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They'll always be good consultants, but they will never achieve greatness in any way. In life, only a third of people can
00:05:50
become successful entrepreneurs. That's it. And the rest can be very successful employees. And there's nothing wrong with that. You can have a fantastic
00:05:56
life. You won't be shackled to the, you know, the the ups and downs of
00:06:02
entrepreneurship, the challenge of it, how hard it is, but you'll never be free. And that's the debate. That's it
00:06:09
right there. Do you want personal freedom? It's the only path. That's it. It's the only path. It is the only path. I mean, you can't I
00:06:16
I've always said it's not about the pursuit of money. It's not about the pursuit of greed. You will fail if you do that. It's it's the undying love of
00:06:22
freedom. So that one-third of people that you say will be successful, they'll pursue their
00:06:28
their dreams, they'll build a business, whatever it might be. Yeah. Do you think it's possible for us in this conversation to increase the
00:06:35
probability of their success? You said you don't think you can you can make someone an entrepreneur, but is there things you can do to
00:06:42
increase their probability of success? Yes, there are a couple of things that you must achieve to be successful. And
00:06:48
let me explain what they would be. And this is not some academic study. This is real data from real situations of real
00:06:56
CEOs I've worked with and learned from because I used to work for guys like Steve Jobs and others in my career.
00:07:04
Let me um let me give you one that I think is very important. We'll start with this one. I used to work for Steve
00:07:10
Jobs in the early 90s making all of his educational software. I mean it was just
00:07:15
Oh, there they are. My goodness, you guys do good research. Those are the kind of things that we did for him, you
00:07:21
know. Yeah. Yeah. All of that. It's hard to find. Those are senior realms. But, you
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know, in developing that software, we used to go quarterly. Um Heidi Rosen
00:07:34
was there in the room. She's still a a very famous venture capitalist. And I would say, Steve, you know,
00:07:43
we got to do some market research on Oregon Trail. I mean, it's a huge title. It's in 110,000 school buildings. We got
00:07:49
to do an update. It's going to cost you 12 15 million bucks. We want to find out what the students want. We want to find
00:07:54
out what the teachers want. Want to find out what the parents want. Steve would say, by the way, not a nice guy. Not a
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nice guy. He would say to a room full of people, Kevin, I don't give a [ __ ] what
00:08:08
the students want or the parents think or anybody thinks. It's what I want. They don't know what they want till I
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tell them what they want. And I said, "Steve, you sound like such an [ __ ] You have no idea what that
00:08:22
sounds like." He says, "No, no, that's how it is, Kevin. Now, are you making money with me? Are we Are you Am I your
00:08:28
fastest growing OEM? Have we not been wildly successful and continue to be?" I
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said, "Yes, Steve, that's true." He said, "Then [ __ ] shut up and do what I say." That's how he would talk to you.
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100%. And here's what I learned.
00:08:47
Look how wildly successful he was. But here's why.
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There's a concept that he understood that very few people focused on back then in the early 90s of signal to noise
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ratio. What was so brilliant about Jobs
00:09:06
that I tell every CEO now and I don't care if you're an S&P 500 CEO or you're just starting a business.
00:09:12
His vision of Signal was the top three to five things you have to get done in the next 18 hours. Not your vision for
00:09:19
the business next week or next month or next year. Just the next 18 hours you're
00:09:24
awake. You're going to get those three things or those five things done that you have deemed critical for your
00:09:31
mission. They must get done today. Anything that stops you from doing that is the noise.
00:09:38
So this signal to noise ratio to be successful for Steve Jobs was 8020. 80
00:09:44
signal, 20 noise. And I knew that to be true with him because he would email me
00:09:49
at 2:30 in the morning expect me to get back to him because back then we didn't have texts. It was all email.
00:09:56
He was right. He was right. And the only other person that I've seen that has a higher ratio than that
00:10:03
is Elon Musk. He has no noise. He does not deal with noise. He is 100% signal.
00:10:08
24 seconds of, you know, every cycle. I mean, the guy is just 60 seconds of
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every minute, 60 minutes of every hour. The 18 hours he's awake, it's all
00:10:19
signal. And look what he's achieved. Now, it's very awkward for him socially.
00:10:24
Because noise is dealing with your family sometimes or noise is saying hi to a friend or noise is is is listening
00:10:31
to some doom scrolling on you know some social media app that just takes your mind or maybe playing your guitar but
00:10:38
very few people on earth and if you go back in history you're going to find out that the geniuses of their time we're
00:10:45
close to 100% signal and so I can really sort of summarize this for my audience signal is the most
00:10:51
urgent thing you should be focused on right now and noise is bas basically everything. No. The goals you set for that the the weight the that you were awake if you're
00:10:58
going to be awake 18 hours. Yeah. And you've determined that there's three things you have to get done. You're
00:11:03
going to get those done. No matter what it takes, you're going to get those done. And you're not going to let anything distract you from those three
00:11:09
to five things. If you're a CEO and you achieve that and you can get those done
00:11:14
with 80% of your time based on that, you're extraordinarily successful. You
00:11:20
are absolutely and you're Steve Jobs or you're an Elon Musk or you're somebody if you if you even talk to Bezos I don't
00:11:27
know him personally but I've heard in many interviews like I knew you know I've I've met Elon just a few times I
00:11:33
spent a lot of time with Jobs but they say the same thing Bezos will not make a
00:11:39
decision after 1:00 in the afternoon because he felt that the noise was too high the signal for him was in the
00:11:45
morning hours it this is a crucial aspect of success that that I now understand to be the
00:11:53
ability of of of it defines an entrepreneur. A man or woman that
00:11:58
understands a signal noise ratio that focuses on that, they'll be successful.
00:12:04
The ones that can't that get down to a 50/50 signal noise, they'll fail. It's that simple. And it's a very simple
00:12:10
concept. You know, you made one of your things today this interview. You're going to
00:12:16
get it done. You're going to all these people around and everything else. This is one of the three to five things you're going to get done. I have five
00:12:21
things today. I'm going to get them done. I'll do the same thing tomorrow and the day after that. And you have to
00:12:27
decide how much signal you need to get those three to five things done. And for
00:12:34
jobs it was 80%. What's the opposite of that? Sometimes looking at the opposite helps us to
00:12:40
understand something. So the opposite of having you know I hire managers and CEOs that have a
00:12:45
balance in life between the discipline the binary aspect of business which is I make money I lose money and the chaos of
00:12:52
the arts or some other pursuit dance painting photography collecting crystals
00:12:57
whatever it is that that they that they have that balance you you need you need
00:13:02
the ying and yang in your mind to make correct decisions. It doesn't mean it takes you off the signal. The signal is
00:13:08
you got to get stuff done. But how do you live your life? And so I spend a fair amount of my time practicing my
00:13:15
guitar or working with my photography or my my watch, you know, up tonight, very
00:13:21
late tonight, I will meet a master watch maker and we will deal with the design of a new piece unique he's going to make
00:13:27
for me and I'm going to love that moment. That's going to be something completely different to what I did all day long. And we'll start our journey
00:13:32
together over the next two years to make this piece unique. And that's something that just takes me away from all the
00:13:38
[ __ ] I'm going to be dealing with today. And I also tell successful entrepreneurs in the same day you will get a and this
00:13:46
happened to me today. It happens every day. You're going to get a call from some aspect of of your what you you call
00:13:53
it your empire, whatever you want where your this company's going bankrupt. It's just going to go bankrupt and you're going to lose
00:13:59
I don't know 10 million bucks on that deal. And that's a piece of information you're
00:14:05
dealing with. Half an hour later, this actually happened to me today.
00:14:11
One of my companies going public. It's a 450x for me.
00:14:16
The stock will get unlocked sometime in the fall. But
00:14:22
how can how do you how do you fit that together? Utter catastrophe,
00:14:27
destruction, woe, loss, utter euphoria. half an hour later. That's
00:14:36
that's what my life is like. That's entrepreneurship obviously on a different scale for most founders.
00:14:41
Well, the founders deal with the same thing. They get disastrous news. They lose an account like a Costco or something if it's consumer goods or
00:14:47
service and they get something else. The the the eb and flow is is the management
00:14:53
of expectations and your ability emotionally to navigate those ups and
00:14:58
downs is part of what entrepreneurship is. But it goes back to the signal. It
00:15:03
can't take you off the signal. This is what Steve taught me. Yes, it's great news. Yes, it's bad news. But focus on
00:15:11
the signal, O Liy. Focus on the signal. That's it. Where does this analogy come from of
00:15:16
signal and noise? It was his genius of of of making it so simple. What are the three things you
00:15:22
got to get done today? What are they? What are they? How do you know what they are?
00:15:28
They will make themselves apparent. They will definitely make themselves apparent. They will make themselves apparent and you will realize I have to
00:15:36
deal with that. You may have them set up from the day before. I actually still use sticky notes on my mirror. Got to
00:15:41
get these three things done and or five whatever it is. But then something else will hit. That's the skill of
00:15:48
understanding is that noise hitting me or is that signal? There is the essence
00:15:54
of the great entrepreneur, the great manager, the great leader. Is that signal or is that noise? What is it?
00:16:01
That's what you're looking for. You're hiring somebody that can actually distinguish signal and noise because it
00:16:07
could be noise. It could be irrelevant. You have to determine only you makes
00:16:12
that decision. That's the key right there. This is what I teach
00:16:19
entrepreneurs and engineers and this is the most important thing. It's that judgment of prioritization but then
00:16:26
the sort of force of execution to get it done. Can you interpret signal and noise and
00:16:31
can you keep the noise away from from the things you got to get done? That's one. The other which is something that
00:16:39
I've learned over the last 5 years and this uh you might find this interesting but most of my particularly
00:16:46
the naent startups and you're you're involved in the same format I am. You're dragon stand in England. I'm a shark
00:16:51
tank in the US. I you know you put up 500,000 or a million bucks into somebody's business
00:16:58
eight out of 10 is going to fail maybe six out of 10 depend you just don't know and I love it when people tell me oh I I
00:17:07
know when I make an investment it's going to work
00:17:12
so full of [ __ ] they have I'm talking about startups they have no idea what's
00:17:18
going to work and you won't know for 5 to seven years which is why you need divers diversification in the portfolio.
00:17:23
But I would go as far to say now, you know, when I meet um venture capital firms and
00:17:31
young analysts that work there and they think they're so damn smart. They've never operated a business, they know
00:17:37
nothing. They have no idea what they're doing. They're going to hope that one or two of their portfolio uh is going to
00:17:42
work out in seven years and pay for all the other mistakes. But the serendipitous nature of success in
00:17:48
entrepreneurship is brutal. It is. So that does that mean though that it's I
00:17:53
guess I was going to say does that not mean that it's highly luck? Investing is highly like entrepreneurship must be
00:17:59
well I said karma you know I call it karma but you need executional skills but here's another skill that I think we
00:18:05
should talk about um when you look at at least my experience
00:18:11
over decades of making these uh naent these early stage investments
00:18:17
these around investments remarkably and I've done them in all 11 sectors of the the economy the majority of the
00:18:24
successes five to seven years later are companies run by women. Why is that? Why
00:18:29
is that? And so they don't know each other. They're in different sectors. They never
00:18:36
meet each other. Why is that? And I have come to the conclusion um
00:18:42
two things. They set goals that they can achieve so that in the early stage of their businesses, they put growth rate
00:18:48
targets like 15 16% versus men at 30%. Very often men hit their targets 65% of
00:18:54
the time. at least my portfolio and women 90 [ __ ] plus percent of the time and that keeps the the the team very
00:19:01
sticky. They want to be part of a so they don't have a lot of attrition when they're small. They don't lose the head of financing and marketing that that
00:19:07
works but they have another attribute and this was pointed out to me by one of my female CEOs a few years ago to me.
00:19:13
She said, you know, Kevin, you talk too much. You talk too much. Um you talk two/3s, you listen one third. Why don't
00:19:19
you try reversing the ratio? She said that to you. Yeah. Yeah. [Laughter]
00:19:27
I'm very thankful actually because I tried it and um she's right. If you
00:19:33
don't talk and you listen, you become far more effective as a manager or an investor in my case by getting
00:19:38
information that you weren't going to get by talking. And so if you go into a room,
00:19:44
I just did this a few minutes ago before I came here. I'm involved in a litigation and we decided to attempt
00:19:50
settlement talks which is why I was a few minutes late and um
00:19:56
you know we knew we were going in there to settle and it it's long protruded you know long it's a long long long
00:20:05
uh litigation and I remembered her as we sat at the table like this there were other people
00:20:11
in the room but the two uh you know were across from each other. I just looked at
00:20:18
him. I understand for a long time,
00:20:23
a long time. And it gets uncomfortable and no one else is talking,
00:20:31
you know, just looking. And um
00:20:37
maybe after 90 seconds, he blurted out something he shouldn't have said.
00:20:43
And I knew exactly what the price was right there. That was the end of it.
00:20:49
You learned that as a podcaster. You learned that there's actually something going on in the silence.
00:20:55
There is something going on in silence. And it's it's it's the number that he was going to settle at.
00:21:01
He showed his hand. So, we saved ourselves two hours. You know, it's a it's an attribute that many people can't do because they can't stand
00:21:07
the social uncomfort of it. I have no problem with it. I could sit here and look at you for 10 minutes. it wouldn't
00:21:12
matter to me. And I've actually found it to be a very useful piece of information. It's not just a negotiating, but to listen to employees,
00:21:19
listen to investors, listen to financeers, listen to alternative ideas to yours
00:21:25
and become more powerful from it. You're in the very business of people selling to you and pitching to you. We
00:21:30
both sit on a similar show where people come in and pitch to us. You're seeing at times 10 to 12 pitches a day. So
00:21:37
you've developed this muscle over the last couple of decades now almost this
00:21:42
instinctive spidey sense of when an entrepreneur will be successful at least in the context of securing investment.
00:21:49
What have you come to learn about the the attributes of the ones that are successful? Is there is there anything one can take from that
00:21:56
in the moment when that entrepreneur comes out onto the carpet in the context of Shark Tank or Dragon's Den even
00:22:03
they need the setup shot of the product with the entrepreneur and they have a in our case a steady cam or a jib that
00:22:09
comes down and shoots it. So the the stage director, Eric, uh is his name. I've worked with
00:22:15
him for years. Says to the entrepreneurs I've never met, usually it's a team or
00:22:21
it's a family or it's whatever. Three or four, two people, whatever. Hold.
00:22:27
Hold. Don't speak. Hold. Hold. Don't mind the camera coming into your face.
00:22:33
Hold. Hold. Maybe for two minutes.
00:22:39
And I'm right there in front of them. I'm 12 feet from them. And I just look at them. Not smiling, not blinking, not
00:22:45
frowning, just looking at them. And before they say a single word, I know if they're winners or losers. Just
00:22:53
like that. And why is that? Why is that?
00:22:59
When? And I'm right probably 99% of the time. Maybe I get it wrong one out of a
00:23:05
hundred. I doubt it though. You walk in a room, even though you've
00:23:10
practiced, you know, you in the context of of Shark Tank, 20 plus cameras, a
00:23:17
billion plus dollars in in the five chairs there. You've been practicing for months your pitch, but it wasn't the
00:23:25
real deal. Here you are, cameras are rolling, tape is running, you know,
00:23:30
you've only got so many minutes. This is your moment. And you're on
00:23:36
national television. 100 plus million people will see you in syndication. It's all in your mind. It's all in your mind.
00:23:42
It's going through your head. Can you project
00:23:48
who you are with your eyes and the way you're standing? Can you project your confidence? Are you looking at the
00:23:54
ground? Are you looking away from me because you can't stand me looking at you directly without saying anything to
00:24:00
you? Or do you push back? Or did you say, "I'm gonna I'm gonna stake my aura.
00:24:05
I'm gonna stake my ground here. I'm gonna show you I'm ready."
00:24:10
You see what I'm getting at? Yeah. And I can feel it. I can see that they're ready to do battle. They're
00:24:16
ready to answer. They're ready to present. They're ready. Ready. Ready. Ready. Or they're not. And I've taken
00:24:23
that out of the Shark Tank. I see that every day in life. I see it. So you have to learn how to project yourself in
00:24:31
front of your peers or who's who you want to you want to lead or teach or if
00:24:37
you're a general or a preacher that is maybe
00:24:42
an innate something you're born with or maybe you can learn that I don't know I don't care but if you don't have it
00:24:49
you're going to fail and you're just that's before a word is spoken
00:24:54
before the first word is spoken. And so then what has to happen?
00:25:01
Then Eric says, "Go. You're on." And everybody's just sitting there looking
00:25:07
at you. Can you articulate your idea in 90 seconds or less? Can you whatever props
00:25:14
you have or whatever you're going to say, can I get the big idea right away?
00:25:21
The ones that had that aura generally get there. 30 seconds later, I get it. I
00:25:26
get what they're here for. I understand their product. Okay, that's good. Unfortunately, great ideas are a dime a
00:25:32
dozen. I mean, there's millions of them. The next phase begins. This is after 90
00:25:38
seconds. Can you explain why you're the right person to execute on this idea and
00:25:45
create a business from it? Because you know something about this space? You worked for a competitor. You've tried
00:25:51
three times before and failed. You figured out what you did wrong. What is it about you or your team that can take
00:25:56
this idea and make it happen? Now, when you
00:26:02
get those two things together, you can feel the aura of the room. The isotope is sizzling because you've derisked a
00:26:08
great idea. You got an operator in and they But then the third thing, this is the killer. This is the killer. I've
00:26:15
seen it so many times in real life and Shark Tanks real life it is. it.
00:26:21
You got to know your numbers. How big is the market? How fast is it growing? What's the gross margin? I mean, I've said this a million times to people. I
00:26:26
teach this every day. How many competitors are there? When are you going to break even? What month? If you
00:26:32
get the first two right and you don't know your numbers, you deserve to burn in hell. And I'll put you there myself. I mean, you wasted an opportunity for an
00:26:39
entrepreneur that did know their numbers that could have been in that spot that I could have invested in. You don't know your numbers. I take you out behind the
00:26:45
barn and shoot you. You should have brought somebody that understands the language of business because those three
00:26:51
together are the definition of leadership right there. I've never heard someone talk about aura
00:26:56
in entrepreneurship quite like that. And I was I was just trying to for the people listening that are either trying
00:27:03
to figure out if they have an aura or to grow that aura. What does it what does it look and feel like? Is it physically?
00:27:09
Is it shoulders back? Is it you said it's eye contact? Or is it indescribable? And do you think you
00:27:15
could take someone who doesn't have that aura in business and teach them it? Does
00:27:21
business give you that aura? I think you can teach it. I certainly try and teach it to my children. Um I
00:27:28
try and teach it to my students. And the best way to do it is to look at
00:27:36
yourself in the mirror sometime. You know, just what do you look like to yourself? You know, if you're going to
00:27:42
go make a presentation to take down a million-doll line of credit or something, you want to dress the part,
00:27:48
obviously, but you're going to walk in a room with, you know, a loan officer and maybe an assistant, maybe one other,
00:27:54
depending on the size of the deal, and they'll have never met you probably, and you're going to have to project yourself
00:28:00
in those seconds as you're walking up to shake their hands. What does that take? It takes an aura of
00:28:07
confidence. And it's in the eyes. It's in the way you're you're standing. It's in how the way you're dressed. It's it's
00:28:12
not a joke to be dressed for success, you know. It's it's um
00:28:17
it's but it's it's something about presenting yourself and keeping your eyes focused
00:28:26
on who's talking to you so that they know that you're absorbing the information, that you respect the
00:28:32
information, that you're about to get into a narrative with them of respect even though that there may be
00:28:37
disagreements. All of this is happening in the first 60 seconds. And it's
00:28:42
setting up for the rest of your life with that person. It could be who you're
00:28:47
going to marry. It could be who you're going to work with. It could be your partner in business. It could be your banker. It could be anybody. It could be a soldier that's going to give up their
00:28:54
life for you. It's sort of who are you? That's it. Just closing off on the point you made
00:29:00
about women being your most successful investments and the companies that have given you the greatest returns tend to
00:29:05
be led by women. Does that mean that you focus on hiring women into executive
00:29:10
roles? Yeah, I'm practically all women. Um, particularly Asian women. I am a uh, you
00:29:17
know, this whole thing about DEI and all this stuff. I've always had diversity because I only hire on merit. I don't
00:29:24
care if what sex you are or what you call yourself or what where you came
00:29:29
from or the color of your skin or what planet you were born on. I couldn't give a [ __ ] Can you execute?
00:29:36
And the way I hire people, and that's why I have such a diverse staff in my operating company, I don't hire you. I
00:29:43
say, "Look, you sound good, and you look great on paper, but that doesn't mean
00:29:49
anything if you can't work within the team. So, I know you want a job and you want benefits and all that stuff, but
00:29:56
I'm not going to do that. If you want to be part of my universe, you're going to work for four to six months as a
00:30:01
contractor at a much higher salary. because you're not going to get any stock options, you're not going to get
00:30:06
any uh benefits. But I just want to see what it's like for you to work with all
00:30:12
of the people that we deal with every day. All the lawyers, all the bankers, all of the, you know, the CEOs that we
00:30:19
have investments in and and your co-workers because I don't do 9 to5
00:30:25
anymore. I do projectbased work. I don't care where you live. We have people working in Dubai, Abu Dhabi, uh England.
00:30:32
I mean, everywhere. everywhere and and you know we meet we try and find an hour every week where we can see each other
00:30:38
but we're just constantly communicating using modern day tools today but
00:30:45
you know can you actually be given a mandate and execute on it that's it I
00:30:52
don't care when you do it if you have to get the financials out let's say you're running in finance you got to get them out the 15th for taxes I don't care when
00:30:59
you do it but if you miss the 15th I care so I I need to find out if those people can fit into that kind of an
00:31:05
environment. Some of them make it, some of them don't. Some sometimes we know right away after 90 days, let's hire them, bring them in the team, and you
00:31:11
know, let's give them the whole package. And sometimes after a month, we say, "No, it's not going to work. Here's like, you know, that's it." I think I
00:31:19
think more companies should do that. Actually, it's more like the Swiss apprentice system. They bring you into a
00:31:24
lot like, you know, my stepfather's Swiss. I've been going to Switzerland for 50 years. So if you're a giant
00:31:30
company like a Fiser or a Nestle, you pull them out of high school at 14. You give them a job in the afternoon. They
00:31:36
become an apprentice. They want to learn. They want to work. They want to understand what it's like and then you
00:31:42
find the the winners at while they're still in high school. Then you give them summer jobs and then you bring them into
00:31:47
the company. That's where I got the idea from. The Swiss are genius that way because you're sort of mitigating the
00:31:53
risk. I guess you're taking less of a a risk on No, but you're also finding out if their their DNA is going to fit with
00:31:59
your I mean, I want my team to make a ton of money. I I just I want them to be successful. I want every person to be
00:32:07
proud to work with the other and and just we're almost invincible. We're so damn good at what we do. You have the
00:32:13
same thing here. You you don't have people that don't work for you. Well, you get rid of them. You whack them. I'm more just formal about it. Boom. You're
00:32:20
gone. With with the investments that you've made, how many investments How many offers have you done on Shark Tank now? probably like 800
00:32:26
we know we don't even count it anymore we look at the portfolio rolling over a 5 to sevenyear period
00:32:32
a lot like a lot and and the thing is the thing what I've learned is you get a
00:32:37
you get an exit like uh base pause from five years ago or something
00:32:44
remarkable woman that was the the cat DNA thing the cat DNA thing I mean nobody saw that coming I thought the thing was a joke um
00:32:51
I was so wrong I mean that's the whole point and and She she had the highest IRA I think in the whole format's
00:32:57
history. Nobody's made her She was around for 36 months and taken out at such an extreme number in all cash that
00:33:04
there was an NDA signed between Sony and the the pharmaceutical company. I can't even tell you what it was. It was
00:33:09
extraordinary. It was extraordinary. Was it nine figures?
00:33:15
Believe me, it's a tough NDA because and I understand why they did it. They
00:33:20
didn't buy it for the cat DNA testing. They bought it for the data
00:33:27
with AI didn't really wasn't emerging then. It existed but it wasn't with the
00:33:33
data they have now. They can develop products for animals that are extraordinary in terms of feeds and
00:33:40
medicines. Yeah. And nobody had that much data on the 110 million cats in America because she got
00:33:46
it all during the pandemic. thousands and thousands and thousands of of of you
00:33:51
know it was it was never about it was it was a data company. It's like my son
00:33:57
telling me when he got his internship at Tesla, "Hey dad, it's not a car company. It's a data company."
00:34:03
Buy the stock. I said, "I'm never buying the stock. It's a joke. It's so expensive." He said, "You're an idiot. It's not a car company." So I bought the
00:34:09
stock and he was right. It became my most successful investment. I I had to keep selling it down to 5%. My cost base
00:34:16
is zero on Tesla now. [ __ ] hell. Yeah. Before it split and he worked there for 5 years.
00:34:21
One of the personas that I have that watches this show a lot are young people, not always young, but that are
00:34:28
on the sofa thinking about being an entrepreneur and they talk about it a lot. You know, they they come up to me in the street.
00:34:33
Twothirds will never do it. Twothirds will never do it. That you you might as well do it when you have less burdensome risk like a
00:34:41
mortgage in a family. You might as well do it in your 20s. You're going to fail the first time, maybe the second, maybe the third. You only need one success.
00:34:49
You I had plenty of failures and I I still have failures. I mean, it's just, you know, that one I talked about this
00:34:54
morning. It's, you know, when I I you know, I I said to the largest shareholders as was I was in the car and
00:35:00
your assistant was, you know, at looking at me in the limo. I was telling the other two shareholders, "Listen, guys,
00:35:06
it's it's a binary decision. As soon as I get out of this interview, we're going to make a decision.
00:35:11
This company's going bankrupt." Oh, on the bankrupt company. Yeah. Yeah. And so if we want to save it, everybody's going to have to pony up
00:35:18
x million. And um we're going to own the whole thing. We're just going to own it
00:35:23
all. We're going to we're just going to do a cram down round at a fraction of a cent. We're going to own the whole thing. You want to do that or you want to let it go bankrupt? You guys choose.
00:35:30
I'm onethird of it. So it's going to have to be, you know, two against one.
00:35:36
And I'll do whatever they want because that's how I am. But it's, you know, you want to get yourself in a position in
00:35:41
life. I think most CEOs understand this. You are going to have bad outcomes.
00:35:47
There are going to be bad outcomes. But never put yourself in a situation where one bad outcome defines who you are. I
00:35:54
mean, for those shareholders, they're going to be unhappy. But then I got the
00:36:00
call on the IPO. Those shareholders be very happy. They're going to make 400 400x. So it and that was one of my
00:36:07
deals. And so it's sort of like learn to live with the idea that
00:36:15
you're going to fail. You're going to lose money by taking risk.
00:36:21
Will it change relationships permanently? Maybe. But if there if you're respected and you're honest and
00:36:27
you're transparent, probably not. I think there's a lot of people don't like me for my bluntness. I don't care.
00:36:35
I think a lot of people respect me for my blindness. They may not like me and you know it's sort of um it doesn't
00:36:43
matter because the only people that really matter to me are probably my 20iest closest friends in my family.
00:36:48
Do you think if you hadn't worked with or known Steve Jobs you would be a different person? 100%. Steve changed my life. There's no
00:36:55
question. I didn't like him. But
00:37:01
I feel so bad that he he didn't have to die that way. He just wouldn't go with the modern
00:37:06
medicine at the time is my view. Guy was a freaking genius.
00:37:13
He was so smart in terms of keeping on track to get getting stuff done and look
00:37:20
what he achieved. But he was
00:37:26
difficult difficult because he wasn't always right. But he was right so much that the
00:37:33
mistakes just didn't matter. And I thought, you know, the people that
00:37:38
spent enough time with him know what I'm talking about. Um,
00:37:45
you know, it occurred to me because I know Waznjak too, not as well as Jobs, but they really needed each other. They
00:37:52
really needed each other because W understood he was he understood what the
00:38:00
let me draw an analogy here for you. I think it's a good one. take the situation going on right now
00:38:07
with Nvidia, AMD, to a certain extent Intel,
00:38:14
um maybe Broadcom, where policymakers in Washington have
00:38:19
decided that we can't sell those chips to countries like China or Russia or
00:38:25
whatever the list is of adversaries. That's bad policy.
00:38:31
And here's why. What I learned from from jobs was
00:38:39
the the computer, the chip is the queen bee. It's it's the it's the queen bee.
00:38:46
But it has no value without the honeybees, which are the programmers around it that form a community that
00:38:52
spend all of their energy writing code that works with the queen
00:38:59
bee, which is the chip that pushes out its influence. Because every coder that
00:39:05
becomes familiar with that firmware, that Bosnjak computer, writes to that
00:39:10
platform, is part of the honeybees.
00:39:16
Jobs understood that. He said, "I've got to get every honeybee writing for the Mac,
00:39:22
writing for the OS of Apple." It's the same with
00:39:29
the Nvidia chip. We need to sell it to everybody. Every
00:39:34
even adversaries because within that country of Russia or China is some
00:39:41
genius kid. You don't know who he is or she is that's going to write the next piece of firmware or advanced AI
00:39:50
from the queen bee, the chip, the American queen bee. The
00:39:56
minute you shut down a market and you don't, your adversary sends their queen
00:40:02
bee in, which is Huawei. We can't let that happen because I don't think the lawmakers understand what jobs
00:40:09
understood. You create the hive with the queen in the middle. That's the chip.
00:40:14
You convince every bee around to make the honey, which is the
00:40:20
software, and that is the AI in this in this case. You make it off that chip. And when you advance the chip, again,
00:40:26
everybody knows how to take that set and stay within the American chip that
00:40:33
you're advancing. Maybe you keep them one generation behind. Maybe maybe that's the policy.
00:40:39
But you don't ever let an adversary put their queen bee in the middle of the hive. You see what I'm saying?
00:40:45
Of course. I mean, and that is what Jobs did. That was the war between Gates and Jobs on the OS, on
00:40:51
the operating system. Yeah. I was thinking about the app store and yeah, it's the same thing. It's exactly the same thing. And so, so when I see this
00:40:57
policy now, I go out of my mind. I mean, the first
00:41:02
thing I do is get on a plane, go to Washington because AI is so important for all the investments I've made. I do
00:41:08
not want to be putting Chinese honey into my companies at all. It's that simple. So for that person that's
00:41:15
stewing over their ideas now, if they had just a couple of minutes with you
00:41:20
and they and they asked you the question, Kevin, I'm about to start this business. I'm about to go on this journey of trying to go from zero to
00:41:26
something in my life. Is there anything else that I need to know as I set upon this sort of next 10 years of my life?
00:41:33
I'm 21 years old. What what are because I think every entrepreneur has like their principles. You you talked about one which is the signal versus noise
00:41:39
thing. Are there any other foundational principles that you think are conducive with success
00:41:46
that you might have learned? Yeah, I mean I what I'm telling 20 21 year olds now is look,
00:41:53
go work for 24 months in a sector you love that you're passionate about. Even if they don't pay you, go in there and
00:42:00
be an apprentice. Um, if you're that passionate, you're going to be able to convince some manager to go work for free in there. you're just they're going
00:42:06
to recognize your passion and they're going to bring you in. Do that first.
00:42:12
Most young entrepreneurs say, "Nah, nah, I don't want to work for anybody." I said, "Yeah, you do actually. You you do want to work for somebody. You want to
00:42:18
just understand how all the cogs move. Just 24 months and after that launch.
00:42:25
The first one will probably fail. You're going to start with your parents giving you 10,000 bucks or whatever it is, friends and family. But you will have
00:42:33
the baseline knowledge of your industry. You will know who the participants are. You will understand how it works and
00:42:38
you'll have a much higher probability of success. But the key is to launch sort of in your in your mid to early 20s
00:42:46
because you need to burn a few years failing and and that that matters.
00:42:51
On the point of how to lead people, when people hear about Jobs's approach, they
00:42:57
sometimes assume that you also have to be an [ __ ] And this is the this is the conflicting thing because the world
00:43:03
has changed since Jobs was in a leadership position. Things have gone a little bit more soft shall one say.
00:43:11
Have you seen all all types of leadership win out in that regard? The direct you know signal focused kind of
00:43:17
brash approach but also the kind approach.
00:43:22
I don't think kind works. I think respect works. I I the same number of
00:43:28
[ __ ] are out there being successful now as they were back in the 90s. Um
00:43:33
it doesn't matter um whether you're an [ __ ] or whether people like you or not. I mean, people get so stuck on this
00:43:39
stuff. It it's the team you're building are not your
00:43:45
friends. They are the team you're building to execute on a mandate. Your
00:43:51
customers come first. They're more important. And then of course the employees and how are they respected or
00:43:57
not. There are people that work for me I don't like. It doesn't matter. I respect them. I respect their ability to
00:44:04
execute. And that above all is the most important thing. If you start getting into interpersonal relationships, you
00:44:10
will fail because you may have to fire that person one day. People that hire family take huge risk. Nepotism is a
00:44:18
horrible disease. It's it's uh some of the greatest uh private companies on
00:44:23
earth never let the kids run them. They just put them on the board and they hire professional management. That's how they
00:44:29
keep wealth multigenerational. Think about a tetropac for example. People may not know that name but it's a
00:44:36
massive successful company. IKEA I mean you know it's sort of you have to learn those lessons. It's it's um
00:44:44
it's about respect in both directions. It's not about likability or softness or some social
00:44:54
met metric. It it really isn't. And trying to redefine leadership that way
00:45:02
because it's on trend, it's not going to work. I started my first business at 12 years
00:45:07
old and I started more businesses at 14, 15, 16, 17, and 18. And at that time,
00:45:13
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00:45:58
That's shopify.com/bartlet. What about finding the definition of the
00:46:04
word company is group of people. So in terms of finding great people, is there anything that you can offer to
00:46:09
entrepreneurs that are listening about how you've done that and what you've learned over time, the mistakes you've made with assembling your group of
00:46:15
people. Yeah. Hiring them without testing them first. I've made that mistake. So So you now test them first.
00:46:22
Just because someone says they can execute doesn't mean they can. I mean it's of course you're in an interview.
00:46:27
They're not going to say I can't execute. You know, you're looking at their past. You're saying this looks terrific. Looks like you can fit in, but
00:46:33
it's on a piece of paper. They haven't been road tested. They haven't been put in a situation where they have to make individual decisions that that have
00:46:40
consequence. The people you want are able to make decisions that have consequence. Good, bad, good
00:46:45
consequence, bad consequence. You don't know yet. But they have to have be able to make that decision on their own
00:46:52
without calling you up because you gave them that mandate. Maybe you put a set of parameter you could spend a million
00:46:58
bucks no more without calling me. But whatever it is, I don't want to hear from them. I just want the outcome.
00:47:04
What about resilience and hard work? How much does that matter to you? Cuz I know you said they can work when you know
00:47:09
they as long as they get the job done. But are you trying to figure out if they are a bit of a psychopath in terms of
00:47:15
hard work, if they're possessed, obsessed? I don't find the ones that are psychopaths hard work are actually the most successful. It's not the case. I
00:47:23
find the ones that are eclectic people that have other pursuits that are
00:47:28
nothing to do with the business they're in that
00:47:33
do crazy stuff. You know, maybe it's riding motorcycles in the desert. I
00:47:38
don't know. You know, these are the examples I'm just using because I'm living with them. And say, "Look, I've got to go and ride a bicycle across the the desert." Okay.
00:47:46
How many days you going to be gone? I don't know. Maybe three. Okay. Is there anything that is immediate? That tells
00:47:53
me that if you look at if you look at the years outcome from that person, you're going
00:47:58
to find that they probably outperformed. You you you want you want you want the
00:48:03
eclectic ones. You want the ones that are not just robots working. It it's
00:48:10
going to be cheaper to get a robot if you want a robot. I'm going to buy those too when they come available. But I want
00:48:16
people that have creative and
00:48:21
unusual solutions that you know just think outside of the box.
00:48:28
It's it's really interesting that way. The other thing that um everybody wants to hear from you about is how to keep
00:48:34
and grow your wealth because you know making wealth. I kind of understand through the lens of entrepreneurship, take a big bet, um hopefully have an
00:48:42
exit or you know draw a dividend or make profit from a company you've started. But in terms of what you did and your
00:48:48
relationship with your money, what is the most important things for someone to understand who's just trying to grow their money?
00:48:53
Yeah. Yeah. Know I learned this from my mother and I actually built a whole indexing company around it when I was very young. I found out something uh
00:49:00
that um so she um was fiercely
00:49:05
independent. She's one of three daughters uh of Lebanese descent. Myth's father, my my father, my original
00:49:11
father, biological father was Irish. She didn't Yeah, there she is. Geette.
00:49:17
So,
00:49:43
I haven't seen that picture in a while.
00:49:49
Okay.
00:49:54
She was very independent and she never ever wanted a man to control
00:50:01
her life. So she started at an early age when she was working for her father.
00:50:08
They paid the girls. the family all worked there and she worked in the accounting department
00:50:14
and billing, but she got paid cash and so she
00:50:19
would take 20% of that cash each week and
00:50:26
she would put it into two asset classes. Stocks that paid dividends, large cap
00:50:32
stocks and telco bonds. 7-year Telco bonds paid about 6 and a
00:50:39
half to 8% back then. She bought the long bonds and she had that portfolio
00:50:44
for 55 years. Wow. Um she never spent any of the principal,
00:50:50
only the dividends and the interest. She put my brother and I through college, you know, she took care of her family
00:50:56
and her sisters when they fell on hard times. But her rule is very simple. No
00:51:02
more than 5% in any one stock or bond of the portfolio. and no more than 20% in any one sector ever. Ever. So when a
00:51:10
stock ran up past five, she'd sell it down. This is not genius. This is just diversification.
00:51:16
And when she passed and I I was the older brother and I saw the portfolio cuz the
00:51:23
lawyer said, "Listen, you got to come down here. You're the executive of Will." And I said, "Yeah, but you know, my mother was middle class."
00:51:30
He said, "No, you got to come down here." um she kept her account secret from both of her husbands. She wanted
00:51:37
her own independent money and back then you could do that and um damn I mean what that portfolio
00:51:46
did the performance was extraordinary. It was beyond any hedge fund guy or
00:51:51
anything 55 years. When I saw the results I said that's it.
00:51:57
That's how I'm going to invest for the rest of my life. Exactly the way Geette did. No more than 5%
00:52:03
in any one stock ever. No ma no matter what it is and no more than 20% in any
00:52:09
one sector with the exception of real estate which is a very large part of what I have in net worth and I it's a
00:52:17
it's a third. So that's broken the rule but there's reasons for that and I'm very happy with that portfolio. But um
00:52:24
that if she if if everybody that's listening to this does that they will
00:52:30
maintain and grow their wealth. But it's people bet. They make big bets. They just they think they're so damn right.
00:52:35
They put half their net worth into one sector or one stock and they get wiped out. That's what happens.
00:52:40
So would your mother pick the stocks herself or would she invest in an index fund or
00:52:46
she indexed? She used Okay. So you can even back then you know they didn't have ETFs but they
00:52:52
had mutual funds that said their own the only stock in this mutual fund is it
00:52:57
doesn't have any debt and it pays dividends you know whatever they were very rudimentary back then they were
00:53:03
just collections of stocks I think she had like 28 names or something like that in the
00:53:09
portfolio but if you looked at them they were really boring large cap names but they were sectorally diverse there
00:53:16
wasn't 10 sectors back then there was only there there There wasn't 11, there was 10. So, they didn't have real estate as a sector. So, but you know, I looked
00:53:23
at it saying, "Wow, at least they're really boring." You learned a lot about money from your early upbringing, right? From your that
00:53:29
early context. Yeah. Because what she said to me was, "Look,
00:53:35
you know, I I even do this today with wealthy people call me up all the time and say, "Look, um,
00:53:42
you know, they get divorced. this really this a very wealthy woman got divorced recently and she said look I you know
00:53:48
divorcing and she was a billionaire she was divorcing she was more multi-billionaire and so she said look I
00:53:54
I'm getting everybody's calling me up um to be my advisor because I'm separating
00:54:00
from my husband it's all his guys that did all the management of our family wealth would you be my adviser I said no
00:54:06
I don't do that um but you know I can I can just give you some basic advice and
00:54:12
you and hire people that stick on the mandate. And I gave her Georgette strategy, but she I I had her do
00:54:18
something else, too. I said, "Let's get a piece of paper. You're a billionaire. Let's put everything on this piece of
00:54:24
paper on the last 90 days that you've spent on whatever the hell it is. I don't care. And let's put on no
00:54:30
computer, no spreadsheet on this. Let's look at all the income that you've made off your portfolio as it stands now,
00:54:37
whether it's gold you have or land or stocks or bonds. Let's just do a a gut check on do you
00:54:46
outspend yourself. She said, "Why would I give a shit?" I said, "Wouldn't you like to know how
00:54:52
much money you're burning living your lifestyle the way you live it just out of interest? Maybe you have enough for
00:54:58
the rest of your life, but maybe you want to give some of it to your family one day or give it to charity. Wouldn't you like to know?" Because one of my
00:55:04
rules is never outspend yourself on any 30 or 60 day cycle ever. Just ever. I don't have any debt. So, so
00:55:11
I'm very careful about that. And we went through this little thing. She freaked out. She was pissing away
00:55:19
money. Just bleeding hundreds of thousands of dollars a week.
00:55:26
I mean, I don't care how rich you are, you don't want to be stupid. And I said,
00:55:31
"Does that shock you? One of two things has to happen. I mean, you're you're losing millions of dollars a quarter.
00:55:37
Like, why? Why? Like you don't you you've had
00:55:42
nobody restrict what you do with your money because you're going to have to sell stocks at some point or sell gold
00:55:48
or sell land to keep this up and are you really that happy? Like what do you
00:55:53
what's all this [ __ ] you're buying? Like what is all this crap that you don't need? It was a eye openener for her. So
00:55:59
I'm my point is most people don't do that exercise. I don't care if you're only making 56,000 a year or 68 the
00:56:04
average salary. So, are you in the camp that you shouldn't spend money on the small things like the coffee? If you don't
00:56:11
need it, you should make the coffee at home. Is that kind of I I just I can't stand it when I see kids that are making 70 grand a year
00:56:18
spending $28 for lunch. I mean, that's just stupid. It's just think about that
00:56:24
in the context of that being put into an index and making 8 to 8 to 10% a year for the next 50 years.
00:56:30
What's an index for someone that doesn't So, okay. I mean, you know, I even have it. I even built an app for this purpose
00:56:37
just so I could There's many apps out there. You don't have to use mine. Mine's called Bean Stocks, but you just
00:56:42
allocate 15% of your salary and it automatically puts it into two buckets. Some stocks and some bonds. The stocks
00:56:49
are ETFs, exchange traded funds that just track the S&P 500. Very simply, mine's a little
00:56:54
The S&P 500 is the top 500 stocks. Yeah. So, it's just, you know, people tell me, "Oh, I can beat the S&P. I can
00:56:59
pick stocks." They're so full of crap. not over the long period they can. So, it's better you might as well just own ETFs. I have a version of the S&P that I
00:57:06
designed with other people that strips out all the crappy balance sheets. But that's just me. You can just buy the index that you want. You know, the ETF
00:57:14
and then you pay low fees and then over time it appreciates and then if you buy some treasury bills or what fixed income
00:57:20
you get that you should have less of those when you're young and more of them when you're older. That's just diversification. But you you know the
00:57:28
best test I do with my kids' friends too. Go into a closet. Go into your closet and look at how much [ __ ] you
00:57:35
have you don't wear because you either bought it because you thought you were going to wear it and never wore it or
00:57:41
wore it once and you end up wearing 20% of your portfolio all of the time and 80% you you pissed away. I mean that's
00:57:49
really stupid. And so for a young person, a young woman or man, don't do
00:57:54
that. Start putting and just buy the minimum stuff. And another thing I
00:58:00
learned from my mother, this is interesting because I saw it happen at her death. She,
00:58:05
you know, would buy two Chanel jackets a year, really expensive Chanel jackets,
00:58:12
handmade Chanel jackets. I do business with Chanel because of, you know, the legacy of my mother and the whole Coco
00:58:17
Chanel thing and watches. I love those guys. And her theory was this will never get old.
00:58:26
And it never did. A classic vintage Chanel jacket from the 50s that's well-kept
00:58:31
is worth a fortune today. The classic, it still wears beautifully. They're so well made. So, she wouldn't buy crap.
00:58:38
She'd buy really good stuff, but a little just small amounts of it. And over the years, she'd built up this portfolio of amazing clothing. And when
00:58:44
she died, the women in in our family had a cat fight over her portfolio. Unbelievable.
00:58:49
Is that in part why you have so many watches? I've noticed you have a watch on either wrist right now.
00:58:55
Yeah, I'm pretty big in watches. I mean, but but watches to me, every piece I
00:59:00
have marks something in my life that was important. A deal, a child, graduation,
00:59:07
um, you know, something. Every piece. I've got a lot of watches. How many have you got? I I don't even say anymore because of
00:59:13
the insurance policy I have. I got a lot. Do you invest in You're talking about your your mother's investing strategy,
00:59:19
and one of the things you said is she invested in dividend stocks. Yes. What is a dividend stock and should I be investing in dividend stocks?
00:59:26
Yeah, I mean, you know, a company if it's profitable and it's operating, it business plan is working and it's growing market share at some point says,
00:59:33
"I'm going to distribute some of the success of our profits to our shareholders." That's a dividend. And so
00:59:38
they send that cash to you and you can either redeploy it in other ways or live off it or whatever. Many tech stocks
00:59:45
until recently did not pay dividends. But now the behemoth tech stocks do pay dividends because the demand of an aging
00:59:52
population is I need to eat and so I like to own the stock for growth but I also want to get some of the profits and
00:59:57
so dividend paying stocks uh used to be utilities uh but not so today. Every
01:00:02
every sector has dividend paying stocks. So I prefer to own dividend paying stocks div payers and then I also own
01:00:08
fixed income products. I also own crypto now and I own alternative assets like gold and watches. My watch collection's
01:00:14
actually done quite well even though there's been a correction. There's volatility, but I have some watches that have, you know, I bought for
01:00:22
200,000 that are worth over a million today. Crypto. So, are you still bullish on
01:00:28
crypto as an investment? Yeah, I am actually, but people get crypto confused with its real potential. Um,
01:00:35
uh, let's talk about digital payment systems because what's about to pass first, we're days away from this
01:00:41
happening, is the Genius Act, which is actually the Stablecoin Act. It was just passed by the Senate 48 hours ago. It's
01:00:47
going back to the House. I I actually worked on that bill two years ago. So, if that bill passes, it's really nothing
01:00:53
to do with speculating on crypto. It's a new form of payment. So, if I wanted to order a watch in uh from Simone Brit,
01:00:59
who's somebody I buy watches from. He's a master watch maker. Right now, I have to take US dollars, I've got to get
01:01:05
through a know your client um prerogative. Um I'm treated like a criminal by transferring $100,000 over.
01:01:10
Turn it into Swiss Franks. Takes about a week. I get screwed for about 200 basis points in the whole thing. If I if he
01:01:17
accepted USDC, which is actually a stable coin back with the US dollar, just went public, very successful IPO. I
01:01:23
was a shareholder in that company, too. That's one of my best IPOs in the last two years. The transaction would happen
01:01:29
in less than a second and the fees would be at hundth of what the costs are right
01:01:35
now. So it's a digital payment system. The price doesn't it's not it's no
01:01:40
speculation on it's backed by the US dollar treasury bills. So it's sort of a
01:01:46
new form of of digital payment. That's different than Bitcoin which is a
01:01:51
speculation. It's if you believe in Bitcoin, you think it's a digital gold and you live through the volatility. I
01:01:59
believe in both. I believe that that crypto will be the 12th sector of the S&P in some period of time because it
01:02:06
provides productivity to all 11 other sectors. So the way I own it is I own
01:02:12
the exchanges. My exchange in one called Wonderfy up in Canada just got acquired
01:02:17
last week or two weeks ago by Robin Hood. I'm happy because I think Vlad who runs Robin Hood's great and now he's got
01:02:24
a million plus accounts in Canada and market that he never participated in. But the point is this is never going
01:02:31
away. It's going to stay forever. So how do you participate? You can buy some Bitcoin just like you can buy gold, buy
01:02:36
it in an ETF or actually own it yourself. You can buy the exchanges. You can use um you know you can buy Circle
01:02:43
stock now it's public. You can Circle makes USDC. you can buy USDC in in an
01:02:48
account and make 4.1% interest on it right now. So, there's a lot of ways to participate, but yes, I'm here to stay,
01:02:54
but I've g I've grown up. I was around during the period where the crypto cowboys lived and and I survived that
01:03:00
all and I even testified in front of the Senate and the House and whatever else the testimonies were during the the
01:03:06
tumultuous period and most of those guys went to jail. Your portfolio in terms of Bitcoin allocation or crypto allocation, what is
01:03:12
it now? It's at about allin. Uh we we marked to market last month it was 19.1%.
01:03:18
19.1%. Yeah. We have to keep it under 20. It's a sector. So but remember in that is the cryptos itself, Bitcoin, the USDC and
01:03:26
the shares of the infrastructure companies like Circle and everything else. I've got you know it was a very
01:03:31
successful IPO. One of the first things most people do when they get a bit of money, usually from their their job, is
01:03:37
they get a mortgage on a house because we're kind of taught as we grow up that the best way to make or the the not
01:03:44
maybe the best, but the most obvious way to create wealth is to buy your first home.
01:03:50
Yeah, there's a very basic rule for that and I understand it and I did the same thing. But what I made sure again from
01:03:56
my mother was never let the mortgage and the cost of maintaining the house be
01:04:02
more than onethird of your income. Onethird of your income.
01:04:09
If it's more than onethird, you bought too much house. So it's better to buy a house that's maybe it's only going to be
01:04:14
1,900 square feet to start in a neighborhood that you may not want to stay for the rest of your life, but
01:04:20
start to acrue the benefit of real estate from that point of view. Learn how to manage it. Maybe you rent part of it out or whatever, but it can't be more
01:04:27
than a third of your income. The mistake that people made, and they're starting to suffer from it now, is when money was so cheap, mortgage mortgage rates were
01:04:33
under 4%, they were 3.2% some of them, they bought massive houses. And now
01:04:39
they're running into having to refinance those houses at much higher rates, more than 7%. And it's becoming 60, 70, 80%
01:04:46
of their income. They're screwed. They bought too much house. So, it's about making sure that you can manage that.
01:04:53
And also you want some diversification. Yes, a mortgage is okay, particular if you're having a family because you're
01:04:59
going to pay rent or you're gonna pay a mortgage, one of the two. But you want some diversification in starting to
01:05:05
build up that investment account for when you retire so that you have something to live off. If you only put
01:05:12
aside 15% if you're you're making 70,000 a year and you put 15% aside from when
01:05:17
you're 25, you'll have over a million and a half dollars if you just invested it in the stock index in the S&P 500.
01:05:24
That's what that's what history has told you. In what time frame? Your whole career. I mean, you're going to be 65, you're 25, 65. You just stick
01:05:33
with that protocol and you'll watch it grow. You'll watch it grow. You go up and down as the market goes up and down.
01:05:38
Some years it'll go flat, whatever. But it's the people that don't even think ahead and find themselves at 45 mired in
01:05:44
debt, including a mortgage. You want to get rid of your mortgage in your 40s. Most people's primary investment asset is the house they buy.
01:05:51
Is that Yes, it is. But it's also the debt they own. It's a primary asset. How much debt does it have on it? It's only the equity
01:05:57
value is the asset. So, if you're buying a house that's too big and it's you've only put down 10% and it's 90% mortgage,
01:06:05
what do you really own? you really own the 10% at whatever price it is. Sometimes
01:06:11
housing goes flat for a while. It's it's okay, but it's not okay if it's too much
01:06:18
house. If you're a 25year-old and you're on that 70k that you talked about, and your
01:06:23
objective was to make money, you don't have kids, you don't you're not in a relationship,
01:06:28
would you buy a house? No. No, I wouldn't because why do I need a house if I'm only unless I'm renting
01:06:34
as an income property? I'm buying a house because I'm getting married. I'm going to raise a family. I need a house. I mean,
01:06:39
is that the the use case for buying a house? You think? I think it is. People, but it's not. There are many people that say, "I love
01:06:45
real estate. I'm going to buy three houses. I'm going to rent them out." That's a different business. And I know people in their 20s that do that. In
01:06:50
fact, they're successful. That's all they do. And so, that their job is to find houses, buy them, fix them up, and
01:06:56
rent them. And they manage that geographically tight portfolio. It happens a lot in student housing. for
01:07:02
example, got a good friend who's involved in student housing. He's very successful. He just focuses on one aspect, buildings that rent to students
01:07:10
and he manages it and he, you know, raises a family. He's successful, but that's one thing he does. That's not the
01:07:16
same as saying, "I'm going to buy a house cuz I'm I just got married and I'm going to raise I'm going to have a child in the next 24 months." Then you should
01:07:22
have a house. But if you're you said to me, "I'm single. I want to make money." I wouldn't buy a house. That's not the number one asset class. I think I'd get
01:07:28
a diversified portfolio and just ride the pony with that for a while until I meet that special person I'm going to,
01:07:34
you know, raise a family with and then I have a little nest egg I can work with. I mean,
01:07:41
wealth creation comes down to one word, discipline.
01:07:48
That's it. The ability to look at something and say, "I'm not going to buy that. I'm going to keep that money
01:07:54
working for me." Not many people have that discipline.
01:07:59
Wealthy people have that discipline. You meet them later in life, you realize when they were young and had nothing,
01:08:07
even the ones that were employees their whole lives that are now financially free had the discipline to say no.
01:08:13
There's so much stuff you don't need. And you should never buy a watch unless you can afford it. Ever go on debt for a
01:08:19
watch because people hear this stuff say, "I'm going to buy watches like with red bands." No, you're not. That's why I
01:08:24
wear watches now that cost under $500 to show kids you want to get into herology. You don't have to spend, you know,
01:08:30
$50,000. Here's a here's a Timex for $265. It looks beautiful. Get that.
01:08:36
You said, uh, you know, don't buy the house until you meet your partner, etc. How much does the person that you fall
01:08:42
in love with have an impact on your finances, your money, your chance of success in your view? It's everything. Are you kidding? I
01:08:49
mean, it's it's everything. If you read I mean, think about this. You you need to find somebody if you're
01:08:55
an entrepreneur. So that's for the we're talking about the third now that want to go on the rocket ship ride. You better
01:09:01
find somebody that's willing to tolerate the fact that you're never home for the first 10 years. They're going to raise a
01:09:07
family by themselves because there's no balance in life. That that idea of
01:09:12
balance is complete [ __ ] I mean, it's just [ __ ] You have to work so hard to compete globally these days in
01:09:18
every sector. you're going to work your ass off and it's not going to happen over I mean Anna Sky did it in three
01:09:24
years but she had worked much harder previously it was not her first deal but she was just lucky I mean she
01:09:30
was this the cat DNA cat thing I mean she's she she but she's you know she's she's working again she's
01:09:36
back she wants to work I mean that's what happens you never stop working but the thing is
01:09:41
that partnership and this is what people don't get about marriage
01:09:48
marriage Marriage is a business. I know people go nuts when I say that, but it's a business. And the first child you're
01:09:54
going to have is money. It's going to be the first child, and it's going to sit at the table with you every day. It's
01:10:01
it's there sitting there. If you don't have money, you don't have a marriage. I mean, the reason people get married is
01:10:08
to form a form of financial stability so that they can afford a family. And you
01:10:13
have to figure out, you know, I'm I'm I've been with my wife a long time and we've been separated for
01:10:19
a couple of years, but you know, family is very important to me. So, I we got back together again. We you know, our daughter got us back together. I'm very
01:10:25
happy we did it. But it's we make financial decisions together. We
01:10:31
we always check in, you know, anything that's material,
01:10:36
you know, if we're going to do a renovation or something. And and I respect her for that. I have a lot of respect for her because she doesn't just
01:10:42
spend money. We didn't have any money when we started. We had nothing. And so that's why a great marriage can work
01:10:48
because you build it together. You really care about it. You care about your family. You also care about what you you've created in wealth. And I
01:10:53
consider my money her money. You like because she was the family that let me go and do this stuff. Now I don't have
01:10:59
the same relationship with our kids that she does because she raised them. But that's the thing you give up and you
01:11:05
have to give something up. That's it. You can be a great father, a great provider, but you're never going to have the closest that she had reading them
01:11:10
stories when they were young. I wasn't there. But, you know, the outcome has been good. I think everybody looks at
01:11:16
that and says, "All right, that's great." But my mother never believed in entitlement. And so, I don't believe in
01:11:22
it either. I'm not gifting my kids a ton of money. You know, I I want them to
01:11:27
launch, and they've done that successfully. They got to they got to work. You know, they got to do their thing. I've heard you say before that
01:11:33
the most important financial decision you'll ever make is who you'll marry. Yes. Why?
01:11:39
Because think of the geometric loss of wealth. Every time you get divorced,
01:11:46
you pay the woman that you divorced or man and you pay the government
01:11:52
a third often through capital gains and liquidation because you can't separate
01:11:57
all the assets without liquidating them sometimes. So, you've got the government sitting there. You've got the other
01:12:04
spouse sitting there. This is the stupidest thing you can ever do. It took your whole life to
01:12:09
to actually create this nest egg. Could be, you know, you're 45 or whatever. You you've got a comfortable
01:12:15
life and all of a sudden you don't like your wife or husband. Think about that for a while because you are going to
01:12:22
wipe out up to twothirds of your wealth. You better really like somebody else a
01:12:27
lot. And frankly, sometimes it's not the other person that
01:12:33
you're divorcing. It's you. You're the problem. If you're getting married for the third time, you're a guy or woman.
01:12:40
It's not them. It's you. There's something wrong with you. And you should probably not get into another economic
01:12:47
union. You should probably just date till you drop dead because it's stupid. Marriages are tough. I mean, they're
01:12:53
tough. Anybody who's been married for more than 20 years knows exactly what I'm talking about. But they have they acrew more benefit than than you know
01:13:00
anything. So if as long if you're happy 51% of the day with your wife, stay with him or her husband or wife. You that's
01:13:07
very important. How often do you think divorces are a result of money issues?
01:13:13
Well, you may be shocked at this. I wrote a book um about this and I decided
01:13:20
uh men and women of money a long time ago, 10 years plus. Right there it is. And I did some research and I I uh went
01:13:28
to meet some of the top um divorce lawyers in North America, in New York,
01:13:33
in Boston, and other cities. And I said, "Look, I I want to kind of
01:13:38
do a pie chart of reasons for divorce that seemed 50% seem to end divorce within 5 to seven years."
01:13:45
Every one of them, they didn't know each other, said, "It's not infidelity. Nothing to do with it. Most marriages
01:13:50
can u survive infidelity. they can't survive financial stress.
01:13:57
And so what happens invariably is you fall in love, but you didn't do any due diligence on that person's spending
01:14:03
habits or their financial history because La More is so wonderful in the
01:14:10
early days. You didn't do any diligence on their family or them or their brother
01:14:17
or bankruptcy in the past or whatever it is. And then you get married and you
01:14:23
know the euphoria starts to wear off and you notice that the other is outspending
01:14:28
you just buying a lot of stuff beyond your means.
01:14:35
And that starts the first friction. And then that credit card comes in with $100,000 on it at 23% interest and
01:14:43
another purse was bought or whatever the hell it is. and you're you're starting to sink
01:14:50
because you may have married somebody who can't stop spending. This is just a typical
01:14:57
there are people that can't have no discipline. They just can't. They got to have the boat. They got to have this.
01:15:03
They got to have that. And they pressure their other to say, "Look, I want to keep up with the Joneses next door, even though they may only each have a salary
01:15:09
of 100 grand each. Can't do it." And they have kids and they're trying to put them through college.
01:15:15
That's divorce. That's why almost 90% of of unions break up is is is that classic
01:15:24
financial pressure and divorce gets them out of that mess because they can no
01:15:30
longer spend on your credit card anymore. But it's a horrible way to go. So I, you know, I'm an investor in a
01:15:35
company called Hello Prenup that does divorces for does um uh prenups for women and prenups forced during the
01:15:42
euphoric period diligence. It's that simple. You're going to find
01:15:47
out if that person has a financial problem going into the marriage. They have to disclose
01:15:53
their financial background. So, you talk about these five love languages of money. The mooch, someone
01:16:00
who won't pay for anything, right? Should I date someone like that? It's a warning signal. It's a problem.
01:16:07
It's a problem. So, or they don't really want you for companionship. They just want you for financial support.
01:16:13
The spender holic. Someone who always offers to pay for everything to appear popular and successful.
01:16:18
Bad morning sign. Huge. I mean that isn't that is insecurity measurable by
01:16:25
cash outlay. The loafer. Someone who has no ambition and drive for money. A void with extreme prejudice.
01:16:33
The thief. Someone who steals. You can have no tolerance for that. And the meanie. A balanced spender who
01:16:39
lives within their means. Love that. Marry a meanie. That's it. That's That's the Those are the
01:16:45
marriages that last an entire life. That's it. That's what you're looking for. That's great advice right there.
01:16:52
Whatever the book costs, that's that's the best value right there. And then ask yourself, am I dating one of these or
01:16:58
not? You know, you know, you should talk about money on the third date. Think about a date. Think about dating. First
01:17:05
date, oh my goodness, this is a really interesting person. Um or not, then there's never a second date. second
01:17:11
date. I want to learn more. I'm really interested. You're going into a third date. There's something going on.
01:17:17
There's something going on. You both want to meet again. That's the first time you should say, "Look, I know this
01:17:23
is crazy, but we're here together a third time because something's going on
01:17:28
here, and I'm just wondering what are your long-term goals? I mean, it's not about our marriage or anything else
01:17:34
other than we're having a great time, but what are your ambitions? I'm really interested in you. I'd like to know what you think. And the maybe the woman says
01:17:41
or the guy says, "What are you checking me out?" You say, "Yeah, yeah, I'm really interested in you." It's a form
01:17:46
of finding out if the connection, you know, I I should be a marriage
01:17:51
counselor. That's what I think. I mean, it's it's really dating is is the is the
01:17:57
dance, but it should involve exploring where we're going financially.
01:18:02
For many years, you've probably seen this iPad sat in front of me. You've probably wondered what's on it. and I'm going to tell you today because they're
01:18:08
now our show sponsor thankfully. It's an app called GoodNotes and it's where I store all of my research, all of my
01:18:13
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01:18:38
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01:18:45
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goodnotes.com/doac. I've built companies from scratch and
01:19:30
backed many more. And there's a blind spot that I keep seeing in early stage founders. They spend very little time
01:19:36
thinking about HR. And it's not because they're reckless or they don't care. It's because they're obsessed with
01:19:41
building their companies, and I can't fault them for that. At that stage, you're thinking about the product. How to attract new customers, how to grow
01:19:47
your team, really, how to survive. and HR slips down the list because it doesn't feel urgent, but sooner or later
01:19:54
it is. And when things get messy, tools like our sponsor today, Just Works, go from being a nice to have to being a
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01:20:33
just.com. One of the big uh protagonists in the story of many things we've discussed,
01:20:40
money, investing, building businesses now is this thing called artificial intelligence which you mentioned earlier. Yes. It's like entered the room.
01:20:46
Yes. And it's changing lots of these equations in a really profound way. Again, for that person who is maybe at
01:20:52
the start of their career or even, you know, they're they're a lawyer right now. How are you thinking about AI? What
01:20:57
should they be thinking about? Because I don't think we've seen something quite like this. Not certainly not in my lifetime. I've not seen disruption of
01:21:03
this scale. I wasn't around for the com boom. I was too when I was 10 or something. I was eight. Yeah. So, so how should we be thinking about
01:21:09
this moment? Is it a huge opportunity for wealth creation or Yeah, it's immense. It's bigger than the internet. And I'll tell you why. I want
01:21:17
to keep it down to earth. Uh because um I'm actually using it now in use cases.
01:21:23
There's every sector of the economy, every aspect of research, every aspect of business has a huge opportunity here.
01:21:28
But let's just take use cases that you would understand, everybody listening would understand. In today's post pandemic world,
01:21:37
most businesses have developed large and small direct to consumer strategies where they try and build relationships
01:21:42
with customers and sell them product direct. Yeah, they still use retail. Say you're Nike or something. And um you you
01:21:49
were 27% uh you know direct to consumer before the pandemic. You're now 50%. And
01:21:55
direct to consumer gets you higher margins, but it also gets you data. Gets you information about the preferences of
01:22:00
your customer base. What they like, what they don't like, the flavors, and what they buy, when they buy, where they buy it, all that stuff. And it's very
01:22:06
interesting that data. And let me give you an example. Wine business. If you
01:22:12
think about the wine business, the challenge of a
01:22:17
thousand-y old business, you don't know what the weather's going to be like. you don't know what varietals to to to grow
01:22:23
because you don't know what the preference of the customer is because you're selling it through multiple tiers of distribution. During the pandemic, 43
01:22:30
states in America opened up direct to consumer sales from the wineries in the West Coast. For the first time ever, the
01:22:36
wineries found out, what people buy, where they buy it, when they buy it, what they drink, what varietals. And I'm
01:22:42
in the wine business. I sell three million bottles a year of wine. One of my companies, actually, a Shark Tank
01:22:47
company. Um, and we partner with a company called uh QVC. We sell online
01:22:52
and and so I can tell you today, this month, this week, the number one
01:22:59
varietal in Southern Florida for women ages 44 to 64 is Mosscato, a sweet wine.
01:23:06
I think it tastes like [ __ ] I don't care what I think. It's the number one wine right now. And I knew that to to
01:23:12
make that varietal available six months ago so that I would be able to ship it and put the inventory, the capex in the
01:23:20
right place at the right time to support that demand for the rest of this summer.
01:23:25
A sweet cold Mosscato wine. That means I spent a lot less money, a lot less risk.
01:23:31
I don't have any varietals they don't want this summer. I have exactly what they want. That was AI.
01:23:38
It cost me virtually nothing to get that data. Five, 10 years ago, it would have
01:23:43
cost me a million bucks to go do all the market research. I got that for $18,000.
01:23:49
So that's using an AI tool. Here's another example. So do I use that tool? 100%. And there's many tools. You don't
01:23:56
have to just use chat. There's many different competing platforms. So we use them all. We check the assumptions by
01:24:02
checking it all on all of them. See the little variances. Number two, I have to shoot an ad. I have to shoot a
01:24:08
commercial. I'm going to shoot it here in LA. I'm going to do it in a studio like this with a green screen. And um I'm going to
01:24:16
spend, you know, $250,000 for a 30, you know, 15, a 30, and a 60 out of the same
01:24:22
shoot. And I'm then going to go into post with the green screen and I'm going to spend more money in post. I'm going
01:24:28
to add whatever I need, whatever background I'm going to need. Or I could fly to Dubai
01:24:35
where they have a giant studio with a 6K digital wall
01:24:41
where AI links up your script to the background. There is no
01:24:48
post-prouction. You basically shoot the commercial in 4 hours and it's done. The
01:24:56
background's perfect. The imagery is perfect. Your script is perfect. And I
01:25:01
did that two weeks ago for the first time. I'd never seen that before. We did it for a fraction of the cost of what it
01:25:07
would have cost to do it in the old way in post-prouction. But then I'll tell you what freaked me out.
01:25:14
They reshot the commercial without me there using Kevin agent
01:25:20
an AI view. I wasn't even there. and just to show that they could produce a new commercial
01:25:27
with the same background for $9,000
01:25:33
that would have cost 400,000 from scratch. So there's going to be a lot of job disruption then because as you said
01:25:40
you don't say but on the other hand I've now got content for that particular
01:25:46
business I was shooting that you know I've got content for that particular business I was going to shoot that commercial for and I said guys
01:25:54
let's tweak it and shoot it again. He said yeah we'll do it in two seconds. We'll send you the the 15 seconds back. I said I I I don't like what I said
01:26:01
there. Can I change what I said? Yeah. Well do you want it in Spanish? You want it in Japanese? You want it in Arabic?
01:26:07
That's the power. The productivity that we're going to get, we're going to our budgets for producing content are going
01:26:13
to drop dramatically over the next and software and everything else, right? Creating everything is going to get Now, full circle to your your thing
01:26:20
about the chips that all came from Nvidia chips that not that's not from Chinese chips.
01:26:26
Whoever controls the chip and the honeybees that the honey bees are those guys are all Indians and Pakistanis.
01:26:31
They're genius mathematicians. That's the team over there running off that platform. If we had let anyways I don't
01:26:38
want to I'm just freaked out that we got to control that. We we need democracy to control that.
01:26:43
Your children, what are you saying to them though about their professional ambitions in a world where creating
01:26:49
stuff like that and you know whether it's who do you want to do your your taxes an accountant or an AI? Who do you
01:26:55
want to do your legal documents? Who do you want to do your any sort of like white collar job your make your videos
01:27:00
edit your videos? I I tell them, you know, everybody's got a lot of angst with AI. I I tell them, listen,
01:27:06
everybody chillax. It's a tool. You know, it's the same classic thing where
01:27:14
radio was going to be displaced by television. Radio's bigger than it ever has been. It it just it doesn't matter.
01:27:21
The one thing I concern myself with with AI is warfare. And I think the country
01:27:27
that has the best AI and data centers and the most advanced chip technology
01:27:32
will win the wars of the future, which will be fought by drones and robots. I know that sounds kind of crazy. No, it doesn't sound crazy. That's where
01:27:38
it's happening now. That's where it's going to go. So, so when I when I solicit the ear of a
01:27:44
senator, I try and explain to them my honeybee analogy saying this is about defense. I don't want to live under
01:27:51
authoritarian. You know, I know we debate the whole political environment these days, but I don't want to live
01:27:58
around Chinese honey. I just don't. And those are going to be the two superpowers. You both you're in one
01:28:03
vertical. Either you let the Chinese make the honey on AI or we make the
01:28:08
honey and let the Chinese buy some honey from us. I know where I want to live. I know what I want to do. And I think I
01:28:15
can convince a lot of senators the same idea because you got to understand the Wnjak jobs analogy that we that you
01:28:21
brought out earlier. That was the genius of jobs. Make the honey but know who the
01:28:27
queen bee is. The genius of jobs brings me to a question I've wanted to ask someone like you for a long long time which is do you
01:28:33
think Apple is dead? No. No you don't. No. I'll tell you why. I'll tell you why. You know it's so interesting. uh
01:28:39
people don't understand the genius of Apple because this is again came from Jobs you know he used to say to my team
01:28:47
over and over again and I mentioned it earlier they don't know what they want until I tell them
01:28:53
and I always just just as close as you and I are right now you're Steve
01:28:58
say Steve how the [ __ ] do you know that how do you
01:29:04
know that you don't know that you don't know what you don't No. He said, "Show
01:29:11
me where I'm wrong. Show me one instance of us working together. I'm wrong." I said, "It hasn't happened yet, Steve.
01:29:16
Doesn't mean it won't. Get back to work. Don't worry about it.
01:29:21
I'll worry about it. You make the software. I have the chips. Make the software. Go make the honey. I have the
01:29:29
queen bee. Don't worry about it." And that
01:29:34
is pretty interesting because you got to prove it that he was wrong. Let's take
01:29:40
let's accelerate. He's dead now. But the philosophy of Apple and I'll give you the the way you win at you look at it. I
01:29:47
can go buy a $330 laptop right here
01:29:53
with the same processing power of this $1,800 Mac laptop.
01:30:01
Why would I been spend 1,800 when I could buy this for 300? Why brand? I
01:30:08
want to be part of this universe. This honey right over here, the Apple
01:30:15
Care, the fact that the OS works on all the platforms and the messages are shown on all platforms simultaneously. All the
01:30:21
OS, all the honey, that platform is the power of brand.
01:30:28
It's I'm not leaving this universe and Apple is one of the world's largest
01:30:34
companies. And you may say, "Oh, an innovation is going to make everybody leave that platform." I don't think so.
01:30:40
They let other people sometimes bring in a new market and then they take it over. And I saw Steve do that multiple times.
01:30:47
He did it um with the phone. I was around for that. That was crazy. I mean,
01:30:54
he had the vision that we would someday run our software on the phone. I said, "You're out of your mind. The screen's
01:31:00
too small." He said, "No, you're going to go vertical. You're going to rewrite all this crap vertically."
01:31:06
I mean, I can't fault him on anything. Although I kept telling him, "You're
01:31:12
going to get it wrong one day. You're not going to be right all the time." I can't find when he wasn't right. That
01:31:17
that's that's the frustration because I teach this you know to a har bunch of really smart kids at Harvard of which by
01:31:23
the way a third are international students and they say well when did you catch him? I
01:31:31
said he didn't what was he doing was did he have a practice or or principles that allowed
01:31:37
him to see around the corner? He spent a lot of time at night um
01:31:44
you know even studying fonts and looking at art
01:31:49
and um focusing on the signal. I think his wife talked about that a lot. He I
01:31:55
mean she spent more time with him than anybody else. Although W talks about a lot because those guys spent countless hours together and
01:32:04
but but Jobs defined he would take
01:32:10
instances from nature into his head or from Japanese,
01:32:16
you know, scripture or text or imagery and redefine it into technology in a way
01:32:23
that no one else was doing. And that's the idea of the honey and the bee and the queen and all that stuff. It kind of
01:32:29
comes from his view of the world. And I don't know if you can understand this,
01:32:34
but because it was so it came from nature, it was easy for people to assimilate it. It wasn't
01:32:41
foreign. When they looked at the imagery and the design, he he tried to pull from
01:32:47
from pleasing images from nature like the fonts on the first Max. I remember
01:32:52
when we were writing the code for that saying, "Steve, this is not what people are used to seeing on a computer
01:32:59
screen." He said, "No, it isn't. That's why it's going to work." He, if you think about the very first scalable
01:33:05
fonts, I saw that first. And I said, "See, this
01:33:10
is this is almost foreign." He said, "Well, how's it make you feel?" I said, "Makes me feel pretty good. This looks like it's on a piece of paper. If you I
01:33:16
don't you weren't even born when this stuff was happening but it was it he was so far ahead
01:33:23
and this is the same way Elon is redefining whether it's you know SpaceX or whether it's what he's doing in
01:33:30
neurosurgery or Tesla or you know all of these initiatives uh you know his
01:33:36
satellite technologies they are the same those guys except you know Elon's 100%
01:33:42
signal I said that earlier they are the same and they should be their treasures, their national treasures. It doesn't
01:33:48
matter if you like them. It doesn't matter what their politics are is irrelevant the contributions they're
01:33:53
making to society and to America, frankly, and the competitive competitive nature of of of countries. That's why I
01:34:00
thought it was so important that Trump make up with Elon. The the most powerful man on earth should have a a very good
01:34:07
relationship with the most the richest man on earth because he's the largest industrialist on earth. Maybe there's like an inherent inability by way of
01:34:14
them being who you just said they are the most powerful. But they know they're smart enough to know. It's the same way I felt about
01:34:21
Jobs. I'm getting back on the plane this quarter. I know he's going to beat me up, but it doesn't matter. It It's the
01:34:28
greater good is that we get this software out there advancing ma math and reading scores. Was he happy, Steve?
01:34:35
I don't know the answer to that question. Do you think he was a happy person? I don't know. He I've never I never saw him happy. He was always barking at me.
01:34:41
I never saw him happy. I don't think I ever saw him laugh. I don't He may not have been, you know,
01:34:48
that I mean that's probably something his wife would know, but he looked like a tortured guy to me, but um
01:34:57
you know that may have been his curse. I you know some some you do you love him?
01:35:03
Yeah, I can see it in your face 100%. I saw a lot of emotion in your
01:35:09
face the first time you spoke about him and I thought that's surprising for someone that barked at you. Well, he respected me, that's for sure.
01:35:17
He wouldn't execute on my ideas. He expected me to execute on his, but he was never wrong.
01:35:23
Where did the emotions stem from? Oh, you know, it brings me back into that room with Heidi Rosen and all the
01:35:28
crazy crap. I mean, it was just nuts. And you know, the you know, I'd have to spend a lot of time. The only the only
01:35:34
meeting I really remember um the the one that's really sticks in my mind when we
01:35:40
were in Certino and we were just I think I don't know we were going after him for
01:35:45
18 million or something and Heidi was there. Who's Heidi? Heidi Rosen. Um, she's a
01:35:51
famous um, venture capitalist, but she was also kind of the muse, the person
01:35:59
that could actually deal with Jobs all day long at Apple and bring him back to
01:36:05
Earth when he was out of his mind. I'll give you an example of how that would work. And I've seen her since, you know, it's it's it's I don't even know if she
01:36:12
remembers this particular. Anyways, we leave. He's barking at me. He's and he's
01:36:17
got one of my product managers in tears because she wanted to do the market research and he said, "No way. I we're just going to do what I say." And she
01:36:23
just felt like her job was useless. And and for him it was. I mean, he just didn't give a [ __ ] what she thought.
01:36:28
Although she ran the universe of the Oregon Trail or something. It's a massive title, like a huge multi-million
01:36:34
dollar title on the Mac in every 110,000 schools in America. And he he was so pissed that you know in
01:36:42
these old buildings they have the little window where you have a little knob and it only opens up four inches so you
01:36:49
can't jump out of it in a hotel or something. So we were we had a Herz rental and we're the whole team's going
01:36:54
out. I'm going to drive the car back to San Francisco. I'm going to fly back to Boston and he he undoes the window and
01:37:01
he's got his head stuck and there's yelling at me from from
01:37:09
I'm looking up at him saying, you know, what the [ __ ] Like what? Like what what
01:37:14
more can we we you already kicked us out, you know? And then on the way, we had these old brick the earliest cell
01:37:20
phones, these brick phones. Heidi calls me, says, "Okay, he'll do it for 12
01:37:26
million." I said, "Heidi, why do we have to go through all that [ __ ] Like, why do we even have to get abused?" She
01:37:32
said, "Why is the sky blue?" you know,
01:37:37
just get back on the plane and go do it. It was a huge hit. Like it just, you know, it's a huge hit. Like it's just
01:37:43
the guy was if you looked at it like uh he he he could he could write the hit songs. That's what he did. He write the
01:37:49
hit songs. So you don't even if you hate the producer, you want the the guy that can do the hit songs, right? If you're an artist, you put up with a crazy
01:37:54
producer. Could he not have been nice? Do you think? Not in his DNA.
01:38:00
No. Do you think if he he was a nice person he wouldn't you know what he would say about that that's noise
01:38:06
he gives a [ __ ] yeah he doesn't give a [ __ ] noise being nice is noise that for him I mean we spent a lot of time talking about him
01:38:12
but I think there's a lot of lessons learned from him that I think managers today parents today certainly CEOs today
01:38:20
uh you know you're you're about this show is about CEOs um I wish every CEO had spent the time the
01:38:28
minimal time that I spent with jobs had such an impact on me. I mean, it it I I
01:38:34
I owe a lot of my success to him because I think I always think, what would Steve have done?
01:38:39
And I make decisions like that. It's amazing. The guy's still around. I bet you if you talk to, you know, any of the
01:38:45
management at Apple, they they have that ghost in those rooms for sure,
01:38:53
including the current CEO who I think was doing a phenomenal job. He he spent so many hours with Jobs. He knows
01:38:59
exactly what I'm talking about. Nobody spent more time in business than that guy for sure.
01:39:04
I asked you a second ago if Steve Jobs was happy, but are you happy? I get happier the older I get because um
01:39:12
I've I'm very comfortable. I found a place um you know uh that I'm and I this
01:39:21
may be just what aging does. I mean, it just, you know, in and when I was in my 30s, I had a lot of trauma and turmoil
01:39:28
and and just, you know, um hard time to find trying to figure out who I was. And
01:39:34
I also suffered from dyslexia, which I've come to think of as a superpower now, not an affliction, but it it was
01:39:41
kind of like it's hard to know what journey you're going to be on until you find it. And then I found it, and then I
01:39:47
started on a new journey. and and you know it's um
01:39:57
it's something where you know you ask yourself every day goes by and you know
01:40:02
this the noise and signal thing and how much of this day was I happy doing the things that I wanted to do and I am very
01:40:09
happy if if I measure it by is there anything that I spend my time
01:40:14
doing that I don't want to do today the answer is no because I don't have do and so I don't waste my time. I do, you
01:40:22
know, even coming here to spend two hours with you. When I first, you know, heard about it, I went online and said,
01:40:28
"Oh, yeah. This guy, this guy's great. I'd love to work with him." You know, that kind of thing.
01:40:33
You you allocate your time. This is this is I'm happy to do this. I want to be here. And I think, you know, we had a
01:40:38
very interesting couple hours together. But that's the definition of happiness.
01:40:44
What concerns me, and my wife often says to me, "We don't need any more money.
01:40:50
Why are why are you flying 300 hours a year on an airplane? What are you doing?"
01:40:56
I said, "I'm happy." Like, you know, I'm I'm happy doing this. I want to do this stuff. You know, I
01:41:02
sometimes I do five cities in a day. It's freaking crazy. And it's the wonderful thing about, you know, air
01:41:08
travel today. You can do that. But it's it's sport for you. It's it's it's so
01:41:14
interesting. I get so many interesting opportunities. I can't turn them down. They're just such,
01:41:19
you know. Are you driven or are you dragged? You know, you use the word trauma there. And I often ask myself that question because
01:41:24
I I came from a all-white area. I was the black kid with the strange hair and the strange family. I was insecure. And
01:41:30
I think that resulted in this this force of will to try and correct the insecurity or to prove something to
01:41:36
myself which then resulted in success. I I think there is no drag. There's only driven. I don't understand being
01:41:42
dragged. Dragged insinuates that you don't care about performance. You don't care whether you succeed or not. You're
01:41:49
just being sucked into the void of success. You might be able to say that for a rock star that gets a hit song,
01:41:55
but um most of them doesn't last. I you need massive amounts of of drive. And I
01:42:02
love the most the most exciting thing I like to do is when someone tells me
01:42:07
you can't do that like watch insurance. You will never launch a watch insurance
01:42:13
company. It you will never do that. You will never get around the compliance state by state. You will never launch in the Middle East. You'll never launch in
01:42:19
England. [ __ ] That's exactly what I did. I found the right team. I found the
01:42:24
right partners. I figured it out. I I was passionate about it. And I think I'm going to kick ass. I think I'm I think
01:42:31
in two or three years from now you won't be able to catch up with me. That's what I think. I'm 32 years old. What What is the
01:42:37
advice that you wish you got at 32 years old? Kevin, what I have learned and this is
01:42:44
something that you should really think about for yourself.
01:42:49
Your real value, your real brand are your followers. this army of people
01:42:56
that have decided to invest their time in you. You know, you've cut across a a
01:43:03
vast swath of people. So you influence
01:43:10
very successful managers, CEOs, and a lot of young entrepreneurs want to hear
01:43:16
what you have to say because they they're expecting you to deliver valuable information
01:43:22
across multiple sectors and you also have your own data, but men and women. And so
01:43:29
where do you take that? Because you know it's do you want to launch a clothing line? Do you want to sell burgers? Do
01:43:35
you want to do consulting? You know, it's it's you have all those
01:43:41
opportunities, but what fits your brand? And so, I have and you'll get to do this. You'll
01:43:48
get to do this. You'll be approached by a lot of people that want to ride that network you've built. And my advice to
01:43:55
you is because this has really worked for me. Is is this a product or service that I
01:44:02
personally would use that I would actually use?
01:44:09
Because you'll get offered a lot of money to talk about one brand or another
01:44:14
brand. They will. And you may be weak and take it. But
01:44:20
the minute anybody in your network, in your
01:44:28
community thinks you're not authentic, you're [ __ ] And you know that. Yeah.
01:44:33
And so you better be authentic. You better be transparent. You better be honest. Even when turmoil hits, whatever
01:44:39
it's going to be, I found that saved my ass so many times by just saying, "Here's what I know. Here's what
01:44:45
happened." And that actually bonds them even closer to you. And and that's
01:44:51
that's the difficulty you're going to have is how much do you want to take ne because you're going to have that
01:44:56
opportunity. But if you stay authentic and say I'm going to do I'm going to support this brand because I use it.
01:45:03
Every single brand or commission I have in supporting a business I use myself.
01:45:09
I'm a shareholder in it and I believe in it and I use the product or you know
01:45:15
whatever like the wines I make myself with my wife we drink them at our family and everybody knows that. So you
01:45:22
if it's I wouldn't drink it if it's [ __ ] wine. Yeah. So it's it's sort of like that's my advice to you because I meet a
01:45:29
lot of people but you're very rare. you what you've built maybe by
01:45:34
happen chance that it occurred. Whatever alchemy occurred, you have it now. It's
01:45:40
yours to lose. Don't [ __ ] it up.
01:45:45
No, everything you said is so true. And um obviously the things that I uh the things that we talk about in the show in
01:45:50
terms of brands that I promote, pretty much all of them I've invested my own money into. Yeah. And this is like super important. So I talked about my Whoop. Yeah.
01:45:57
Um, if you look at the investments I have and the things I talk about, there's a really clear through line through them.
01:46:02
So, there's a really clear through and it's actually reflective of just where I am in my life. There's actually a sponsor I used to have on the show that I was very big on. And I just stopped um
01:46:09
I stopped consuming the product. They offered me £6 million which is about what $8 million to
01:46:15
continue for another year and a half. And I said like it just wouldn't I'm about to basically start
01:46:20
um talking about and investing in the antithesis of what you do. Yeah. So, I had to turn down that $7
01:46:26
million, which is a lot of money for anybody. Yeah. But it's because my life shifted and I shifted in a different direction. People
01:46:33
don't see those things. They they don't see that the this foreign government comes along and offers you $4 million to
01:46:38
go and talk about their country or to go do the dario in their country. They don't see those decisions that you make.
01:46:44
But I think hopefully if you listen to me long enough, you'll see a through line between the things that are authentic to me. Yeah. And I think that so you've already
01:46:50
figured it out. And the other thing that I would do and say anybody your age and because I wish I'd done it is start
01:46:56
focusing on longevity in your 30s. Start thinking about what you eat and what you drink and how much sleep you do and how much exercise you have. You're you could
01:47:03
live to 120 years old. I mean crazy, you know, it's sort of if if you understand if you're wearing a whoop,
01:47:08
you know what I'm talking about. It's sort of I am very very uh focused on what I do and exercise and what I eat
01:47:14
and all that. Um, but uh that makes you feel healthier and more and just better
01:47:19
about the your day as you go through it. But the fact that you figured that out at your age because most people your age
01:47:25
would have taken the 7 million pounds or whatever it was, that would have been a huge mistake because now the next
01:47:31
product that you do endorse, I will know with certainty that you use it because you told me this.
01:47:37
We have a closing tradition on this podcast where the last guest leaves a question for the next guest, not knowing who they're leaving it for. And the question that was left for you, funnily
01:47:43
enough, I feel like I might have asked it, is where do you believe happiness really comes from?
01:47:55
You know, I think the answer is very simple. Consistently achieving your goals because happiness is not a
01:48:02
destination. It's a journey. That's what it is. So you have to set those goals whether
01:48:08
it's noise to signal going full circle. talked about or long-term, whatever it
01:48:14
is, it's consistently achieving those goals, you will be happy. Consistently
01:48:19
not achieving them, you'll be unhappy because it is not a destination. Happiness is not a
01:48:26
destination ever. It's a mistake that's so elusive. I mean,
01:48:34
it's just not a destination. It's a journey. That's it. This is one of the great things you've taught me today and reaffirmed for me today is this idea of
01:48:41
like signal and noise and radical prioritization because kind of dovetailing into what we were just talking about. When you have a lot of
01:48:46
opportunity, it gets even harder, I think, to know which ones should be
01:48:51
taking your 18 hours a day. This is something I struggle with. You should feel it. You know, you're you're kind of a weird dude because
01:48:57
you're like a 70-year-old man in a 30-year-old body. Like you've got you've got the intellect of of experience,
01:49:02
which most people don't have at your age. But deals There's a certain feeling that you if if
01:49:10
you should feel that it's a good deal. It should it should be in your gut. And I've learned this. There's many deals
01:49:17
that sound great that when I just do the gut check, I don't participate in. They
01:49:22
just don't give me and that came from experience. But you seem to have that in
01:49:28
some weird way to avoid that one we just talked about. That's it. It's it's it's
01:49:34
an intuitive feeling that you generally get by having a lot of winners and losers over time. But you seem to have accelerated that
01:49:40
somehow. It's an intuitive nature of where you want to get to and what it's
01:49:46
going to take to get there. And there's going to be sacrifice along the way. It's never about the money. Never. It's
01:49:54
not about the money. It's, you know, it's do I want to achieve that goal?
01:50:03
You know, I'm having a it's it's just a weird thing because I I had a similar situation just a couple of days ago,
01:50:10
you know, when somebody approached me and said, "Look, can you get behind this and and back it and I'll pay you a ton,
01:50:18
like just a crazy amount of money." And I thought, "Do I actually want to spend one hour pursuing that?"
01:50:26
And I went back and said, "Look, um, no. I I just it's just not interesting. I I
01:50:32
just I don't I can't see my I can't see myself getting involved in that narrative, which was it was a complicated situation, but
01:50:40
and then he said, "Look, how about I give you two and a half% of the company?"
01:50:46
I said, "No, I I just don't want to be associated." I you know, it's just it's the same idea.
01:50:51
It would intuitively It was noise. Yeah. And what that would do is some
01:50:58
opportunity you don't know about down the future that you you you you pursued some goal that somehow tainted your
01:51:04
brand and that opportunity never comes to you. You you're you're the you're the captain of your brand. You got to you
01:51:11
have to define yourself right through the journey. It's hard. It's really
01:51:17
hard, you know. It's it's uh it's really hard. and that and that if
01:51:23
if there's going to be a downfall for you, you will have chosen unwisely somewhere. But it better not be from
01:51:29
money. That's there should never be an amount that you would take because if
01:51:36
your gut says no, it doesn't matter what the money is. Not after what you've achieved. I mean, you don't need to buy
01:51:43
a guarantee anymore. You got it. I'm assuming you've put some away. I mean, it's very simple.
01:51:50
If you've got five million bucks in the bank, you can do whatever you want. Now,
01:51:55
I mean, it's may sound I want more, but that is enough under cat. Always have
01:52:02
always I have an account that just sits there with 5 million bucks in it in T
01:52:08
bills. I never touch it. That's my nest egg.
01:52:15
Kevin, thank you. You go. [Music]
01:52:36
[Music]