I Lost $100 Million... Here's What I Learned
Summary
TLDRこの動画スクリプトは、事業を通じて失った100万ドルを振り返る内容です。クリプトcurrency、不動産、パートナーシップ、ソフトウェア開発、食品ビジネスなど、様々な分野での失敗を詳細に解説し、それらから学んだ教訓を共有しています。特に、パートナーシップの失敗やソフトウェア開発における技術者的役割の欠如、価格戦略の誤りなどが、大きな損失につながった要因を明らかにしています。これらの経験から得られた知見をもとに、将来の事業においてはどのようなリスクを避け、成功を追求するかを考えるべきです。
Takeaways
- 🚀 失敗を恐れず、挑戦する。 - 彼は自分の失敗から学び、それらを今後のビジネスに活かすための非常に価値ある経験と見なしています。
- 💡 自分の専門分野でのみ行動すること。 - 彼は自己の能力と専門知識の範囲内でのみビジネスを行うことを強く提唱しています。
- 💸 投資ではなく、本格的なビジネスでお金を稼ぐ。 - 彼は投資ではなく、本格的なビジネスを通じてお金を稼ぐことを好んでいます。
- 🏠 不動産投資は注意する。 - 彼の経験から、不動産投資には注意が必要であると述べています。
- 🤝 パートナーシップには慎重にアプローチする。 - 彼は、パートナーシップの選び方や、パートナーシップの構造に関する重要なポイントを指摘しています。
- 🔄 ビジネスの核心を強化することの重要性。 - ビジネスにおいて、基本的なものを改善することは、他のすべてよりも重要であると彼は学びました。
- 🚫 誘惑に負けず、集中力を保つ。 - 彼は、他のビジネスチャンスに誘惑されがちであることを自覚しており、集中力を保つことが重要だと述べています。
- 🧠 知識と経験を活用した意思決定の重要性。 - 彼は、ビジネスにおける意思決定には、知識と経験を活用することが不可欠であると強調しています。
- 💼 従業員やパートナーに対して適切な報酬を与えること。 - 彼は、ビジネスの成功に貢献する従業員やパートナーに対して、適切な報酬を与えることが重要であると提唱しています。
- 📈 ビジネスの成長戦略を慎重に計画する。 - 彼は、ビジネスの成長戦略を慎重に計画し、長期的な成功を目指ることが重要だと述べています。
Q & A
どのような誤った投資が脚本の作者に最も大きな損失をもたらしたか?
-最も大きな損失をもたらしたのは、cripto投資で、特にエッセントムの投資です。彼は100ドルでエッセントムを購入する予定でしたが、価格が93ドルまで下がったため、購入を中止しました。その後、エッセントムの価格は30倍にも上昇しました。
脚本の作者が実業家として学んだ教訓は何ですか?
-脚本の作者は、自分の得意なビジネス分野でお金を稼ぐことの重要性を学びました。彼は、投資ではなく、基本的なビジネス活動を通じてお金を稼ぐことを好みました。また、彼は自分の能力の範囲を超える投資を行う際には、リスクが増加することを学びました。
脚本の作者はなぜ、オハイオでの不動産投資が失敗したか?
-脚本の作者は、信頼できる情報源がなかったため、オハイオでの不動産投資が失敗しました。彼は、低廉な価格で購入された家を修復し、賃貸できると考えましたが、実際には家が電化されておらず、駐車場も破綻していたことが分かりました。さらに、その家を正しく修復するためには、予想外の費用が必要でした。
脚本の作者がパートナーシップで学んだ教訓は何ですか?
-脚本の作者は、パートナーシップで学んだ教訓は、パートナーシップを結ぶ際には、相手が持っているものを自分たちが持っていないこと、時間、資金、スキルなどであることが重要であることです。また、パートナーシップを始める際には、股权投资をすることよりも、自分が行うビジネスに核心を置くことの重要性を学びました。
脚本の作者はなぜ、自分のビジネスのエゴを押し付けないで、よりシンプルな戦略を好むようになったか?
-脚本の作者は、自分が持っているビジネスをシンプルで基本的な戦略に焦点を当てることの重要性を学びました。彼は、自分が所有し、運用するビジネスが最も成功し、最も利益を上げることができました。また、ビジネスにおいては、最小限の投資で最大の利益を得ることが重要であることを学びました。
脚本の作者が食品ビジネスに参入した理由は何でしたか?
-脚本の作者は、フィットネス業界で栄養について話しているため、食品会社を始めることで、既存のサプリメント販売の基盤を利用できると考えました。また、彼はこのビジネスを通じて、フィットネスジムの顧客に食品を販売することを目指しました。
脚本の作者が食品ビジネスで直面した課題は何でしたか?
-脚本の作者が食品ビジネスで直面した課題は、低い利益率と、ビジネスの复杂性でした。食品ビジネスは、販売価格とコストとの差が小さいため、利益率が高くありません。また、食品ビジネスでは、市場推進、販売、顧客サポート、返品などの多くの費用が必要となります。
脚本の作者がソフトウェア会社を始めた背景は何ですか?
-脚本の作者は、フィットネスジムのオーナーがリードを稼げなかった問題を解決するために、ソフトウェア会社を始めました。彼はAIの進化とメッセージングの方向性を見て、自動化されたチャットボットを作成し、低スキルの従業員と同様の仕事をすることができたと考えました。
ソフトウェアプロジェクトでの失敗から脚本の作者は何を学びましたか?
-ソフトウェアプロジェクトでの失敗から、脚本の作者は、技術的な共同創業者が重要であることを学びました。技術的な共同創業者は、開発チームをアカウンタブルにし、コードを適切にドキュメント化し、長期的なマージンを守ることができます。また、ソフトウェア開発を外部に委託する際は、プロジェクトの核心的な価値を自分で把握することが重要であることを学びました。
脚本の作者が最も後悔している投資の失敗は何ですか?
-脚本の作者が最も後悔している投資の失敗は、競合他社が提供するパートナーシップを受け入れたトップジムを奪われ、自社のサービスの価格を下げることです。彼は、他社のサービスに対抗するために、自社サービスの価格を下げ、より多くのサービスを提供することを決定しましたが、これは年商50万ドル以上の損失につながりました。
脚本の作者が得た教訓から、どのようにビジネスを改善する策を立てたか?
-脚本の作者は、得た教訓から、ビジネスを改善する策を立てました。彼は、顧客とのコミュニケーションを重視し、競合他社に代わって顧客のニーズを満たすことを重視しました。また、ビジネスの核心的な価値を外包することなく、自社のチームで維持することを選びました。さらに、価格戦略を変更する際は、顧客の反応を考慮し、よりプロアクティブな市場対応を行った方が良いと学びました。
Outlines
💸 投資の失敗とその教訓
この段落では、話者は自分が経験した投資の失敗とその教訓について語っています。彼の最初の大きな損失は暗号通貨に関連しており、エッセントムを買おうとする際にタイミングを見逃したことでした。彼はこの経験から、自分の能力圏外での投資は避け、自信があるビジネス分野での基本的なビジネス活動に集中することが重要であると学びました。また、彼は友人との投資の経験から、大規模な損失を被ることも経験しましたが、その経験から得られた教訓は、今後の投資においてより大きな成功につながったと述べています。
🏠 不動産投資の失敗とその教訓
話者は、自分の不動産投資の失敗とその教訓について語っています。彼の最初の不動産投資は、友人の提案でオハイオ州の家を購入することでした。しかし、その家は予想とは異なり、電気が引かれていなかった等诸多の問題があったため、修理費用が発生しました。この経験から、話者は「too good to be true」(あまりにも良いので真実ではない)という言葉を信じることを学び、投資には慎重になり、より自分の専門分野に近い分野での投資に重点を置くことを決めました。
🤝 パートナーシップの失敗とその教訓
この段落では、話者は自分が経験したパートナーシップの失敗とその教訓について説明しています。彼は、自分自身の能力を高めるためにパートナーシップを結んでいたが、結局それは失敗に終わりました。彼は、パートナーシップを成功させるためには、相手が持っているものを自分にはないことが重要であると学びました。また、パートナーシップを始めるとき、自分自身がビジネスを成功させることができるかどうかを確認することが重要であると述べています。
💼 ビジネスにおける基本的なことの重要性
話者は、ビジネスにおいては基本的なことが非常に重要であると語っています。彼は、自分が過去にビジネスを始めた際に、他のビジネスモデルを模倣してはいけない、そしてシンプルなビジネス原則を守ることが成功の鍵であると学びました。彼は、ビジネスにおいては継続的な改善が求められることであり、最も基本的なことを改善することで大きな成功を得ることができると強調しています。
🚀 ビジネスにおける「Push」と「Pivot」
この段落では、話者はビジネスにおいて「Push」と「Pivot」という二つの概念について説明しています。Pushは、ビジネスがうまくいかなかった時に努力して乗り越えることを指し、Pivotは、ビジネスの基本的な前提が誤っていた場合に方向転換を行うことを指します。彼は、これらの決定が非常に難しいことを学び、時には大きなリスクを冒すことが必要であると述べています。
🍲 食品ビジネスの失敗とその教訓
話者は、自分が食品ビジネスに参入してしまった結果、多くの問題に直面し、最終的には大きな損失を被ることになった経験について語っています。彼は、食品ビジネスには低利益で多くの問題が存在することを学び、将来的には別のビジネスチャンスを追求するべきであったと反省しています。また、自分自身の能力を高めるために、新しい分野に挑戦することの重要性を強調しています。
💻 ソフトウェアビジネスの失敗とその教訓
この段落では、話者は自身がソフトウェアビジネスに挑戦した際の失敗とその教訓について説明しています。彼は、技術的な知識がなかったにも関わらず、ソフトウェアビジネスに参入し、その結果、維持費用が高額になった上に、コードが記録されておらず、他の開発者が代码を理解することができなくなったことを経験しました。この経験から、技術的な共同創業者がソフトウェアビジネスにおいて非常に重要であることを学びました。
: 付加価値の提供と顧客との関係の構築
話者は、ビジネスにおいては顧客との関係を構築し、彼らのニーズに合わせた付加価値を提供することが重要であると述べています。彼は、ビジネスの成功を追求する際に、顧客からのフィードバックやニーズを無視し、競合他社に注意を集中していたことが、最終的には大きな失敗につながったと反省しています。顧客との関係を構築し、彼らのニーズを満たすことがビジネスの成功につながると強調しています。
Mindmap
Keywords
💡投資
💡リスク管理
💡パートナーシップ
💡市場動向
💡顧客とのコミュニケーション
💡ビジネスの基本
💡収益性
💡自己評価
💡戦略的リスク
💡市場調査
💡損失
Highlights
The speaker shares their experience of losing $100 million over their career and the mistakes that led to it.
The first significant loss was due to not investing in cryptocurrency when Ethereum was at $100.
The importance of staying within one's sphere of confidence and focusing on core competencies is emphasized.
The speaker highlights the dangers of FOMO (Fear of Missing Out) and how it can lead to poor investment decisions.
A real estate investment mistake is shared, where the speaker bought a house that was misrepresented and ended up losing money.
The lesson of being cautious with opportunities that seem too good to be true is discussed.
The speaker talks about the pitfalls of partnerships, especially when they are formed out of insecurity or with the wrong structure.
The importance of having a partner who brings something unique and valuable to the table is stressed.
The speaker shares a costly mistake of getting into the food business without fully understanding the industry and its margins.
The concept of 'push and pivot' is introduced, discussing the difficulty of knowing when to persevere and when to change direction in business.
A personal story of losing a significant amount of money due to a bad partnership is shared.
The speaker emphasizes the importance of not being too distant from the day-to-day operations of a business to avoid costly mistakes.
The dangers of outsourcing core business functions without having in-house technical expertise is discussed.
A multi-million dollar mistake of relying on a vendor who couldn't handle the volume of business is shared.
The speaker's biggest mistake was a pricing error, which led to a significant loss in annual profit.
The lesson of listening to customers rather than reacting to competitors is highlighted.
The importance of being proactive rather than reactive in business decisions is stressed.
Transcripts
I've lost $100 million over my career
and in this video I'm going to break
down every single one of my mistakes so
you don't have to my first big loss was
crypto and I'm going to be order these
roughly lowest to most amount of money
at the very end I'll give you the Big
Kahuna the one that I lost absolutely a
shitload on that you'll probably be able
to learn the most from in 2017 a buddy
of mine was like hey man you should buy
this stuff called ethereum it was 100
bucks I set up the account I put a
million dollars in and like right before
I'm about to click per purchase at $100
it like went down to like 93 and I was
like ah I don't know about this and so I
decided not to pull the trigger long
story short and then you know 30X from
there or whatever it was this next time
around a few years later it had been
going like this and then right here
Bitcoin was at
$60,000 ethereum was really high too I
called my buddy up not the same guy
different buddy and I was like hey man
I'm going to get it on this and he was
like I'll put a million bucks in if you
do and I was like fine so we put a
million bucks in and then lost 500
Grand in a matter of weeks but there's
two things that I think were good
reminders for me from this whole
experience the first is that me making a
million dollar bet at the time was not a
huge percentage of my income or my net
worth and I made more than that every
month anyways I didn't plan on having
this be how I made money I made money
doing stuff that are fundamental
business things and then I basically
made a bet or a gamble which
realistically it was just gambling the
second big point was that warm buff and
Charlie Monger talk about your sphere of
confidence business is very much within
that Marketing sales acquisition pricing
product those are the things I'm very
good at now outside of this is probably
real estate and crypto and a bunch of
other things that other people do and
have spent lots of time developing their
skill set those people should do those
things I have no idea and I have just
noticed the further away I get from my
core the more money I lose and the
closer I am to the core of what I'm good
at the more money I make I will give you
a a little tidbit that a a mentor gave
to me if you know how to create wealth
just create wealth don't [ __ ] with
investing if you know how to make money
and he gave that to me as advice and I
try to remember that as like what am I
good at and so I think it's important to
think about what are the themes that are
going to be around these mistakes cuz
you're hopefully not going to repeat the
mistake I'd rather you just get the
lesson without the scar right and so
number one out of my sphere of
confidence number two I latched on to
fomo I saw these people like man I would
like to make quick fast easy money too
when everyone thinks something is a good
idea it's usually a bad idea whenever
you feel that fomo I've now learned
pause so the second big mistake I had uh
was in real estate and you'll notice
there's multiple big mistakes that I
will make in real estate over my career
and hopefully I sto making them this one
was actually my first ever real estate
investment so L and I have been making a
ton of money uh in gym lunch for a few
years now I think at the time we
probably had I want to say like 20
million bucks in cash so buddy of mine's
like hey I've got this guy he sells
houses in Ohio cuz houses in Ohio are
actually really cheap when I got on the
phone with the guy and he said yeah I
buy them for 30 I fix them for 10 grand
so I have 40,000 and then I flip it to
you for 50 so I make 10 on the spread
he's like that's my business model I
just sell a lot of them I was like okay
that's cool he's like well do you want
to buy five do you want to buy 10 what
do you want to buy and this is from a
lesson that I had learned earlier on
less money I was like why don't I dip my
toe in like let's not lose a shitload of
money if this doesn't work but I said
why don't I just buy one of these houses
and see what happens it turned out that
the house was not in fact a
three-bedroom it was actually a
two-bedroom house and the third bedroom
was actually in a closet that they had
put a mattress into the house did not
actually have electricity they were
running it from the neighbor's house
illegally the driveway was so in
shambles that the people couldn't
actually Park on it so tenants couldn't
park there fixing the driveway on its
own was like 7,000 now for a house that
cost 5050 that's a huge chunk of what
you put into as an investment now
remember I'm trying to get like 6,000 a
year uh a friend of mine who is in real
estate different friend looked up the
county records or whatever and found out
that the guy who had sold it to me
actually bought the house for
$199,000 and had put no money into the
house and so his business model was buy
it for 19 flip it to 50 to people who
don't know any better that was me and
the tenant's paying $700 a month now all
right so that was what we got we were
able to rent this place for now $700 a
month doesn't cover the the driveway
that I had to repair it doesn't cover
the electricity that I had to actually
run from scratch into this thing to make
it livable and honestly really kind
tenants they were like hey you think you
know it'd be nice if we could have our
own electricity and like of course they
[ __ ] should I didn't know I I was
buying it out of state what did I have
to do because he was unlivable I had to
put him up in a hotel while we had to
basically make this place livable and so
that took like 30 days this family isn't
hotel that I'm paying for this whole
time as the landlord selling the house
with the tenant in it I think for
$20,000 because I was like just get rid
of this [ __ ] thing but the thing that
I lost Beyond just the 30 or $40 or
$50,000 I lost in the deal was the
amount of time effort and energy and
emails and phone calls that went back
and forth about this [ __ ] thing and
for context at the time I'm making
50,000 a day in profit like I like I was
like just [ __ ] get this out of my
life what a mistake so anyways I called
the guy up who sold me the house and I
was like dude like what the [ __ ] and
basically sto responding to my my
attempts to reach out to him because it
was apparent what he had done and I
basically was like I just want to let
you know I'm really grateful that you
taught me this lesson for so cheap and
he being the scumbag that he was said
you're welcome he very much was aware of
the fact that he was totally running a
scam let me walk you through some of the
lessons that I got from this so number
one is that if it's too good to be true
it usually is now he was telling me
about 25% plus cash on cash returns
right I caught a a buddy of mine who
owns a billion dollar fund and I was
like hey what do you think about this
thing he he was like this doesn't make
sense he's like cuz if he really was
doing that he should just own all the
houses like why would he why would he
sell these houses and I was like no man
you're just not a Believer too good to
be true all right usually is and the
thing is is the hard part about this one
this one's really deceptive is that if
you're in early on something sometimes
it is really good but the thing that
makes it the to be true part is that if
no one else is aware of it there's this
double-edged sword of like am I seeing
some opportunity that's going to close
in the marketplace or am I just about to
get [ __ ] robbed
blind the second thing is you'll see
this lovely recurring friend we have
here is that I saw my friend making
money and I was like oh man I should do
it and he was a business guy and I was
like oh if he's a business guy he can do
it I'm a BS guy I could do it he lost
his ass too which leaves me to number
three which is now if someone tells me
about an opportunity that they're doing
for investing which for me is now a much
longer time Ron I say how long youve
been in this deal for if someone says
they've been doing it for less than 2 or
three years I don't care point three is
that what's the hold period if I'm
hearing about something from somebody
they better be doing it for multiple
years before I'm going to even consider
it and so what I would say I do now with
these types of things is that one I'll
do it with somebody but I want to do it
with the guy so that guy who was on the
phone with me selling me the property
what I would do now is to say I'll buy a
property that you buy and if they don't
want to go on with me great then I'm not
doing a deal in the beginning I was
really greedy I was like no I don't want
anybody have the upside now I'm happy to
give Partners the upside because the
more money they make the more they want
to make it with me and we'll do it
together and I'd rather have a very sure
20% than a really risky 40 and whenever
I feel that little tickle in my stomach
or the back of my neck where I'm like
ooh I feel like I'm missing out I
literally just stop and I say wait
because every huge amount of money that
I've made has never been from any
investment it's been from me seeing an
Arbitrage opportunity in marketing and
sales and seeing that I can acquire a
customer for $10 that's worth a th000
and then saying great let's Jam as much
cash as humanely possible into that but
that takes lots of iterations to get
there and I was there every single step
of the way it doesn't just appear on
some spreadsheet showing how rich I'm
going to get so mistake number two my
little house in Ohio for $50,000 that
taught me lessons far more valuable that
have saved me way more than $50,000 over
the rest of my investing career so
$50,000 goes survey
says goodbye so my third lovely mistake
that I had was terrible Partners now I'm
going to go through a few of these um
and I'm going to ladder up to the worst
partnership I had the first Partnerships
I made I made because I was insecure I
made them because I didn't think I could
do it on my own I just partnered with
people that I thought would know more
than me just because they were there
more or less and this is not any
disrespect to those people it was my
mistake not theirs I have had nine
failed Partnerships in my entire life
before I started making money nine
different people that I was partnered
with I'm going to give you the the
nitty-gritty of every lesson I learned
from all of them so the first partner
that I ever took on was an adviser to
told me hey you should partner with this
guy to start a gym all right my very
first gym and he said he's already got a
gym in the neighborhood you want to be
in you can start with his client tell
base and just go into a bigger gym and
come together and I was like okay that
sounds good and he's like yeah you guys
both have the exact same skill set and
you have the the exact same business you
guys should just split it and then I
will take 10% for putting the deal
together so you'll be 45 he'll be 45 and
I'll be 10 for advising and putting this
whole thing together and we both said
sure now guess what the worst way to
start a business partnership is you both
have the exact same skill sets and you
both bring the exact same thing to the
table we're both bringing work and very
little Capital to the table where we
have the same business that we're trying
to do and guess what most people do when
they start a business exactly that so
lesson number one of Partnerships they
have to have something you don't so they
either have to have time you don't they
got to have money you don't or they got
to got skills you don't that's it if
they don't have one of those three
things one of you isn't needed all right
lesson number one they got to have
something don't lesson number two you
lose the most Equity day one so most
people are so anal about how they want
to sell their company for this amount of
money and blah blah blah blah they're
thinking about their Equity but day one
they Lop half off and give it to
somebody they L 2/3 off and give one/
third here and one/ third here because
they've got three buddies and they say
hey well there's three of us let's cut
the pie into thirds and we'll go into
business together doesn't work that way
because often times the economic
contribution is not Equitable if you
look at time money skill between all the
people that are going to get into
business together if you have more than
one of those and they have more than one
of those well who how much is each
person contributing now part of that
comes down to negotiation being really
honest about it but people want to avoid
these hard conversations early on CU
they're like well if hey if it works out
we make a lot of money it's not going to
matter I [ __ ] promise you the more
money you make the more it's going to
[ __ ] matter I'm not living that from
experience you lose a lot of equity day
one Equity doesn't need to be equal so
for example if you did want to bring
Partners in you could have a 955 split
just make sure that what people are
doing what they're investing in time
money and skills is appropriate for
their contribution and if they bulk at
that then thank [ __ ] God you said
that on day one so you don't have to
deal with it later now you have this
fear well what if I can't do this
business without them I promise you you
can do the business without them all
right every successful business I had
during the period after my nine filed
Partnerships I did on my own with Lila
my OG ride or die partner so I give half
no matter what that was from my first
two Partnerships that I had the second
two Partnerships that I had when I got
into business with these guys I was
going to run the business all day every
day I was going to be there I also
invested capital and I was also the one
who knew everything about Fitness and
the individuals didn't know either of
those things and weren't going to be
spending all their time in the business
like I was they didn't take a salary
because they had other income streams
they were far wealthier than and far
older than I was and I didn't and so I
had saved up about $70,000 in the first
you know 6 months or so of my business
so you're like wait a second you were
making money and the business was
growing and then you brought Partners in
damn straight I did and then I sold 2ir
of my my business for the cost it cost
me to start it not for what it was
making me every month I made 2third of
what I got paid for the entire
two-thirds of my business because I was
a [ __ ] and so not really I was in
experience that I didn't know any better
it was me paying down ignorance debt
which is why I'm making these videos for
you so you don't have to do it either
okay and if you're the one who's in the
business you should get paid as an
employee as well like there's ownership
and then there's working in the business
if you're saying Hey I want to be 50/50
in this business but I'm going to be
working in in you're not for example
which happens a lot I'm 50/50 but I need
a manager salary because this is what
this would be and that basically makes
up for the fact that you're doing the
job and taking the risk on make sure
that if you're in the business and
you're doing a job that you get paid
like you're doing a job the amount of
times I talk to entrepreneurs who like
I'm like how much you take home this
year and they're like nothing and I'm
like why they're like I'm reinvesting
everything in the business I'm like okay
not making a profit is not reinvesting
everything in the business it means that
your business sucks and it's much harder
to say that and it's wayte sex here when
you say hey I'm reinvesting all my I'm
reinvesting in growth but if you're
actually reinvesting in growth then I
would say then what's your return on
Capital and if you don't have the answer
to that question you're not [ __ ]
reinvesting in growth you're just not
making money I'm still going to come
back to Partnerships I'm staying on this
page cuz it's it's going to be a
recurring theme mistake number four
getting fancy so my first location in
Huntington Beach cost me $37,000 to open
I had duct tape sandbags from Home Depot
that I used the sandbag I couldn't
afford the nice ones like I was I had so
little money to start this thing thing
what's crazy though is that within 6
months that business was making 20
$225,000 a month right in profit it was
making good money but the thing is is
that once that business my hunting Beach
location started making money I was like
okay my next location is going to be
really sick so I went from a 5,000 ft
Warehouse that was behind an auto shop
to an anchor location in a retail Center
that was 7,000 ft so bigger more
expensive rent big storefront I spent
$250,000 to open it up I wanted to be we
got glass Lobby we like we [ __ ] you
know we did it all up it made the same
amount of money as my first location and
so the lesson for me was like I
literally just burned money so I could
say I was investing in the business but
all I did was buy [ __ ] that didn't
necessarily turn into revenue and so
that's why and this is the lesson here
so this is D or whatever we're on right
is roic I want you to write it down
that's return uninvested Capital if
you're going to spend money in your
business every expense you have on your
expense line you should be able to say
how is this making me money how am I
getting a return on this right if you
buy cost of goods you buy you buy
products for 10 bucks and you sell them
for 30 you have a return there you're
tripling your money that's a great
investment if you can get if you can go
from 10 to eight all of a sudden becomes
three and a half or whatever it is right
whatever the math is there but where you
lose is where you spend $25,000 on
something and you do make $25,000 over
the next 10 years well [ __ ] that means
you make $2,500 extra this year you're
just down 22,5 and in a small business
you should be making 3 to1 5 to1 10 to1
on the dollars you spend because you can
when you're small you can be way more
more efficient than big or organizations
can you can buy leads for a buck and
sell $500 things to one out of five
spend five bucks spend 20 bucks make 500
like you can do that flip and that's
where you can make crazy money really
quick and that's where that's the main
economic engine and so the rule is don't
be
fancy do the basics all right so I had a
really interesting uh business Mentor
who uh I called when I was considering
selling my uh selling gym lunch years
later he had been private Equity CEO and
so all he did was basically they Dro
this guy in when they buy a company and
then he would have the job of tripling
it in three years or so and he had done
it three times and so I'm on the phone
with this guy and I was like so what's
your secret man and he's like don't be
cute backyard football he's like
everybody tries to get get cute get
fancy you know when you're you're a kid
and you're like okay so we're going to
do with a double deep fake and we're
going to go AI to the right and we're
going to we're going to spin it back and
then you're going toss it back to me and
then and then Johnny's going to go to
the left and then we're going to we're
going to toss it to him and then and
then we're going to get the he's like
what happens I was like I don't know
he's like you [ __ ] fumble and you
lose the ball right and you lose the
game he's like no we play fundamentals
football he's like two fat guys in the
middle to the right he's like that's how
we play he's like don't be cute I did I
get too cute right I get fancy with my
expenditures right but I also get too
fancy in my strategy just saying like we
want to provide Superior Service very
easy to say very easy to understand and
if you do it well most people get it if
you do a good job people tell their
friends they come back like it makes
sense but really hard to do how do you
get all of your staff to smile how do
you get all of your staff to remember
people's names how do you how do you
write handwritten cards on a systematic
basis so that people see that you're
going above and beyond like how do you
do those things like that takes systems
that takes effort right but the idea of
just doing backyard football of just hey
if we treat customers well they're going
to come back if we provide a good
product they're going to come back right
we think through the details we actually
drink our own Kool-Aid we eat our own
dog food so that we know if something
comes off I could write a book on
business that if I just gave it to
people who buy companies it would take
me way less effort because I could just
write it for them but to be able to
write a book that somebody who has no
idea how to run a business and somebody
who buys companies can both get five out
of five value from takes a shitload more
work and so that's the kind of obsession
that happens with product that when you
start getting fancy you don't have time
for it a 4.4 product compared to a 4.7
product on Amazon in the same category
the 4.7 might get 10 times the sales if
you see a 4.4 and a 4.7 which one you
buying it's like it's it's obvious
you're not buying the 4.4 neither does
anyone else it's just the game of
incremental improvements on the Big
Basics that if you just get those right
nothing else matters and I got really
fancy and I got distracted from the
thing that mattered most whatever that
was me being fancy now let's go back to
Partnerships so I had two different
Partnerships um after the first four
that I talked about where uh I just was
like you know what I've got my gym
business thing going I'm going to start
doing launches too and then I'm also
going to start these agencies right and
so I'm going to get partners cuz that's
what smart people do I was still the
main economic driver in all of them and
so I was the one who was doing the sales
and doing the delivery what is the
partner doing right besides having the
idea that we should start a business
together all the parns I've had I've
learned a ton from and I I wish all of
them the best um and it was my
deficiencies it was not their fault it
was my fault like I shouldn't have made
these these mistakes which is
why I'm making these videos so that you
don't have to make them too I was the
rain maker if you're the one who brings
in the customers and makes the money you
should get a disproportionate share of
the proceeds if the business can't
function without you but it can function
without them you are needed they are not
and here's a really hard truth you might
think man I need an accountant okay cool
most businesses do in fact all
businesses do but it doesn't mean that
when I start a business I partner with
an accountant just because I need it
doesn't mean that they have to have
equity in it and so just because you can
identify a function in a business that
is required in the beginning it doesn't
mean that you have to have give Equity
there like you can hire these people you
can have vendors right you can have
other companies do this for a living and
then you just fractionalize the cost and
you pay to them and they have systems in
place and at a certain point maybe you
bring it in house maybe you don't right
but these are decisions that early on I
made mistakes for and so the partners
that I had had functions that they could
do they just weren't core to the
business does it get customers in the
door is it part of how we deliver you
acquire the customer you deliver on the
customer that's it and so if they are
not core to those things they are
probably not people that you need to
give Equity to in the beginning or at
least any meaningful share to a a
completely makes sense partnership is is
where one person handles product and is
like I will just make sure our thing's
absolutely exceptional and the other
person's like I will go tell the world
about it a phenomenal split a great
split that many people do now I'm going
to get to the bad one now because I know
you guys were waiting for it so I lost a
lot of money a lot of money a lot of
money and a lot of brain power when I
got in bed with a very bad partner so
I'm going to tell you what I did and
what I did wrong all right so this is
number five bad Partners now I had
Partners before and they were good
partners we had bad Partnerships this is
bad Partners so I want to be really
clear about the difference all right all
the partners I had before ethical fine
people nothing wrong with that we had a
bad structure and so you have the person
and you also have the structure of the
relationship that both have to be
aligned the bad Partners I'll Define as
people who have nefarious intentions who
actually want to hurt you this was
actually the last partner that I took on
so this was punishing enough that it was
quote traumatizing it permanently
changed my behavior and so I had just
sold um so I had six locations at this
time with my gyms all right I had bought
out some of my past partners which cost
me a lot of money and so I had six
locations now I shut down one because it
was too new and I decided to switch
gears because I wanted to start the
licensing business and then I sold five
now I had big pile of money this is now
like basically my egg what I have to
show for it for all this work and all
the sacrifice I've done at this point
I've got this S I was doing gym launches
at the time so this is why I made the
transition I started flying out to gyms
I started making money and I could do
like $100,000 in sales in about 3 weeks
and I would keep that cash for myself
because I had almost no cost besides my
airfare my hotel and the ads Bend which
usually for me was like 1 to three grand
so not a lot and one gym owner was like
hey you're leaving so much money on the
table red flag number one so much money
on table you can't pursue every
opportunity so it's the definition of
Entrepreneurship that you have to say no
which means there's always money you
could make you choose to leave small
amounts of money on the table so that
you can have the one pile of money that
is on the table that you're choosing to
play at get bigger he's like you're
opening these gyms and you're filling
them up to full capacity he's like you
should own them average gy owner makes
$36,000 a year for a full year of work
working 80 hours a week I was making 100
Grand in 21 days and walking away way
better business me being a [ __ ] I was
like sure this is what a [ __ ] would do
so I should do it he says how about this
I used to run this gym $4.2 million year
out of I know how to run a gym I don't
know the Marketing sales stuff you go to
the Marketing sales I'll come behind you
and I'll run the gym after you so he's
like every month you open a gym you fill
it up I'll come behind you I'll staff it
he's like every month you can open a new
gym and I was like man that means at the
end of the year I'll have 12 gyms that
means that my ego will go up and I can
tell people I have 12 gyms so I launched
his gym crushed that and so he's like
hey so now let's do this next gym as
we're about to sign the lease he says
small detail you know I had a little bit
of a bad credit situation big
misunderstanding but you're going to
have to personally guarantee the lease
sure makes sense we're Partners I'll
personally guarantee it also I mean you
just made all this money on my gym you
should front the cost for the new
location and I said of course also you
should run the whole thing and then I'll
come after you I was like okay so I'll
take the risk do all the money and do
all the work and then and then you'll
have half and he was like yeah I was
like oh steal what a great partner and
so I crushed this launch did 370 sales
in like 6 weeks like new members I put
all the cash into the account like all
this cash my big Easter egg because I
didn't understand how money worked and
so I put all the money into the new bank
account for the new nty cuz I was going
all in on this new idea and then I wake
up one morning cuz I would always check
the bank account every morning cuz it
was a habit all of a sudden it was at
zero or close to zero it was actually
just one withdrawal and it was to him
huh and he was like oh yeah I was just
taking my hat I know you're taking your
half off the top he's like I'm just
taking my half he's like I did the math
he's like this is how much my half
should be and I was like first off
you're accusing me of stealing second
off what I had a coach at the time and I
was like dude what should I do print out
the financials go line by line and show
them where all the cost were and I was
like okay so I printed all the all the
expenses took me like 3 hours itemized
everything and I was like let's go have
lunch and like let's go over this I put
the papers down and he pushed them off
the table I don't need to see that [ __ ]
and I was like oh I just got robbed he
ended up sending the money to his
girlfriend in Sweden and filing
bankruptcy so I can Su him so remember
when I said like he said oh there's this
big misund understanding early on with
the whole lease thing he had been
indicted for fraud before that I knew
about it I have my own demons of like I
[ __ ] up in the past two and I'm trying
to you know do good now and so I want to
always give people that benefit of the
doubt and I'm going to say something
that probably won't be popular I don't
do that much anymore there's just plenty
of people I can partner with that I
don't have to deal with that for here's
my little tldr lesson on this this if
someone shows you who they are believe
them the first time red flags are red
flags for a reason I'm not even going to
tell you the amount of money that I lost
because I will tell you what's more
important is that I lost all my
[Music]
money and what felt like years of work
and so from a loss perspective it was
the amount of money was one of the
smaller ones in terms of total dollar
amount that I lost but in terms of
emotional significance I went from a
multilocation gym owner to successfully
exiting my gyms to losing everything
that I had spent years building in 6
months use that lesson so you don't have
to have the scar mistake number six is
the classic example between push and
pivot all right so if you don't know
what the the push and pivot dichotomy is
for most entrepreneurs most people in
general that there are some times where
[ __ ] gets hard and you need to push
through it and there are other times
where your fundamental assumptions were
wrong and you need to Pivot you need to
change directions because the thing that
you originally thought was true is no
longer or you found out that it isn't
and so the hard part is sometimes when
you're in the thick of it you're not
sure if this is a push or this is a
pivot it's one of the hardest decisions
in entrepreneurship there are dead
bodies on either side of this road and
it's hard because you just got to use
judgment to be able to make the best
guess you can and the thing is you can
never replay the game so I graduated
three years from vanderbelt and I got a
job at a management consulting firm that
did space cyber at least the projects I
worked on was space cyber intelligence
with the military so it's a PT firm
defense Contracting that's what I worked
on sounded fancy that's why I took it
when I was there I had the desire to
learn I did learn a lot quickly in the
beginning after that period of time
which maybe took 6 to9 months I didn't
feel like I had more to learn and so I
had two options and I took neither of
them and I think that was the real
mistake I didn't push and I didn't pivot
I did
nothing I
coasted I was actually in that job a
fairly bad employee you can look at work
environment you can look at people you
work with I was a bad employee and I
would actually agree with them I didn't
get challenged in that last period and
so I just read books all day at that
point it was either go to business
school um or start something else and so
that's why I decided to start something
else if you are somewhere where you know
deep down you are you are not living up
to your potential and you are cutting
corners and you're looking at the clock
and you're trying to just like count
minutes and you're like holy [ __ ] it's
only been an hour I have seven more
hours of this [ __ ] like if you were
living like that leave whatever the
alternative is is better it was one of
the most costy mistakes I made also
because of what I started feeling about
me you know what I mean cuz I was like
am I a slacker do something just don't
do this push pivot push being go up let
me learn more give me a challenge pivot
being I'm going to change career paths I
did nothing until it was forced upon me
so that was mistake number six where I
lost a lot of time and honestly a lot of
self-confidence during that period of
time which cost me dearly
later so my seventh big mistake was
actually getting into the food business
now the food business per se is a
mistake cuz you're like what does this
have to do with me it actually has much
more to do with getting into a product
that I had low understanding of and so I
thought okay I'm in Fitness I talk about
nutrition I can start a food company
right because we have this big
distribution base of gyms they already
sell our supplements I went all over the
US tried to find co-packers who could uh
handle the volume that we could do
basically overnight in scale which means
I had to go to really big companies that
could handle that kind of volume we did
this big launch we did this big buildup
the first month sales were a little
disappointing for me so we did like
600,000 the first month now you might be
like that sounds like a lot of money but
let me walk you through the margins of
this business so $600,000 and you're
like okay where's the M mistake coming
from don't worry we'll get there the
average meal was 10 bucks so we were
selling 60,000 meals per month it's a
lot of meals right a lot of meals you
think wow this is a successful business
well sounds good right times $10 now
here's the part that no one wants to
talk to you about in the food business
my cost was $9 I had to cover every
expense that I had in the business
marketing sales payroll customer support
refunds for [ __ ] that went bad boxes
that broke all of that on this $1 I was
able to make in this business somewhere
in the neighborhood of 7% profit margins
that's because I ran this as a skeleton
business cuz I knew that it was low
margin and I already had the supplement
infrastructure for support and so that
was a little bit of a help for why I
like didn't lose my complete ass on this
here's a little fun stat for you
80% of my customer support complaints
came from this 90% of my profit every
month came from my supplements from that
line of business so you mean to tell me
I just 5x the amount of headache for an
extra this much profit just because you
don't lose money doesn't mean you didn't
lose money honestly I might have made
500 Grand on this whole thing but for
the amount of work of me building up to
a launch using some good will with my
audience to say hey use these meals I
had a whole separate website build out
one if I had just done nothing and
taking all of that effort and just put
it into the other one that was making 10
times more money could I have made 10%
more on that business to make up for
this [ __ ] yeah I could alternatively if
I had just done a different opportunity
to go pursue could I have made more
money than I did on this one and the
answer is yes and the main culprit was
that I did not know what I was getting
into I didn't talk to anybody in the
food business and say hey tell me how
you make money real talk the only guys I
did know were losing money the co-packer
that I that I did this go with was
losing money he had to keep raising funy
he was not profitable I didn't
understand what I was getting into and I
split
focus and so right now remember we said
earlier about there's money on the table
there was money on the table and there
was this tiny little pile of money and I
decided to take my off the big pile of
money and go on the small pile of money
and I lost a year of effort and buildup
and marketing and sales that I could
have just directed towards the big money
and maybe grow that by 50% here I did
all these new things had to figure out
all these new problems from ground zero
and that's one of the biggest mistakes
I've made so many times in my
entrepreneurial Journey that now I'm so
obsessed about you hear me talk about
more better more better more better
because I had to learn the hard way of
how many times I lost money splitting my
focus when I could have doubled down and
made so much more so this mistake
realistically cost me probably about10
to $25 million reason being I ended up
selling gym launch and we had a big
multiple on that and so if i' had been
able to just make two $3 million more in
profit on my main business it would have
resulted in $10 to $30 million more in
money to me that's not hypothetical
money like I did sell that company and
it was based on profit and that took
away from the profit that I would have
made
so don't do
that this is mistake number eight all
right so I'm actually going to do this
as a two-parter these are two separate
mistakes that actually stem from the
same principle so I had my lawyer
situation and I had my payroll situation
all right so I'll tell you both I wake
up one day and I look at my emails and
there's this email that says cost of
living adjustment huh I look into it and
it said you have a 0. cost of living
adjustment so I meant I had no change
and I was like I wonder if this was like
a payroll change in entity thing like
they were reorg something whatever so
gas who's one of our employees who's our
executive assistant was like hey I just
got a $6,000 raise um thanks I was like
Leela what she was like I don't know I'm
figuring out right now we had a director
of HR who lived in California and she
had asked for a raise she was denied a
raise because she didn't have enough
experience which you will soon see why
and so she took it on to herself to say
well I deserve more money because I live
in a more expensive area she then
ordered a cost of living study on my
dollar took that very expensive cost of
living study and then looked at
everyone's pay and said okay if you
living in an area where it's cheaper
we're not going to change how much you
get paid but if you in an area where it
costs more we will pay you more now
after making this decision unilaterally
the way she chooses to announce this is
just a blast email to everyone with just
the amount that they got paid more so
like if I were actually going to give
everyone a raise I want to get some
[ __ ] credit for it you want to tie it
to something that someone does so you
can reward behavior that cost increase
cost me 600,000 a year of profit for
zero additional anything by the way she
was in California and so she got one of
the largest cost of living increases
unto herself she costs me $600,000 a
Year everybody just gets erased you now
then say like just kidding she's an
idiot like what do you do right like
just kidding you're actually all not
getting paid more very tough situation
that I got put in so what we did was we
got rid of her so she went from getting
a $10,000 raise to getting a zero pay
the reason I lost money and this is my
principle I'm going to give you know
where the bodies are buried if you're
too far away from the Apartments if you
say hey what's going on and they say oh
everything's good and you don't know how
to go one layer deeper because you are
too far away it means that you don't
know where the bodies are buried I don't
need to know everything but I do need to
know what problems that every department
is struggling with just so I'm aware so
I can keep Loops like updates on what's
going on because I was so far away she
was able to carry out a cost of living
analysis and execute a companywide pay
raise all without me even knowing until
it was way too late second mess up my
CFO Suzanne came in uh to gym launch and
she said hey are you guys in a lawsuit
and I was like and I was like why do you
say that she said well you have a legal
expense that's $120,000 a month yeah
that's like you're on a full-fledged
like multi-million doll lawsuit that's
going on with like litigation
arbitration all this [ __ ] and so she's
like that's how much that cost I was
like oh I just delegated compliance to
my team so then
I clicked down a level and I was like
hey what are what are we doing that's
causing all these lawyer bills they're
like oh well we do a uh we do a
bi-weekly meeting with the entire legal
team it's $150 an hour lawyers two 1our
meetings a week and you're like well
that doesn't that just wait and then
what they're reviewing is all the work
that their smaller attorneys that were
getting built at 200 to 500 an hour are
reviewing every piece of licensed
marketing that we made and that we gave
to our lenses and so we were creating
tons of marketing hundreds of ads every
single month we're creating tons of
trainings hourlong trainings two hourong
trainings so if I did a 1-hour call
every day to help my licensees I had
four lawyers watching every hour and
then sending notes on what I could have
done to be more compliant now guess what
I never read any of the notes and guess
what neither did anyone else but because
I said we need to make sure that we're
compliant they said great lawyers what
do we have to do to be compliant they're
like well why don't you just have us
review everything
and because I wasn't signing the checks
and it was someone it was Uncle Alex's
money they were like oh great instead of
us doing work we'll give it to this Law
Firm they'll do the work for us and not
only did they not actually Implement
anything from all the notes that came in
from this they were happy to just have
the meetings every week cuz they started
getting their buddy buddy with them and
of course they were when you pay someone
a million dollars a year they'll be nice
as [ __ ] to
you know where the bodies are buried
part of the reason I brought uh CFO in
because I was doing other stuff she
saved me you know her first month she
was like well paid for myself I already
saved you a million bucks a year which
is true she did save me a million doll a
year and I was very grateful for it I
didn't have the ding on that because I
was able to solve it but it cost me $1.2
million so that's mistake number eight
multi-million dollar mistake let's go
number nine you're like does it get
worse oh it gets so much worse I started
a software company Allen uh use Allen it
was because I wanted to solve the next
problem that most gym owners had which
is that they didn't work their leads so
we could get leads for them
or give them ads that they get leads for
themselves but they wouldn't work the
leads and if you don't work the leads
you don't make sales it's kind of how it
works I saw where AI was going and where
messaging was going versus pickup rates
and I was like I thought that we could
create like a really strong automated
bot with enough data and enough
conversations that we could probably do
as good of a job as kind of a low-
skilled employee it turned out that we
were right and so the average front desk
girl at the time or guy at the time
would get 10% of leaves in the door and
we got 19% of the door here was the
mistake that I made so Allen was a
purely software business I had never
built software before I've never written
code before and so I did what all very
impatient Founders do I just said I'll
just go find a software company and just
have them build it for
me and then I'll charge for it here's
what actually happened so I went to the
software vendor I went through this
really long competitive process for
people to uh bid the software out
someone came in and said I can build it
for you for 100 Grand or something like
that I said sure fine let's do that the
100 Grand came in and uh the thing
wasn't built yet but now I have Sun cost
fallacy so now I've put money into it I
made promises and so I'm like fine we'll
keep going and so when it was said and
done I think I put 1 point something
million into the software now you might
be like okay well you spent a million
bucks to a software company you had a
big distribution base it might have made
sense it probably would make sense
except once the software was operational
and started making money who maintains
the
software the outsourced development team
if if you're an Outsource development
team and someone needs you to make money
and guess what they can see how much
money it makes what do you do to your
fees you just raise them you just keep
eating it up and what else did they do
they didn't document any of the code
which meant that no one else could go in
and start working on it we couldn't have
an outside firm come take this offer
over because there was no road map it
was like writing a book with no table of
contents they just consistently increase
their fees to consistently reduce my
margins until they ate up everything the
mistake that I made in this big one was
that you need to have a technical
founder and the reason I believe that is
that name me one massive software
company that doesn't have a technical
co-founder name me one I'll wait a
technical co-founder can hold them
accountable right so you could have a
technical founder and then have part of
your team outsourced but the technical
founder keeps them honest keeps them
accountable make sure they're
documenting things correctly keeps
bidding things out and then over time
you can start hiring people inh house
and inh house doesn't even need to be
us-based inh house could be overseas but
they still work for you they're loyal to
you not to whoever their boss is who
writes the check who's not you this time
obviously with school I'm not the person
who is the technological person nor am I
trying to contract that person I found
the product just amazing amazing
developers and they already had an
amazing product and then I'm coming with
it right I'm I'm boosting on top of it
remember I said the core engines of a
business you either have to know how to
get customers or you have to know how to
deliver I was trying to Outsource the
core value generation of the business to
an outside company that is a fundamental
mistake these guys businesses these Dev
shops they rely on you making this
mistake unless you have a clear plan of
having somebody in house who knows more
than them about software who can hold
them accountable who probably has to
have Equity to give a [ __ ] you are just
going to be at their Mercy over time I
was able to sell to an actual software
company that did have developers who
could actually read into the stuff and
they were able to retrofit the software
and incorporate into their business so
again I had this big pile of money that
I could have just worked on doing more
better of and yet again got distracted
and if you're like keeping track here
like wait there was a food thing there
was a software thing yeah like [ __ ] all
right so like I I share these lessons so
that you don't have
to as well okay multi-million dollar
mistake number 10
vendors this was one where we had a
company and I can tell you the amount
lost $15 million real money all right so
not not hypothetical not opportunity
cost cost lost money we were building up
for a big product launch in um one of
the companies we paid
$270,000 for a vendor literally for only
one purpose was to have insurance that
they could handle the volume that we
were going to push through this
particular company was like we're pros
of this this is all we do that's what
I'm paying this insurance bill for is
just that it goes okay as the launch
approaches I hopped on like one of the
vendor calls and the this was now one
level lower so this wasn't the owner of
the company this is one of his employees
he's like oh yeah this is crazy this is
breaking all the records we've ever seen
we've never seen anything like this
before and I was like what I thought
this was going to be like another walk
in the park like that doesn't that
doesn't sound good we're we're having to
spin up all these extra systems just to
handle it but now we're like 24 48 hours
out we wouldn't made able to change this
I think it would have been more risky to
change it at that point we we do the you
know we do the launch even though it
went quote well
75% of the traffic That was supposed to
go to the launch didn't make it there
after all the marketing after all the
the leaking of the you know the stuff
and the Goodwill that was built in that
company 75% didn't make it they lied
just straight up they lied they lied
because they wanted to build their
resume because they wanted to say that
they they were you know doing something
with that particular company um and put
it on um on their on their website or
whatever if you're going with vendors
what the founder of the company didn't
do is that he didn't look for references