I Lost $100 Million... Here's What I Learned

Summary

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

00:00

💸 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。

05:01

🏠 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。

10:01

🤝 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。

15:01

💼 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。

20:02

🚀 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。

25:02

🍲 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。

30:03

💻 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。

35:04

: 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。

Keywords

💡投資

投資とは、資金や時間などのリソースを使用して将来の利益を得るために何かを開始または改善することを指します。このビデオのテーマは、失敗を通じて学んだ投資の教訓を共有することです。例として、暗号通貨への投資や不動産投資の失敗が挙げられ、それらの経験から得られた教訓が説明されています。

💡リスク管理

リスク管理とは、潜在的なリスクを識別、評価、および制御することで、損失を最小限に抑える戦略的なプロセスを指します。ビデオのなかで、話者は自分が失敗した投資において、リスク管理の重要性を学んだと述べています。具体的には、投資においては自分の能力圏外の分野に踏み込んだり、適切なパートナーとの協力を求めることが重要であると触れられています。

💡パートナーシップ

パートナーシップとは、業務や目標を共有し、互恵的な関係で協力することです。ビデオでは、話者が複数のビジネスパートナーシップに関与し、その中で得た教訓について説明しています。特に、能力や資源が補完できるパートナーとの協力が重要であり、逆に能力が重複するパートナーシップは問題を引き起こすことが述べられています。

💡市場動向

市場動向とは、市場における需要や供給、価格などの変動を指します。ビデオの文脈では、話者は自分が市場動向に対して適切な対応をとりくることができなかったこと、つまり競合他社が提供するサービスを模倣し、価格競争に応じることでビジネスを失ったという経験を共有しています。

💡顧客とのコミュニケーション

顧客とのコミュニケーションとは、ビジネスにおいて顧客との間に意思疎通を行うことを指します。このビデオでは、話者が競争相手の分析に注目していたため、顧客のニーズや問題に注意を払わなかったことが、大きな失敗の一つだったと述べています。顧客とのコミュニケーションが不足していると、ビジネスの方向性が損なわれ、最終的には利益に悪影響を及ぼすことが言及されています。

💡ビジネスの基本

ビジネスの基本とは、ビジネスを成功させるために必要な根本的な原則やアプローチを指します。ビデオ中では、話者が「華やかな」戦略や過剰な投資を避け、ビジネスの基本的な要素に集中することが重要であると強調しています。例えば、顧客サービスの改善や効率的な販売プロセスの構築が挙げられ、これらの基本を強化することでビジネスの成長が図れるとされています。

💡収益性

収益性とは、ビジネスが利益を生み出すことの能力を指します。このビデオでは、話者が複数のビジネスモデルを試み、それぞれの収益性に関する教訓を学んだと説明しています。特に、低収益性のある事業に資源を浪費することの危険さや、高収益性のある事業への集中が重要であることが強調されています。

💡自己評価

自己評価とは、自分自身の能力やパフォーマンスを客観的に評価することを指します。ビデオの文脈では、話者が自分自身のビジネススキルや判断力を再評価し、過去の失敗から学び直すことの重要性が述べられています。自己評価が適切に行われなければ、ビジネスにおいて無駄なリスクを冒すことや、改善の余地がある分野を認識できなくなることが警告されています。

💡戦略的リスク

戦略的リスクとは、ビジネス戦略の実施において発生する潜在的なリスクを指します。このビデオでは、話者が戦略的なリスクを取ることの重要性について説明しており、例えば新しい市場への進出やイノベーションを推進することが挙げられています。しかし、戦略的リスクを適切に管理せずに取り組み始めると、大きな損失を被ることも明らかにされています。

💡市場調査

市場調査とは、製品やサービスの需要、市場の動向、消費者の嗜好などを調査研究することを指します。ビデオの内容において、話者は市場調査の重要性を強調しており、自分自身が十分な市場調査を行わずにビジネスを開始したことが、多くの失敗の原因となったと述べています。市場調査を通じて、ビジネス戦略を立てる際に必要な情報を得ることが、成功に導く要因の一つであるとされています。

💡損失

損失とは、本質的には予期されていない負の結果を指します。このビデオでは、話者が過去に経験した様々な損失について詳しく説明しており、その経験から得られた教訓が重点となっています。例えば、無知や衝動的な意思決定、または不適切なパートナーシップが原因で発生した財務的な損失が挙げられ、それらのエピソードから得られた教訓が提示されています。

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