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How to Know If You're Cut Out for Entrepreneurship Before You Risk Everything, with Grant Sabatier
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- [00:00]
Paula Pant
Okay, so imagine that you've never worked retail, not even as a summer job in high school, but as you approach your 40s, you decide to spend 1200 hours learning how to open your own brick and mortar retail store, specifically a bookstore. That's exactly what Grant Sabatier did, and it taught him some crucial lessons about the four stages that every entrepreneur needs to navigate. The four stages of entrepreneurship, which we're going to talk about today. It applies not just to people who want to become business owners, entrepreneurs in the literal sense, but to anyone who has at heart an entrepreneurial spirit, regardless of your job description. Welcome to the Afford Anything podcast, the show that knows you can afford anything, but not everything. This show covers five financial psychology, increasing your income, investing, real estate, and entrepreneurship. It's done. Welcome to Double I Fire. I'm your host, Paula Pant. And today we're deep diving into Grant's framework for entrepreneurial success, which means for the F II five pillars that we cover on this podcast, today's episode focuses on that letter E Entrepreneurship. Grant is the best selling author of the book Financial Freedom and the founder of a personal finance website called Millennial Money, which was acquired by the Motley fool in 2020 and then reacquired by him couple years later. He recently opened up a bookstore in Columbus, Ohio, which we're going to talk about, and published a new book called Inner Entrepreneur. Here he is, Grant Sabatier. Grant, you opened a bookstore in Columbus, Ohio. Tell us about that.
- [01:40]
Grant Sabatier
I did. So I opened Clintonville Books, which is a new used and rare bookstore in the Clintonville neighborhood of Columbus. It's like a really old space and really, really beautiful. The oldest book in the store is from 1517, and then we have new releases as well.
- [01:56]
Paula Pant
Okay, but my question is why? Because bookstores are high overhead, low margin, and you can easily run out of money. Right, Right. There's. There's a lot riding on the line.
- [02:09]
Grant Sabatier
Yeah. So this is one of the things about entrepreneurship. So I've never worked in retail, I've never worked in a bookstore, and I've always wanted to work in a bookstore. So I'm at a point in my career where I moved to Columbus years ago. I live about a mile and a half north of Ohio State. Tons of professors, grad students, the perfect place for a bookstore. And there wasn't a bookstore. And so I tried to convince myself not to launch this bookstore for about three years, and it just kept gnawing at me. It was like, gosh, this community needs a bookstore, and I want to figure out if I can actually make a business like this successful. So it's one of those ego things where I've had a number of successful businesses and can I figure out a bookstore not knowing anything about it, and use it as a way to also give back to my community? And this is the thing about community and place, because as we're all spending so much time online, we spend so much time alone. I wanted to find a way to create a space for my community, especially within Ohio, which is going through a lot of changes, where people could get together, talk about books. I wanted to be around books, I collect books. And so it actually ended up being a relatively modest investment when you look at percentage of my portfolio. But what I learned is that it's very, very difficult, even for someone like me with a lot of entrepreneurship experience, to launch a brick and mortar retailer dealing with the city regulations, renovations, sourcing product. The margins on new books are absolutely terrible, but the margins on used books and rare books are actually quite good. And so I'm in that figure out stage right now where I feel like I've taken a modest amount of money and invested it into my community, but it did take a lot of time. And so it's been great because it's something I've never done. And so I feel like it's a place of growth for me. And it's also just so much fun engaging with the community in this way because a vast majority of the money that I've made has been online and just sitting behind my laptop.
- [04:05]
Paula Pant
Right. And when you say figure out stage, so your expertise is entrepreneurship, you're a serial entrepreneur, and. And you actually have talked about how there are four stages to entrepreneurship, the first of which is the figure out stage.
- [04:20]
Grant Sabatier
Yep. Yeah. The first stage is experimental. It's when you're just trying to figure out how entrepreneurship makes you feel. Trying a lot of things, trying to learn as much as you can about something. And so the nice thing is, you know, we live in a time where there's. There's just so much information and there's so many people who've been successful and have blueprints, and they're just sharing those openly on X on YouTube. And so I spent a fair amount of time watching YouTube videos from people who had launched bookstores, listening to podcasts from people who'd launched bookstores. So I had a lot of information going in and had really done my research, but I'm still figuring it out. I have three full time employees. I just got them health insurance, I'm dealing with the city. Everyone wants to have their events at my bookstore. So I'm really still in that experimental phase. I signed a two year lease and so I really would have loved to have actually bought the building because that's one of the things about bookstores. One of the hedges is buy the real estate. So you're not paying a landlord. So I found a two year lease on this space. Hopefully if I stay there, I can buy the building from the landlord. I'm trying to work that out, but yeah, I'm just figuring all of it out. And because I haven't done it before, it makes me pay attention. It's not something I'm just doing in my sleep.
- [05:31]
Paula Pant
Right. Two years is remarkably short for a commercial lease.
- [05:34]
Grant Sabatier
Yeah, it's actually a crazy, crazy situation where the tenant that was in the space moved across the street. They were really successful. Local gift shop business. I didn't end up actually getting the lease. It never went on the market. Someone locally got it and I actually was going to sublease half of it. This vintage clothing dealer, he tried to charge me basically 80% of the rent and he was going to do that through the sublease agreement. But I'm good with contracts. I know how these things work. I looked at all the red tape and, and it actually wasn't allowed in his lease to sublease. And so I said, hey, I'll do this, but let's talk to the landlord. And through some chess moves, I wouldn't say they were aggressive, but I think they were creative chess moves. I was actually able to push out the guy that had the lease and take over the lease entirely myself. And so that was just one of these crazy scenarios. And it was a two year lease that he had negotiated that I took over. I wouldn't have gone in with just a two year lease.
- [06:30]
Paula Pant
What I'm hearing is that so much of the entrepreneurship experience, even in the figure it out stage, is thinking nonlinearly and getting creative and also forming relationships so that you can figure out what's going on.
- [06:45]
Grant Sabatier
Yeah, absolutely. So you gotta put yourself in the place that you want to try being an entrepreneur. And so I did this before I launched Millennial Money, my financial media company. I went to Fincon, didn't know anyone, didn't have a website. This is 2015 and I just wanted to pay attention. I wanted to see who was doing what. I wanted to look at who are the writers, the creators, the brands. And the same thing with the bookstore. I've spent a phenomenal Amount of time in bookstores, consuming books, collecting books, buying from rare book dealers. And so I've really been paying attention and making some connections as well. So one of my friends is a rare book dealer, Kurt Gippert in the Chicagoland area. Very successful rare book dealer. I showed up at his bookstore, bought books over a number of years. So then when I was thinking about opening my own bookstore, I said, hey man, you know, how does this business actually work? How much money are you making? What's going on? And this took a series of three days of hanging out with him in his 30,000 square foot book warehouse where he stores all his books. And I was just looking for clues. I was just looking for pieces of information that I could pick up. Because a lot of people, even my friends, they're not super transparent, right? It's hard to figure out how much money are you actually making with your bookstore, what's going on. But you can kind of cobble the pieces together if you're really paying attention, and then you just have to start doing it. And I think that's an important part of experimenting. You can only plan for so long. You got to get messy, right? So for me, it was like, I don't have this all figured out. I don't know how this works. Okay, this is a two year commitment, and here's how much money it's going to take me. I'm going to figure this out as I go. I know I need to find a place to buy books, I need to figure out how to inventory them, I need to price them, I need to market. There's all these pieces just paying attention and then getting out and doing it. You're like, oh, here's what I should do. And you start to learn pretty quickly, but you don't have to do it on this large of a scale. And I think a lot of people actually put too much money into entrepreneurship. They launch a company too quickly, they invest a ton of money, they take too big of a risk early on without doing enough experimenting upfront. And I think you see that all the time with retail. You know, there's a donut shop that opened just down the street. And I see what this guy's doing and I'm like, gosh, that's a really expensive lease. There's already a couple donut shops within this neighborhood. I don't think that's a great business. And you can kind of see when people are making these mistakes or taking these unnecessary risks. My new book is about how do you de risk entrepreneurship how do you take these smaller steps to get more information? And how do you really spend as little money as possible and just trade your time up front to test this out before taking on a very large risk? Because the thing is, you can significantly de risk entrepreneurship if you do the research up front and you're careful and you don't take money from other people, you don't take out large loans. These things that you can do to give yourself a much, much better chance of being successful and creating a successful business.
- [09:42]
Paula Pant
And we'll talk more about de risking in a moment. But first, I'd like to continue to go through the four stages of entrepreneurship, because up until this time we've been talking about that very first stage, the figure it out stage. And your personal story has been illustrative of what that figure it out stage looks like. But what comes next? What is step two of the four steps of entrepreneurship?
- [10:03]
Grant Sabatier
Yeah, so the four levels are experimental, which we just talked about. The second is solopreneur. And Solopreneur is that level where it's all about building sustainability. And so you've tested some things out, you're making a little bit of money now. What are the systems that you need to create? Who are the people that you need to hire? Where should you be investing your money? How can you de risk your business by creating some sustainability in it? And so we often think as solopreneur as just doing everything and being overextended. But there's ways that you can be a solopreneur and you can leverage all the amazing tools that are available today. So as we're recording this, we're just sort of in the early stages of AI and all the tools that are available. I launched a new website last night in about 10 minutes using basically react code and using AI tools. So this is something that would have taken me two weeks to build five years ago. And I just iterated a website within 10 minutes. And so the tools, I'm still learning them, they're there that are available to you, give you so much more leverage as a solopreneur. And, and I think over the next 10 years we're going to see a significant number of solopreneur billion dollar businesses just because of the tools that are available that you don't have to hire huge teams, you just have to learn some of these new tools, be savvy, be scrappy, and you can market, build operations, build customer service, iterate design, create new products, build platforms, websites using all these tools that are available today. So at that solopreneur level, it's about how do you create those leverage points to make your business more sustainable? And then the third level is growth entrepreneur. This is where I think a lot of people, naturally, they just want to grow. They think about growth hacks. How do we scale this as quickly as possible? But I've seen so many entrepreneurs get into the trap where they grow this business and they're trying to make as much money as possible, but they end up in some place where they. They've exhausted all of their existing customers, they've sent out too many marketing emails, they've burnt their audience up, and they've gotten into a place in their business where maybe they've made a lot of money, but it's not sustainable and it doesn't last. And so a key component of the growth entrepreneur stage is thinking about how can you use entrepreneurship to grow as a human and thinking about your life first? And so what do I want entrepreneurship to be, what do I want my business to be, and how do I want it to function in my life? And then growing based on that intentionality. And so, yes, I want to grow my business, but I still only want to work 30 hours a week, and I want to spend time with my kids or for the next six months, I'm going to go all out and scale this business because I see so much potential. And so growth, it's not just about the tactics. And in the book, I talk a lot about how do you grow organically, how do you grow through paid media, how do you grow through affiliate partnerships? But I really lead with the why should you grow? And thinking hard about that, Because a lot of people, this is where they really go off the rails and where it ends up not being sustainable.
- [12:56]
Paula Pant
Well, and so within that, at that growth stage, I can see there being a bifurcation where there are some people who are going to say, you know what, this was really intended to be a lifestyle business, and I want to use this business to fund my life so that I can spend more time with my family and more time traveling and things like that.
- [13:13]
Grant Sabatier
Totally.
- [13:14]
Paula Pant
But there's also that other fork where you've got some people who say, you know what, I'm young, I'm healthy, I'm hungry, and I want to see how big I can take this. And I am excited about working hard, like rolling up my sleeves. I will put in 80 hours a week because I want to know what my potential is and how big and what this company's potential is.
- [13:36]
Grant Sabatier
Absolutely.
- [13:37]
Paula Pant
If you're in the growth stage and that's where you are mentally. Then what comes next? Like how do you then hypercharge that growth?
- [13:45]
Grant Sabatier
Yeah, it's a great question. So it's important to know that every business is going to die at some point and opportunities only last for so long. And I think this is one of the key points of the growth chapter. I can tell you that a vast majority of my peers and my friends who were launching personal finance media companies and got offers of 20, $30 million to be acquired, they ended up saying no. The perennial sort of Mark Zuckerberg saying no to a billion dollars from Yahoo when they offered it for Facebook because they're like, there's more to grow and I have more to do. And this is the thing, is that opportunities really only last for so long. And so I talk about how do you pay attention and recognize when you're getting close to one of those opportunities that's no longer going to be there. And so this is an important point where the 80 hours a week, how do you make the decision about I'm going to commit to this. Most businesses have a life cycle of five years. And this is one of the things, this five year increment, if you can last for five years, it's at that five year point where you have to think, okay, do I want to sell this thing or do I see another five year path of growth and what is that going to look like? Because at its core entrepreneurship, what it's about is adaptability to change and being resilient. Because the world's changing, it's changing faster than it ever has tools. I mean, you think about anyone who built a freelance writing business right now with what's happening with AI, right? I see all of the open to work notifications popping up on LinkedIn. People are looking for jobs. Anyone who built a company based around Google SEO right now is just completely struggling. And there were just multi, multi, multi million dollar businesses that their traffic evaporates overnight. And they're like, what happened? What's going on? And so diversifying and de risking, that's another piece of this. But you have to know what phase you're at in both your life and where you're at in the life cycle of your business. And this is the thing. Early on I talk about thinking about how much time do you actually have to do this? And being honest with yourself about this. Because a lot of people, they're like, I'm gonna spend two hours a week on my business. And we know that's not gonna cut it, right? And a lot of people. But on the flip side, I know people who have four kids, they're stressed all the time in their life, but they carve out all that extra time and they build a successful business over time. So being honest with yourself about where you're at and what trade offs you're willing to make. Because at the end of the day, all of this comes down to trade offs. How am I going to spend my time, how am I going to spend my money? What am I going to be working towards? And so at the growth stage, it's very, very important to look clearly at yourself, where you're at in your life and also at the market. What is the opportunity here? What's my competitive advantage? What can I do that someone else can't? And I also talk about how your real competitive advantage, the only competitive advantage that you actually have today is your story. Because AI, everyone can copy what you're doing quickly. So how do you craft your story and share your story in a way that actually connects with others, connects with customers, how do you get them to believe in your story? How do you offer a promise and then deliver on that promise? And so there's some soul searching involved in this along with paying attention and being rational about the market dynamics. And so there's a lot to this, but really it all comes back to paying attention. And the better you know yourself, the better you know your business, and the better you know your market, the easier all of this becomes to kind of intuit, okay, this is where it's going. I don't know how I'm going to continue growing because a lot of people just, they build a business, they stay consistent, but then they're not adapting quickly enough. And so inevitably, if you're not adapting, if you're not changing, your business is going to fatigue and it's going to die. You can't really control and slow down growth. All you can do is really contain it and try to move it where you want it to go.
- [17:35]
Paula Pant
What are the most common causes of death for a business?
- [17:38]
Grant Sabatier
Great question. Number one, running out of cash, that's probably the biggest one. And so a lot of people just think about revenue, they just think about how much profit am I generating. But really cash flow is the most important thing. And so how do you create consistent cash flow in your business that's dependable? And so it gives you some breathing room and allows you to make clearer decisions. Because this is one of the things, if you're worried about cash, just like if you're worried about your personal finances, it's going to keep you up at night, it's going to worry you. And when you're under pressure, you. You tend to make worse decisions. And we're also, as humans, really, really bad at predicting the future, right? So we end up kind of living in this weird space where we don't know what's going to happen, but we end up getting stressed in the moment. So, number one thing, running out of cash, Number two, just losing momentum. And so I talk about one of the key truths of entrepreneurship is momentum breeds momentum. And this is one of the thing. As the founder, as. As the creator, as the center of your business, how you function and how you feel really, really matters. And we can default back onto sort of the David Goggins, like, you need a system, you need consistency, you need discipline. That's all fine. But at the end of the day, you need that inspiration to continue. You need to be excited about your business. And so I see a lot of entrepreneurs really excited for a while, and then they just quit or they run out of air or they run out of energy. And so much of entrepreneurship, it's just like the compounding curve. Things go really, really slow for a while, and you just got to keep at it, and you've got to maintain that passion and that intensity. And then you start to get clues that it's working. You know, an email from a customer, they're really happy, or a reader or something, a listener. And then that gives you more energy. So momentum. If you can't maintain that momentum, it ends up killing your business. And then the third one is just market dynamics. So those first two things you can control, right? Your cash flow, you can be smart about how you manage your business, finances. You and I are both into personal finance. The money matters. I talk a lot about that. How should you think about cash flow in your business? Momentum, you control that. That's really up to you. The third one, the market is more difficult. The thing about business is one of the great things about capitalism, and one of the tough things about capitalism is, is it really, really rewards efficiency and competition. And so if you're successful and you're doing something well, people are going to see it and they're going to copy you. That's without a doubt, right. And so they're just going to try to do what you do, try to be better. They're going to try to just basically get you out of the way. And so when you're small and no one's really Paying attention, you have a lot of advantages, right? Especially as a solopreneur. You can move faster than large companies, you can be more creative. But as you start getting more successful, it just gets more difficult to compete because everyone tries to do what you do. And so that's when you have to lean back once again on your story, form those emotional connections with your customers, with your listeners, with the content that you're creating. And then you need to pay attention to the market and be honest with yourself. Because there are a lot of businesses out there where people just keep doing the same thing, the same way, and they build their life around their business and they think, okay, this is going to last forever. And we know that nothing lasts forever. So how can you stay a couple steps ahead and be honest with yourself about what's going on, but also not quit too soon? Because there's a lot of that that happens too. I see a lot of great businesses, people just wear out, or they're just like, I can't do this anymore. And so that's why the better you know yourself and the more fun you're having, honestly, because the more fun that you have, the easier it is to, to deal with the ups and the downs and some of the stress. And that's one of the big key points in the work is like, you really have to do something you love. It's like, yes, you can go make a ton of money doing something else, but it's going to be so much easier and you're going to enjoy your life a lot more if you're building something you love.
- [21:35]
Paula Pant
All of that was number three, the growth stage. And so what is level four of these four levels of entrepreneurship?
- [21:42]
Grant Sabatier
So level four is empire entrepreneurship. And this is when you have a business that's generating consistent cash flow and you look at the business and you say, hey, my business is making all this money. I don't think that I should invest all this extra money back into my business. I want to use all of this cash flow to invest in something else. And so most business owners, they do the tax inefficient thing, which is they take the money out of the business and they invest it into another asset class. Maybe it's stocks or real estate or crypto or something else. But the thing is, at this point, the empire entrepreneur is you're generating all this cash, and instead of investing this money in other assets, you say, hey, how do I use this money to buy another business that's maybe related to my current business to help expand my empire? Maybe it's a different business that I'm just interested in that I want to add to my portfolio. And so I really think the future of entrepreneurship is this empire level. And you're starting to see this now with people like Andrew Wilkinson and his tiny holding company or Greg Eisenberg, people building these holding companies of primarily digital businesses, but also physical businesses. And everyone ends up becoming like a mini Warren Buffet or a Charlie Munger. And there's really immense tax efficiencies in building a holding company to contain your businesses. And so this is this level entrepreneur. I mean, empire doesn't mean yet massive. These people like Rihanna or LeBron James, these people have all these companies and all of these investments. It's just about you're creating a container in your life to be an entrepreneur in many different ways. And so right now I own five different websites, I own the bookstore, I have my book media company for the books that I'm writing, I have my real estate holdings. And all of this lives within my holding company in a very, very tax efficient manner. And so this is that level where I'm deep in it, still learning about it, but it's just an incredible time. Building a holding company is very much like building an llc. And as you become more successful as an entrepreneur, it's very, very valuable in terms of expanding your life and helping you make more money to expand your thinking into this holding company level.
- [23:47]
Paula Pant
Right. And there are four different types of holding companies, is that.
- [23:50]
Grant Sabatier
Yes. Yeah. So there's more than that. I just tried to distill them down into four. I like that you brought this up. So there's holding companies where it's, you own a bunch of businesses that are very similar and they leverage just one core office. So you have a few marketing people that work across all of your different businesses and that becomes easy to do because all the businesses are similar. Say you own a dog walking company and a dog groomer and a pet store, all in Chicago. Right. And all of these companies, because they're all related, you can cross market across them, but they're still separate companies. And you can create immense sort of operational efficiency because at the whole company level, you're basically able to manage a number of different businesses by using a smaller team. And so I currently have a holding company, it's called MMG Media Group. We own a number of personal finance and gig economy websites. And we own basically six different companies within this holding company. But we have a centralized team. So we have front end and back end developers that work across all the websites, we have a finance person that works across all the websites. And so the thing is, I'm able to use a small team to manage multiple different companies so I don't have to create redundancies. And this allows me to go out and buy a website where maybe there's a small team and I can basically take the website, integrate that website within my own sort of internal technology, my own team, and immediately upon buying it, increase revenue 50% because I've reduced the operating expenses because I'm using my team instead of that old team. And, and then I'm able to do things like put my own affiliate links on the websites and immediately increase revenue because I have higher payouts. And so strategic acquisition, often within your industry, you're able to create holding company that you reduce expenses, increase revenue and so you can make your money back for that acquisition within a year or two. And then it's all profit from there. Kind of like different games of the chess board. And then there's other types of holding companies where you're acquiring different types of businesses, like a Berkshire Hathaway, right. Owning Dairy Queen and Fruit of the Loom and netjets and all these other things.
- [25:55]
Paula Pant
Geico.
- [25:56]
Grant Sabatier
Yeah. And that type of holding company, typically the teams are operating independently, right? So Geico's marketing team's not helping NetJet's marketing team. Right. So every company is siloed individually, but you can do a lot of really creative things, like Warren Buffett does, which is the profit that Geico generates. He can then go used to buy another company, right. Or buy Apple stock or, and use that to invest in another business that needs the capital. And so there's a lot of things that you can do with cash flow management that's very, very efficient. And really the tax code significantly benefits entrepreneurs. And at the holding company level, there's a lot of fun stuff that you can do even in real estate, if you get creative. So I could have never imagined that I would be thinking like this, that I would be operating in this capacity. But it's really, really fun to learn. And I think more and more people are going to be launching these holding companies, especially with digital businesses, just because they're so asset light. You can do a lot of really fun, creative things. And it's amazing acquiring a business. And that's one of the things I never knew until I sold a company just how amazing it is, how much better in some ways it is to buy a business than it is to actually start one from scratch, because you can Go in and spend two to three times an owner's annual basically profit to buy a business and then integrate it within your existing company. And you can basically buy profit and you don't have to start something from scratch. So this is like where I'm at now. It's what I think about. I try to actively convince myself not to buy things on a day to day basis. It's a lot of fun, but it's also very easy for it to run away from you. And so I have a two year old, I like writing books, I like doing other things than just running my businesses. And so there's a lot of sort of introspection within this book and I think within my work around like just because you can do something doesn't mean that you should. And I think I'm at that phase very much as an entrepreneur because there's a lot of great opportunities today. But anything's still going to take time. It's still going to take a trade off. Any business you acquire, you're really going to have to pay attention to it for a couple of years. There's no kind of like just buy it and forget it and then, yeah, I just tend to now default back with the extra cash that I have into index fund investing. Because you're like, gosh, this is really passive and really easy and I don't have to manage all these moving pieces. But not nearly as fun as launching and buying companies.
- [28:28]
Paula Pant
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- [29:47]
Grant Sabatier
Get in the zone Autozone welcome to.
- [29:50]
Paula Pant
Bundle deal days at Autozone.
- [29:52]
Grant Sabatier
Well, I do need a bundle of things.
- [29:54]
Paula Pant
When you bundle, you save. Do I save if I bundle oil with an oil filter?
- [29:58]
Grant Sabatier
Save up to $12 on that bundle.
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Paula Pant
What about brake pads and rotors? Bundle those. And the brake pads are free.
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Grant Sabatier
Can't save more than free.
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Paula Pant
You can save on hundreds of deals.
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Grant Sabatier
During bundle deal days.
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Paula Pant
Ends June 2nd at AutoZone.
- [30:12]
Grant Sabatier
Get in the zone.
- [30:13]
Paula Pant
AutoZone restrictions apply. Duralast brake pads only. So I just got off of a call with our fractional coo, who's somebody who I brought in in order to help better develop the systems inside of our company. And we were talking about all of the things that need to be done, all the roles that need to be filled. It's clear we need to be doing a lot more hiring. But the thing is, hiring is time consuming and if you get it wrong, it has huge consequences. And so you need two things. You need to hire quickly and you also need to hire right. So you need the right people fast. So how do you do that? How do you find amazing candidates fast? Well, use Indeed because Indeed Sponsored Jobs helps you stand out. So with Sponsored Jobs, your post jumps to the top of the page for your relevant candidates. And that means that Sponsored Jobs posted directly on indeed have 45% more applications than non sponsored Jobs. And there are with Sponsored Jobs, no monthly subscriptions, no long term contracts, and you only pay for results. And when we're hiring, we're doing so because we're already overloaded. So this is incredibly helpful. In fact, in the minute I've been Talking to you, 23 hires were made on Indeed. There's no need to wait any longer. Speed up your hiring right now with Indeed and listeners of this show will get a $75 sponsored job credit to get your jobs more visibility@ Indeed.com Paula just go to Indeed.com Paula right now and support our show by saying you heard about Indeed on this podcast. Indeed.com Paula Terms and conditions apply. Hiring Indeed is all you need. We've talked so far about two different types of holding companies. One in which the underlying businesses are all quite similar. And so you can create operational efficiencies. And the other of which the companies are quite different, with Berkshire Hathaway being a prime example of that. Before we get into the others, my question, the one that keeps coming up for me as I hear you talk about this, is how do you keep from excessively fragmented attention? Because it sounds as though if you, you can easily put all of your attention into just one company, and even in doing that, your attention can be fragmented because of all the different tasks that are required just to run one singular company.
- [32:23]
Grant Sabatier
Yeah.
- [32:24]
Paula Pant
So the idea of then taking that and multiplying it out by 2, 3, 4, 5, 10, 12, 20 just sounds more than one human brain can handle.
- [32:34]
Grant Sabatier
Yeah. And this is something I struggle with. Right. I'm naturally human. And so opening the bookstore is a great example where a bookstore is so different than any of the websites that I own. And so the only way that I can segment this out is having a really good team is another thing. So I have, within my holding company, I have a couple of business partners. I own a majority of the holding company, but I have other people who are far more technically savvy at running websites than I am, and they're focusing on the day to day of the business. And so it's very rare for me to hop on a call with an affiliate partner, to hop on a call with really anyone. I talk to our accountants once a month. I talk to our lawyers when we're buying a company, when there's some sort of legal issue that I have to be consulted. But by and large, you have to lean on really, really good people. Right. And this is another Warren Buffett lesson where it's like just recently, the largest manufacturer of RVs, I'm forgetting the name of the company. The founder of it died. And this is 20 years ago, this company sold to Berkshire Hathaway and Warren Buffett marked it as a really successful business because he had actually never been there. He marked like never going there was the marker of success. Right. And I think for me, I mean, obviously that's a really extreme example, but I'm really trying to work with great, great people who are doing most of the work. And then I do what I'm good at, which is finding acquisitions, which is structuring these companies coming in, doing negotiations, and then all the technical details. I don't send out any of the emails, I don't put any of the offers on the website, manage any of the links. There are tons of moving pieces. So leaning on really good people. And these people I met through building other websites in my career. And now, you know, I just turned 40. I've been in digital marketing for 15 years. I've worked with a lot of great people and I've tried to get some of the best people that I've worked with in my career to work with me or for me within the holding company. And then the other piece is just segmenting out your time and knowing what phase you're at. And so it takes an immense amount of effort to launch a business. And so it took me about 1200 hours to launch the bookstore. And this is me in the bookstore alone doing the measurements, getting the bookcases moving, Just massive numbers of boxes of books. We have 40,000 books in our collection. I have four storage units. Immense amount of time and effort and I knew it would take that. But I felt confident that my other businesses were running well and if there was a fire or a headache, they would give me a call because we have that great relationship and we have that trust. I was just getting on the plane to come to New York yesterday. I got a call from one of my partners, hey, we've got this issue, we got to deal with it. Flew to New York, got off the plane, talked to our lawyers, we drafted some emails. And it basically took an hour of my time on the phone and maybe half an hour reviewing the emails. And so I know that they're taking care of that. But launching the bookstore, because it's so different, I've struggled a little bit paying attention to it and the other things that I have going on. I don't have a business partner in the bookstore and I'm trying to figure that out. But now that it's launched, I have three full time employees. One of them is my brother in law. He pays attention. If there are any issues, he gives me a call, they send me texts. We have a group text chain. And so just being in communication, working with really good people and it's hard to find good people that you mesh with. And so as you're working with people throughout your career, take note of who those people are. A lot of my best friends are people that I create things with. I just like to spend my time doing that. And so, you know, I've collected some really good friends over the years who are also good at doing things that I love to do. And so that's really, really important. And then the last piece is just having a good network. Entrepreneurship can be just so lonely. And so being a part of groups that you can be around other entrepreneurs and people who are creating things and have that similar energy or can connect you with people is also really, really important. I'm a natural introvert, so that can be a little challenging for me. But at certain times in my life, I've been fortunate to build a peer group, people who are doing what I'm doing and what I'm into. And that's been just immeasurable to my success. And I talk in the book about kind of cooperation over competition. And I think this is a key point in business. You should reach out to your competitors, get to know them, learn from them. Because oftentimes it's much more effective to work together to grow a market than it is to just compete each other and try to shut each other down, because competition tends to be a zero sum game. So it's better to learn and work with your competitors and collaborate.
- [36:56]
Paula Pant
I've often reached out to groups of other entrepreneurs and what I found is that there's almost a, a bell curve to that use of time in that developing those relationships to a certain extent is helpful because I get new perspectives from other people who are doing similar things. But if I do that in excess, I found that it can cross over into excessively talking about business but not actually taking action.
- [37:25]
Grant Sabatier
Totally right.
- [37:26]
Paula Pant
Because so much of the execution and the implementation is head down, roll up your sleeves. Like the hard, tough, silent, not solo or not fun work.
- [37:38]
Grant Sabatier
Totally. Yeah. I think there's times to kind of ask and there's times to give. And so, you know, I'm in a number of entrepreneurship groups where they get together for these masterminds once a year in these beautiful locations. And I've only been to a couple of those. And I often, like you're saying, I go to these, everyone's talking about their own thing. You're all just kind of hanging out. It's fun, but it's like, just not my vibe. Right, right. I like networks where it's like, hey, I need someone who's a great react developer who does these three things. Do you know anyone? And then they provide that information. And then I'm also there if they're like, hey, we're doing SEO on this website and it's not working. What can we do? And so it tends to be a little more transactional in nature than it is just like personal hanging out. I think this is just like how my mind works. I try not to be too transactional, but it's like hanging out and spending a week with a bunch of people, even if they're doing the same Thing that you do just takes an immense amount of energy and time. And you're right. You can really get lost in going to conferences and events and being on the road and traveling and being tired all the time. And you're like, whoa, I kind of learned a lot. I had a lot of fun, but I really haven't moved my business forward in any way. So I try to be very transactional in those things. And then when you can give as much as you can. Right. And then people associate you with being helpful. And we can't all be experts in everything. Right. So the things that you are expert in, share those. Right. And I know podcasting, the podcasting world, there's a number of podcasters who. It's like they can talk about the other person's podcast on. On their show and share guests. And there's kind of like a sum is greater than the parts at some point, but you can burn a ton of time just talking and not doing.
- [39:27]
Paula Pant
Right. Yeah. I term it as fun disguised as work.
- [39:31]
Grant Sabatier
Yeah, Right.
- [39:32]
Paula Pant
Because there can be a lot of that. There can be a lot of, like, fun disguised as work. It's a tax deductible vacation, fundamentally.
- [39:38]
Grant Sabatier
And those are fun for a while, but, like, once again, you have to figure out where you're at.
- [39:42]
Paula Pant
It just becomes a waste. Yeah, I'd rather take a taxable real vacation totally. Than I would take a tax deductible, like, pseudo one.
- [39:51]
Grant Sabatier
There could also be a lot of pressure, like hanging out with your competitors and your peers in a way, like comparing yourself to them or also being like, why am I not doing as well as them? Or should I be doing something in a different way? Or I'm kind of a blunt person. And so I have, in the business context, if I have a feeling about someone else's business or I see that something that they should change something, I'm pretty forthcoming about that. Right. Which can be a little jarring for some people. But it's always in the spirit of trying to help make someone's business a little bit better. Like, I'm always trying to. If I see something that can be improved, sending an email to a founder, hey, I'm a customer. I got treated poorly, or this didn't work out. I'm not looking for anything. I just want to let you know, as an entrepreneur, this would bother me. So here's kind of what I would do. And that's connected me with quite a few entrepreneurs as well. Like, founders want to hear from customers. And if you're an entrepreneur yourself, and you can provide really constructive feedback. They tend to be open to that. So that's a lot of the ways that I try to engage with entrepreneurs now. It's like, hey, I love your product, I use it. But have you thought about this? Or your website's terrible, or took this much time to load or this link didn't work for me. There's so many times I found like a broken link and just like shared it with the founder on LinkedIn and be like, hey, I don't know who to send this to, but I just wanted to know that this link to your offer that I just got in this email, it doesn't work. And you'll get back this email from a very successful entrepreneur being like, well, thanks, I appreciate that. And that's led to some connection. So just generally trying to be helpful as an entrepreneur with other entrepreneurs really goes a long way.
- [41:27]
Paula Pant
So what are the other two types of holding companies we've talked so far about? The holding company number one, where you're buying a bunch of similar types of businesses.
- [41:35]
Grant Sabatier
The roll up.
- [41:36]
Paula Pant
Yeah, the roll up. And then holding company number two is like the Berkshire Hathaway model where you have a bunch of different types.
- [41:41]
Grant Sabatier
Yeah, the traditional hold. So then it gets a little murkier. So the other types of holding companies, it's really based around your personal interest and how you want to build your business. And so this is when are you doing something that's mission driven? Are you creating a holding company that's built to pass down to your heirs? Are you buying certain types of businesses like real estate companies and title companies and packaging it in a way and hiring your family members to get that level of tax efficiency, that's 1. And then it just gets more kind of creative from there. So you can do things that are more hyper location based, you can do things that are more geographically diverse. And so one of the things you can do in like my city of Columbus, Ohio, I've thought and actually tried to buy one other local bookstore. So it's like within the market, how do you build a holding company where you can become more localized in place and then get local influence? And so that's one of the other things you can do. You can say, hey, within my community I have resources, I'm going to go and buy the other bookstores. And because I know the community well and I see that this coffee shop, you know, the founders has been doing this for 30 years, hey, there's a connection between coffee and bookstores. And this coffee shops two doors down I'm going to buy this. And hey, now that I have these three businesses, I'd rather just own the buildings that I'm in. Who owns this? Part of a strip mall, right? Can I buy this business? And so it's creating that really like hyper local approach to building a holding company where you have a number of businesses that are more location based, you can get more community funding, you can work with local credit unions, you can get grants. And so it tends to be a hyper local type company. The thing about holding company is that it's just like an llc. It can be kind of whatever you want it to be. It's just a container with a business thesis. Do you acquire businesses that are all the same and then roll them up together? Do you acquire different businesses where there's fewer economies of scale? Do you go really local on your local community and then use it as a way to get influence and maybe get into politics? It's just all built around whatever thesis do you have. Do you build by Internet companies that are really, really primed to use digital advertising? And because you've got a really great Facebook or meta ad manager now, you can buy these businesses and just leverage that technology. And so a holding company is really just built around a business thesis and that can be many, many things.
- [44:08]
Paula Pant
Now I'm sure there are a lot of people who are listening to this who are thinking, I don't know if I want to be an entrepreneur. I don't know if I'm cut out for it. I don't have the time, I don't have the money. I don't know what skills I have. Can you talk to that set of concerns? I realize I've just listed a whole bunch at you. So let's start with the I don't have time.
- [44:27]
Grant Sabatier
Yeah, I don't have time. I don't have money. I'm afraid this isn't going to be successful. My friend lost all their money being an entrepreneur. How am I going to find customers? How am I going to grow? How am I going to pick a product? How am I going to, you know, there's just tons. And I go through a lot of these sort of objections, try to dispel them. I think that everyone is already an entrepreneur. I don't think that entrepreneurs are born. I don't even think they're made. I think we're all entrepreneurs, we're all creating our own lives and entrepreneurship is all about creating. And so whether you're a full time employee, whether you have a couple of side hustles, we're already entrepreneurs, so it's important to figure out what it means to you and whether or not you want to actually explore what it could mean and what it could help you create in your life. And so this is the great thing about the time that we live in. You look back 50 years, so much of what we're talking about just wouldn't be possible. The tools didn't exist, the opportunities didn't exist, you know, because of the Internet, because of technology, because of just the ability to work from anywhere. It's unlocked so many incredible opportunities for people to test out what being an entrepreneur can be. And I'm constantly getting emails from people in their early 20s, you know, who are making a million dollars a year selling some ridiculous e commerce product, right? And there's always selection bias, right? There's always, like, someone who's been successful at it. And yes, entrepreneurship is hard. Yes, it can be lonely. Yes, it can be risky. I just want everyone to think about what it could mean for them and at least to understand what the possibilities are. Because you can learn about all the possibilities. How to launch a product, a service, a productized service, how to launch an H Vac company, how to launch anything that you want and then decide, you know, I don't want to do that. But at least you're making an informed decision on your life from a point of knowledge and not a point of sort of fear. Because we're all afraid anyway. Like, I'm still afraid when I launch new businesses and buy new things. Like, I still worry about my businesses. Like, it's still. It's never just, like always easy, right? But I think it's important for people. And this is one of the things, you know, right? There's so little in life that we can control. We're all sort of like, living within this illusion of control. Like, we think we have all of our lives locked down, but anything can really happen. And so of the things that you can control in your life, your relationship with money, what it means to you, how you spend it, how you save it, and then there's this other piece which is how you make it, right? And for me, it's just like I could never, never live with just my income being reliant on someone else, someone else who has different priorities than me. Ultimately, any business is about generating profit. And yes, your employer, they care about you, they want you to be successful, they give you all these perks, but at the end of the day, they're making money off of you. And so at the end of the day, it's gonna be about making money. We see this with all the layoffs today. And so it's really, really important to figure out how to make money on your own terms and all the different ways that you can do that and not just saying that, right? Cause we've all watched the YouTube videos and there's tons of business books out there that are just crap and it's just full of fluff. And for me, I'm just like such a detail oriented thinker where it's like, I wanna lay out a system. At least people can make the choice for themselves around whether I should be an entrepreneur or not. So it all takes experimenting, it all takes testing it out. And also a little bit of motivation and a little bit of spark, right? It's like you need to have that sort of like, I want something better for my family. I don't want to be stuck in a job that I hate. I don't want to be reliant on just one type of income. I don't want to just be reliant on my company that at the end of the day is just making money off of my time. And so to me, it's a very empowering narrative, right? And then it's not about just saying the thing, it's just actually, here are the steps for how you can do these things. Here are the tactics, right? Because everyone's going to say, oh, you should be an entrepreneur, pursue financial independence and make money on your own terms. And all these words and phrases just become kind of empty and hollow, right? Because they're shared so much. They're used to sell very, very pricey products and things. And so for me, at the core of my mission and my being is how do I take these concepts that like even financial freedom, my first book, you think of just some scammy infomercial. How do I take these things and re inject meaning back into them and help people at least make the decision for themselves on how they're going to pursue these things. And so for me, I wouldn't be financially independent without entrepreneurship. It's completely transformed my life and I just feel some deep desire to share how to do that with others in a way that is more expansive. And I think everyone should try being an entrepreneur. They should try it. There are so many of these initial hurdles. How do I sell something to somebody, right? And how do I get used to that and how do I get over this sort of uncomfort, right? And so there's just a Couple of these hurdles where it's like, how do I find an idea? How do I figure out whether that's a good idea? How do I start testing it? How do I see how it makes me feel? And how do I ease into this thing and then just get more confidence as I do it? Right? Because it's like anything, there's so much risk in life when you don't know how things work, but when you know how they work, you can manage that risk. Right? It's like things become more predictable when you know how things function, right? It's like when you know nothing about money or investing, you just get afraid and you don't open your student loan payments, and you're just freaked out about it. And the same thing with entrepreneurship. You say, gosh, I can't imagine doing that. And oftentimes it's just because you don't have enough information and you don't know what you should create and do. And so a lot of the book, a lot of my work is, how do you figure that out and start testing that? So I think everyone, in 10 years, 70% of people are going to be entrepreneurs whether they like it or not. And so can you get ahead of that curve and start getting this information? Because the worst thing, and I see this all the time, somebody gets laid off from their job, they've never been an entrepreneur, and they're forced to learn all of this from scratch. So at least start learning this and figuring it out, and maybe it'll even make you a better employee because you'll understand what your boss is thinking or what the owner of your company is thinking. You're like, oh, this is what my company is trying to do. We're trying to build to sell. Okay, I now know how that works. And so here is how I'm going to add more value to my company because I know how all of this fits together.
- [50:46]
Paula Pant
Let's talk about some of the types of businesses that a person can start. Now, you mentioned earlier, there's products, there's services, and there's productized services. Let's go through all three, starting with product.
- [50:55]
Grant Sabatier
Yeah. So product is just something you sell, right? It's a bracelet you made. It's a baseball cap. It's a ultralight camping tent. It's an apple pie. Right? It's something that you create that someone gives you money for. So physical products versus digital products. Digital products are obviously great, but it's a really competitive space. You can build something once a course, an Etsy Printable. You can Put it on these large platforms, build an audience and make money repeatedly, right? So digital products are great, but very, very competitive. Physical products with tariffs, all the stuff going on now getting very, very expensive to create physical products. But I still think there's a great opportunity there and I talk about that. So if you're really into baking apple pies, how do you build a business around it? Right? It's like a thing that you create that you only have to create once. Maybe you have to keep getting better at it. But I talk about this guy, Dan the baker in Columbus, Ohio, by far the most successful baker within Columbus. Sourdough bread goes between $11 and $17. Sells out by noon every day that it's opened. Viral sensation Incredible. Loves bread, bakes the best bread, has great people who does it. Never seen him in the. Actually I've seen him in the store once. I think he's always out surfing Costa Rica based on his Instagram account. You can build incredible businesses around very, very simple products if you do them at a high quality level. So I talk about the difference between physical product and digital product services. This is whenever you're trading your time for money. This is your consultant, you're a marketing expert, you're a podcast editor, you know, you're trading your time doing something. Service businesses are great because they often require no money to start. You just have a skill and then you're selling that skill. And so this is one of those nice things. Anyone can start walking dogs, anyone can start driving for Uber or Lyft. We all know the sort of limits of those sort of transactional training your time businesses. A lot of people start as a consultant, hey, I'm an editor or freelance writer. I'm going to offer my services. A lot of people just get stuck there. I talk a lot about how service based businesses, especially consulting, they're great places to start, but they're not great businesses because they're very hard to sell because they're often just reliant on you and your time. You're always chasing clients. It's very difficult to build those types of businesses. So in the book I'm talking a lot about, here's why this is great and here's why this is really challenging. And I go deep into this multiple list of the different types of products you can launch. So you can just start envisioning and thinking through, okay, you know, I actually never knew that I could be a home stager for a real estate company. I never knew that people got paid to do that. And you could build a business just getting paid by a realtor to come in and stage a home. Right. Or these things that you might not have thought about. But service based businesses are great when they can be productized service businesses. And we talked a little bit about this before the show. This is really the holy grail of entrepreneurship is when you can create a productized service, which is a service that you've packaged, that has defined deliverables, that you can then pay someone to deliver that product. And so in order to do that, you have to have done a service for a little while, found your market, and then you build basically a product around it. So when I had a marketing agency, we did Google audits, Google campaign audits for universities. And that was something. And then management. So that's something, a product that a university could come by for between 20 and $250,000. And that was something that I built. And then I had a team that I trained how to do it. And. And every single time we sold it the same way. The proposal looked the same and it was tweaked a little bit. And because we were doing the same thing over and over, the team got better, the results got better, it's more predictable. And so that's really the holy grail of service businesses is you've created a product that's a service, that's really a product.
- [54:48]
Paula Pant
The productized service seems like when a person often might make that transition between a solopreneur to an agency model.
- [54:54]
Grant Sabatier
100%. Yeah, absolutely. So at the end of the day, we know that being an entrepreneur is the way you're going to make the most amount of money and get more of your time back is you've got to create something and then hire someone else to sell it and deliver it. And so whether you have a product or a service or a productized service, you as the entrepreneur, you need to create the thing. You need to be Dan the baker and create the sourdough recipe. And you're going to have to hustle at the farmer's market for maybe a year or two before you get enough money to open your first shop or your first commercial baking location. And you're going to have to do it all at first and you're going to have to trade your time for money. But as you make more money and in order to scale and grow, then you start hiring other people, right? So you're not baking the bread, you're not the one at the farmer's market selling the bread. You're the one behind the Scenes, creating the things. But then slowly, you've built an infrastructure where other people are doing all of the work. And instead of selling your own time, you're selling other people's time. And that's really the great thing about entrepreneurship, I can tell you. Go into any of your favorite restaurants, and I guarantee you the owner is probably not the one standing behind the counter or cooking the food, right? It's someone somewhere. And what they've done is they've created a business and. And created a structure where they've hired other people to do all of the work. And this is the beautiful thing, because as you grow, you have more resources, you have more opportunities to hire other people, you've built the systems, and you have something that lives outside of you that you can then reap the rewards from. Because that's the thing about entrepreneurship. So many entrepreneurs are just overstressed because they try to do everything, and they've always tried to do everything. But really, these key points are, you know, it takes a lot of time to edit a podcast and post on social media and come up with interview questions and find guests. And if you can outsource that or have an assistant, here are the four people that you need to hire. Executive assistant. Number one, they should do everything that you do and learn how to do everything that you do. Number two, a great bookkeeper, someone you don't need, an accountant, even. Just someone who knows your numbers and can give you good data, a good lawyer. Right? And there's this. Just a few people that you should hire. Any solopreneur that just is going to free up immense amounts of your time. You can go out and buy expertise. You don't have to learn everything yourself. And so I know I sound like an evangelist a bit, but I'm just so into this because it's so. It just changed my life. And I've just now seen thousands of other people who've launched businesses and just. It's just an incredible time to be alive. And I want anyone who's like, hey, I can try this, or I want to try this just to have enough information and some motivation to try it out.
- [57:36]
Paula Pant
Well, in terms of hiring the ea, the executive assistant, better in person, or online remote.
- [57:43]
Grant Sabatier
So I'll tell you about my executive assistant, and I've had a few over the years, but the one that I have now, and the one that's been the best is a woman named Emily, and she's in her 60s and she retired after a long career in marketing. And then she, you know, I Got introduced to her, we started working together. This is someone who's based in the U.S. she lives in North Carolina. We don't actually meet in person. We did work in person for a number of years in Chicago, but now she lives in North Carolina and I live in New York and Ohio. But she has, like, over the past seven years, I've been able to teach her how to answer all of my emails, manage all of our systems, work with our vendors, work with the team. I basically cloned myself through her. She gets to do it on her own time. But the thing is, we built like complimentary schedules where she works about 20, 25 hours a week. So it's not all the time. A vast majority of her work. She's an early riser, gets up at 5am she can knock out four hours of email and tasks before I even log in. And so when I log into my email, we're using AI, we're using her. There's one folder and it just says Grant. And that's all I pay attention to. And those are things that have gone through multiple levels of review. And these are the things that I really, really need to pay attention to. And she's filtered those for me. And so this whole virtual EA hire from the Philippines thing, I know it works for some people, but for me, I'd rather pay higher hourly wage for higher quality time. And then someone who just knows me and she cares. She's like my mom in some ways. And she also looks out for me in other ways, like, hey, you should really pay attention to this. Or someone emailed you this. And she also writes back to reader emails. So people like my book. Hey, Grant loved this. It's like, hey, this is Emily, Grant's assistant. I'll make sure he sees this. Thank you so much for your support. This means so much to us. And then sometimes she gets in correspondence with my readers and all the good emails that she thinks I should see, she puts in this sort of love folder. So whenever I'm having a bad day, I can go in there and it's like, Grant, I loved your book, or this changed my life. And that makes me really happy. So she wants me to be happy. She's looking out for me. So I tend to think that, like, finding someone who actually not a young person, someone who's had a career and maybe they want to go part time or they're closer to retirement, so they have all this experience and they just want to do something on the side. It could be a family friend, it could be you know, there's just amazing people out there for me that just always felt more comfortable.
- [60:15]
Paula Pant
Close your eyes, exhale, feel your body relax and let go of whatever you're carrying today. Well, I'm letting go of the worry.
- [60:24]
Grant Sabatier
That I wouldn't get my new contacts in time for this class.
- [60:26]
Paula Pant
I got them delivered free from 1-800-contacts. Oh my gosh, they're so fast.
- [60:30]
Grant Sabatier
And breathe.
- [60:32]
Paula Pant
Oh sorry.
- [60:33]
Grant Sabatier
I almost couldn't breathe when I saw the discount they gave me on my first order. Oh, sorry.
- [60:38]
Paula Pant
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Grant Sabatier
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- [61:07]
Paula Pant
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- [61:10]
Grant Sabatier
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- [61:22]
Paula Pant
Just a ride or dinner at your door.
- [61:24]
Grant Sabatier
It's how Uber helps you show up for the moments that matter. Because showing up can turn a tough day around or make a good one even better.
- [61:33]
Paula Pant
Whatever it is, big or small, Uber is on the way.
- [61:37]
Grant Sabatier
So you can be on yours. Uber on Our Way.
- [61:50]
Paula Pant
We talked earlier about the three types of businesses, product, service, and product as service. In terms of who you're serving, there are a few classifications of those as well. There's B2B. Of course, there's B to C. Can you talk about how a person should think through whom they want to serve?
- [62:09]
Grant Sabatier
It's a great question. So first, before answering that, I want to say that you're always going to make more money selling something to someone who has money. Without a doubt. And so this is one of the things. If you go out and build a company to sell something to college students who are broke, you're going to have to get way more customers and probably spend a lot more money to launch your company and market your company than creating something for someone who has a ton of money. And I talk about real versus perceived value and the big thing for me was When I started building websites, the first client I got was a small lawyer who bought a website for me for $500. Small lawyer in Chicago. He wasn't that successful, he just needed a new website. So it was kind of bottom of the barrel. I actually found him on Craigslist, believe it or not, my first website client. But the thing about him is he introduced me to other lawyers in Chicago who needed websites. There's a local association I went and spoke at, got some more clients, and then I sold a $50,000 website six months later. Didn't even take me much more time than the $500 website. The thing is, it was for 100 person firm and this was this big light bulb moment for me. It's like, whoa, I can sell the same thing to two different people and make drastically more money just because this other company has more money. There's more at stake. They the better the website is for the 100 person law firm, the more money they're going to make. And so this is one of those key pieces where ideally you're able to sell something to someone who has money or doesn't worry about money as much. And I see this even at the bookstore. So at the bookstore there's people who come in from my community, there's the woman who comes in, picks five cookbooks, all between 35 and $45, doesn't think twice, throws a $30 tote on top of it. $250 revenue transaction for me, doesn't think twice about that. My margin's about 50%. So I've made $125 off a woman who's in the store for five minutes getting some cookbooks, some gifts, it's clear that she has money. Someone else comes in, 25 year old, spends an hour in the store hunting through all the bargain paperbacks, buys a $3 book that I ended up buying for a dollar. So I made $2 on it. So the margin is actually better right on that $3 book. But I made a lot less money. And those are two different consumers, the person who has money and the person who doesn't have money. And so you're always going to make more money selling to the person who has more money. And so that's a really, really important piece. I think it's also important to understand where your customer, your potential customer is in their life and how can you connect with them. And so we're all exposed to so many messages, so much information, it's very, very difficult to get someone to pay attention. This is why? It's very difficult to launch digital products because you can't just really run an ad and build a successful product. You have to be living within the market. And so this is the thing. I see a lot of entrepreneurs, hey, I'm going to launch this. This looks like a cool opportunity. But you can't launch a rock climbing product if you're not a rock climber or you don't know rock climbers, right? It's like you. We see this in personal finance. How many finance companies have we seen come and go over the years thinking that they could just buy themselves into the market? Right. And the thing is, you're not going to get accepted. You're not going to know how the market works without being inside of it. And so this is one of the things about even my bookstore. The first thing that I did when I decided to open the bookstore before it was open, the first way I decided to market it is I convinced our local farmers market to let me set up a table to buy books at the farmer's market. I'm not selling anything. We buy books here. I had a sign put it out there, and that was that people could bring their books to the farmer's market. I'd buy them, and then they could use that money to buy vegetables. I did this for four weeks straight, and it was by far the best, most effective marketing I could do. The farmer's market charged me $10 a week. So for $40 and some of my time, about 20 hours, I stood there and people, oh, where's your bookstore? Oh, it's a block away. Oh, I'm open. Oh, you're opening a bookstore? Oh, oh, you know, my mother just passed away and she has, you know, I have 2,000 books. Hey, I'm a professor. You know, I'm getting ready to retire in two months and I'd really love to find a place for all of my books. And so just with $40 and 20 hours of my time basically having this table at the farmer's market, I got to know who the customers were, I got to connect with them, they got to learn who I was. And I couldn't have faked that. No amount of Instagram advertising, no amount of Facebook advertising could have replaced that hand to hand interaction. And then when I launched some of the early book reviews, hey, I met Grant, you know, the bearded owner of the bookstore. He's a really nice guy and gave us good prices for our books. Right? No one knows who I am, that I'm an author, that I've Been successful. It's like most people have no idea who I am, right? They just know me as the bearded guy with the bookstore who's really kind of jolly, you know, I feel like I'm working on the sort of like Santa Claus, like the hipster Santa Claus look or something. But it's like it was by far the most effective marketing and way to connect with my customers was being at the farmer's market, connecting, buying their books in that way. So you have to know your market and figure out how to get connected with them. Same thing. I'm working on a project in the rare book world right now. I haven't announced it, haven't shared anything about it, but I've been going. I'm getting ready to go to the New York Antiquarian Book Fair. I went last year. I went to the Boston Antiquarian Book Fair. I've been paying attention. I've been connecting with dealers. I've been listening. I've been seeing the tools that they use, how they're engaging with those tools, how they're selling books, how they're buying books. And so I'm building a product. I haven't shared anything about it yet within the rare book world. I'm at that point where now I'm doing that grassroots component of getting to know the market, being involved, buying books from these people. And so you can accelerate entrepreneurship, but you can't fake it. People can tell when you really care, when you're really into it. And so I think that's an important piece as well. Within the book is like, yeah, you can go out and see how to make money and launch a product and maybe do it successfully. But at the end of the day, people can really tell when you care and especially when you're first starting out. It's very hard to sell against big companies. And the only way that you can do it is through your story, right? So if someone's always been working with this H vac company for 30 years, how do you convince them to work with your new upstart H Vac company? Hey, I'm Grant. I'm really passionate about H Vac. Here's why I'm launching this company. Here's where I see the opportunity in the market. Every H Vac company in Columbus is just selling subscription fees, and the costs and prices have gotten higher. I built this company to be responsive. We respond in two hours or less. We're fair, upfront, transparent pricing. We don't try to sell you on subscriptions. And I'm really Passionate about serving you, blah, blah, blah, whatever. You know what I mean? You think about the about page on the website, but you have to connect in that way. And the best way to do that is to really know your market, really know your customer. Ideally, you're the target customer in some way. And so this is the problem with this is once you start looking at the world this way, anytime I hire anyone, like, tree removal company, I'm like, I'm gonna launch a tree removal company. I could do this better. We'll be there 24 hours or less, $750 price point. So I start seeing these business opportunities everywhere.
- [69:20]
Paula Pant
Right.
- [69:20]
Grant Sabatier
And you look at the world a different way.
- [69:22]
Paula Pant
Yeah, exactly. I have a little bit of a dream of having a dumpster company.
- [69:26]
Grant Sabatier
Dumpster.
- [69:26]
Paula Pant
It's a good business in always. Yeah, exactly.
- [69:28]
Grant Sabatier
It's a great business, actually.
- [69:30]
Paula Pant
Thank you for spending this time with us. Where can people find you if they'd like to know more?
- [69:33]
Grant Sabatier
Yeah. Thanks for having me. So antsaboutier on Instagram, grantsabatier.com is my website on X. Those are the best places to reach me. You can email me grant sabatier.com. it's my personal email. Emily will see it and she will filter it and I will hopefully see it and get to read it and then, yeah, check out my books. That's the best way to engage with me. And that's my mission, is to share what I learned with others. And so my first book, Financial Freedom, you can get it in most libraries. You don't have to buy it. Just go to your local library. They'll have a copy, or you can pick one up online. And then my new book, Inner Entrepreneur A Proven Path to Profit and Peace, comes out today. As we're recording this, today is the release day, so thank you for having me. And I love everything that you do. It's nice to hang out in this context. We've hung out in less formal circumstances, so I appreciate you having me on and just love everything that you do and just love being on this journey with you. And thanks for having me.
- [70:35]
Paula Pant
Thank you. Grant, what are three key takeaways that we got from this conversation? Key takeaway number one. Many entrepreneurs invest too much money too early. Often with new projects, there's this eagerness to get started. And so a lot of entrepreneurs might just throw money at their business before they really understand how it works. Grant said that he spent years researching bookstores, talking to dealers and setting up at farmers markets before he actually opened his brick and mortar shop. And so he had this low cost testing phase that saved him from making expensive mistakes because he got to, he still, as every entrepreneur does, he still made mistakes, but he did so with, to paraphrase Dave Ramsey, he did so with fewer zeros afterwards. He got to make inexpensive mistakes. And in the process of doing so, he got to understand the business better and his customers better.
- [71:29]
Grant Sabatier
I think a lot of people put too much money into entrepreneurship. They launch a company too quickly, they invest a ton of money, and they take too big of a risk early on without doing enough experimenting upfront. And I think you see that all the time with retail. You know, there's a donut shop that opened just down the street and I see what this guy's doing and I'm like, gosh, that's a really expensive lease. There's already a couple donut shops within this neighborhood. I don't think that's a great business.
- [71:57]
Paula Pant
Don't over invest in your company straight out of the gate. Instead, take some time to learn. The first year or two, your primary objective is learning in a low stakes, survivable manner. So that's the first key takeaway. Key takeaway number two, your story is your competitive advantage. Because in a world where AI can copy pretty much anything, your personal story is the one thing that competitors can't replicate. Customers don't just buy products. They buy into the person behind the business and they buy into the values, the spirit, the personality, the character that that person represents.
- [72:38]
Grant Sabatier
I also talk about how your real competitive advantage, the only competitive advantage that you actually have today is your story. Because AI, everyone can copy what you're doing quickly. So how do you craft your story and share your story in a way that actually connects with others, connects with customers, how do you get them to believe in your story? How do you, how do you offer a promise and then deliver on that promise?
- [73:02]
Paula Pant
So bring yourself your personality, your ideas, your principles. Bring all of that into your business because it will show. That's the second key takeaway. And finally, key takeaway number three. You are already an entrepreneur, whether you know it yet or not. Grant believes that everyone will become an entrepreneur in some manner within the next decade. And you know Josal Sehi has a term, he talks about intrapreneurs, where you maybe you work full time as a W2 employee at a company, but you still are entrepreneurial in spirit and you're entrepreneurial or intrapreneurial about your own career and your own trajectory. If you look at entrepreneurship broadly, not just as a career category, but, but as a concept that anyone in any role could embody. So sort of if you look at entrepreneurship as a spirit that you could embody, well, there's a lot of value there. Because even if you stay in your current job, or even if you stay a W2 full time employee throughout your career, understanding how businesses work and having an entrepreneurial spirit at heart will make you a much more valuable employee because you'll be able to think like an owner and you'll be able to empathize with the owners.
- [74:25]
Grant Sabatier
I think that everyone is already an entrepreneur. I don't think that entrepreneurs are born, I don't even think they're made. I think we're all entrepreneurs, we're all creating our own lives and entrepreneurship is all about creating. And so whether you're a full time employee, whether you have a couple of side hustles, were already entrepreneurs. So it's important to figure out what it means to you and whether or not you want to actually explore what it could mean and what it could help you create in your life. This is the great thing about the time that we live in. You look back 50 years, so much of what we're talking about just wouldn't be possible.
- [74:59]
Paula Pant
Those are three key takeaways from this conversation with Grant Sabatier. Thank you so much for joining us through this conversation. I hope that you learned from it, I hope it sparked ideas, I hope it inspired you, and I hope that some positive change, whether big or small, comes from it. If you want to talk about this episode with like minded people, go to affordanything.com community. It's completely free. It's a space where you can chat with other members of the afforder community about anything you're interested in, whether it's entrepreneurship, debt, payoff, retirement, financial independence, anything you want to talk about. There's a community for you. Totally free affordanything.com community to sign up. If you enjoyed today's episode, please share it with your friends, family, with the people who run the local bookstore. Share this with the people in your life. Also, please open up your favorite podcast playing at and leave us a review. Let us know what you think about the show. I read every single one and they're enormously valuable. You can also sign up for our newsletter affordanything.com Newsletter completely free and we share valuable insights that you won't find anywhere else. Thank you so much for being an afforder. This is the Afford Anything podcast. I'm Paula Pant and I'll meet you in the next episode.