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- [00:00]
A
Welcome to the operators podcast. We're talking about money, how to get it, how to give it, how to spend it, how to wire the money to me directly. We're talking everything money. Today episode. We're going to be hiring CEOs, replacing yourself, all that type of stuff. How much money isn't enough? We're going to cover all of that today. Thank you for listening to the operators podcast. We have Matt, Mike and myself, the three most handsome operators. Let's get into the episode.
- [00:25]
B
ECF dropped their, like, their survey data on a whole bunch of brands that are in E Commerce Fuel. And it's all brand founders. And one of the things that was in there is there was this like data around, like, how much money and how do people pay themselves? And Sean, I know you've got a bit of a take on this and I, I'd like to start off, I don't know if we've ever talked about this in great detail, but like, if you're a brand operator, how are you making money? Is it salary, is it distributions, is it recaps, is it like, is it only acquisition? Like maybe. Sean, start us off and then, Mike, I really want to hear your thoughts on this because I know you've done some interesting things at Simple Modern too with how you guys think about like distributions and stuff. So, Sean, take us away, man. From your perspective, how the hell do people in E Commerce or consumer make money?
- [01:16]
A
One, I love E Commerce Fuel. They do great events, they have a great forum, active every single day with people who just talk about E commerce. And because they have so many members, you know, hundreds or thousands at this point, they, they, they do really great annual surveys and they, they put out this, this thing. I tweeted about it. It was about like, hey, small business owners, how are you actually getting paid? And we've all probably gone through this. Or if you run into Brandon out, you're probably going through this and they fall into different camps. Some people are like, I'm only swinging for the fences. What that means is they put their salary to zero or like ramen wages and their goal is to be bought by somebody, private equity or whatever, and they're going to have one huge, amazing payday. Right? You know, I would put Zach stuck in this, in this bucket when he launched Mars, man. It's like he already had cash flow from previous businesses. He didn't take any money out of business. He's like, I'm going to push this thing. And then he could get secondary distributions when there's actually Some sort of transaction event. Then there's like a middle rung which is, you know, take a normal healthy salary. So 50, 75, 100, $150,000 a year. Right. Like basically market rate or a little bit below market rate. And at the end of the year you're going to have some amount of money left over, going to pay taxes, you're going to buy inventory and then you're going to do a distribution for your profits. And then there's the just like bottle, like the lowest tier is just like maximize cash flow out of this business every single day.
- [02:37]
C
Right.
- [02:37]
A
There's people who are just, no matter how much money's in the bank account, they're taking 50 grand out. Right. So there's lots of different ways to structure this. I think the middle path is where people are. If you're listening to the show, that's what you're going to end up doing. You're going to have a salary, you're going to run your business as lean as possible. You're going to have profit in the year and you're going to pay yourself out.
- [02:55]
B
Mike, how have you guys done this at Simple Modern? Are you guys, do you maybe multiple partners in the business? Does everybody take a salary? Are you guys largely distributions? Is there a tax reason that you need to take a salary in the States? Like I, I know the Canadian system works. I know a little bit about the US types of corpse, but like maybe run us through your setup. No. Okay.
- [03:18]
C
Yeah. I don't think there's really a lot of incentive to take it as salary versus distributions. The way that the taxes work out, if you're un or a C corp, it's kind of six in one hand, half dozen in the other. So the way that we started was early on I took a very low salary, like a hundred for a year and then 150. I mean I say very low salary, very low relative probably to what CEOs earn in a lot of situations. For the revenue level we were at and low compared to kind of what I had made previously and everybody that joined the team, it was a little bit of a badge of honor that people took salaries, they took six figure salaries, but it was less than probably everybody in the early ownership group could have made if they were out on the open market. But we had equity and I would say we were so under capitalized that the first few years it's just like paying salaries and funding working capital. Like there, there were no distributions, there was no extra. And then on top of that we had giving. So we got to a point it probably took us, I don't know, five, six years before distributions were even really feasible. And at that point I really prioritized raising salaries and getting salaries to more market level first. So partially because that disproportionately benefited my co owners compared to me, because I figured I've got the biggest ownership stake and you know, the biggest thing is I want to keep them feeling appreciated and incentivized to keep growing the business. And then we grew some more and had some more success. And I use that to pay down our debt load to zero and to do more distributions, even do some stock repurchasing, stuff like that. And so at this point we have zero debt and you know, we have profit and we have a lot of optionality. We can do bonuses, we can, we can pay really good salaries, we can do distributions, we can repurchase shares, we can do all these different things. But I would also say we're near 11 and we're probably, I don't know, man, 700 million sales, 800 million in sales in, I mean, some kind of big number. And so I think the biggest thing that I've learned in this area is that it's completely counterintuitive how long it takes you to get to a point where you can really pull money out of a business.
- [05:34]
A
Yeah. And this is why the first path I talked about, the selling, like going for the acquisition is so attractive because Mike grinded, he like, he's waking up every day. He's a farmer planting the seeds, he's, he's tilling the field. And I mean like he's not broke by any means. I mean he's made millions and millions of dollars. But at any point he could have sold simple modern and gotten 50 or $100 million personally.
- [05:58]
C
Right.
- [05:58]
A
He can get 5 or 10x what, what he's earned so far by selling the asset. Right. And that's why a lot of people, like in their mind, they get obsessed with getting $20 million, any $20 million or like some big amount of money so they can buy the big house or buy a jet or that type of stuff. But the flip side is Mike owns 100% of his thing or you know, he's never sold a share and he still made millions of dollars. That is the power of compounding about owning the business.
- [06:22]
C
The big thing for everybody to understand is that like, if you're truly going to have an equity mindset, your earnings are going to be insanely lumpy, very unpredictable and Very back weighted. And for most people, they just don't want that. And so they're happy to kind of take some kind of an off ramp where they have less total upside, but they just have more predictability or they get more of it now. And I think that this is where kind of being able to be in control of your lifestyle and having, you know, understanding that most of your enjoyment comes from things other than like, what you can buy has really helped me. But like, it's also like, I'm gonna be like 60 and I'm gonna be getting distributions of, you know, really big amounts of money that I don't need and I'll probably be giving it all away. So it's, it's all kind of like what your goals are. But, but I just think that it doesn't make any emotional sense to people. It's not intuitive that, like, oh, I've got this thing and it's doing X million in revenue. What do you mean it's going to be seven years before I get significant money out of this? Like, it just doesn't make sense. Unless you've been through the experience. Dealing with big box retailers means EDI connections, and that's often a trigger for needing an ERP system. We've been using EDI connections to Costco forever, and the only way that we've really solved that problem to make it seamless is through Fulfill. EDI adds complexity to everything you do, and Fulfill solves that complexity with their connections to their systems. You need Fulfill to move from being just a D2C brand to being a true multichannel brand because big box retailers are going to require you to connect to their systems using edi. Let me tell you, it's way easier if you do it with Fulfill.
- [07:58]
B
Do you do Sean, I'd love to hear both of your thoughts on this, but start with Sean. But do you have a strong sense of what Enough is? So, like, all of this rooted in like just how much is enough? And then past that point, you're doing it for other reasons. Like, I guess that's kind of what I'm taking from Mike here.
- [08:18]
A
Yeah, well, they did a study where they asked hedge fund managers how much more money they need to retire. And it's always two. Yeah, yeah. So I mean, the human nature, there's never enough. Look, and there's lots of reasons for that. I mean, we started this podcast talking about how hard it is to have a kid and how I'm blessed to have money to pay for things. So it's like it's like there's, there's good reasons to want money and chase money. I don't think money is inherently good or bad, but you need it to do a lot of shit. So look, I think the, the better thing is how, how old are you, how much gas you have in the tank and what do you actually want? For instance, I bought a company a couple years ago and the guy had, in his head he needed $4 million for his business. And I'm, I can't get into the details. There's a lot of legal stuff to it. I ended up buying it for like a million bucks or whatever. And the whole time he's like, I just need 4 million, need 4 million. And I kept being like, okay, dude, I'm the only buyer and it's a million. So you can either take it or you can go out of business. And in, in his head, $4 million was his, his enough number, right? He end up taking a million dollars and he's doing great. So I, you all, I think you need way less than, than you dream or imagine, but you do, you definitely need something. I guess that's the answer to the question.
- [09:30]
B
And Mike, like, I'd be curious, like, did you think about this a lot when you were, as you were building simple modern and as you like think about taking money out Personally, is this part of the framing? Because I think it all goes together. It's, it's, it's not about how, it's, it's how much and when. And I agree on all that, but how much thought did you put into this going in?
- [09:49]
C
You just, you have to spend a lot of time thinking about this because that's the primary reason everybody's showing up. They do have to earn a living, right? And like, that doesn't make them a bad people that they're like focused on the money. Like, that's, that's the reason, that's the, the reason why we get up and do jobs. Like, I love the people I work with, but if, like, if there was no money in the world, like I, I might build things, but I wouldn't probably be doing business, you know, Like, I, I do it because it helps to support my family and I'm able to give and all this other stuff. So like, yeah, like, you gotta think about these things and you have to think about the trade offs. I think the most interesting questions are what's an appropriate salary for a CEO to take at different stages? Like, what's an appropriate salary for you to take at different revenue Stages, what's an appropriate salary to take if you're not profitable versus you're profitable? Because think it kind of all of the other executive compensation flows downward from there. And I think the times that I haven't spent a lot of time being deliberate thinking about this is probably when I've gotten compensation in other parts of the organization wrong. Because my motivations, the one of the lessons I've learned is that my motivations as the primary owner are just going to be different than everybody else's. I'm differently situated. And that doesn't make them bad that they don't have like an ownership mentality or an extreme ownership mentality. Because you know what? They're not owners in the same sense that I am. So I think that in some ways this question is a larger framing on how do you think about how compensation flows out of the organization and what's your share in that? And when you're sitting on both sides, when you're like at the top of the cap table and you're at the top of the organization management, you have to really think about how you want to compensate yourself as on the management side. And so like, it's really weird. I basically have like these two hats I wear. I mean, if you're an owner operator, you do where you like have the CEO hat and then you have the big shareholder hat. And sometimes those two different entities like want different things. Like if I just have my CEO hat on, I'm like, yeah, I'm worth a bunch of money. I actually make a million dollars a year. And if I just have my, my top shareholder hat on, I'm like, well, maybe, but like there's a bunch of other smart people that would probably do it for a half a million dollars or you know, whatever. And so anyway, that I think those are the tensions is that it doesn't. None of this stuff happens in a, in a vacuum unless you're really like run in a very small company with one or two people.
- [12:09]
A
You know, Matt brought up, he asked the question, is there tax reasons why you have to take a salary? And there is just guidance from the IRS that you have to take a market rate salary for whatever your role is.
- [12:21]
B
Yeah, that's why I asked because I think there's something right, yeah, you can't
- [12:24]
A
pay yourself a dollar, but like market rates all over the place. And I think this is a great conversation to have about like what is CEO comp and what should it be? And the classic thing is if you had to replace yourself, how much does that cost? Because, Mike, you're a great CEO. You can totally run the Simple Modern right now. Are there people on earth who could do a competent job of being the CEO of Simple Modern?
- [12:48]
C
Absolutely. Everybody's replaceable, right?
- [12:50]
A
And is there somebody on earth who would be more valuable running Simple Modern than you? If Elon Musk came to you and be like, hey man, I'll do it for 600 grand a year, it's like you'd definitely do it, right? Or Terrence, the old CEO of Stanley, right? Like he'd do a great job coming into your, your business, right? And you'd give them a million dollars
- [13:06]
C
a year to do it.
- [13:06]
A
So you know market rates all over the place. What would it cost to replace yourself? I think what it comes down to is if you have a business doing 20 to $40 million a year, which are, which is our core audience, CEO should make at least a quarter million dollars a year, right? It's like that is, I think, I think benchmarking. It's not basically like 1% of revenue in executive.
- [13:28]
B
I was going to say it's usually around 1%. Like so it's like on the high end, maybe smaller. If it's like single owner, you could justify paying yourself more. But like probably distributions from what I've seen, like in my first company we were largely distribution based and I think by the time we had sold it, we had already distributed out like many, many, many millions. And you know, so like the sale was more like just the cherry on top of the, I guess at the end of the day, which does set you up differently for how you think about your own comp going into it. I do agree with Sean. I think that one a really helpful frame for this. If you have multiple shareholders, active or interactive, if you're the CEO, it replacement value is actually really important. The reason I bring that up guys, is when it comes time to ever selling the company, that's the math the buyer's gonna do like, they're gonna look at it and say like, so it's nice that you paid yourself 50 grand a year, but I gotta replace your ass with somebody who's gonna make 500 to 750. And I'm adjusting EBITDA now to change the sale price. So like, you gotta think about this
- [14:35]
C
a little more holistically what you're saying, Matt, is that going back to the analogy I used, I have two hats that I have to wear. You know that the more you can separate those hats the better. Basically like, yes, I might be CEO and also the biggest shareholder. But those are very different things. And so like the way that I think about comp. Like it needs, I need to appropriately separate those two things out, right. I can't be like, well, I'll pay myself less because I'm just getting distributions. Because, like, it just don't run your business that way because a buyer's not going to look at your business that way. Like, look at yourself as like, what's the market value of me as a manager? Just like Sean said. And, and then you can, you can have a sustainable business because the other way you can run your business other than selling it is that eventually, exactly like you said, Sean, you find somebody very competent to take your place and you continue to retain ownership of the asset and it continues to make money. You, you just aren't doing the work. And we actually don't talk about that enough. I, I think on the pod, we talk about, well, here's how you sell your business. It's just as valid to talk about how do you build a business that's structured where somebody else could run it and you can still make the money as the shareholder, which is also awesome.
- [15:48]
B
We don't do that. I actually don't think that's enough of a conversation in like, broad North American business is like, how do you build things that last a long time? And I guess, like, I listened to a podcast many years ago and the point of the, I think the, if you could summarize like two hours of talking into one thing is just because you don't sell it doesn't mean it's not valuable. It's just that people seem to value. Like my wife doesn't. Like there's times, there's many times, and hopefully she's not ever going to listen to this, but where she will literally look at us like she thinks we're poor because she can't see it in the checking account. It's like if the money's not under the mattress, you don't have the money. And I'm like, that's not how assets work. Right. Like, but we put so much value on like dollars in the bank and we don't actually put a lot of value on the asset that is just own the damn company and it generates cash flows and it's a really good
- [16:41]
A
thing known we're in the zillification of the world. It's like every, even private market investments, you can see the marked, the marked value every day. If you log into your, you know, I forget the software. I Have to like, you know, the one, the one with all the shares in it of Northbeam or whatever our fair tester sponsors. But you know, it's same thing with Zillow. It's like you used to, like, not really know what your house is worth, but now every single day you can see all the comps in the neighborhood, right? So like, people are putting real market value to everything all the time. And it's weird when you have an illiquid asset. Like, what's Ridge worth today? More than a dollar, but less than a billion? I don't know. Somewhere in there it's like, so if someone wants to make a bid, I'll take it. But let's talk about actually replacing yourself as CEO, right? Because I do think that is a great topic for an episode. Maybe we're not going to get to all of it today, but if you do not sell your business, okay, and you want to retire, who is going to run that thing? Do you have a strong number two? What does that look like? To recruit them, I'll say internally. At Ridge, we have our coo, Andres. He was hired with the intention to be president, Right. He's been here two or three years and he has a clear path that when I want to stop doing this, he'll step into that role. I do think they need to come from inside though. Like, you can't just go out there and hire a CEO. I think it's. There's too many horror stories about that. But, you know, maybe, Mike, you're the closest to wanting to do this. Probably. So where's your head at? Implementing AI without trusted data is shooting in the dark and building application from scratch. Dealing with tableau, dealing with data pipelines, dealing with all that. It doesn't have to be your headache. You can hire Saras analytics to handle that stuff for you. Saras IQ gives your leadership team a single shared view of the truth. Contribution margin, channel, performance, customer economics. All can be answered instantly with the power of Saris Analytics. Do not fall behind. Saris analytics is experts. They've set it up for Ridge, hexcloud and hundreds of other brands. Speak to them today. Connect whatever AI tool you already use and you can put that right on top of your personal data, privately, securely, and you can start talking to your data like your favorite chatbot.
- [18:48]
C
Just a couple of thoughts before I give the specifics of how we did it. You said this, Matt, but many of the best businesses ever built have never transacted. You just wouldn't know who they are because they're privately held. And I'll tell you what, man, you get over to Europe, you look at some of these like shipping companies, like you're talking about generational billion, multi billion dollar estates. In fact, Julia Lewis Dreyfus, her father had one of those businesses. She's apparently loaded beyond belief. Yeah, it's like, it's crazy, but she comes from one of those old money families that just has an asset that never transacted. And so I think that that's part of the reason that people don't think about this path very much is that you just don't see the news clipping on those. We've got one in Hobby Lobby that's based locally that's just, it's just prints money. Anyway, so the, one of the ways that this ties in directly with what we're talking about with compensation is that the more you pay yourself to manage, the less you are going to pay other people to manage. Right. So another way of saying it is the bigger the share of salary that your company's paying that you take, the less of the share that that's going to other people. And what that generally means is the lower quality of people you're surrounding yourself with. It's either you're surrounding yourself with less people and they're having to do more or you're not going as up market with the people that you're adding. But so like, it's a very logical thing sometimes when you sit on both sides to say, hey, I'm going to take less money out of the company in one way or another so that I can recruit, develop, retain talent that can take my place. Right. So like, and that's what we've done a lot of is like we've, we've spent a lot of intentional time cultivating a lot of leaders where it's like, guys, if, if I just decided tomorrow that I'm gonna go full time with podcasting like Sean, that like, I could do it and the company would be fine and it would be great. But that's also because like, I've invested really heavily in other people. And so we've probably got six or seven people that could be a CEO level leader. And some of them are spinning out to other businesses, but some of them are kind of being ready to take over if I, like, I don't want to be the CEO of any entity, any. And like at some point in the future, I don't know how far off. So yeah, so I'm spending money, I'm probably taking less Money out, spending more money to be able to create a future where I can abstract more, if that makes sense.
- [21:07]
B
Do you guys have a strong opinion on where the. An internal CEO might come from? So, like, what function in the business
- [21:14]
A
Traditionally, there's two paths. CFO or CEO. There's. I think in the Fortune 500, there's probably two current CEOs that came through a marketing tract. So, you know, if you're a tech company, you can come from the product side or the CTO path. But like, I'll say internally address, he's our coo, so, like, that's the path he's come up through. I think in consumer increasingly, it should be the cmo. I think marketing is the most important function in the modern digital brand. Um, but just there's not a lot of clear examples or product.
- [21:49]
C
Sometimes, Sean, I mean, you can make the argument that Jobs was really like, I mean, he, he founded the company, but if he'd come up through the company, he probably would have come up through product with the way that he thought.
- [21:59]
A
Yeah. And. And John Ternus. Right. So, like, I think if you're, if you're a tech company, I think through product, through cto, something like that. But if you look at the Fortune 500 as a whole, it's going to be COO and CFO. Like I think Targets. Target just named their new or probably a year ago and it was the CEO took over as the CEO role. So it's like that's, that's the traditional path.
- [22:21]
B
You know what? If you guys ever want to ask him, I mean, this is just fun. I just did it. But like, if you get, you can get a list. Thanks. AI. Of like, large, privately owned companies that have been around for decades and are owned by families. The list is actually really impressive. You've got like Cargill and Coke and Mars and Bosch and Aldi and Ikea and Bechtel and Cox. Like, names that we actually do know. Right. Like, most Americans would know these names. These are, these are. Some of these companies have been around since like the 1930s.
- [22:50]
A
Yeah. But you know, the, the big thing that that list has in common, there's a lot of European names on there.
- [22:55]
B
A lot. Oh, dude. Ferrero is a great one. Right. Barilla is a great one.
- [23:00]
A
If you guys ever want to see, I mean, or go down a really crazy rabbit hole, like the ownership structure of IKEA and like, the way that they keep that as like a privately held asset, it's pretty nuts. I mean, that business is really, really big. Like $80 billion a year. Big. It's like one of the biggest companies,
- [23:16]
C
Rolex has a similar one, Sean, where they have this kind of foundation piece. Yeah. And so like as an example, like that's probably more my jam, right? That like there's a foundational component, there's a big giving component. Like another piece of this, like for me is that I just want optionality because I've got two kids and I'm like, that are 11 and 14 and I'm like, maybe I could see both one or either of them wanting to help run the business or, you know, be involved, but they're also too young to be thinking like that. So I just want to keep my options open.
- [23:50]
A
Okay, I'm glad we're having this conversation. I before this podcast, I had a call 30 minutes ago with a big strategic in my space who was privately held and his grandfather started the business, then his father inherited the business and now he runs the business. And this is a multi billion dollar year business. And I was talking about this because he just had his third kid and he's got two siblings. So he's like, look, he's having this conversation right now. He's like, how do I set up the structure when it was so easy? It was my father and then his father. Now there's going to be nine kids. How do we make sure this thing doesn't get ruined? So maybe a different episode for a different day, Mike. But thinking about foundational structures, maybe it's too niche of an audience, but I'd love to hear about it.
- [24:33]
C
I don't think so at all. I think that if you're involved with really big numbers. So this is a kind of hobby for me. I don't know if hobby's the right word, but it's like a thing that I've devoted some time to talking to exceptionally wealthy families where the patriarch kind of started a business and now they're at generation three. Because the, the thing that I really want to understand is how did they structure the business, how did they structure the money and how has it turned out and what have they learned through the process? And the reason why I want to talk to people that are old enough that they've got grandkids is that it's given it enough time for them to understand kind of the ramifications of their actions. And it's very similar to if you talk to wealth managers, the type of people that do estate planning and stuff like this and what you really learn. And this is what most people who are Kind of in the process, I think of going after money. Don't think about is the obtaining of money is actually in my mind a lot easier than steward that, stewarding that money well and making sure that money doesn't burn your family to the ground. Basically. This is what I've learned from all of these things. And so you should spend a ton of time thinking very intentionally about these things. Like it's great if you have a successful business and it gives you a lot of options. But also there's a, there's, there's real peril that comes with that. There's trade offs. And so I've actually spent a lot of time trying to figure out like, hey, how do I prevent the success of Simple Modern from like making my kids and my kids kids miserable? You know, like if you look at, I think it's the Vanderbilts. It's just insane the way that that family.
- [26:08]
B
Gross story.
- [26:09]
A
Yeah.
- [26:09]
C
I mean the wealth just burned the family to the ground. It was all gone. Like he was like the richest man in America or second to Rockefeller and by the time they were in the third generation, it was all gone.
- [26:20]
B
Yeah. Anderson Cooper is the first successful Vanderbilt in like 200 years.
- [26:25]
C
And. And it was like, it wasn't even just that the money was gone, it was like. And it made them all miserable. And so I, I think I. It always comes back to me, to the thing I always say on the show. It's like you can't even talk about how to be successful until you understand what you're aiming at and once you understand what your goals are. So like, even if you're talking about how do you pay yourself, it's like, well, what are your goals? You know, like so for me, I want to be able to, I want to be able to have priorities outside of the business. I want my family to be healthy and my kids to have good lives. And you know, I want to be proud of like what the company does and I want to empower other people. And so I'm going to make decisions around that. And that might be really different than Sean or Matt. And that's okay because I have my own success criteria.
- [27:04]
A
I would say there's another famous story in the E Commerce space. This was during the COVID boom. Guy had an accessories brand. He gets approached by Strategic to buy them and he goes, I want a billion dollars. The company was doing about like 60 million a year or like then like the strategic was like, okay, we'll make the case for it and we'll see what's going on and he ended up getting into a horrible deal because like he missed projections, it was predatory. He needed money, he needed a loan. And it's because in his mind like he's anchored. He's like I need a billion dollars. So we just rambled a lot. If you could take away one piece from this, it's understand what winning looks like, understand what success looks like. And I always say this. Get your million, your first million dollars as fast as possible. If you have to sell the whole business or take distributions or do whatever, get that first million doll. Really build that road map like Mike's talking about. Understand where you need to go with, with, with your earnings and, and what is, what's your dream outlook?
- [27:57]
C
I, I'll build one more concept on top of it that scarcity is good for us and constraints are good for us. There's a new book that's coming out that talks exclusively about like the really positive side of scarcity and constraints and the like. We, we were really under capitalized early on as a business and it helped us to make much better decisions and grow the muscle of being really decisions because we just didn't have very much money. But like the same is true about your personal balance sheet. A lack of scarcity breeds laziness. It breeds investing in things you shouldn't invest in. It breeds getting soft. Right? Like all these things are true. And so like there's also a reason why I haven't taken out $50 million or whatever because it's like I think it would be a net negative on me. I've got enough to live, I've got enough to do very nice things. But like I'm not trying to take out so much that I get fat and fat and happy because that really, that, that that's a real thing. So I don't know I'm, I'm a believer in like I try and have goals that I can't quite reach and that I have to work towards and I only take out enough to kind of for what I need right now. If you're scaling an E commerce brand today, ads alone aren't enough. After Sell focuses on the one moment that every brand already owns after checkout and turns the post purchase moment into more profit. Monetize every order with post purchase offers and thank you page experiences without disrupting checkout or hurting conversion. Enterprise grade tech used by Gap, Ticketmaster, Macy's and Target. Now driving results for brands like True Classic, hexclad Ridge and Jones Road. I would know this is the reason I ended up buying three pans from Hexclad instead of two. Aftercell has already generated over 1 billion in additional revenue for E commerce brands. Revenue that doesn't require more traffic or higher cac. So check out after sell and tell them that the operator sent you.
- [29:53]
B
I got a few things on this. I think the. Sean, what you're hitting on first is an understanding between, like, I would say the framing is financial security and then financial freedom. So like, the goal is, I think, get to security as fast as possible. Security being like, it's very hard to get knocked out of the game personally. Now freedom is like the, the. The movie quote, like the FU number, right? So it's like, it's enough money that like, nobody can ever really tell you what to do. And those, those are different based on where you live and what your goals are and all that stuff. But I would say, like, that's a simple framing. It's like security, you know, and then freedom. And I think, Mike, for me, like, what I'm taking from you is, is that if you. I, I would be very conscious of this. Like, and I've seen friends that get very wealthy, that it is actually a net negative. And then I have friends where they get very wealthy. And then the opposite side of that is that they've put a lot of effort into keeping sort of like drive and discipline alive so that it doesn't actually net drag them down. Right? So like, they tend to. These are the jackasses who. And I say that endearingly because I might be one of them that like, sign up for triathlons and, and like, they wind up doing other hard things in life to keep them from getting soft. And I guess my third thing, my takeaway from. With this, with you guys. And I don't know how many people you know like this, but in my, I guess in my life right now, a lot of people have sold companies over the last 10 years. Inevitably, I get. There's like two common things I hear from both of them always. One, I shouldn't have done that. It was valuable just owning it. And two, I really miss having cash flow in my life. Like, it's. It's that simple. It's like they might have a hundred million dollars in the bank. They're like, but I got no cash flow, man, and it sucks. Money only goes out now. So I think there's like, dynamics to all of this that you just should be aware of.
- [31:48]
C
Yeah, for sure. And, and I guess to bring us all the way full Circle with what we're talking about. If you're an owner operator, you should pay yourself a market salary. I think it's good to try and build toward distributions, but you should keep money inside the business. If you can make really good investments and having some kind of a balance is a really great place to be where you make a really good salary. And then also you have this asset that you're working on every day that's paying you some additional money as distributions. And I just, I've loved being in that situation and I think if you achieve that, it's great and you have maximum optionality about where you want to go from there.
- [32:24]
A
And I'll just say a good rule of thumb, 1% of top line revenue as a salary for CEO replacement up until about 500 grand a year and then it's 1, then it's 500 grand plus bonuses equaling probably 500 grand.
- [32:38]
C
Sean, how do you think about compensating your president, who or your kind of. You said he's your CEO right now, but you're kind of president and waiting position. How would you think about that?
- [32:50]
A
The hardest thing is how do you keep someone around for years, right? Like you know, he's been here three years or whatever. I might, I might, I might not be ready to move on in three years. So like he has to have enough salary to you know, float whatever life he is. Also this is somebody we recruited who was already a CEO. Like so I had, I had to overpay basically to get this person in the door and then he has a strong comp package in terms of bonus. So like, you know, he could, he could be the second or third highest paid person at the company, including his bonus. We have lawyers and lawyers make a ton of money and then he has a multi percentage point ownership interest in the business. So like the hardest thing and the reason why family businesses work is because your kids, you're from a very young age, they know that they have to shepherd this thing, right? Like that's how European companies do it. How do you build the structure to hire people to manage that business business? And as much as you hate public companies or you might not like the large scale companies that you have to interact with, the public shareholder interest that we have in America does a great job keeping companies on the right track. It's very rare to hear about CFOs stealing money or running off with drugs or whatever. And it's because there's a lot of structure put in place. So there's a reason why A lot of these companies go public is because just all of the extra scrutiny that goes with being public. But how do you do that in a private company? It's like you have to build trust over years and years and years. So that's. That's the way we had to do it.
- [34:23]
B
Mike, I, I am then curious because Sean brought up the, you know, you need to know what you want. You've mentioned it. I would like to know if you are thinking sort of like long game, like, what are the ultimate goals for you? Like, just personally. And then, Sean. I'd really like to know, Sean, how you, even beyond Ridge, like, you're in this game of business and you're. You're like in your early 30s. You're so young in this game. So maybe Mike, kick us off because I, I love this topic.
- [34:50]
C
It helps to have avatars, people that you can look at and say, not necessarily I want to do exactly that, but I want to draw inspiration from that. And I, I think there have been several families that, that I found that from. I don't do great. I'm not at my best if I'm not in community and if I'm not working on problems. I know this about myself. If I were to abstract completely from the simple modern business, I would just go look for other problems to work on. And as I've had more flexibility, I've been able to work on the podcast. I have several businesses that I advise for. But knowing that about myself, one of the ways that the company I've created adds value to my life is it gives me interesting problems to solve with people I like being around, and that's really valuable. So, okay, that's an asset, and that's something I'd want to be true. Probably not just for the next three or four years, but probably for the next 10 or 20 years.
- [35:40]
A
Years.
- [35:41]
C
Unless something were. Were to change that I can't foresee. So, okay, that's a value add. I really am committed to philanthropic giving, and I love that I can do some of that through the company and it makes it possible for me to give outside the company. And I'm one of the. These types of people that's like, hey, if you can make money and you like to give money away, you should try and make as much money as possible. I. I think we live in a culture where it's like, hey, make as much money as possible so you can buy the most stuff. And I, I don't subscribe to that, but I do think like, ob Obviously, as Sean said at the beginning of the episode, like, you can do a lot of really positive things with money and I'd like to make a lot of really positive impact. So I'm pretty motivated to keep building businesses. And then, you know, from a personal lifestyle perspective, I guys, I already have a great life. Like, I love my family. My favorite thing to do is to spend time around my family. I have a lot of great friendships and a lot of great community. I live in this awesome house that I built that I don't have any debt on. And so, like, I think I've kind of like already basically maxed out the kind of lifestyle thing. And I found that it's actually shocking how little it takes for that to be true in my life. And so I'm much more concerned now with, okay, what's it look like for this to be great for my kids? What does it look like for me to be engaged in philanthropy and making an impact in a lot of people's lives? What does it look like for me to be able to have something to work on, you know, problems to solve, puzzles to solve on a day to day basis with people I enjoy? And I think the one thing that I want more, that I've decided I want more flexibility with, is that I want to be able to kind of roam around and pick the puzzle each day. I don't. I like it when no day's the same. So that's probably the piece of flexibility that's unique to me because I own the business. It's like, hey, I can, I can bounce around to our different business units. I can go advise another business. And you know, what if it's Wednesday and I just want to do a podcast or I just want to, you know, to take my wife to lunch for three hours, Like, I can do that. And so the, the last piece, I would just call agency. I want to live as high end agency life as you possibly can. And the business makes it possible for me to do that while also maintaining these other things. And it's usually mutually exclusive. Like, I either have like interesting problems to solve and things to work on, or I have really high agency. But you can't have both at once. And I'm trying to figure out how to do that.
- [37:59]
A
Mike, how old were you when your parents or how old were your parents when they paid off their house?
- [38:03]
C
Gosh, I don't even know, Sean. Probably probably their 50s, 60s, I don't know.
- [38:12]
A
Outside of the entrepreneur community, you have to remember people have mortgages for 30 years, you know, What I mean, so, like, you know, they could be 30, they're gonna be paid off the house till they're 60. And if you can speedrun. This is why getting the first million dollars is so important. Matt did a great job calling it financial security. It's like, just pay your house off. Because if you pay your house off, if you have no debt and your house is paid off, you could work at Starbucks and survive. It's like housing is so expensive, so it's like you just. That's the box I'm talking about checking. Just get to the point where you have no mortgage. Everything becomes a lot easier after that.
- [38:43]
C
Well, and like, I just will say one qualitative thing that I've observed, and that is when you have a lot of money, you start to think that that's the tool that solves every problem. And what you start to find is it's. It's only. It solves a few problems, really. Like, if I want something to do, there's a million ways I can do that that don't involve spending money that are going to be deeply satisfying. But if I have a lot of money, it's like, oh, you know, I got to pick something that, you know, spends a lot of money, like, I'm going to fly private somewhere or something. And I think that that's one of the ways that you can get turned upside down by wealth, is you just start thinking, well, I have all this and I've got to use it. And it must be the tool for any challenge or problem I face. And it's just not true.
- [39:25]
B
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- [40:27]
A
There's.
- [40:28]
B
So this is such a hot topic on the Internet, but like, speaking specifically to entrepreneurs, I have long maintained that while in a even and especially in like these low interest environments, I mean, we're still in a low interest environment. Let's just call it what it is. Like, it's not that high relative to history. If you're an entrepreneur and you don't have a mortgage, that's a good use of capital because like, that is literally sleeping at night when you already take so much risk in your day to day life. You know, like, don't list in my view. I tell people all the time, like, do not listen to the people that say, like, yo, no, you should just invest the money, have a mortgage, take the spread between the interest and what you would make. You're still not going to sleep better. And as an entrepreneur, like, I would take the sleep all day long.
- [41:12]
C
I would take on this to just say that like my, the house that I have is kind of like in my mind, almost like a trophy. It's like, hey, I worked really hard on the business and I was able to buy this thing and pay for this thing. And so it feels great. It feels great. Like, hey, here's a concrete reminder. I'll give you guys another analogy. So like, I'm really tight with the Thunder and they won the championship last year. And usually the way it works is like everybody on the team gets a ring and then like some of the support staff and some of the organizations. And so like as a thing they did for a few people that weren't on the team, they, they gave out rings. And I don't know how many of these made. They. Maybe they made 10, maybe they made 50, I don't know. But like they gave me a ring and so like, how much is this ring worth? I don't know, like, I don't know how much it cost them for the materials. But the point is that they chose to give it to me and like, so that makes it really valuable. And I just think, I think that it's kind of the same kind of concept with, with concrete things. Matt, like when you turn everything into an, like a return on investment calculation, like, you miss the point about how we work psychologically. Right? Like you said, my wife, the fact that the house is paid off and we don't have a mortgage. Like, makes her sleep great. And it's like, well, what's that worth? That's pretty much priceless for me.
- [42:22]
B
It's worth a lot.
- [42:23]
A
Well, I just want to say, Mike, you've just moved up two full notches in my belt. You're so much cooler than I let you have an NBA championship ranked.
- [42:32]
C
I mean, look at the size of this thing. It's freaking huge, isn't it?
- [42:34]
B
It's hilariously large.
- [42:36]
C
It's so big. It's so big that the real ones like that the team got. This opens up and there's a smaller ring inside of it because you can't wear this. This is like multiple fingers big.
- [42:49]
A
At one point, Matt said, you should pay off your mortgage even if you have low interest rates. No, if you have a 2% mortgage. Ignore what I'm saying. That is a gift from God.
- [42:56]
B
Keep that story. That's different. Yes, that's free money. Take the free money. But like, balance sheet wise, I think I'm with you. I, I think it's still the same thing. It's like if you have a million bucks and you have a half a million dollar mortgage at 2%, you're, you're, you're basically mortgage free. Like, that's great.
- [43:15]
A
But all we're saying is like, it's like, you know, our jobs are very risky. Our business is very risky. We have a lot of. We have people smarter than us that have gone bankrupt, right? Like, you can get taken off the board and it's so much easier if you just own, own. Own your house. Just like it's an asset that's just going to be there. Mike, you brought up having avatars. People you look up to or. Sorry, I actually pause what I'm saying. Matt, you want to say something?
- [43:38]
B
Yeah, I want. Sean, I want to hear your, like, what you're aiming for, like, what are your goals? Like, you're a young guy. What, what is like the North Star for Sean? Frank.
- [43:49]
A
Yeah. And Mike brought up having avatars. My avatar in my personal life is Jeremy, our good friend. Because, you know, we talk about, we've known people who've gotten rich and then stopped working, right? And like, you know, you get after booze a little bit, you get after the ladies a little bit, and then just like you end up being 45, doing stuff that 22 year olds would do, right? Jeremy's not that guy. Jeremy is insane. Like, he is still probably working 14 hours a day yelling at suppliers. He's texting me about like, he called me during this to talk about some sort of new North Beam feature he wants to talk about. And that's a guy who by all accounts has made it. And he's still grinding. So, like, that's the avatar for me. It's like, it's like the reward is doing the job. It is not the money or anything else. It's like the reward is like you get to do the thing every day. And that is just so inspiring. So I'm trying to be like Jeremy when I, when I grow up. Dude, the guy, the guy's killing it.
- [44:48]
B
It.
- [44:48]
C
He's a true love of the game guy.
- [44:50]
B
He is, He's. He absolutely is my favorite thing that Jeremy does, honestly. And this is like, maybe we'll turn this into a Jeremy love fest. Him and his wife, like, go for a walk together.
- [44:58]
C
I was just about to mention that from the Titans episode.
- [45:00]
B
I'm like, that is like the coolest thing like, that you, you can do every, that mic goes back to the whole, like, money is not a tool to solve all things. You know? Like, you got to find the things that, that you just like these, these things light you up. They fill the cup and they can be really mundane, you know? Like, I got a friend who love, like, genuinely loves to garden. He loves it. That is his jam, man. He's worth like $250 million. He should have a gardener. But that guy is outside, hands in dirt, doing the thing. He loves it. I'm like, good for you, man. Like, that's, that's great. He doesn't cook for shit. Somebody else does that for him. Buddy gardens.
- [45:39]
A
Yeah. On the Jeremy love fest. Yeah. We have to give Cassandra her flowers because she puts up with a guy who is a maniac, who is, who is yelling all the time at their suppliers or whatever. So, I mean, the other really inspiring thing about that is, like, it's a husband and wife team who've stayed together for 20 years building a huge business. It's like, easier said than done. Like, those things are very difficult. So that's, that's the goal. Mike's also expressed wanting to work on bigger businesses. I love Ridge. I didn't found Ridge. Right. I, I, Ridge has paid me all the money I've ever earned in my entire life. But no, I went to build space companies. It's like, that's cool. So I'm hoping to do that next time.
- [46:15]
B
So are Mike, are you also of this mind with where it's like, the work is the reward. It's sort of the Artist's way. It's like, you can't be an artist if you don't like the process.
- [46:24]
C
I would make a generalized observation that you spend your life if, if the middle of the road is, I have exactly the right amount of things in my life for the amount of time I have that we spend our lives either in one ditch or the other where I've got too much on my plate or I have not enough to do with my time. And my generalized observation is that most of the world does not have enough good uses of time to fill their days. This is why, like, you know, people doom scroll TikTok, because it's just like, we've got more time, we've got a surplus of time compared to good ideas of how to use it. And like, I actually think one of the things that drives life enjoyment is when you're able to come as close to balanced out on that equation as you possibly can. That like the number of good uses you have for your, the hours in a day and like that they kind of match. And this is the thing that I think one of the reasons why I love the game of business is that because the fact that you can be involved in multiple businesses and there's all these different things you can do that you can, if you're smart about it, you can do all the things in your personal life that you deem to be impactful, important and, and worthy of your time. And then you can also come in and you can say, okay, I'm going to balance it out. Where all my other hours are used in these really good ways and, and productive ways with, with business. And so like. But the, I think the difference for me with most people is I think a lot of people start and they're like, well, okay, here's all the hours that business takes up and how do I cram in all the other things that I think are important and what's left? Whereas I'm starting to kind of invest, convert it where I'm like, okay, what are the most important things to me? And they're not business. And then like, I set aside time for all those things and then I'm like, okay, now like kind of the analogy where you've got a jar and you put in the rocks and then you pour in the sand, like, and then I'm going to pour the sand in on top of those things and the sand is, is my time in business. And so like, it makes it where I rarely have a meaningless hour. Right? And I love that. But also the Things that are most important don't get cannibalized for my business stuff, because the business stuff just doesn't matter. I mean, like, electrolyte packets don't matter compared to my kids. Right? They're, like, not even in the same universe. And. And, you know, it's funny that I say that and we laugh at it, but it's like, sadly, like, lots of people make that mistake, right? Where they. They end up prioritizing their careers with their company over their kids. I mean, have you guys watched any of Ben Sass's stuff? So he's great. He did a. An hour with 60 minutes. It's been going around Twitter and. And going viral because it's so good. But he's got stage four pancreatic cancer. He's about to die. He was a senator, and then he was president of university.
- [49:02]
B
Oh, shoot. My business partner was just telling me about this guy. Crazy story.
- [49:05]
C
Unbelievable guy. But they were asking him, you know, because he's basically at the end of his life. They were asking him, like, now, like, how does your perspective change on your life? What would you have done more of, less of? And one of the things he did is he said, you know, I just would have traveled a lot less. When I was early in my career, I was in private equity, and I traveled tons. And he said, I kept a card for every hotel that I went to, and I'd keep it in this box when I came home. And I was looking at it the other day, and there were just thousands of cards in there. And I'm just like, man, what a waste of time compared to the things that were really important to me. And I think if we're honest with ourselves, we all have things like that. Like, how many times have I just refreshed a dashboard where I could have just, you know, what, logged off and gone and, like, hung out with my kids or had a conversation with my wife about her day or, you know, basically done anything other than just doom refresh on. On Shopify. And this is. I think this is how I'm kind of changing as a person after all the years of being in it, is that I'm just starting to reorder my life around what I want to be true about it from first principles. And the business is giving me the flexibility to do that, which is awesome. To me, that's like the highest possible outcome from starting a business, is that it allows you to do that.
- [50:17]
A
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- [51:02]
B
Look, I, I'll, I'll give you the first thing I'm listening to Mike here talk about the, the hotel business cards. Mike. I call those badges of dishonor. So like mine was always air miles, like loyalty with airlines. Like, if I was, if I ever found myself in the position where I was like in the absolute top, you know, rewards program of an airline, I really up somewhere, you know, like, that is just time on a plane. Likely not with my wife and child or with anybody else that I really want to be around. So I try to avoid those. I don't know if you guys are like this, but I'm like a goals and anti goals kind of guy. I find it often easy to like start with anti goals, to say like, these are the things I don't want for me in business now. Honestly, I get so much value out of working with like, people I like that are, you know, have a shared set of values that are driven and smart. Like, that is so fulfilling. I could kind of just do that forever. And to me, that's the, like, Sean, that's the, the work that matters. I could just show up and do that for, for a very long time. I think the money thing is just a tool. It's like best framing I've ever had for that is it's just an amplifier. Like the more you get is it's just gonna amplify who you already are. I'm with Mike. Like, my life is not that complicated and it's not that fancy. Like, I like to be outside and ride bikes and hang out with my friends and, and drink wine in my backyard. Like, I like to cook. These are not things that cost a lot and I could just do them increasing in frequency and maybe intensity. And that's kind of about it, you know, like. But I'm also in my mid-40s and it's, if I'm being honest, did not have a clear as picture, maybe as you do, Sean, at your age, right. Like When I was 30, 31, I was very money motivated, very like, get more. I don't think I. I sort of had a lot more clarity around what I want, how I want to work and live until I was in my late 30s. I don't know if that's slow or not.
- [53:09]
C
So I've got a super interesting question around what you just said, Matt. And maybe this is a way to kind of wrap this up. Like, we obviously are coming from the perspective of kind of having semi made it and obviously we're just in a different part of life. We're all in the. In our unk phase. Although Sean, you're an honorary unk. You're. You're like a old, old soul. But I wonder how it's. We would counsel our younger selves because obviously a lot of people are listening to this. They're like, yeah, that's great. But you know, like, here's the deal where I am like, I'm trying to make payroll, you know, next month or whatever. And like, what would you say, Matt? Maybe we start with you and then you, Sean, like, what would you say to yourself seven years ago, ten years ago, based on your experience today? Like, if you could give them some kind of insight or vision based on how you're situated today? Back during a period where it was
- [54:07]
B
more of a struggle for me, what Sean said earlier is probably the most important thing I would have needed to hear or to understand. Hearing it and accepting it, understanding it are very different things. But you need a lot less than you think you do. Because once I like what I thought I needed, and once I far surpassed that, I was like, what a stupid goal. Like, I hadn't. I just picked a number out of my ass. I didn't really understand where it came from. And it has absolutely no. Like all. Every dollar above that has had zero utility to me. I would try to. I try to slap my young ass into understanding that is the way I would put that.
- [54:50]
A
We know Connor, my. My CMO who does a podcast on the network. Love him to death. He is one of the most frugal guys you'll ever meet in your entire life. Okay? The guy does not spend money. He, he. I had to beg him to rent a house to live in. He moved back to la. He was moving by himself. He was like, yeah, let's get an apartment or something. I'm like, dude, just spend $10,000 a month. Get a nice house. Like, what are you doing? All of his clothes are bought secondhand. He buys everything off of Depop. Like, he, he has never bought a new pair of pants in life. I, I guarantee it. Okay? But you know, because of that, I mean, we make a lot of money. He's, he's a very wealthy guy and we just did a big payout. And I'm like, hey, what are you going to do with it? He's like, nothing. I'm like, so you're like, are you going to put it in the market? He's like, no, I'm just going to put my bank account. I'm like, and you're just going to see the number get bigger? He's like, yeah, I feel better. Number bigger if that's good. And if you're ever, if you're ever in that position in your life, it's like, oh yeah. Like, look, he feels very secure. He's doing great. I love Connor to death, but it's like, like, you know, if there's not a practical use case for the dollars, then you don't need more dollars, right? I think that's, that's, that's a pretty realistic thing. If you weren't hungry, you wouldn't get more food. So that's, I 100% agree with what you're saying, Matt. I think, I think you need, you need less than you say. If I was going to go back seven years and talk to younger Sean and tell him, hey, think about this, prioritize this, it would be take money out of the business. It's like you, you see what you get, right? So like, the more you prioritize it, the more you'll get of it. And I see a lot of guys who are like, no, actually I have to do this thing. I'm gonna try this new software, I'm gonna put this into this new experiment, I'm gonna launch this new product. And it's like, all that stuff's great, but unless your needs are met, just you tell people, I'm taking 10 grand every month out of this business. I'm taking 20 grand out every month out of this business. Your business will find a way to support it. If that becomes a top line priority, if it's number one in your priority stack, your business will find ways to support it. So your, your business has more money for you than you think. Just like all of our net worth is tied up in our Business. The business can give a lot back to you if you prioritize it.
- [56:57]
B
Yeah, pay yourself first. So there. Sean, I'm so happy you said that, man. Because there's two schools of thought on this, right? One is like you are, you're here to serve your business and to serve your people, but then we, and I think that if you follow that, that ball, that ball down the path a little too far, you forget that the business is also here to serve you. Like, otherwise, what are you doing? There's actually books on this. I think one might be called profit first or pay yourself first, but I don't know. There's like, there are people that have written about this subject and there's actually frameworks that you can follow where like you can just set. Like this is the amount that gets drawn out of the accounts every month and that's like you budget up, up from distribution to yourself. Like, that's very much a way to do it. I don't know if you do that forever, but it's. I'm with you. I love that, man. That's great. Mike, what about you? What would you, what would you tell your, you know, young Mike, not the going around the world mission, saving everybody, but like the I'm starting a business Mike. Every SaaS company says they are AI powered, but very few can explain what it actually does for the revenue of my brand. This is why postscripts approach stood out to us. They don't just build AI for demos or buzzwords. They built it to drive real incremental revenue. Postscripts AI called Shopper. It shows up inside of SMS at moments with real buyer intent, when shoppers are likely asking questions, hesitating, maybe even about to drop off. Shopper can answer product questions instantly, answer questions about fit, availability, recommendations, order issues, the kinds of stuff that people usually bounce for. This means more conversions, higher rates of less loss demand. So you are driving more revenue and doing it more efficiently. Check out Shopper from postscript. We use it at Pela, which is why I am telling you to check it out.
- [58:43]
C
I think I would tell him that you have a lot of idealistic ideas about things and it's okay to be different. But there's also a reason why people do some things that they do and that some of my idealism has probably done more harm than good. Some of it's been good, but some of it's not been great. I think Sean's point is a really good one and I think the. It's a good one for more reasons than one, even one being that like scarcity, as I mentioned earlier, helps create focus and it helps bring out the best in people. I think that one of the most powerful things we did is very early in the business we were like, we are going to give 10% every single year. And so we just kind of budgeted from that. Kind of like you were saying, Sean, what I should have done is I would have been like, we're going to give 10%, we're going to distribute 10% and then we are going to make everything else work or something like, like that where like I was just building it in from the beginning and that I, I think I was focused more on like, kind of maximizing growth. I, I probably, I, I, I've learned along the way that like the way that I feel about my personal balance sheet and the way that I run the company are more tied together than I would have expected. But I just think in general, you know, I'm an enneagram3. I would have just sat myself down and been like, hey, you're more insecure than you think you are and you don't have to prove anything to anybody. And I think that as I've matured, I've gotten better and better about that. Just being comfortable in my own skin and not feeling like I, I mean, really the person that I've tried to prove the most to has probably been myself. But you know, like, we can drive ourselves crazy doing that. And like, it's good to be ambitious, it's good to be driven. But I probably at points, especially around the start of the company, had just kind of borderline insane levels of drive. And I would have probably been like, hey, you can chill there. And I think one other thing that it's interesting we were talking about that example of the hotel cards. I think in different seasons of your life, the same thing can have different meanings. Meaning. So there are things that I've done over the course of my career because I needed to do it to protect the people that care I cared the most about and to put, you know, and to make things continue to work and their badges of honor. But if I did them today, they'd be badges of dishonor because I don't need to be doing those things today, if that makes sense. I think context matters a lot. So anyway, all that to say like that. I think I would say some similar things to what you guys said. And then I would probably add some like, specific specifics around how it's okay to like, look at how people have done things and, and to imitate that while still having like this higher view of what business can be about. And then I think I would have said one other thing that has been true, but I would have really emphasized it to myself. Like you, you do not want to leave a wake of bodies behind a successful business. And a lot of times successful businesses leave a wake of broken relationships behind them. And fortunately we haven't done that. But I would have emphasized that even more that like be intentional here because in the heat of battle and you get so fired up and so ambitious that like it can cause you to not talk to people or treat people the way that you want to and something we can all grow in.
- [62:06]
B
I think I was thinking more like practical and tactical with how you get money out of a company in this space. But I think that that's simple and I think that the bigger questions are or what we went down, which is why are you doing this and how do you want to do it and for how long?
- [62:22]
C
I think really practically setting small short term goals that you can hit over and over again is way better than one massive dump of money is kind of like my overall takeaway. I remember really early on when I had virtually no money, I set a goal of I'm not going to buy an HDTV until I accomplished X. And then I loved that TV because it was like, it was kind of this trophy concept of like, I'm not going to buy it, even though I really want it. I'm not going to do it until I accomplish this. And it's amazing how gratifying it is when you set goals like that. And then it's way more gratifying than like, I can do whatever I want right now.
- [62:58]
A
I think there's so much pressure on the big pool of money, the big transaction actually getting that distribution that like you do leave more body bodies in the wake, you make more sacrifices because you get so close to getting $20 million and then you don't get it. It like, or there's the risk of not getting it. And that's why you see people get really bad private equity deals, right? Like because they'll, they're, they're committed. They're so like, they're so into getting it, they have to get it right because they, they've deprived themselves for so long. Like that is, that is the carrot
- [63:29]
C
they've been chasing that Exactly. If you're starving, if you're starving, when somebody offers you, you know, a crap sandwich, maybe you eat it. And I think that like that idea of in moderation, that you're gradually growing your net worth, you're gradually enjoying the fruit of your labor, but not this, like, huge step change. Not this idea that I'm going to be able to do this huge step change and do it well.
- [63:50]
B
Sean, what you're hitting on is literally the reason why private equity funds know that they can retrade a deal at the last minute for sure.
- [63:57]
A
And, like, I would. I would do, like, you know, I. I hate a lot of business practices, but like Mike says, they do them for a reason. It's like, if I was in private equity, I'd be retraining every deal that came across, man. Because that's. That's how you get the best return words.
- [64:11]
C
Yeah, I mean, like, we've talked about this before. You know, how you sell your business for the biggest amount by not wanting to sell your business, because you can just sit there and be like, I mean, I've heard so many stories like this where it's like, well, they came to me with an offer, and I said no, and then they doubled it and I said no, and then they tripled it and I said no, and then eventually I sold it when they quadrupled it or, you know, whatever. But it's like when you. When you have a strong kind of. When you have a strong life and a strong personal balance sheet, like, you don't need anybody to come in and do anything in your life. And then that's also. Even if you do want the outcome of selling a business, it's by far the. The best position of strength you can be in.
- [64:47]
A
Here's. Here's a good note to edit on. Younger Sean wouldn't know what to do with the money older Sean has now. He'd do bad things with it, right? So it's like, if. So true. If current. If current, Sean got a billion dollars. I would it up, right? So it's like, you have to grow into the game ahead of you, and you can do that in. You want to do that in. In steps, not step changes, right? So, you know, like, if I. I couldn't play in the NBA right now, and if you put me in the game, it'd be embarrassing. But it's like, if I can work my way up, I'll play in middle school, I'll play in high school, I'll play in college, I'll play the G League, then I'll be ready to play in the NBA. And it's. It's. It's those. It's that linear progression that we have to go through as people. So don't give me a billion dollars now, but in 30 years, when I have it, I'll be. I'll be an expert with. With what to do with money.
- [65:32]
B
That is. That's actually a great place to end it. Let's just stop there. That's great advice, Sean.
- [65:37]
A
All right. And if you want to send me a billion dollars. Okay. My bank account information.
- [65:40]
C
He's changed his mind. Next episode, when he sells Ridge for a billion dollars.
- [65:47]
B
Boys, that's.