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Tiny Office Hours
#3 with Shane Parrish: How Andrew Networks, How to Cold Email & How to Operate a Holding Company
01:19:00
Andrew (@awilkinson), Chris (@_Sparling_) and Shane (@ShaneAParrish) answer your questions for charity. To be featured in a future episode, submit your question here: https://podcast.tinycapital.com/.
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- [00:10]
A
Hi, everyone. Thanks for joining us on our third AMA episode. And this time we thought it would be fun to pull in our friend Shane. Shane runs Farnham street, which is an incredible blog, as well as the Knowledge Project, which is a podcast where he interviews all sorts of fascinating people. And we have known Shane for probably what, five or six years, something like that?
- [00:35]
B
Yeah, definitely. I think even longer maybe.
- [00:38]
A
Yeah. And we met Shane through a speaking event that he did in Victoria with us, and we became fast friends and ended up investing in a whole bunch of businesses, including we Commerce and Me Lime, and a whole variety of different things. So it's been really fun and we thought we'd invite him on here to answer some questions with us.
- [00:58]
B
Happy to be here. It's been a wild ride with you guys for the last five, six years at least. Co investing.
- [01:03]
A
No kidding. It's been a lot of fun. Lots of good stories that we can share in the future. So basically what we do on this podcast is we just tweet out, say we're going to be answering questions on a certain day and we get people to donate money for us to answer questions and then we donate all the money to a charity. In this case, we'll be donating all the money to the Ottawa Food Bank, I think. Shane, is that the charity you chose?
- [01:30]
B
That's the one I chose.
- [01:31]
A
Awesome.
- [01:32]
B
That's great.
- [01:33]
A
And thank you everyone for your questions and all the great donations. I think we raised quite a bit of money this time, so that's. That's awesome. We've got a Brayu here to emcee and ask all the questions and stuff. So Bray, you want to kick us off?
- [01:47]
C
Awesome. Yeah, let's do it. First question coming in from Matthew Sharp. He says, hey, Andrew and Chris, really impressed with what you've built here in Victoria and beyond and love the work you've been doing with Capital Daily. And he says, hi, Shane. I'm a massive fan of Farnum Street. Better understanding of mental models and critical thinking have helped me go from being oft injured athlete to being on the cusp of making the Canadian Olympic team. I'm currently trying to plot my next steps post sports. I'm wondering if any of you have insights on the process by which you discovered your careers or if you have any reflections on what you would have done differently in your pre career slash, early career phases.
- [02:27]
A
Wow. It's a good question, Shane. You want, you want to take that one and then we'll chime in?
- [02:33]
B
Yeah, that's an excellent question. I think you Know, one of the things that you can do right now that might give you a little leg up or more opportunity in the future. I always think of this as sort of, there's multiple possible futures, and how do you, how do you prepare for the most of those futures that you can. And one way you can do that is sort of like start building your personal brand, start building your audience, using your, you said you were on the cusp of the Olympic team and using that to sort of get followers and get people following along with you, and then that'll give you leverage down the road in whatever you want to do. But post career, I mean, it's hard, right? That's a hard transition to go from athletics, professional sports into a career, I would imagine. What do you guys think?
- [03:22]
A
Well, I think, I think, yeah, I think that's a great answer. You want to invest in things that'll always be valuable, regardless of whether or not you're an athlete or you're in business or something else. And as Shane pointed out, having an audience is really valuable. It's like a really interesting thing. I call it a personal moat. But I would really think about doing social media and trying to build up your public profile so that when you do retire, you have a lot of people who know you and like you and will provide you with opportunities. And I think I kind of came to this late, but, you know, we've been in business for what, 15 years now, and we've really only done social media and brand building and audience building for maybe five years. And one of my greatest regrets is not starting that a lot so sooner, because what it's enabled us to do is reach tens of thousands or hundreds of thousands of people and build direct personal relationships with them via podcasts and writing and Twitter and everything else. And so if we had to start again or we were launching a new business, you just naturally have, you know, 100,000 fans of yours, all wanting to give you opportunities and support whatever business you build. So I think that's a really interesting way for you to basically, for free, build a bit of a personal brand and emote. Chris, what do you think?
- [04:46]
D
Yeah, it's interesting. I just, it's fascinating just that you've come from the world of sports and, you know, you probably have a lot more gumption than most individuals have. I have, I walk into a gym and then walk out and just feel satisfied there. So I feel like you have an unfair advantage there. But even just pushing through, like, what other advantages you have, and it might be access to other celebrities or sports or, you know, figures in sports and trying to leverage every single unfair advantage you have. I would really kind of break through or almost a sip, sit down and just strategize and just think, what advantages do you have in life that the average person who's just starting off doesn't have? And I think given where you've come from, you probably have a lot more advantages than you might realize. And just thinking through just different ways that you can do either partnerships or leverage that in meaningful ways, I think.
- [05:37]
B
Could be very, very powerful. I think one story that would be really powerful right now is, like you said, you're on the cusp of making the Canadian Olympic team. Just sharing that journey and sharing that story with people, like, behind the scenes look, because it's so rare that we get to look behind the scenes on that stuff. And then something you said, Andrew, which was direct. And so having a direct way to reach people, owning your audience, and there's different ways to own your audience without platform risk. Email is sort of the best way, but there's multiple ways that you can sort of start building that audience up.
- [06:08]
A
I love that there's. I actually met a really cool guy, this guy named Rob Fraser, and he was a professional mountain bike or mountain biker. And he realized he wasn't going to make any money doing it. And he just was, you know, didn't want to go all out and go, you know, go to the Olympics or. I don't know what the Olympics of mountain biking are, but whatever those are. And so he stopped and he tried to figure out business and he ended up building a sock business. It was very, very simple insight. He realized that socks were high margin, easy to produce, and he saw a gap in the market where he could design these really interesting floral pattern socks that were athletic. And they were partly from his own experience of mountain biking and wanting to wear super comfortable socks that you could wear all day and, you know, wouldn't wear out, you know, give you foot issues. And so he made these, and his unfair advantage was he'd been a mountain biker for five years in a professional capacity, and so he knew all the pro athletes. And so when he launched his sock brand, he went out and he said, hey, will you be a brand ambassador to all of his friends from that world? And was able to do a lot of partnership deals. And now he sells millions of dollars a year of socks. This guy just lives here in Victoria. I met him a couple months ago. Um, so there's an example of an athlete with you Know, very limited business experience, going into business, then using his unfair advantage.
- [07:30]
B
Are those the socks, the black socks that you tweeted about a couple months.
- [07:34]
A
Ago, they're so comfortable. And it was funny, like we met him for, for coffee and he delivered all these socks to us and we're like, oh man. Like, you know, now we've got to wear these. They're insanely comfortable. And I'm a total convert. My entire wardrobe is now injured socks.
- [07:50]
B
I got to get some of these.
- [07:50]
A
Yeah, they're great.
- [07:52]
C
All right, so next one coming from Ahmad Ibrahim. He said, how would you start a paid community of high net worth individuals with no connections to high net worth individuals?
- [08:03]
A
Well, that, that's a little hard because from one perspective, if you're not a high net worth individual, you probably don't understand the problems of high net individuals. Like if you think about what Chris and I have done, it's all, almost every single business opportunity we've found has been born out of our own personal pain. Whether we're starting a business to solve a problem, even tiny. The holding company was born out of our own problem, which was dealing with private equity is way more complicated and miserable than it needs to be. And we wanted someone great who we liked, who is long term oriented to buy our business. And so we've always taken that approach to it. I think the most important thing for you to do if you're really set on that idea, is to connect with either high net worth people and interview them and learn their problems, or maybe talk to a multifamily office or some sort of wealth manager who deals with people like this and would actually know this because you're just guessing what they want.
- [08:57]
B
Yeah, that's, that's a hard one to follow up on. I think you need to offer value to them and that's really hard without understanding some of the problems that they might be facing, some of the challenges or some of the frictions that you might be able to remove for them.
- [09:11]
A
Okay, cool.
- [09:12]
C
Next one comes from Spencer Keys. I'm going to play it. Let me know if you guys have issues hearing it.
- [09:20]
E
Hi, Andrew and Chris.
- [09:22]
A
My name is Spencer and I run.
- [09:23]
E
A small law firm in, on the Sunshine coast of British Columbia. So my question is this. I see a lot of opportunities in the legal space in particular to disrupt some really sclerotic business models. And I'm wondering in particular with your work through many maps, what opportunities do.
- [09:43]
A
You see in disrupting some of these regulated industries and professions in Canada?
- [09:51]
E
So first of all, do you See there being significant opportunity in this space. And secondly, what do you think are the key challenges that people who are doing other kinds of startups simply don't have to face?
- [10:08]
A
So, you know, the biggest problem that we see with law firms is just pace. Unless you tell a lawyer, hey, gun to the head, we have to close a transaction by this day, we find that everything languishes. There's been many instances where we're doing a simple contract that should at the end of the day be something they pull out of a filing cabinet, punch in some corporate names and send to us where it takes six months to. So I would say that's a huge. Just thinking about, you know, Bezos talks about doing things that will never go out of style. Your customer will always want. Well, in his instance, he talks about customer service. It should never be slower, right? It should always be faster, it should always be better. No customer goes in and says, I wish this would take longer. I w. You know, I wish I couldn't get my question asked or I wish, you know, I wish the transaction took a week or shipping took a week. So with lawyers, I think the bar is very low. You really just need an internal project management system that basically sets a ticking time bomb and says we always have high response times and we move things forward fast, especially if they're kind of templated things. And I've been very, very frustrated with this. We've experienced it over and over again and we've now have very expensive layers. Um, and this is still a problem. It's definitely much, much better. And we love the law firm we use, but we really do find we have to set artificial deadlines to get things to happen quickly. So to me, that's low hanging fruit. I'm sure there's lots of other legal opportunities, but that to me jumps out. Anyone else just hit it on.
- [11:42]
D
I can't underscore that enough when it comes to dealing with law firms. Shane, what were you going to say?
- [11:46]
B
I was just going to say like the, the. It's velocity, right? And sometimes you look at the hourly rate and you're paying a lot more, but the velocity of those individuals actually makes it cost less in the end. And so you can't do that and, or you can't think about it just on a pure hourly rate basis. You have to think about it on a customer service basis. And I totally agree that, you know, some of the stuff gets dragged down and if lawyers are busy, I mean, something we've run into, you guys probably don't run into this, but sometimes we have to follow up with them.
- [12:18]
A
Oh yeah, no, no, we have to all the time. Like I, I'm, I'm doing a, one of our, one of like a little side business that I have, a local business. We're making a small asset purchase. It's $150,000, very simple transaction. And I swear to God, every time I message the lawyer, she's just fully forgot about it and goes, oh, oh yeah, let me, let me get on that. Right. And it's one of those things where she's a good lawyer and I like working with her, but if she could fix that problem of just proactively updating me and moving it along, that would solve a lot of problems. I think. You know, the other thing a lot of lawyers do is they don't delegate.
- [12:55]
B
I'm just going to add one more thing to that that I would love to see from all, not just legal, but all of our professional services is proactivity instead of just reactivity. So like I noticed this in the accounting firms that we deal with and the law firms, they're really good at dealing with problems if I bring them the problem. But they're really bad at telling me how to avoid problems in the first place, whether it be tax problems, structure problems or anything like that. And I think being proactive on that and being a partner in that sort of sense would be just amazing and really hard to replicate and hard to compete with if you're somebody almost just.
- [13:32]
A
Having a checklist or something where when you walk in it's like every year we're going to ask like, oh, what kind of tax optimizations could there be? How could our reporting be better? How are we, you know, where are we falling short and just having a system to that. And I've even the big firms like PwC and KPMG, they don't do that stuff. It's really shocking. You have to ask them to do tax optimization when they should look at it and go, hey, I know you pay us 300 grand a year to do all this other stuff. There's actually, if you pay us 500 grand we can save you 10 million, you know, over three years. And they don't really do that. I find.
- [14:07]
C
Awesome. Next one is from Dustin Iannadi Audio as well.
- [14:12]
E
Hi guys. Dustin here at dustini on Twitter. My question today is a two parter considering rolling funds. Firstly, I'm curious where you guys stand on the debate as to whether or not rolling funds make a good first time investment for someone. I've seen mixed opinions of that online. So I'm curious for your thoughts. Second, I'd love to know your plans for sharing information with investors in the tiny rolling fund. Do you plan to consider, kind of tell us more about your selection process, the investments you passed on or did make and how those investments are going along the way and if so, how you plan on distributing that information, if at all. Thanks guys. Big fan.
- [14:51]
A
So I think it's a, I don't recommend Venture for anyone who's a first time investor. At the end of the day, venture is playing roulette and making a bet that you Hope, you know, 51% of your bet pays off versus 49% failing. So I think it depends if someone came to me and said, look, I'm, I have a million dollars, this is my entire net worth and I have to put it into venture. And they were putting it into Sequoia Capital or Excel or one of these incredible venture investors who I think is, you know, incredibly smart and almost thinks like a value investor? Yes, I would have. No, no real qualms. I wouldn't, I wouldn't think it's a great call, but I wouldn't have an issue with it. Um, but I don't recommend that for anyone. So. And I would include our rolling fund in that. I do not feel comfortable with someone putting their net worth into it or you know, anything they're not willing to lose or put at risk, at least. That said, you know, we are investing our own money into this. I think we're the largest single LP in the fund and so we obviously believe in the companies we're betting on. But you have to remember that we have a diversified portfolio. We're putting 5% of our portfolio into venture and 95% into majority acquisitions. So we think about it a little differently in terms of disclosure. I think we're just doing whatever the minimum required by angel list is. And I believe that is going to be kind of outlining the various names. We're not big fans of doing extraneous, you know, investor relations because frankly it ends up just creating a lot of bureaucracy. So I think we'll disclose, hey, here's what we invested in, but we're not going to go much, much past that. And hopefully people are making a bet that it's us and we've got a good track record and trusting us with that.
- [16:39]
C
The next one is from Dustin again.
- [16:41]
B
And I'll play it.
- [16:43]
E
Hey guys, Dustin here at dustini on Twitter. This is actually my second donation and question for you guys, I run a creative agency that focuses primarily on emerging gray market industries. So industries that aren't federally fully legal yet things cannabis, online sports betting, hunting, daily fantasy sports, et cetera. I've had a good amount of success in running the business over the last five and a half years, but I'm kind of at a crossroads where I have this feeling inside me that I want to branch out and do more of what you guys have done. Investing in different businesses, growing my kind of wealth and expertise in working with other startups, things of that nature. At the same time, I do know that this business has a chance and kind of, you know, growing further. I guess my question is, if you guys were starting out today, or rather mentoring someone that was starting out today, where would you send them and recommend them? Getting information on, you know, more about what your path was so that I could better kind of digest and understand, like what I'd be getting myself into if I decide to go down that path in terms of books, courses, people to speak to, kind of. What would you recommend that I do in order to kind of understand more about what you guys, you know, the path that you took?
- [18:01]
A
Well, I can, I can start. So I think the biggest we, we've had a very odd 15 year run where we started as a design agency, really, me as a freelancer, and then somehow 15 years later ended up as a conglomerate with public companies Investing, you know, 35 businesses, all this other stuff. And, and the path there was very strange. But the biggest thing that we, that triggered us to do what we did was reading about Warren Buffett and Charlie Munger. And the big aha moment was that it didn't need to be so hard and that running a business or owning a business doesn't mean running it necessarily. And that you can own multiple different businesses and achieve a lot of things via delegation. And they're just the extreme form of that where, you know, they have 100 businesses and they have CEOs run all of them and they're not involved really at all in day to day operations. So that was the huge thing for us. We tried, you know, very painfully to have five businesses where Chris and I ran them all. And we're a little bit like, you know, Lucille Ball in the chocolate factory trying to keep the conveyor belt running. And it didn't work out very well for us. And fortunately we read the Buffett and Munger stuff. That was, that was the big inflection point for us. Chris, did I miss anything?
- [19:23]
D
No, I think you, I think you've hit it. Well, I, I, I can't underscore the importance of, you know, just getting out in the world and just starting as many things as you can and, and almost just getting flesh wounds, small flesh wounds, nothing, you know, not outsized bets where it could be a mortal wound. But I can't underscore, like, just going out in the world, experiencing, trying to start different things. And at the same time reading books. I find over and over it's hard to just learn a lesson from reading a book. You could read about Buffett, but it's really hard to actually internalize those lessons. The lessons I've always learned is by going out, making a ton of mistakes at the same time as reading and being able to attribute the lessons from those books with my own personal experiences. And so the way I try and recreate Tiny again is really by just doing as much as I can and at the same time reading and just slowly finding my way. But I think you've summarized it well.
- [20:16]
B
That was the, well, I just had a question for you guys, a follow up, like, on that, because that was the big turning point, right, for everything is when you guys were, because you, Andrew, I remember you telling me, sort of like you were stressed out of your mind. You weren't sleeping.
- [20:29]
A
Oh, both of us.
- [20:31]
B
All these businesses were like, they weren't failing, they were all successful. But it was all predicated on your time commitment, your effort, your. And it was that moment when you sort of like, okay, we need to hire a CEO and we need to step back. And then that was the moment you guys really started to not only free up your time and get less stress, but things really started to grow. And often you find yourself in these moments where it doesn't even feel like you can do that, right? It feels like hiring that CEO or hiring that assistant or hiring that person just takes up all your cash flow. But if you think about it from leverage point of view and leveraging your time, it's super effective.
- [21:10]
A
It's funny, I was just thinking about this on the drive over here. I drove by a, there was a, like a bunch of construction. There's a construction crew and there was someone holding the red sign. And I remember my friend told me that they're, you know, incredibly well paid. Like, they make like 50 bucks an hour to do that. And that's a really great job when you think about it, right? You stand there all day, you turn the sign might be boring for some people, but some people will be like, oh, that's a sweet job. What it's not doing, though, is leveraging other people's time.
- [21:38]
D
Right?
- [21:39]
A
You can only ever sell your time for an hour. And 50 bucks an hour isn't bad, but you can never make more than $50 an hour doing that. And I think the magic of delegation is that you can make, you know, a hundred thousand dollars an hour if you can learn how to delegate and scale that and build systems. And there's multiple levels, you know, there's the in house hiring a team of people to help you. But the final. And we got to that point, we could definitely do that. But where we, where we capped out was realizing that we're a bad CFO and CEO of an operating business after about 15 people, we just don't enjoy it. We're not excited and realizing, hey, there's people, there's CEOs out there who love to take those businesses that we've built that have potential or that we've bought and have a lot of potential and go and unlock that. And it was so, it's so counterintuitive because you feel like you're being lazy and you beat yourself up for not becoming the next Bill Gates or Mark Zuckerberg. But yeah, that, that was the big thing for us.
- [22:39]
B
You're a master delegator. How do you, how do you think about that, Andrew? Like, how do you decide what to delegate and what not to?
- [22:46]
A
I would say it's like anything I'm not enjoying. Derek S. Has this great saying, it's either hell yeah or it's no. And if I'm saying not saying hell yeah every day, I know there's something wrong. And don't get me wrong, there's a lot of stuff I do that I don't enjoy doing where it is. Me being not really following the kind of e myth delegation rule where I should be. But I'm, I'm strategically lazy and I used to beat myself up for being lazy and think, you know, why am I not a better CEO and I just need to read more Jim Collins books or something. And then finally I embraced it. And it's hard to do. We both struggle with letting go.
- [23:26]
B
You know, I would say I'm not the best sort of operating company CEO either in terms of some of that stuff. And you know, hiring and firing is definitely not my strength or forte. And for delegation though, it's. I try to learn from you, actually, because you delegate almost more than anybody I know. And what I do is I'm similar in the sense of like, I just don't enjoy this. So I, I don't consider myself that I work for a living. So if I, if it feels like work, then I'm probably doing something I don't want to be doing or I shouldn't be doing. And on a one time basis that's fine. But if that's recurring and it's like the same task, then it's a matter and I have to do it because I always look at, well, what would happen if I just don't do this and if I can't stop doing it, I have to do it and I don't enjoy it, then somebody else should be doing it as far as I'm concerned. And, and paying people to do that is just great, right, because it frees up your time and you can do a lot with your time when you have it. It could just be relaxing though, because, you know, it could be that you're just paying somebody to do something that you don't enjoy doing, you don't want to do, but it doesn't mean you're doing something productive on the other side of that. And I think that's where people get lost, right? They're like, well, if I pay somebody to mow my lawn, my, you know, opportunity cost for that is being in the kitchen with my family, so I'll just do it myself. And you know, maybe you think about it in different ways, right? And you should do that, maybe you shouldn't. That's all an individual choice. But I wouldn't look at it just purely in productive time. I would also look at it from a downtime point of view and a holistic kind of life sense.
- [25:04]
A
Well, and it's funny because I know people who are very wealthy and they still mow their own lawns because they love it and they're, they nerd out on what kind of seed am I going to put on my lawn and what kind of manure. And they talk to their neighbor about it. To me though, I just go, oh my God, like the whole reason to make money is to not take out my own garbage and not do my own lawn. And all the, all these things I just have always hated. But it's funny how many people get caught into those kind of duty bound tasks. One other comment I was gonna say is also, it's so important to have done the task like, Shane, I'm sure you've edited your podcast before, so now you know what a good editor is like and then you can delegate it, right? And that's something I think a lot of people. Ms. Is it? Chris and I have been through the school of hard knocks. We've run businesses and we've dealt with all the problems a CEO has encountered. So I think we have both better empathy and then also we know what to look for.
- [25:56]
B
Always do the job before you delegate it. So you have an idea and then you can. You can also sort through bullshitters from. Not bullshitters too. Right. When you're trying to find somebody. Because, you know, that's why so many.
- [26:06]
A
People hire the wrong person the first time because they haven't done the task before, so they can't validate it.
- [26:12]
B
Yeah.
- [26:14]
D
Sweet.
- [26:16]
C
Next one comes from Grace Park. Grace says, I wanted to ask each of you how much time you spend per week crafting your tweets, Twitter threads, and what does that process look like? Do you batch create? Do you have a staff to help you? Do you keep a list of topics and if so, how do you organize your notes, etc. If I want to take Twitter more seriously and use it as a tool for helping grow my business and my profile as a founder, starting today, what would you recommend I do to learn?
- [26:43]
D
I can take this one. Zero.
- [26:46]
A
Chris. I don't think Chris has 7,000 Twitter followers now, but I don't think he's made. You've made one tweet in six months.
- [26:53]
B
Yeah, yeah.
- [26:54]
A
One day. One day. There's a. There's a big opportunity sitting here for you, Chris. Shane, you're the expert on this build up demand. Yeah.
- [27:02]
B
Well, I can just say what I do. I don't know if that works for everybody, but what I personally do is, um, when I think of something, I sort of like draft it in Twitter and then just leave it in drafts. Um, so that, that is sort of batching in a way. And then I'll go through it once a week and refine and I'll also schedule in advance. So there's usually one tweet a day coming out of my account. But some of the things that I've learned about Twitter threads work really well, especially for followers. Andrew, you can, you can definitely speak to that. I think you gained like 30,000 followers in one day based on one of your threads.
- [27:34]
A
That's crazy.
- [27:35]
B
The other thing that works really well is, and not a lot of people know this, but whatever platform you're on, be it Twitter, Facebook, even LinkedIn, keeping people on that, the algorithm that rewards you for keeping people on that platform, not sending people off the platform. So if you're posting links on Twitter, the algorithm is just naturally going to be like, oh, this is less valuable than if somebody stays on Twitter. Um, and so it's something we're thinking about. It doesn't happen for every post. But your body of work, if it's always linking to something else. It's really hard to get a following if you don't already have an audience. You want engagement, you can check your tweet insights. Anything less than sort of 5%, you probably don't have the right wording, you probably don't have the right metric on it. You're probably not thinking about it in a way that's resonating with other people. But that's only if you're doing it to grow your audience. Like, I use it for thinking, I use it for refining, and I use it for feedback, testing ideas, testing wording, making sure it's simple. But I do find when the engagement score tends to be lower, it means I'm using esoteric language that people don't understand. I'm not being. I don't understand the idea well enough myself, to put it in a general way, or I'm using nuanced sort of phrasing. And so it's really good feedback for not only writing, but thinking and communicating ideas. If you use it that way and you'll naturally sort of grow your audience.
- [29:02]
A
How long do you spend refining? Because one of the things I'm always blown away by with your Twitter is you'll take things that I might do in four tweets, and you'll put it in one sentence, like a super, super succinct sentence. And then I think it's very shareable and quotable, and you instantly get it. And like, I. I'll find the same thing if I spend, like, two days and I keep refining and refining and refining, I can get it to that level. Are you spending days on that? Are you letting them sit for days, or are you just kind of sitting there on a blank page for. To figure out the perfect language?
- [29:33]
B
Well, it really depends, right? Like, sometimes I just tweet, like, what's in my head, and I'm like, oh, that. That makes sense to me. And maybe it'll resonate with other people or help them. And sometimes I refine it for a long time. Like, I got draft tweets from, like, two years ago that I'm still sort of. Like, that's not quite right. And it doesn't mean I'm spending hours on them. But I've definitely. I would be lying if I said I didn't spend 20 minutes or 30. 30 minutes on some of the thoughts that I put out there.
- [29:59]
A
It's funny how those. Those, like, toilet tweets where you're just like. Or your shower. You get out of the shower and you type a one sentence. Those are sometimes some of the biggest tweets I've ever done. And then I'll do months where I'm writing these really thoughtful things and writing threads, and they don't get any traction. I think one of the biggest things people miss about Twitter is you can have 300,000 followers, but if the algorithm doesn't like your tweet, 20 people might see it, and it's really crazy.
- [30:24]
B
And then the other thing, to her point, I think is not letting somebody else do it for you, but under your name anyway. If it's under your name and you're not like Taylor Swift or something, you know, you need to be authentic. You need to be the person behind that, and you need to be the one reading the feedback on that. Not. Not a team of people. And so I don't. I don't delegate Twitter, at least under my name, to anybody else. Our team can do the front end street account, but for Shane, it's. It's sort of like just me.
- [30:55]
A
Yeah. I have a team that does analytics. So basically what they do is they look at my analytics each week, send me a reminder, they'll say, hey, this tweet worked. Here's why we think it worked. You should do more of this. And I'm still trying to figure out whether or not it adds value or not. But I've liked the accountability of going, oh, there's people whose job it is to make my Twitter grow. And they're saying, andrew, you're disengaged this week. You should try and get back to it. But at the same time, I don't like saying things when I don't have anything to say. And I hate seeing those worthless tweets that are just like, hey, what does everyone think about this current event? And you're like, oh, some PR team did this.
- [31:32]
B
But. But if you're the algorithm, like, if we invert this a bit, what do you think the algorithm rewards? Right? It rewards consistency. It rewards sort of engagement. It rewards. And so it encourages a lot of these things, and it penalizes. So it rewards people just talking for the sake of talking. But that, again, comes back to you.
- [31:50]
D
Are you speculating on that?
- [31:50]
A
No, it does.
- [31:51]
B
No, I. I am speculating. I'm just saying think about it from the algorithm point of view.
- [31:56]
A
Well, Actually, it actually so on Instagram, it's a well known fact that if you don't post daily, you lose hundreds of followers if you're a big account. So at GirlBoss, we have 2, over 2 million followers or something crazy on Instagram. And it's funny talking to the woman who manages our social media because she goes, oh, oh my God. You know, we didn't tweet yesterday and we lost 500 followers because of that. So you are actually penalized if you're not engaged. It's really crazy. And so you start thinking about, imagine we're lucky in that neither of our businesses really rely on Twitter. It's more a fun thing we do and it, the benefit of it is it builds our brand. But imagine if, you know, all of your sponsorship revenue was tied to your Twitter following or something you just live in. I think being an Instagram influencer is probably one of the most hellish life. So I can imagine for me personally.
- [32:45]
B
I also think it's a good idea to look at the people that do it and figure out which way you want to do it, which way resonates with you. It's purely strategic from a business point of view. Just look at the people who are growing it the fastest and what they're doing to do that. And if it's you trying to be authentic and be you, then you have to do it in a way that makes sense for that.
- [33:04]
D
The thing I've noticed there is just how long you actually have to put into it. Because years ago, I used to kind of tease Andrew when he wasn't getting much of a following, and I used to think he was wasting his time. And I really would tease you quite a bit about it, actually. And seeing the net benefits of it in the last two years has been tremendous. And I can't underscore enough. Just like, you know, if you're going to invest in your personal brand, sticking with it for a long period of time.
- [33:27]
A
Well, it goes back to the leverage thing, right? Like we, I would say Chris and I both have spent a long time, a long time investing in our personal network. And nothing replaces one on one time, right? Obviously, Shane, if we hadn't had that time in Victoria to just hang out and chat for like 10 hours, like, we wouldn't be as close as we are today. But the leverage of being able to have one tweet that, you know, I think one of my tweets, like 8 million people saw, that's like an episode of Friends, right? Like, that's Crazy. And then the people who can follow you without you realizing and all the, all the of brand that gets built there is so crazy.
- [34:04]
B
One thing I love about Twitter is like you can actually connect with the best people in the world without their permission and see how they think, see their wording. Like it's always in history, it's always been there's a middleman between you and that thinking. If you're in an organization, there's a person between you and the CEO is filtering that message for you. If you're reading about it in the newspaper, there's a person filtering that message. But now you can follow like Toby Luque and Elon Musk and all of these people, Donald Trump and you can get their thoughts directly. Right. And, and nobody's filtering it for you. And so it's never been a better time for you to learn from other people in that way.
- [34:42]
A
Well, yeah, you think about the level of intimacy you can get from like for me, when I resonate with someone on Twitter and I see they've been on a podcast, I start going through and I add all their podcast interviews, all the lectures they've ever done on YouTube and you can basically do a masterclass and somebody build your own Masterclass on YouTube and podcasts and stuff. It's really cool.
- [35:03]
B
Totally cool.
- [35:06]
C
Next One is from Mr. M. Cosmizida. Sorry if I butcher that. He says, I am an owner or operator of a home services elderly care at home company in the uk. Having acquired and scaled a business successfully, I want to apply my experience in learning more broadly. The idea is to acquire good, local, reputable home service companies where the owners are retiring or keen to sell. In your opinion, what will be the most effective and sustainable way of financing this type of acquisition? And what kind of home services company would Tiny be interested investing or acquiring?
- [35:42]
A
Interesting. Well, so homes. I think the problem is I have a bunch of follow up questions and you're not here to answer them. So I guess it comes down to what kind of home services. I think there's a reason why the home services industry is so fragmented and that's because it's really hard. So for example, you don't see a lot of large plumbing companies, you see a lot of individuals and that's because the demand changes a lot and it's just a generally disorganized industry and that's, you know, two, two things. One, there's an opportunity and that you can probably buy those businesses cheaply because they're small, disorganized, there's Not a lot of buyers for them, so that's kind of interesting. 2. You can probably operate by just being better, right? Going back to plumbers, I don't have a lot of faith that if I call a plumber they're going to show up on time, that I'm going to like talking to them, that I'm. They're going to be reputable, etc. It's really hard. You're going on Google reviews. If there is a, you know, a really established player that rolled up a whole bunch of them throughout the UK in your instance, that would be really interesting. I think this would. Honestly, it's too bad Brent isn't on or something like that because he'd have a really good take. You should tweet at Brent. Be sure. I feel like he would know. He would know better than we would because at the end of the day we buy tech businesses. Chris, any thoughts?
- [36:59]
D
No, but the way I try and finance it is vendor. I do vendor takeback for sure in a space like that and try and do very low multiples up front and then vendor finance for the rest. But I kind of agree. Tweeting at Brent. Be sure. I'm incredibly curious what his take would be.
- [37:16]
C
Next question comes from Maya. This is an interesting one. Which entrepreneurs did you send cold emails to when you started? How did they help you back then?
- [37:25]
A
Shane, you want to take this one?
- [37:27]
B
Nobody. I didn't really cold email any entrepreneurs. I think I started just anonymously online and then built up an audience through that. And then I did at one point go through our email list and then reached out to a bunch of people who I thought were interesting. But I already had a warm introduction. It wasn't cold at that point because I had already done something that they found valuable or they wouldn't have given me their email address and subscribed. So I cold outreach to people that already had a warm sort of intro to us. I didn't really email anybody else and ask them how they did this or in part because I just wanted to do my own thing too and I didn't want it to be. It's the same reason I don't listen to a lot of podcasts by other people. It's like I just don't want to be tainted by what they're doing. And I know that if somebody does something really cool, I'll definitely pick up on it and I'll start doing it. And I would rather just organically come across that versus like trying to do it.
- [38:24]
A
So for, for us like, we're big fans of cold emails, but I think to Shane's point, you want to find someone who has a warm intro to you or you want to be able to offer value. And in the early days you can offer value. I've been doing this my whole career. My first email, cold email was to Steve Jobs when I was 12. And I got a response back in 10 minutes. And I'd wrote him this very long, ridiculous, flowery email about how I wanted to be like him. And he just wrote back one line, find your own path. And it was just so cool to get a response. Right. But he didn't, obviously. We didn't talk after that. The most impactful, there's some really great ones. I mean, we emailed Ricky Van Veen, who is the founder of CollegeHumor and Vimeo, back in 2007, I guess, and we had something to offer. I just said, look, I see you have a Tumblr. I have been learning how to redesign Tumblrs. Can I redesign your blog? And he said, yes. And so I just did it for free. And from that point on, I just email him once a month. And he started introing me to clients and, you know, talked on the phone a few times, etc. And I've found that just connecting with interesting people is probably the biggest way. It's the biggest payoff, both personally because we've gained amazing friends and professionally because interesting people beget more interesting people. They beget business opportunities, et cetera. You know, Shane being a great example, or, you know, Dan Gilbert, we reached out to cold emailed him and got to meet all sorts of interesting people as a result.
- [40:00]
D
Well, I was thinking specifically of the Dan Gilbert one where there's like an underlying theme here that you'll notice, which is, you know, to Shane's point, a warm intro is obviously the best. The very worst is a cold email that just asks of something. I get a lot of those and, you know, they're just hard to necessarily, they're kind of hard to reply. If you're going to do cold emails. The Dan Gilbert's a good example of just finding commonality. And it might be worth you kind of describing that a little bit, but just it makes it a lot easier for the recipient of that email to engage if you're highlighting a commonality that you have with them. And it's just a great way to kind of bridge within a cold email, make it easy for them to reply and don't ask anything.
- [40:42]
A
Oh, sorry, go ahead.
- [40:43]
B
No, go ahead with the dance story and then I'll follow up after.
- [40:45]
A
Well, just to touch on the long email, everyone writes these long emails and you got to remember, any of these people are getting 200, 300 emails a day. If you're lucky, you'll break through their assistant and their assistant will forward it to you. Right. Because a lot of these people have their assistant read their email and if there's just a bold faced ask, it's never going to go anywhere and it just gets deleted. So with Dan Gilbert, I read in the New York Times an article about what he was doing trying to rehabilitate Detroit. And he just sounded like a neat guy. And on a whim, you know, I send these cold emails a couple times a year and I'd say 70% of the time I don't receive a response. But I wrote him an email and I said, hey, here's kind of what we've been building. It was pretty short and succinct, but it says like, you know, over the last 15 years we, you know, have all these businesses we started, we're doing something kind of similar to what you're doing, except in Victoria. And hey, we'd love to meet you. And we made it easy for him. We said, we will fly to you anywhere in North America. You have a business trip to Delaware, we'll come meet you in Delaware. So just tell us where and when. And I got an email.
- [41:49]
D
Wasn't the, wasn't the commonality though, notarize.
- [41:52]
A
Oh yeah, that's right. That's what I'm actually talking about. Find.
- [41:54]
D
Find a common.
- [41:55]
A
Yeah, there was. And then the commonality was they had also been talking to one of our portfolio venture portfolio companies and we had, we had worked on it and so he was really interested to talk to us. So we did pull that thread. But anyway, and we just went and met him and he was the coolest guy ever. Spent like, you know, a couple hours with us and we've met, we met all these people from his team who we really like and there's no actual direct business benefit that I can point to, but just we've met great people and I'm sure in 20 years there's going to be some deal we do with somebody that we met through him. Right. So it's just, so, it's so cool.
- [42:30]
B
Yeah. I think that what you said is really important. Right. Offering value. And offering value, if you have nothing of value is solving a problem for them. You can read about it online and then don't ask them if you can solve it. Just do it. Just solve the problem. Like, I built you this website, maybe you like it, and then you're more likely to get their attention. It might be wasted effort, it might not be. It depends. But now you're separating yourself from everybody else because, I mean, you guys must get. I get cold emails all the time. And what nobody's ever done is say, like, I see this as a problem. I will do this for you. Or I've done this for you already. Here's Take a look and let me know. And I think that would be so valuable for other people in terms of just breaking through the crowd. But you're one of like a hundred emails a week that everybody gets. That's a cold email. So, yeah, that's a tough one.
- [43:21]
A
This podcast is actually born out of these cold emails because what we were getting is hundreds of emails a day where it's someone with an ask or they just want advice. And I love giving advice, but if I'm doing it for 50 people and they're all asking for just a 15 minute zoom, you know, it's not going to work. And so we just said, hey, let's convert that into let's ask everyone to donate between 5 and $5,000 and we'll just answer their question this way. And it's more fun. So you can have fun with these things. But yeah, I think showing how you're adding value and I can't drive this home enough. Just being very succinct. If you haven't grabbed them in the first sentence, you're not going to grab them.
- [44:00]
B
I get 20 emails a day asking for a quick 15 minute phone call. And, you know, often what I used to do just actually to test people was like, oh, fly to Ottawa and I'll grab dinner with you.
- [44:10]
A
I love that.
- [44:11]
B
And then I want to see how committed you are to, like, this. And if you won't fly to Ottawa to grab dinner, like, why am I going to hop on the phone with you?
- [44:18]
A
Totally. I love that. I actually do that a lot too. I'll just be like, yeah, let me know when you're in Victoria. And I'll meet anyone in person pretty much if they're here and they seem interesting. But the idea of just dropping everything and getting on a zoom. I had a guy ask for a zoom and then I was super busy and so I scheduled it three weeks out and he got offended that I scheduled it 50 or three weeks out and I'm going, I'm giving you free advice and you're upset that it's taking three weeks. Like, it's, it's really crazy. Great problem to have, right? I, I didn't used to have that. And I, I, it goes back to that. Building the personal brand and just all these opportunities dropping in your lap. Whether it's people to hire, businesses to do, friends to make, trips to go on, conferences to speak at. It's a cool opportunity.
- [45:04]
C
Next one is from Robert Fraser. This question came in last minute. He just got in.
- [45:08]
A
Rob Fraser is the injurious socks guy. I didn't know he asked questions.
- [45:12]
B
Oh, dude, he's got to send me some socks.
- [45:14]
A
Yeah, Rob, you got to send Shane a whole bunch of those socks.
- [45:19]
C
So he said, in the pursuit of anything great, you'll often be met with criticism and negativity from others. I believe it's only natural that it makes you feel shitty. And it's easy to look at successful people and assume that nothing gets to them. Do you have strategies for how to deal with criticism slash negativity? And have they changed over time? Thanks, guys.
- [45:40]
A
Shane, you want to take this one first?
- [45:42]
B
Yeah. I mean, the way that I think about it now is not the way that I've always thought about it, but if you're doing anything meaningful and different, there's going to be people who try to take you down a peg and pull you back or criticize everything that you're doing. I don't read comments on Twitter anymore. Very rarely. Unless I'm asking a question, I want sort of responses, same as, like, YouTube and that I try to touch. The delicate thing here is, at least with what we do at Farnham street, is I need to touch the terrain. Like, I need to know what's going on. Are we wording things right? Are we resonating with people? Are we doing this? And the byproduct of that is, like, you do end up reading some of this stuff and you know, those thousand comments that are like, oh, this book changed my life, or your podcast is amazing. Just sort of like, brush off you. But that one sort of criticism, that one comment that somebody made, just, you know, not even listening to what you were doing, it just bothers you and it stays with you. But I also think that that's a sign that you're probably doing something important, right? If people are, you might not be right at it, but you're doing something that people at least reply to. And I think that that's a really interesting take on that. Right? If you're just doing what everybody else does, you're just in the noise. And if you do something different, you're naturally going to move out of that bell curve. So you're going to get a better outcome or a worse outcome. And you want it to be better. So you want to advantageously diverge from everybody else. But people are going to comment on that. It's going to look different. You have to be willing to look like an idiot in the short term to be a genius in the long term.
- [47:12]
D
Yeah, that's interesting. So I keep thinking that just even listening to this, I love everything you've just said, but the criticism I face obviously isn't really on outwards in the world because I'm just not active on anything in a social media sense. But I do face criticism all the time when it comes to just those around us or portfolio companies or in various negotiations and such. And sometimes it definitely can stab really deep and it can be kind of hard to deal with. What I've started to really do is just really take like an extreme empathy approach and just try and better understand where they, where have they come from? What's the, what's the lens that they're coming into the situation with or what narrative do they believe to be true and just kind of like better understanding the narrative or the sequence of events that led them to criticize. It's helped a ton in just better labeling or dealing or just helping to work through the potential solution. What I've. The mistake I've made in the past is someone would criticize me and out criticize them back. And I don't know if you've ever read Dale Carnegie's book How to Win Friends and Influence People, but the moment you yourself start criticizing someone, they shut off. And you know, that used to be true for me too. People would criticize me and I would, I would shut off and kind of get aggressive back and feel like I'd been, you know, feel offended and really defend myself. And it's just, that's a path to. You're not going to resolve anything that way. I really encourage just like, you know, almost just like, you know, taking a few deep breaths, leaving the situation and then just trying to better understand, you know, with as much empathy as you can, what narrative do they believe to be true. But I'm curious, you probably do a little more with the social media side.
- [48:52]
A
Yeah, I mean, what I've struggled with is if you have, you know, I have 160,000 followers and there's always going to be 1% of people who have the least charitable Interpretation of whatever you say. So I had something as simple as, what was it? I wear a glucose monitor because I'm a health nerd. And at one point, you know, I. I talked about all the benefits and how interesting it's been. And then at the final tweet, I said, you know, it looks a bit goofy, but I. I really love it. And I got all these people who are diabetics saying, how dare you? You're so privileged. You can afford this. And you're insulting me and saying I look ugly by having my glucose monitor. And at first I just kind of went, oh, this is ridiculous. You know, these people are on a witch hunt. And then I started thinking about it a little more, and I started thinking about, you know, if this was something that was something I had to really fight my doctor to get, and I had to save up for it. You know, I could see how someone could think this way. And they're, you know, assigning all these things to me, their own frustration and just trying to do what Chris has some more. More empathy. And I find when I have more empathy, if I can get to the point where I'm like, I wish I could see this person in person and just, like, give them a hug or, you know, whatever it is, as cheesy as that sounds, that's the best. But I really personally struggle that with this because I'm. I'm a bit of a glutton for punishment. I love being loud and outspoken and a little bombastic, and I like stirring the pot. But then I also want everyone to like me. And so that's just a natural kind of feedback loop that's always going to create some negativity. And I try and remind myself of this on a daily basis. So I actually have a Siri reminder every day at 3pm and it says you don't control people's emotions and you aren't responsible for them. And that's just me kind of giving myself permission to go, you know, they can think whatever they want, they can say whatever they want. I know what my own intention was. And at the end of the day, like, when there's that many voices, you can't take the time to empathize with every single one and understand where they're coming from. And there's always going to be that 1%. You know, the squeaky wheel will always get the grease. And how do you avoid giving them too much of grease coming out of your brain?
- [51:00]
B
Yeah, I think the audience size thing is key. Right. Like, at a hundred people that 1% is one person. But at, you know, a million people, that 1% is a lot larger. And you're, you're hearing that voice differently. And not all criticism is valid. The way that I filter sometimes is like, if you're not in the arena, if you're not doing what I'm trying to do, then your criticism may or may not be valid, but it definitely carries a lot less weight with me. Like, if you've never done what I'm trying to do before, then it's different. Right? It's easy to just chirp online and it takes two seconds to put out a comment. And I love the empathetic approach and most respectful interpretation. But you also have to be valid in what you're doing. Right? And I think that if you're, if you're one of those people that are doing that, you need to make sure that you're adding value with that criticism and it's not just, you know, another way. And then also have a little bit of empathy for the people that you're criticizing. Because if you tailor your, your social media to160,000 people, to the lowest common denominator, so nobody's offended, you're not going to tweet anything, you're not going to say anything, we're not going to put ideas out there. And part of the problem that I'm seeing now in social media is people don't want to explore ideas anymore because they're worried about what other people will say. And the world, um, we're not in a better place because of that. We need more ideas, we need better ideas, we need people to share ideas, and we need the best ideas to win. And the minute that you're, you're restricting yourself from sharing those ideas because you're worried about what other people think, the world is in a much worse place.
- [52:31]
A
Well, it feels so zero sum, right? The idea that you can get canceled for making a misstatement or coming across the wrong way is scary. And when you think about, you know, the Warren Buffett stuff about preserving your integrity and your brand and your reputation more than anything else over over 50 years, and then it only takes a small thing to ruin it, you do start to get pretty scared in this environment. So I think that's really valid. And I don't know if there's an easy solution to it. I was wondering how have you scrubbed your own social media habits to make sure that it doesn't make you miserable? Because some of the most unhappy days I've had over the last two years have been bad Twitter days.
- [53:12]
B
I use social media very differently than a lot of people. I have a Facebook account, but that's just to share pictures of the kids with my parents. I have three friends on Facebook. You can't search and find me on Facebook. I don't like. I'm literally just sharing photos. I don't want to use it to engage. And the same as Twitter. I mean, it's a personal account. I really use Twitter for news like other people follow, like, what you're up to, and that way I don't have to ping you every day over text or something. And, you know, I can just sort of see what other people and get really unfiltered information from some of the smartest people in the world. I don't always agree with them, and I actually go out of my way to make sure that I'm not subscribed to people, so it's not an echo chamber about what I agree to. But I've stopped reading comments largely in the last couple years. I mean, it's. It's. You just reach a certain size where it's not healthy for me in a lot of ways to read those comments, and that the lowest common denominator sort of always gets to you. And I don't think that that's. That's a healthy thing for anybody. And I don't want to stop sharing things because I'm worried about what other people are going to say.
- [54:16]
D
Well said. Yeah, I think don't live in fear. Andrew, are you one of Shane's three Facebook friends?
- [54:21]
B
Unfortunately, no. It's my mom, my dad, and my grandmother.
- [54:24]
A
That's the upper echelon in Scientology. It's OT8. That's the OT8 of Shane's life.
- [54:29]
B
It's my mom, my dad, and my. My grandmother.
- [54:33]
A
One day. One day, yeah.
- [54:35]
C
Next question this is directed to Shane comes from Karan Gandhi. They're asking, what will it take to work at Farnum Street? And maybe we can speak to this broadly as well. What would it take to work with you, Andrew and Karl?
- [54:47]
E
Chris?
- [54:48]
B
Well, we just sort of tweeted out a job post for a research assistant, and to the point of doing the job, we basically paid everybody for a month of their time and had them do the job that we were asking them to do, because I figured that was the best way to actually figure out, like, who could do what. And it was a project where we could easily hive that off without a lot of inconvenience to the team. And I'm Just sort of going through the submissions now, but we have a small team. I mean, you have to be able to do a lot of different things at Farnham street to be able to contribute to that. You can't just do one thing. We could easily grow to like, 10, 15 people if we wanted to, but that's not what we're looking for. And then it's adding value to what we're doing. Right. We're just constantly trying to get better at what we're already doing. And young, hungry or hungry, you don't necessarily have to be young, but there's a lot of people who are sort of like, lacked work ethic and resourcefulness. Right. Lack what?
- [55:46]
A
Gumption. Chris always says lack gumption. The number one thing Chris looks for when he hires someone is gumption. Do they follow up? Are they prompt?
- [55:54]
B
Yeah.
- [55:55]
A
Do they care? Do they. Are they fighting for the job?
- [55:58]
B
That's work ethic in some ways to me. And resourcefulness.
- [56:00]
A
Right.
- [56:00]
B
Because often we're doing stuff that we've. And you guys do this too, at least in your portfolio companies, and you're just doing stuff that nobody's ever done before or you aren't experienced with. Like, we started a publishing company. I've never done that before. And it's like, well, I need people that I work with to be able to figure that out. And the way that I think about that is that Jeff Bezos or had this line where he asked Mackenzie, his former wife, about this, and it was resourcefulness was a key to that. And he asked, could you break me out of a third world prison if I ended up in there? And I always. That question always runs through my head when, with friends and definitely with people that I work with. It's like, if I ended up in a third world prison, would I trust you to be able to figure out how to get me out of that?
- [56:44]
A
I hope he doesn't end up in a third world prison now that he doesn't have her anymore. Yeah, it's really interesting. You know, one of the things Chris and I have really observed is that all of these people that have big followings or are, you know, super successful in business or whatever, their worlds are actually very small. And a lot of it is luck and timing in terms of who bursts into that world or not. And it goes back to that thing of you have to just stand out. Right. So I'll often post on Twitter and say, we're hiring X role or we're looking for someone to run the company. And I'll get bombarded with a hundred emails. So it's that one resourceful person who figures out, hey, I know this person in common. I'm going to get them to text message intro or I'm going to do a big Twitter thread about why you should hire me or whatever that crazy creative thing is to get in through the bubble. Because honestly, like, we just don't have time to filter through a bunch of CVs and then find the gold within. So it's been very strange, like, who we've ended up hiring has often been a result of just who gets in our face and has gumption and shows that to us. And it makes me sad because there's probably hundreds of amazing people who have emailed their CVs that we'll just never get to work with. But that, that's a really tough thing. And one of the best books I would recommend on this is Made to Stick by Dan and Chip Heath, which is all about making your writing memorable and compelling and it's all about hooking someone.
- [58:10]
B
The other thing I would add to that, like, we, we recently had somebody cold outreach which was really interesting and saying, like, I could do a much better job for Farnum street on Twitter than you guys are doing. And I literally just replied like, show me, show me with Farnum street without access to the account that you can do a better job on Twitter than we can. And it's like no reply. And it's like, well, if you're so good at growing the Twitter follower for all these accounts that you've mentioned, then show me that you can do it and I'll hire you in a heartbeat. Right, like, and I think that, that, you know, you actually just. I try to put a shit back on other people. It's like to Chris's point, like, show me how interested you are. Show me you're going to climb this mountain with me. Show me that I don't have to micromanage you. Show me that you're resourceful and scrappy.
- [58:52]
A
And one other thing I've seen people do recently that's really worked well for me at least, is they'll make a loom video. So it'll be them talking me through their thinking and their cv and it'll be on the screen and I'll see their face, I'll see how they talk. And I can just do a one minute version of this. There's a product that a friend of mine told me about called sparkhire and what it was was you put out. I think it still exists. But you Say I'm hiring this role. I want you to answer the following questions, but you do it on camera. So it's almost like an automated job interview. And I find loom is very similar. I see how someone talks, how they think, I can more quickly get more information on them. So that kind of stuff is a huge hack.
- [59:32]
D
I've always wondered if that over prioritizes extroverts in a way because I brought that up with one of our CEOs and they were kind of saying like, well what about like the quieter people or the people who are a bit more shy or the people who have some sort of background and they're worried about being judged. And I do wonder, I do wonder if there's like a second order consequence if that's your only hiring method.
- [59:52]
A
But okay, make a TikTok dance for us. We're going to hire a bunch of theater kids. Super extrovert theater kids.
- [60:02]
C
Cool. Next one comes from Sam Hook. He says, can you tell us a bit about how you think the Shopify ecosystem versus the Amazon ecosystem in terms of buying businesses? So not exactly sure what the question is there maybe a little bit about the differences of the two.
- [60:20]
B
I think, Andrew, this is a perfect one for you.
- [60:23]
A
Sure. So I think we would never buy businesses in the Amazon ecosystem because by its nature it's just hyper competitive. And at the end of the day, Amazon's algorithm prioritizes whoever will sell for the cheapest, with the lowest margin, the highest quality product for the cheapest margin, price at the lowest margin to them, that's going to end up what gets maximized, which is amazing for the consumer. But just like how you don't want to be a vendor to Walmart, you don't want to be a vendor to Amazon. So I personally think people that are buying up all these Amazon FBA businesses, it's a hard way to make money. I'm not saying they won't do well, but it's a hard way to make money because it's a daily knife fight to maintain your status in the ecosystem. And you have the worst competitor of them all, the house. Amazon's competing with you every day. So. So we don't buy businesses just in the same way. I think we're a little misunderstood sometimes. We have a holding company called We Commerce that acquires the top partner businesses in the Shopify ecosystem. And that doesn't mean we go out and we buy e commerce businesses that sell things. What we do is we buy the software tools that enable them to sell things on Shopify. So we think about it very differently and at the end of the day we are making a bet that Shopify will continue to be the best place for independent retailers to sell online. And the reason we think that is because while they can go to Amazon, they don't own their customer, they don't own everything end to end. Shopify is not competing with them. It allows them to fully verticalize, own all their own data, own the customer experience and we think that's tremendously powerful. And as we looked around, I mean we've known the, the founder and president of Shopify for a very long time. We've been in the ecosystem for over 10 years. We just realized they just have so much momentum and we think they are the best platform and we don't see that getting disrupted and it's a very long term trend. So we felt very comfortable making a large bet there. Chris? Shane, anyone?
- [62:19]
B
The only thing I want to elaborate on there is that you said you're competing with Amazon and I think people misunderstand what competing with Amazon means. You're actually competing with like Amazon Basics. If you design a product and you do fulfilled by yourself and it sells a lot and you have high ratings and Amazon can do it cheaper, they're going to compete with you. Their whole advantage is they can, they don't have to design and develop products, they can just see what works and what sells and they literally just copy it and rip it off and you can't, it'd be really, really tough to compete with them on price, especially at the volumes that they can do. And so you're basically just trying all of these variants for Amazon and one that's successful, they're going to, when you, when you do win, you hit that one payday out of 100 or something, Amazon's just going to be right there competing with you. And I think that that is a really, really tough business. Again, it's great from a consumer point of view, bad from a business point of view.
- [63:18]
A
And what's the Great Bezos quote? Your margin is my opportunity. I think that very much applies here.
- [63:23]
B
Yeah.
- [63:25]
C
First one is for you, Shane. It says, can Shane tell us what he's learned during the pandemic?
- [63:31]
B
Oh man, that's really interesting. I've learned less trust in institutions like the WHO and the CDC than I had before. The bureaucracy, the misinformation and all of that. And I'd say that's a big lesson for me to just sort of take away because I've massively, I mean, maybe I just had too much respect going in for those institutions and maybe that was my problem. But just updating based on how we handled that. And the other thing that I think I've learned is, you know, margins of safety. And maybe this isn't a learning as much as margins of safety apply everywhere. Right. We're used to this world where we have this just in time inventory system where we can react and respond and if everything's perfect, that works out really well. But the minute something there's a hiccup, everything just falls apart. And we just saw that with the pandemic, right. And we're seeing it now as things work their way through the supply, supply chain. You know, GM had to shut down plants because they can't build semiconductors. And so I think what countries consider of national importance are going to go well beyond what they've considered before in that importance. And they're going to band together in a different way than they have. We're going to have a repatriate repatriation of a lot of key manufacturing. But that doesn't come back in a heartbeat and it doesn't come back quickly. It's going to come back over the next 10, 20, maybe 30 years and, and it's going to come back in different industries. I think we're going to get a lot of pharmaceuticals coming back, a lot of pharmaceutical research. I think we're going to get a lot of semiconductors technology investments coming back into the country, not only in terms of cell towers and cell infrastructure, but also the core, you know, Google, Amazon, Facebook, Microsoft. These guys consume CPUs like crazy. And they should band together and create a fab in the US capable of, of producing at a mass scale and technologically advanced. And that's really hard to do. Right. If you look at China, they spent 120 billion, I think on the Chinese semiconductor manufacturing company and they're still five years behind tsmc. And that's why Taiwan is so important.
- [65:39]
A
You did an amazing deep dive on semiconductors recently. Was there any investing insights that came out of that? Did you end up investing in any companies?
- [65:48]
B
Well, I had invested in TSMC before that because my whole rationale for that was like there's two people in the world that can really make semiconductors at scale and Samsung and tsmc. And China's trying to catch up. And I figured that as things get more and more chips, that's going to be more and more important. I've since sold it, which might be a mistake, but yeah, I think like it's just a key industry and if you do the daisy chain and we did an episode on this, so if you just search semiconductors and the knowledge project, you can watch it on YouTube. And John, you know, a remarkable insight here was that once you start going down the deep dive, there's only two or three companies in the world that can not only make the chips, but there's only one company in the world that makes lithography machines. There's only two companies that can actually do the software to make the chips. Like, there's really, really an interesting set of monopolies in there and it's probably going to take a step change in the way that we manufacture chips. And I don't know if that's on the horizon because I don't know enough about them for to dislodge those. But it also makes Taiwan of global strategic importance. Not because it's Taiwan, but because TSMCS there.
- [66:56]
A
Wow, that's crazy. That's really. It does add a lot of gravity to the situation with Taiwan for sure. For, for us, I mean, the pandemic was super interesting. We started freaking out in January. Chris and I locked down a month early, I think, and we had food stores and only the paranoid survive kind of stuff. And you know, I had a bet with a friend that we would have, you know, 10,000 deaths in, in our city and all this stuff. So we were very much going to the worst case scenario. And what was really interesting about it was life goes on. You know, at the end of the day we still wake up, drink a cup of coffee, see our kids, drive to work. I think, you know, it was just, it was interesting that it was, it was kind of heartening the idea that when bad things happen, humans have a way of adapting and also that generally businesses that existed before will be unlikely to get fully disrupted. And so if you have the guts to do it and you can deploy capital when there's blood in the streets and when everyone is fearful, you can do very well. That said, that may be an artificial lesson because of the Fed action. So I always try and keep that in mind. And you know, the other interesting thing about it has just been the step change in technology that's happened as a result of the drive to, you know, do research around Covid. What I'll be very interested to see is do MRNA vaccines for things like measles and potentially the flu. They're talking about a universal flu vaccine now or, or the ability to vaccinate via pill, which has also been discussed. Will that save more lives than we've lost. And I think that's fascinating. If you look back to the biggest periods of technological change, it's often when there's global strife, like World War II. So I think there's gonna be a lot of good things that come out of this. And we're lucky that it wasn't a more fatal virus, because it could have been many, many times worse.
- [68:56]
B
Yeah. Just to put things in perspective, right, like, we've never mobilized a vaccine that quickly. We actually had the vaccine two days after we should do challenge testing to speed up the testing phase. And challenge testing is where you pay people to take the vaccine and then expose them to the virus. And you could pay them a million dollars or $10 million in this case. We probably could have paid people $100 million and sped that up from six months all the way down to like three, five, six, seven days to get the approval for the vaccine. But some of the other lessons, like the second order consequences of misinformation, miscommunication, you know, not clear and succinct, lockdown, not locked down. All of this stuff is going to be in the next pandemic. And I think to Andrew's point about January, if you're going to overreact, you need to overreact in the beginning, not at the end. And when everybody's losing their mind, there's opportunities. I know we were all investing in Perishing Square during March when the world's falling apart, and Ackman had come out, and he basically said, hey, we put on this hedge and you could see the net asset value skyrocketing as the stock market's falling, and everybody was just indiscriminately selling shares. And we, we caught on to this, and everybody else is so busy that it was just lost in the noise. And he literally put it out there in public. Everybody could see it. Another asymmetric bet. Nobody paid attention to it. And it was available in the market for a good month or so before the gap started to close.
- [70:19]
D
I love the thinking around asymmetric bets especially. Well, what stands out most to me is the whole notion of the hubris that we had of making any decisions, big decisions, especially with very limited information. I don't know if you guys have ever really dug into, you know, the. The model of, you know, the two by two matrix of known and unknowns. So there's known knowns, known unknowns, unknown knowns, and unknown unknowns. And the pandemic was fascinating of just how many decisions we were trying to make with unknown information and unknown consequences. And it's been, yeah like you know, we're making early asymmetric bets and those panned out well where it was kind of unknown but a bit of a known.
- [70:59]
B
Right.
- [71:00]
D
And later we started making some bets where it was almost in the unknown unknown type category. And the hubris of just how foolhardy I think we were being of just like making decisions based on nothing more than know we have to be right. It's been fascinating the whole year of COVID to be honest. Well, I'm thinking so at the start, you know Shane, you're kind of inferring to this but you know, yeah, we bought into Pershing but Andrew and I also made a big short on the S and P and we were geniuses in our minds and we were literally high fiving and thinking oh we're, we're, no one's more brilliant than us. And the weekend before the Fed announcement, Andrew and I sat down in the house and with unknown information and unknown consequences and we sat there and our own egos in a way and just kind of amped ourselves up to do.
- [71:55]
A
A bigger short share the details. So we, so we, we basically said look, we've got all these businesses with a lot of accounts receivable exposure and so you know, we own agencies and stuff and we think everyone's going to slow their ar. So let's make a, you know, let's make a buy some put options on the S and P and if the world falls apart we'll make sure we get all our accounts receivable solved and you know, add some liquidity to the business. And so we bet $500,000 which you know, it's not, not a super material amount of money for us. And we did it on February 25, which is before the world kind of caught on that there was going to be a lockdown. And so our put options went from being worth $500,000 to almost $7 million and we felt like geniuses. So mid March we're going to, oh my God, we, we've made seven million bucks. Let's sell. So we sold. We felt like geniuses. We actually discussed putting the entire amount into Pershing Square holdings. And then we looked at each other and we said this is only going to get worse. This is, you know, this, this is, the story hasn't played out. And so we, we put the entire amount back on saying what's the point of having a hedge if it's not on? And then we proceeded to lose almost all of it because of the Fed announcement. And it's another example of just taking your wins off the table. When you make a risky bet and you win, just take the money off the table. Don't triple down.
- [73:17]
D
Yeah, and we were especially greedy too, because the initial thesis of a hedge, I think, was pretty sound. And it was a very asymmetric bet too, right? You know, a very small amount of money for an outsized potential return. And yeah, like, I really think it was just like, you know, FOMO driven and kind of agreed driven and, you know, high flying. It was that. That stands out as a great lesson that's been attributable throughout the whole pandemic.
- [73:41]
B
I'd say the, the other lesson that I would add just to, to sort of switch gears a little bit on that is that we're used to being told the answers with what's, you know, this solves this, this solves this. And the problem with that is when people don't have the answers, we're not used to solving problems on our own anymore. We're not used to thinking for ourselves. And so when the CDC came out with conflicting guidance on sort of masks and don't wear masks, and the inability of people collectively, not individually, but collectively, to think through those problems with a degree of accuracy tells me that our school system is broken when fully functioning adults can't think through these things and know that there's, you know, very little impact to wearing a mask and it's not going to hurt you and it could possibly save your life, despite what the CDC says. Like, we're just so dependent on these institutions to have answers and when they don't have answers, we're stuck waiting for people to have answers.
- [74:36]
A
I think the human brain almost is broken because I find the same thing with myself. So, you know, I think everybody became an armchair virologist and was studying, you know, especially nerdy people. You know, we're all studying the science and reading Google Scholar and stuff. And I would read all that and go, okay, statistically my odds are low and you know, I have a good vitamin D status and you know, all these things. But then my wife would send me one article about one random guy who happened to be 35 years old and, you know, seemed healthy and then he died. And we would make decisions, emotional decisions, based on that, or my wife would really spend a lot of time getting panicked about it. And so it goes back to, there's always more power in stories, and unfortunately, charlatans are great at selling stories. And even people who are smart and understand data still get caught up in stories. And I think that's the result of all the misinformation and panic and stuff that's happened. People are not, they don't think in statistics. They're not scared driving to the airplane. They're scared of the airplane because they've seen in movies plane crashes are scary.
- [75:42]
C
Okay, Andrew, you talk a lot about paying to be in the right room as a means to network. I'm curious, are you a believer in sending thank. Oh, sorry, sending thank you notes and. Or gifts, basically asking about how you network. Andrew.
- [75:56]
A
So I remember reading the Robert Cialdini book Influence and it talked about the power of gifts and gift giving and favors. And Chris and I used to really think, you know, that was a really great idea. You know, you show someone I care. I sent you a birthday gift. I take you out for a nice dinner and I pay. But what I realized as people started doing it to me is I found it incredibly manipulative. And I immediately became suspicious that they had read the same books I had and stuff. So what I appreciate is if a friend sends me a text on my birthday. What I don't appreciate is if someone who I don't know that well sends me a big elaborate champagne thing if they have, especially if they have a financial incentive to do so. So an example is a stockbroker sent me a bottle of champagne when we took our company public. And I found that I almost was more distant to him because of it. And so when I think about gifting, I only gift very appropriately. So, you know, we have a friend of ours who's been with the company for a long time. He's leaving to do something new. We bought him a watch, but he went with the company for 15 years. There's no more financial relationship between us. Just like a thank you. We'll do stuff like that. But I personally find it quite uncomfortable. Chris, what about you?
- [77:10]
D
No, I totally agree. I think the rule of reciprocity is very strong and we, we used to be such hard believers of giving gifts. And yeah, being the recipient of gifts, I tend to now just not even respond and reward that behavior because the psychological poll it can make is you just don't make the best decisions. When reciprocity is a factor, any little.
- [77:30]
A
Favor, letting anyone do a little favor for you can create this mental owing to them and you'll make worse decisions, decisions as a result.
- [77:38]
D
Yeah, I call it the psychology of a gift. We talk about this almost literally daily. I'd say, hey, and the psychology of a gift being, you know, when you first give the gift, you don't value it that much. And the recipient of the gift values.
- [77:50]
B
It quite a bit.
- [77:50]
D
And then over time, the recipient of the gift just starts to value it less or they start to come up with different narratives that are very flattering to themselves where they were owed the gift and the person who gave the gift just starts to value it more and more and more and more. And it's always the path to resentment. And we see it in every interaction. Anytime there's a favor, anytime there's something wasn't signed right from the get go or you, you, you know, they drive some sort of benefit. That dynamic just shifts over time, over and over, even between us. By the way, yesterday was a revelation of how a psychology of gift got between us. Shane.
- [78:25]
B
I have nothing to add to that. I think it's entirely accurate.
- [78:29]
A
Great. Well, Shane, thanks so much for joining us. That was really fun. It was fun to bounce stuff back and forth there and we'll have to do more of these.
- [78:36]
B
Yeah, that was fun. Thanks, guys. Appreciate it.
- [78:38]
A
Yeah, this is a riot.
- [78:39]
D
Awesome.
- [78:39]
A
And best of all, for an hour, we, I think we donated what, $4,000 or something to the Ottawa Food bank. So that's great.
- [78:45]
B
Nice. Perfect.
- [78:47]
A
Great. Awesome.
- [78:49]
B
Okay, take care.
- [78:50]
E
Talk to you guys.