Behind The Scenes of Selling My Company For Millions | Suli Ali (#410)

1. 0:00 – 2:07

   Intro

   1. SPShaan Puri0:00

      Every time I've had a s- company sale, when we sold Bebo to Twitch, when we just sold The Milk Road, you have been our, what we call the deal doula. You help us, you know, go through that labor process and come out the other side with, you know, the, the happy ending, I guess. [upbeat music] Suli, welcome to My First Million. Uh, you're s- subbing in for, for Sam Parr today, and like every substitute teacher, it's always the best when they're there. Um, we... We're gonna do a bunch of things. We're gonna talk about some of your, the companies you started, the companies you've invested in, things are, you know, some ideas you have. You were the first ever episode of the podcast, so if people wanna hear your life story, that's the place to go, episode number one. Um, we've come a long way from there. Did you think this is what would happen? [laughs]

   2. SASuli Ali0:52

      Uh, I always knew the podcast was gonna be big, and, uh, I think from the very beginning you were like, "Let's do Barstool, except for business," and that's what it's become, and it's huge, and I actually think it's gonna be way bigger in a year than it is today. Like, three times the size a year from now than it is today.

   3. SPShaan Puri1:11

      Uh, yeah, I hope so. That's the, uh, [laughs] that's the goal. Uh, the, we did the kinda Barstool thing except without hiring anybody. It was like, "Okay, we will just be the jackasses," and then, like, let it go from there. Um, all right. So I got, you sent me this doc, which is great, 'cause there's a bunch of topics on here that I kinda wanna jump into. You, uh, I guess we should set the, the, the, the, like, groundwork here. So I'll give your very short life story so people understand who you are. You, um, you worked at a job for, like, a couple years. You did, like, the traditional path. You worked at Microsoft. You quit. You decided to start your own company. This is right when the Facebook app platform comes out, so you start building, like, silly Facebook apps that go viral. So, uh, think things like Superlatives, which was, um, like, which of your friends is most likely to do X? And, uh, it would invite those friends to, like, do it too, and it grew like crazy, but it was like a silly Facebook app. So you didn't know what to do with it, but you ended

2. 2:07 – 4:33

   Suli's story

   1. SPShaan Puri2:07

      up selling it, so you got, that was your kind of My First Million moment. So you sell it. Um, you're how old at that time? Like, 24, 25-ish? 26, maybe?

   2. SASuli Ali2:16

      Uh, yeah, 26.

   3. SPShaan Puri2:17

      26. Take that, and you go on the next big wave, which is, uh, mobile apps are gonna be a thing. You are creating games, I think maybe first on Facebook, and then on the iPhone when, when, when the iPhone app store comes out. You're like, "Oh, this is gonna be big." You create a company called Tiny, uh, or TinyCo, and, um, end up somehow you raise money from Andreessen Horowitz. You're living the dream. Things go south as the economics of that business change, and then you go all in in this Hail Mary strategy, which again, episode one for the whole story. You go all in on this Hail Mary strategy of, like, we're gonna get the rights to Family Guy. [laughs] And you end up somehow as a startup that nobody's ever heard of getting the rights to, the license to, to make the Family Guy mobile game. You did it for Harry Potter and a couple other big IP things, sell that company. Um, and then s- that, I met you after that. So I met you kind of when you were selling that thing. We met at a, a dinner that Sam was throwing 'cause you were speaking at Hustle Con, and immediately we hit it off. We were, we made some big plans. We were like, you know, you were talking about Tony Robbins. I was like, "Oh, I'm a Tony Robbins guy." You're like, "Really? I don't even know about Tony Robbins. Tell me." And I started gushing about my experience there, whatever, and I was like, "Yeah, we should do that here in San Francisco." Like, "Let's do it tomorrow morning. Let's have a-"

   4. SASuli Ali3:38

      Yeah. Yeah, exactly.

   5. SPShaan Puri3:38

      "... our own power session with people like us who are just, you know, electric." And, uh-

   6. SASuli Ali3:43

      Yeah, we were like, uh, Tony Robbins is amazing. Nobody is doing this, um, in this kind of modern way. Let's put up some Facebook ads today, um-

   7. SPShaan Puri3:52

      [laughs]

   8. SASuli Ali3:53

      ... and then tomorrow, let's have 50 people in here-

   9. SPShaan Puri3:55

      Right

   10. SASuli Ali3:55

       ... and try our hand at, like-

   11. SPShaan Puri3:57

       And the-

   12. SASuli Ali3:57

       ... being Tony Robbins for a day.

   13. SPShaan Puri3:58

       We did the thing where you spent 20 minutes being like, "This is great. This is a great idea. This is, this is a no-brainer."

   14. SASuli Ali4:04

       We gotta do this.

   15. SPShaan Puri4:04

       And we just keep talking about how much it's a no-brainer, how much it's a slam dunk. We're gonna do it. We're using all these terms. Never did it. 10 years later, [laughs] we still never did it, but we became good friends along the way.

   16. SASuli Ali4:14

       I still think it's a great idea.

   17. SPShaan Puri4:15

       [laughs] Yeah.

   18. SASuli Ali4:16

       And it would be the most fun weekend ever.

   19. SPShaan Puri4:18

       [laughs] Yeah, I think, I still think we should do it. We, uh, but then we, you, we kinda got, uh... I guess from there you, you did a couple things. So your brother started Native Deodorant. You kinda helped him with that. You started another company, which we won't really talk too much about. Then I was starting

3. 4:33 – 8:13

   Deal Doula

   1. SPShaan Puri4:33

      my e-commerce brand. You have helped me out a lot with that now. Are kind of a, a s- a shareholder in that business. Um, and when we were... Every time I've had a s- company sale, when we sold Bebo to Twitch, when we just sold The Milk Road, you have been our, what we call the deal doula. You help us, you know, go through that labor process and come out the other side with, you know, the, the happy ending, I guess. Um, so that, that's kind of, like, how our interactions have been, like, on a business side, and then become great friends, uh, since then. So that's my intro. Did I miss anything?

   2. SASuli Ali5:05

      Um, I love being the deal doula, by the way. Uh, uh, when we sold TinyCo, we had this banker named Dick Filippini, and he, uh, ran, he was our banker, ran the transaction for us. And I told him that I loved what he did so much that I just wanted to work for him for free for six months after this-

   3. SPShaan Puri5:21

      [laughs]

   4. SASuli Ali5:22

      ... so I could see all of the deals that he was doing. And, uh, he did not accept my offer and said, "No, you, you can't do this."

   5. SPShaan Puri5:30

      Dick is great. He helped us for free when... 'Cause Bebo was, the Bebo deal was gonna be too small. He does bigger deals, like, I think, like, $100 million plus type deals. Um, it was too small, but he got on the phone with me several times throughout the process, talked me off a ledge multiple times when I was like, "I'm just gonna say this." He's like, "No. Well, you should probably just wait, see what they say." Um, and his advice was basically just like, "Don't F this up s- you know, son." And he was totally right. He helped me a ton. And actually, I still feel the guilt that I didn't, like, send him a gift afterwards. [laughs]

   6. SASuli Ali5:59

      [laughs]

   7. SPShaan Puri5:59

      I think I even texted you, like, a year later. I was like, "What's Dick's address? I need to send him a gift."

   8. SASuli Ali6:04

      Yeah.

   9. SPShaan Puri6:04

      "I can't believe I didn't." And here I am still, four years later, have not s- sent that gift. Dick, I am so sorry. You were so helpful. And I will, I will still send you a gift

   10. SASuli Ali6:12

       I also owe you a gift.

   11. SPShaan Puri6:12

       [laughs]

   12. SASuli Ali6:13

       The deal, uh, another deal that Dick did that I thought was super interesting was he sold AppLovin to a Chinese company for, uh, $1 billion. And the Trump administration blocked the deal, or the FTC blocked the deal, and, uh, instead of it being a billion-dollar sale, the Chinese company invested $100 million into AppLovin, and then, uh, couple years later, AppLovin... So everyone, I thought, would be devastated, like the founders were like, "We're gonna become so rich overnight as we sell this company for a billion bucks." Transaction doesn't happen. I assume founders are sad and upset. Then a couple years later, the company goes public, and at some point it was worth $30 billion as a publicly traded company

   13. SPShaan Puri6:56

       [laughs] Yeah

   14. SASuli Ali6:57

       So such an amazing transaction to not have hap- uh, closed.

   15. SPShaan Puri7:01

       Well, they got the best of both because they... Whatever the company was putting in, I think it was 1.6 was the original, 1.4, 1.6 was the original purchase price, and they were gonna put in a few hundred million dollars to own 70 or 80% of it. And then instead, it was like the year went by, nothing happens. And, and so with that anxiety came this big payoff because the business grew like crazy in that time. So they're like, "Hey, okay, same deal, but now you own like 20 or 30%." [laughs] And so they got the money

   16. SASuli Ali7:26

       Wow

   17. SPShaan Puri7:26

       They got liquid on that, but they only had to give up a tiny fraction, and then they sold it ag- uh, then they went public, um, you know, later for, for way more. So that turned out, you know, pretty much as good as it could go, [laughs] right? Like

   18. SASuli Ali7:37

       Yeah, best scenario

   19. SPShaan Puri7:38

       They got both. [laughs] Uh, just had to wait a year. Um, speaking of kind of like acquisitions, I got a, I have a Milk Road-related question for you first, which is, um, you saw, you saw both the acquisitions that I did, uh, from like sort of start to end, and I shared, you know... It's like in high school when it's like, "The boy texted me this. Should I reply this? Should I say this?" Like, "No, no, no, that looks too needy. Say the, like change the period to a comma and then just, you know, cut that last line." Like, it's that level of help that, that you were doing with me. Um, what's your... I've given kind of my debrief of the acquisition.

4. 8:13 – 17:25

   Acquisition Nuggets

   1. SPShaan Puri8:13

      I'm just curious, what's your, uh, what was your takeaway or what was your, what are some nuggets that, that you would, you would share from, uh, from watching that go down?

   2. SASuli Ali8:22

      Um, I love the deal structure that, uh, Milk Road ended up with, which was a bunch of cash up front and then, um, a bunch of equity in the new company, where those two guys are wanting to grind it out for years and build a giant business. And, uh, those guys in my head, you know, some percentage of the work that they do is just creating value for you and Ben, and that's awesome.

   3. SPShaan Puri8:46

      [laughs]

   4. SASuli Ali8:46

      So I love that deal structure. Uh, the... In my head, uh, kinda having been through this a couple times, I feel like a lot of the, um, you know, texts, the nuance of words that you care about when you're trying to sell your business, the buyer doesn't care about that much. Um, and it's more of a emotional thing than a practical thing, where practically the buyer is like, [lips smack] "I wanna buy this business because of the strategic reason and the revenue and the profit." And a lot of the things that, um, you can be squeamish about or uncomfortable to say or not sure how to say things, um, I think a lot of that stuff doesn't matter. O- One of the things that I learned, uh, actually when I was trying to sell TinyCo was, um, we ran a sales process where I was trying to sell the business, and we talked to a bunch of, uh, acquirers. And we got pretty far along with one, um, and then the deal didn't happen. Uh, and then a year later, we went and sold the company, um, successfully. And the, um... There was a bunch of stuff that I was trying to keep close to the chest, and I was like, "Oh, people aren't gonna wanna hear this.

   5. SPShaan Puri10:04

      [laughs]

   6. SASuli Ali10:04

      People aren't gonna wanna hear that." And what was great about a banker and some- somebody like Dick was, uh, he was like, "No, actually, this isn't a big deal. Just tell these guys this, and, uh, they're not gonna care about that." So it took, uh, this kind of unc- discomfort I had around like things I thought were secrets that I needed to take to the grave with me, v- and he just made me comfortable telling them about them.

   7. SPShaan Puri10:29

      Right. Sam, Sam did something for me in this process. So as we were selling to Milk Road, I was like, "Yo, any kind of tips or advice you've had," and w- when he sold to HubSpot. And he goes, "Oh..." S- on that same note, he goes, "Just do, uh, just tell them up front all the shitty things about your business that they, that might scare them away 'cause guess what? They're gonna find those anyways when it comes to due diligence, and you're just gonna be, you know, four weeks in or six weeks in emotionally invested, and it's gonna get ugly later, and they're gonna feel like they just found some, like, you know, big wart on the deal at that point in time." Um, and he goes, "Just tell them all the skeletons in your closet now and be like, 'Here's all the reasons you shouldn't buy this company. If these bother you, you now know them, and you can decide for yourself, you know, if that's a, a deal breaker for you.'" This was like not the very first thing, but shortly after. Like, we went to a dinner, and everybody was interested. We hadn't even fully negotiated the deal, but I just said... They're like, "You know, any questions you guys have or, you know, any co- any concerns?" I said, "Well, you know, I wanna make sure, like, you fully understand this business. Um, and, you know, I've been through this a couple times, and I just, I know, like, um, it's better to just be fully transparent." So I said, "Yo, here's all, uh... I made a list of the reasons why, you know, you shouldn't buy this. Here's all the skeletons in our closet, and you can look at these today, and you could, you could decide if this is too, [laughs] um, too concerning for you. You know, let's talk through these now." And we did it, and later, af- after the deal was closed, we did a debrief, and they, they basically... This is how you know they're smart. They were like, "What could we have done better in the acquisition process?" Like Um, you know, from your point of view, and we, uh, we asked the same. It was like-

   8. SASuli Ali12:04

      Amazing they asked that

   9. SPShaan Puri12:05

      ... it's like, "How was that for you? Uh, was that good for you? It was good for me." And it was like we, we told them, uh, our... They told... They gave me that feedback. They were like, "You know, you said something at this dinner where you were just like, 'Here's all the ugly parts of our business, and like let me just tell you about them, and we could talk through them.'" They go, "That built so much trust, 'cause we didn't know you very well, and immediately we were like, oh, okay, we feel, we felt at ease, and, um, we felt like we could trust you guys going forward." And so that turned out to be a big win. And that's the exact opposite. My, you know, the... I think the entrepreneur's instinct is hide that, you know, as far, put it behind your back. You know, if they, if they, if they ask for it, you show them, but like don't scare them away. And, and, and in fact, what you wanna do is like find out as q- quickly as possible if there's a real match here or not and use that as a tool to build trust, uh, versus to build distrust by not disclosing it upfront.

   10. SASuli Ali12:59

       The other thing I've seen entrepreneurs do that I, I, um, think is also kind of, uh, the wrong common sense out there is, uh, when you ask an entrepreneur if they wanna sell their business, entrepreneurs are told to say, "No, I do not wanna sell my business." And they expect that the buyer is gonna come over the top and say, "Even if you don't wanna sell your business, we're super interested in buying it. We'll do anything it takes. Uh, please come talk to us." And in practice, that's not at all how it works. Uh, oftentimes a buyer is looking at a bunch of different businesses to buy at that point in time, and so they'll reach out or talk to 10 different businesses. Five of them will say, "No, we're not for sale," and they'll say, "Okay, great. We're knocking these five off. We're gonna focus on the five that have said, 'Yeah, we are for sale.'"

   11. SPShaan Puri13:48

       [laughs] Right. And so what's the way to say yes without seeming desperate there, or seeming too w- too eager to sell?

   12. SASuli Ali13:55

       Yeah.

   13. SPShaan Puri13:55

       'Cause you don't wanna do that either.

   14. SASuli Ali13:56

       I think the way I've done it before is, um, one, w- when I was ready to sell a business, I would, uh, find somebody that I knew was interested but wouldn't have a good offer and get them to make an offer and then say, "Cool. Uh, go..." That enables you to reach out to other people and say, "Hey, we have an offer to sell the business, and we're thinking about, uh, whether or not to do that, and you are somebody that we think there's a great strategic fit with, so we thought to talk to you before we did something else."

   15. SPShaan Puri14:27

       Yeah. Yeah, I like that.

   16. SASuli Ali14:29

       So that's kind of one way to do it.

   17. SPShaan Puri14:30

       And if they come inbound, it's sort of like, um, you know, we have had interest and nothing, you know, nothing felt, felt right. You know, we really like our business. Um, but, you know, we respect you guys, and if that's something you, you know, we, we obviously be open to listening. Uh, you know, w- [laughs] we, we owe, we owe ourselves that, right? And so, so you kind of, you just say, "We like our business. We have interest. It hasn't... We, we, we didn't real... N- nothing went too far 'cause we weren't very, you know, weren't too keen on it. But, you know, really like you. If you wanna talk, like we're open to talking. There's nothing... You know, that's fine."

   18. SASuli Ali15:04

       Yeah. Um, yeah, I think that's a good setup. And, uh, I think buyers who are experienced can kind of read between the lines pretty quickly, uh, 'cause what you just said is like, "I'm wide open. Somebody please ask me out for a date."

   19. SPShaan Puri15:16

       [laughs] Exactly.

   20. SASuli Ali15:17

       "Uh, I'll... I'm ready. Uh, you know, and I'll be a cheap date. Sign me up."

   21. SPShaan Puri15:21

       [laughs] Exactly. But like it's the signal. It's the signal that I'm interested-

   22. SASuli Ali15:25

       It's the signal

   23. SPShaan Puri15:25

       ... without like, um, without begging you. Uh, [laughs] but it's like, "To be clear, I'm interested." [laughs]

   24. SASuli Ali15:32

       Yeah, yeah, it's perfect. It's like looking at somebody across the bar for, and catching their eyes, um, their eyes for one second and then smiling and looking away.

   25. SPShaan Puri15:41

       There was a- another meeting. We won't talk... We won't name the name, but you were a part of a few of the meetings as we talked to different people from Milk Road, and it was the first meeting with one of the buyers [laughs] and you, you immediately called me afterwards and you were like, "Wow." Yeah, and then you said, uh, there's this phrase, "A fool and his money are easily parted." [laughs] And you immediately sniffed out that this person was sort of an idiot, um, and like, you know, would, [laughs] would, would be... And sure enough, they made the, the by far the largest offer. Um, and, you know, it turned out to be, you know, th- they turned out to be not, not exactly who... W- we didn't go with them because of that. But of, of the three or four people that we talked to, this was one of them, but you sniffed that out immediately. What, what tipped that off for you and, uh, what can you say without getting us in too much trouble?

   26. SASuli Ali16:29

       Um, you know, there's a lot of people who are charlatans nowadays, and, uh, they'll often lead with a lot of like flattery and not substance. Um, like it's very easy for me to tell when somebody is like, "Hey, this is who I am. I've done X, Y. I started this company. I sold it. I started this company. It didn't work out." They're just like honest about their resume, and there isn't tremendous amounts of puffery that with a couple Google searches you can be like, "Actually, that's all not true."

   27. SPShaan Puri17:03

       Right. [laughs]

   28. SASuli Ali17:06

       And that's what happened with that guy.

   29. SPShaan Puri17:07

       Or like you've said a lot of words, but you haven't said anything yet. Okay, that is, uh, you know, either I'm not understanding what you're trying to say or you have nothing to say, basically.

   30. SASuli Ali17:17

       Yeah, that's right. And they don't lead with like numbers and information. They lead with, uh, like flowery language that doesn't go anywhere.

5. 17:25 – 36:08

   Business Ideas

   1. SPShaan Puri17:25

      Yeah. So I'm curious, um, what are some business ideas that, uh, you think somebody could start that would be successful either at the smaller scale, like I think this can be, you know, like a clear business that'll make a few million bucks and I just think, you know, if somebody out there is looking for a way to get financial freedom, this is a way, to here's a big idea, somebody who is willing to grind that out should go do this?

   2. SASuli Ali17:50

      Um, the big idea that I like the most right now is, um, Robinhood for real estate. So, uh, you know, Robinhood makes it easy to invest in, uh, the stock market. Um, and the way I've thought about this is I've got a ton of friends who are, you know, in their 20s that work at, uh, Facebook or Google, and they make a ton of money. But, uh, what they do with it is they just stick it in their, uh, bank account or in a savings account or a CD. Uh, sometimes they'll invest in the stock market. Um, I think it's so hard to be able to invest in real estate, and if there was a turnkey way through a mobile app to be able to invest in real estate, uh, I think that would be huge. And I think it's really different. You, you did this, um, investment and, and I followed you, uh, in a company called Jar in India. And so they make it super easy to invest in gold in India. And so you can invest with a dollar or $50 or $5,000 and just buy gold-

   3. SPShaan Puri18:54

      And there's no choice

   4. SASuli Ali18:54

      ... through, like, a one click.

   5. SPShaan Puri18:55

      It's just-

   6. SASuli Ali18:56

      There's no choice

   7. SPShaan Puri18:56

      ... if you believe that gold is a good thing to invest in, we'll make it easy for you to do that thing that you already think is a good idea.

   8. SASuli Ali19:02

      Exactly. And so it's a one-click thing of, like, how much money do I wanna invest today? And then, uh, they... The best way to do it is to kinda set up a subscription where every month you're like, "Cool, I'm buying $200 of gold every month," and 10 years from now, it's gonna be worth millions of dollars. Uh, I think the same should happen with real estate. There's a bunch of companies that are like Cadre and, um-

   9. SPShaan Puri19:26

      Like Fundrise or-

   10. SASuli Ali19:27

       ... CrowdStreet

   11. SPShaan Puri19:28

       ... or, yeah, whatever those are. Like, it... But you have to look at the individual deals.

   12. SASuli Ali19:32

       You have to y- They're targeted towards, um, people like me who like investing in real estate and who are sophisticated about it and wanna know what a, what the cap rate is and the location and the year of construction and all this stuff. Um, I think there should be a one-click way to be able to go buy equity in rental properties that generate income. And, uh, it should be marketed to, um, people in their 20s. It should be marketed through Facebook. It should be set up so that every... You basically log in and are like, "Cool, you wanna invest in real estate? How much do you wanna invest every month? $200? Great. $200 is now happening in real estate. You're now investing $200 in real estate every month." And boom, it does an ACH from your account every month, um, on the customer side and invests in that real estate. And the income that's get generated goes back and r- reinvests in more real estate. And that's it. And so it shows, uh, this is how much you've invested so far and here's how much it's worth. Boom.

   13. SPShaan Puri20:37

       Okay. Love it. Give me more. What else you got?

   14. SASuli Ali20:41

       Uh, what else do you got?

   15. SPShaan Puri20:42

       [laughs] Hey, hey, hey, hey. Whoa, whoa, whoa. What's going on here? This, this is, uh... Y- you're the, you're the guest of honor here. I got, uh, I, I'm dumping ideas every week here. I'll give you one that, like, I think is... I, I'll give you one that I get asked a lot, which is not actually what's a big idea, but what's the easiest way to get to, like, a million dollars. Um, and I always think that, like, the easiest way to get to a million dollars, if I'm, if I need to get to a million dollars right now, here's, here's what I would do. I would, um, I would create an agency that's gonna target a really specific part of a business that makes money already and just figure out how to make more of it. So, for example, email marketing for, uh, e-commerce brands or con- conversion rate optimization, CRO, for, for companies. So you basically say, "Hey, visitors coming to your site, we can help you convert more of that traffic into sales." And I think there's such an easy play where you basically just create content. So you create content that basically just says, like, "Here's the before and here's the after. Look, I changed these three things 'cause I call this my, you know, my hot, cold, hot method, and, um, we boosted revenue by 32%. By the way, if you want somebody to boost your revenue by 32%, work with me." And I think that this is, like, a such a bootstrap-able, easy way to get to 100K a month in revenue, right? Like, you get 10 clients paying you 10K a month. It is not hard to get 10 customers to pay you 10K a month when it's, um, a part of their business that's already gonna produce, like, already producing hundreds of thousands or if, if not millions of dollars of revenue and you're gonna provide, you know, m- uh, turnkey service. So you take it off, you take the headache off their plate, but you do it better than they're doing it because you're, you get seen as a thought leader by putting out, like, 10 of these case studies. And this happens all the time with ad agencies, um, email agencies, conversion rate, uh, uh, optimization agencies. But you could do this with anything. You could do this with site speed. You could do this with, like, uh, any number of things. So I would just go... And you could start with z- start at zero and become a, quote-unquote, "thought leader expert" just by publishing, like, very simple before and after, like, kinda case studies. Um, and you start by not even having a client. You say, "Hey, if I was this brand, here's what I would do. Look, when they do this, it sucks. Uh, you know, they, this is a dead end for them," or, "You know, they should steal this good idea from this other company." And so you could put together case studies without even having clients. And so to me, this is, like, the easiest... Like, if you are willing to work hard and you feel stuck at a job that maybe pays you 100K a year and you're looking, "How do I go from 100K to 900K? How do I go from 100K to, to, you know, 750K a year?" This is the, like, all- all it takes is hustle, uh, approach to, to that side of b- type of business. And then those businesses can be sold. So, like, your job, you can't be s- You, you can't sell your job, right? Like, if I write a book, I might write that. That might be the title. You Can't Sell Your Job, just, like, my, my one-line case for why you should start a business instead of have a job. And if you get a business like this to 900K and, you know, 60% profit, you could sell that agency or that consulting business for maybe two or three times, you know, EBITDA. And so you could sell that. You could make 600 to 800K a year and then sell it for two or three million, um, you know, after a couple years. And so that's a very easy pathway to financial freedom. Easy meaning it's simple, not, not that it's no effort, but e- e- easy that, like, anybody can do it and it doesn't take being the genius with the one idea who beats all the competitors in the space.

   16. SASuli Ali24:12

       Yeah, I totally agree with that. I think there's a bunch of other examples in my head, like, um, just setting up a Facebook Pixel and doing it in a way that's actually optimized, um, and perfect and following all the Facebook guidelines. I think that's super hard, and I think there should be some guy who's like, "I'm the expert at this-

   17. SPShaan Puri24:30

       Right

   18. SASuli Ali24:30

       ... um, and I take care of that for you."

   19. SPShaan Puri24:32

       And, uh, I gave a brand of e-commerce, but, like, you can also do this for just, hey, every l-la-legal practice, every dentist. You need websites, I make websites for dentists, right? So it doesn't even need to be like you're the best at doing growth for D2C brands. It could be like, "Hey, in Minneapolis, Minnesota, I make the best websites for restaurants in Minneapolis, Minnesota, or legal practices, whatever." And just through cold email or, you know, some combination of cold email, LinkedIn referrals, you can, like, get 10 customers to pay 10K a month.

   20. SASuli Ali25:05

       Yeah, I think you could pick any of these, um, big sectors of the economy like accounting, law, medicine, dental, um-

   21. SPShaan Puri25:15

       It could be anything. Senior living

   22. SASuli Ali25:16

       ... and go and be like, "Cool."

   23. SPShaan Puri25:16

       It could be whatever, you know? [laughs]

   24. SASuli Ali25:18

       Yeah. Yeah, and I'm just gonna go and build a online thing that, um, makes their life easier through marketing to them, making it easy to make a website. Uh, it's insane how many of those old world businesses are still, like, don't have a good website-

   25. SPShaan Puri25:35

       Right

   26. SASuli Ali25:36

       ... don't do any Google ads. Um, so I think there's a-

   27. SPShaan Puri25:39

       And I've seen some stuff like-

   28. SASuli Ali25:40

       ... huge opportunity there

   29. SPShaan Puri25:40

       ... our, our friend Nick Huber does this thing where he's like, he basically has a playbook to make a self-storage unit run better. And so his thing is like, I'll buy it at some multiple, but I know I can run it at 30% more efficiently or 40% more efficiently, so I'm getting value. I know within nine months I have a turnkey process to make this thing generate 30 or 40% more EBITDA. And so he does that buying the properties. But you could also just take that playbook and say, "Hey, self-storage owner, I will do this for you. I'll do it risk-free for you, meaning you pay me-

   30. SASuli Ali26:09

       Yeah
6. 36:08 – 50:00

   Rapid Fire Response

   1. SPShaan Puri36:08

      I wanna finish with some rapid fire. Can I do some, some quick ones? And then I just want you-

   2. SASuli Ali36:12

      Fire away

   3. SPShaan Puri36:12

      ... to say your reaction to this. Okay, so I'm gonna s- this first category is things you've told me that I thought were funny, and I want you to just, like, react or elaborate. Sort of like explain this tweet. Um- I don't know what the hell mental models are. I used to think I was dumb for not knowing what mental models are. Now I think everybody else is dumb for thinking about [laughs] mental models. Some version of that.

   4. SASuli Ali36:32

      Yeah, that's right. Um, in Silicon Valley, it's so in vogue to be like, "Oh, I'm applying the, you know, this cognitive bias theorem to this situation." Um, and, you know, everyone in Silicon Valley that's smart talks like that. And so I was just like, "Why do I... When I see something, I don't see it in that same way." And I just thought I was an idiot. Um, and I always solve a problem, like, from scratch, like tabula rasa, like it's the first time I've seen it, and I just like that way of doing it. So I gave up trying to b- find mental models.

   5. SPShaan Puri37:06

      [laughs] Um, all right, another one. You started your first two businesses on what I'll call waves. So, like, the Facebook app, app platform I think launched the same day you, like, had quit your job and were like, "What can I do next? Let me just do this." Uh, you saw the announcement and you're like, "I'll just do that. I have nothing to lose." Um, same thing with the mobile app store launch. I think you were one of the first big iPhone games. Um, what are the waves today? What would 22-year-old Suli be doing now?

   6. SASuli Ali37:32

      Uh, probably something in genetics or, um, AI. Uh, yeah, probably one of those two things. I think it's the biggest sectors.

   7. SPShaan Puri37:42

      Okay. What, um, you... Uh, seven years ago we were at dinner, and I was, just asked you a question. I was like, "Why haven't you..." You were like, "Oh, I wanna build, like, a big company, a billion-dollar company." I was like, "Why haven't you done that already? Uh, you s- you're so smart. You're so great. Why, like... What's, what's gone wrong?" And you said to me, "I don't think I understood what a billion-dollar company was before." What did that mean?

   8. SASuli Ali38:05

      Uh, I think you need to have a certain moat, and, uh, th- there's a bunch of things you need to get right to build a billion-dollar company. You need to have a big market, you have a clear way of getting customers that, um, makes economic sense, uh, and you need, um, a product that's really good. Uh, so I... Even today I feel like I've got a very clear path to be able to build, you know, $100, $200 million businesses, but I haven't quite figured out how to build a billion-dollar business. Outside of taking, uh, five or 10 100, $200 million businesses, I think there's a different code to build a billion-dollar business than a $100 million one.

   9. SPShaan Puri38:49

      Excellent. Uh, what would you do if you were MrBeast?

   10. SASuli Ali38:53

       I would start a Y Combinator for creators and, um, maximize the, uh... Basically find, uh, the next Kim Kardashian, the next MrBeast, and, uh, support them and own a piece of them, and be a king maker where I'm making other kings.

   11. SPShaan Puri39:11

       Um, you s- did a lot of startup investing. I think you've pulled back some from startup investing. Give me the, uh, the, the bullet point version of your take on startup investing.

   12. SASuli Ali39:25

       Um, I think startup investing, uh, I think competing for deals sucks. I hate trying... I find it very demeaning trying to convince somebody to let me invest $50,000 in their round. Uh, a friend of mine was raising money and got a term sheet from Andreessen Horowitz and Bill Gurley at Benchmark, and went with the Andreessen Horowitz term sheet, and Bill Gurley was so mad that, um, he called the founder up and, like, yelled at them for two hours and sent them 15 angry emails. And, uh, Bill Gurley is one of the most successful people in the industry, and the fact that he still has to do that made me be like, "This is a industry with no moat."

   13. SPShaan Puri40:06

       [laughs]

   14. SASuli Ali40:06

       I don't wanna, like, have to go, um, kinda beg or try to twist people's arms to let me invest in their startup. Um, the other thing that's happened is trying to turn, um, $50,000 investments into $2 million over a 10-year period, um, doesn't really do anything for me anymore. So my first startup investment ever was 100K investment in a company called Chartboost in 2011 or 2012, and then the company sold in 2021 and I made $2 million. So th- that was a 10-year time span. Um, so I, I think having to wait 10 years to get, uh, cash out is really annoying and makes me like it a lot less. I think the valuations have also gone really crazy, um, and companies are so much more competitive. Like, uh, there's a company called Divvy Home that raised at a billion-dollar valuation, and there's four other Divvy Homes out there, um, that are competitors to it. Uh, so the combination of high valuations and increased competition makes it really hard to make any money as an investor. And I've evolved from being, um, interested in kinda making these 50K checks into trying to buy a majority interest or a 30, 40% interest in businesses that have revenue and, uh, profit or a path to profit. I think that's a better way to invest for me because I'll see money back and be able to take that money and reinvest it in other new businesses.

   15. SPShaan Puri41:45

       What's the biggest investment miss you've had and biggest hit you've had?

   16. SASuli Ali41:51

       Um, biggest miss was, uh, Coinbase. My, uh... At TinyCo, we had this guy who worked for me named Adam Merber. He was roommates with Fred, the, um, Coinbase co-founder. And so Brian Armstrong and Fred, um, were fundraising for their series A. They got a term sheet from Andreessen Horowitz and, um, Benchmark and a bunch of other firms. And so they called me and said, "Hey, should we go with Benchmark? Should we go with Andreessen Horowitz?" Uh, you know, we'd at TinyCo raised money from Andreessen Horowitz. Marc Andreessen was on the board. And, uh, I was like, "Go with Andreessen Horowitz. Here's what's awesome about them." And, um, on that call, if I was like, "Hey, by the way, can I put in 25K into this round?" Uh, I feel like they would've said yes, and that 25K at their IPO was worth $200 million.

   17. SPShaan Puri42:48

       [laughs]

   18. SASuli Ali42:51

       I think it's probably Andreessen Horowitz-

   19. SPShaan Puri42:52

       And did you not ask 'cause you didn't believe, or you didn't ask 'cause you didn't think about it?

   20. SASuli Ali42:56

       I didn't ask 'cause I didn't believe, actually.

   21. SPShaan Puri42:59

       [laughs]

   22. SASuli Ali42:59

       'Cause I was like-

   23. SPShaan Puri42:59

       I, I, that's the honest answer. [laughs]

   24. SASuli Ali43:01

       Yeah, crypto, Bitcoin, these guys are building PayPal for crypto and Bitcoin. That's silly. That's just PayPal.

   25. SPShaan Puri43:09

       [laughs] Um, what about biggest hit?

   26. SASuli Ali43:13

       Biggest hit is-

   27. SPShaan Puri43:14

       Well, let me ask you. You, you wrote something on here. You said, "Could've invested in Facebook stock." I thought you ... I read something that you had bought ... After you sold your company that was on the Facebook app platform, you had bought Facebook secondary shares. Did you do that or, or am I missing that?

   28. SASuli Ali43:27

       Um, I did this really stupid thing, uh, that I'm still embarrassed of to this day, which is I, uh, signed a contract to buy some Facebook stock, like $150,000 worth, and, um, the stock price, you know, it was private, but in the private market, the price went down by 50%. And I called my father and was like, "Oh, you know, this happened to me." And he was like, "Don't worry about it. Just buy it and, um, you'll be fine. It'll go back up." And, uh, instead, I didn't buy it.

   29. SPShaan Puri43:59

       [laughs]

   30. SASuli Ali44:00

       Um, they su- I think they might've sued me and said, "Hey, you signed a contract to buy this." And then I said, "Okay, fine. I did." And I paid them, uh, $75,000 to not buy it.
7. 50:00 – 1:02:49

   Honest LinkedIn posts

   1. SPShaan Puri50:00

      You have a very honest LinkedIn, and I saw a guy who I think one-ups you, and I, I actually wanna tell you about this business in a second.

   2. SASuli Ali50:06

      Oh, amazing.

   3. SPShaan Puri50:07

      So, so Google this guy, Justin Yoshimura. So Justin and then Yoshi-M-U-R-A. So I wanna read you this guy's LinkedIn. He goes, "I'm currently the founder, uh, founder, chairman, and CEO of CSC Holdings, one of the dime a dozen, quote, unquote, 'unicorn startups.'" [laughs] So already I'm like, "Well-

   4. SASuli Ali50:25

      Wow. Wow

   5. SPShaan Puri50:25

      ... [laughs] who is this guy?" Just-

   6. SASuli Ali50:27

      Unicorn startups, dime a dozen. I'm trying, I've been trying for 15 years-

   7. SPShaan Puri50:30

      [laughs]

   8. SASuli Ali50:30

      ... to make a unicorn. He's like, "These are dime a dozen."

   9. SPShaan Puri50:33

      And then he goes, "After being told that nobody would ever hire me, I quit the bureaucracy and the negati- negativity of Palos Verdes High School," [laughs] so already just like holding a grudge against his high school, "to start a marketplace for unlocked cell phones." Anybody who sells cell phones, ringtones, or any of that shit, they're like the best. They're great hustlers. So already, you know, bonus points. So he's got two points. First, making fun of s- the fact that he owns, he's a CEO of a unicorn. Second, s- high s- dropped out of high school and sold unlocked cell phones. He goes, "Which was-

   10. SASuli Ali51:01

       Wow

   11. SPShaan Puri51:01

       ... acquired by a family office when I was 19 years old. More recently I started 500 Friends, a marketing loyalty thing. We merged with whoever and have e- were eventually acquired by whatever." And then he goes, "I angel invest 50K to one million in interesting companies run by interesting people." Then he names a bunch. When he names the companies, he names the round he invested in. Another key-

   12. SASuli Ali51:17

       Love it

   13. SPShaan Puri51:17

       ... another key thing that o- only real investors and honest people do, um, which is that they, you know, you know, "I invested in M- in the seed round. I invested this one late stage," right? Versus what most people-

   14. SASuli Ali51:28

       Love it

   15. SPShaan Puri51:28

       ... do is they'll go buy, you know, Airbnb shares in the public market and call themselves an investor in Airbnb, right? [laughs] It's like, we know, we know what you're doing here.

   16. SASuli Ali51:36

       I've seen big venture funds do that too, where they're like, "Oh, this is a hot company. We wanna invest in the secondary, in the series D-

   17. SPShaan Puri51:43

       Right

   18. SASuli Ali51:43

       ... a couple million bucks just to be able to put it on our website."

   19. SPShaan Puri51:46

       Small amount at any valuation, don't care, I'm just buying a logo, basically.

   20. SASuli Ali51:49

       Yeah.

   21. SPShaan Puri51:50

       Um, so then he goes, "Besides, uh, besides business and things I shouldn't be discussing on LinkedIn, I love animals, dogs, many cats, especially Persian Himalayans, dolphins, whales." He names like 10 animals. "Manatees, turtles." Then he goes, "Despite this, I'm not a vegetarian bas- mainly because I lack self-discipline. [laughs] However, I do wanna clarify I don't eat any of the animals above, and I would judge you for doing so, especially considering [laughs] that the prevalent belief is that eating wild animals at wet markets is what caused COVID." [laughs] Where is this-

   22. SASuli Ali52:18

       Oh my God

   23. SPShaan Puri52:19

       ... where is this LinkedIn profile going?

   24. SASuli Ali52:21

       What is this?

   25. SPShaan Puri52:21

       And then he, then he goes, "I've been included in many vanity lists such as Forbes 30 Under 30, Inc. 500," whatever, uh, yeah, F- 40 Under 40. "But thankfully I stopped advertising these on my LinkedIn headline when I was 19 after realizing I was being a douchebag. [laughs] For, for a formal bio, go to my Wikipedia." [laughs] So first just a-

   26. SASuli Ali52:40

       Wow, this guy's my hero

   27. SPShaan Puri52:40

       ... deep breath to digest this guy. Do you know, have you ever heard of this company, CSC Generation? It's, it's pretty interesting.

   28. SASuli Ali52:46

       Never.

   29. SPShaan Puri52:46

       So what he did was he started buying up all these like kind of antiquated furniture companies. So it's this, it's this kinda hush-hush thing, but they own Z Gallerie, which like half my house is like from Z Gallerie. Um, he owns, uh, what are the other ones here? One Kings Lane. He lo- he owns Sura, uh, la Table. So he's bought like Sura la Table for $89 million, Z Gallerie for $20 million, One Kings Lane, and then he started making offers to buy... I heard about him because, um, my, our buddy, I don't know if you know Metab, but Metab, uh, sent me this link.

   30. SASuli Ali53:18

       Sure.
8. 1:02:49 – 1:31:47

   Suli's next steps

   1. SASuli Ali1:02:49

      Um, yeah, so I've been kinda trying to figure out what to do next. I think after TinyCo I was like, wow, startups are hard. I'm gonna try to take it easy. And, uh, now gotten to a place where I'm like, cool, let's do something big again. Um, and starting a new company from scratch is really hard, so I've just been like, is there a public company that I can acquire, um, where I don't go through that zero to one phase that everybody loves but is really difficult, and go to a place where something's already at a five or a 10, and, uh, can I then take that and scale it as an, as a way of, uh, kind of running a business? Um, so to me, the perfect business out there to acquire is this company that was... that's... This is number one on my list, is a company that was a $3 billion, that's currently a $3 billion company, but in the private market was $10 billion. So it was worth $10 billion before, and now as a public company it's worth $3 billion. Uh, the company is Squarespace. Squarespace is down 50%-

   2. SPShaan Puri1:03:55

      We should, we should read a Squarespace ad. I feel like every ... The only time I ever hear Squarespa- [laughs] Squarespace is in their ads now. [laughs]

   3. SASuli Ali1:04:02

      Yeah. Squarespace spends, uh, so much money on these, like, podcast ads, and, uh, you hear about them everywhere on podcasts or, um, places that you wouldn't really... You don't see companies doing, like, direct response advertising. Like, I never see them on Facebook, but I always hear about them on podcasts-

   4. SPShaan Puri1:04:20

      Right. [laughs]

   5. SASuli Ali1:04:20

      ... which I think is super weird. And so the stock is down, you know, 50% since the IPO. They're at this, like, kinda 900 million revenue run rate now. Uh, it's a subscription business with more than four million subscribers. Um, I'd love to buy it, 'cause I think it's a great company that's super undervalued. Uh, it's not being run to maximize profits, so it's being run in a way that, um, keeps it at break even. So I think you could run it to maximize profits, get rid of those podcast ads, focus on direct response, uh, Facebook ads to get new customers. This year they'll spend-

   6. SPShaan Puri1:05:00

      So where, where's the fat in their, in their spending?

   7. SASuli Ali1:05:03

      They do a ton of, like, uh, d- non-direct response ads that are, like, TV ads or podcast ads that I think are great to have this, like, halo effect around the brand, but I don't think those are the optimal way to maximize return on ad spend.

   8. SPShaan Puri1:05:20

      Right. And so they do, I think, 300 or 400 million of marketing spend, so that's one. You could make that more efficient or cut that down. Where w- what is the, the other? Is it like, like, you know, like Elon buys Twitter, he fires half the staff type of thing, there's like a huge headcount? Or what else is, like, uh, fat in their system?

   9. SASuli Ali1:05:39

      Yeah, I think they've got a ton more people than they need. Um, their headcount costs are, like, 225 million a year, and their headquarters in, is in New York City, and I think you could just cut that team materially and, um, you know, get rid of the New York City headquarters, 'cause it's super expensive to be there.

   10. SPShaan Puri1:06:00

       Yeah. Sam was talking about... I, I remember back in the day, like, uh, one of the earliest podcasts, he talked about Casper, and he's like, "Casper, you know how I knew Casper was gonna fail? They had, like, 150 employees in New York," and it's like, why are you, why are you hiring all these people in New York? You don't need... These people should be sitting in, like, you know, South Carolina, Omaha, and like, you know, these other places. Like, why is your customer support, you know, somebody making, you know, all this money in, in New York? He's like, "That's the first thing you gotta do, is just get rid of New York." [laughs] And he was, like, so adamant about it. That was like his number one rant. And this is at a time when Casper was still, like, seen as, like, kind of, like, one of the, like, rising stars. Like, now I think Casper's just kinda taken a beating in the, in the market and all that stuff. Um, I think it might have gone private again, um, because it, it-

   11. SASuli Ali1:06:43

       Yeah, Casper went private. Yeah

   12. SPShaan Puri1:06:44

       ... could, could, couldn't last publicly, I guess. But the- [laughs] I remember that was his, like, number one thing. He's like, "I... Say no more. I don't need to read the P&L. Uh, I just saw how many employees work in New York. I could tell you this business is mismanaged from day one." [laughs]

   13. SASuli Ali1:06:58

       There's this great Carl Icahn story where he buys a business, uh, that makes, like, um, subway cars, and, uh, they've got a huge team in New York and a team somewhere in, in middle America. And he goes to the team in New York and is like, there's three floors of them in some fancy Midtown building, and he's like, "So what do you guys do?" And, uh, you know, they show him all these presentations for two days, and he's like, "Okay, I saw the presentation, so what do you guys do?"

   14. SPShaan Puri1:07:24

       [laughs]

   15. SASuli Ali1:07:24

       And they're like, "We just told you." And so they're... He's like, "All right, let me go visit the guy who runs the middle America thing that actually makes the railroad cars." And so he goes to visit them, and he hangs out with the guy, and the guy's super charming, and at the end of the day, he's like, "So, uh, you know, there are these guys in New York. What do they do for you? Uh, do you need them?" And he's like, "No, those guys don't do anything. In fact, I got four guys that are just there to manage those guys-

   16. SPShaan Puri1:07:53

       [laughs]

   17. SASuli Ali1:07:53

       ... and all the questions that they bother us with."

   18. SPShaan Puri1:07:55

       Like a firewall.

   19. SASuli Ali1:07:56

       Yeah. "If you get rid of those guys, I, uh, think the business will continue to grow and, uh, we'll be fine." And so the next day he goes back to New York and fires three floors of people.

   20. SPShaan Puri1:08:08

       [laughs] It's like that scene-

   21. SASuli Ali1:08:11

       Amazing

   22. SPShaan Puri1:08:11

       ... in Entourage where Ari Gold just walks in with the paintball gun [laughs] and just starts blasting everybody. That's basically [laughs] what, like, the, the, the New York, uh, the New York firing by Carl Icahn.

   23. SASuli Ali1:08:22

       Yeah. He tells this story with such a smile, and, um, actually, he tells it as like, "This was pretty early in my career, uh, so it took me, like, a couple months to do this. If it was now, I would buy the company and fire them, like, the next week."

   24. SPShaan Puri1:08:36

       [laughs] And so how does-

   25. SASuli Ali1:08:38

       Insane story

   26. SPShaan Puri1:08:38

       ... how does somebody actually do this? How do you go buy a $3 billion company? 'Cause you're rich, but you're not $3 billion to spend on a company rich, so how does somebody do this?

   27. SASuli Ali1:08:46

       Yeah. Um, I think three billion, the $3 billion thing is probably too much for my, uh, you know, personal balance sheet. But the way you would go rou- about it is just like the guy at CSC Generation is doing, which is, um, make a public offer. It's the same way Elon Musk did it. Uh, you first make a private offer, then you make a public offer. You, um, make sure that all your financing is lined up when you do the public offer. And, you know, the way the US stock market works and, um, shareholder rights laws work is a board has to respond to that offer, and they have to have a really good reason to not take it if it's, if it's at a material premium to the current stock price. Um, otherwise, they're gonna get sued out the wazoo by shareholders.

   28. SPShaan Puri1:09:34

       Right.

   29. SASuli Ali1:09:35

       Um, and so yeah, that's kinda how you do it.

   30. SPShaan Puri1:09:39

       [laughs] Okay, so that's, that's one way. You, um, let's do some of the other things. Let's do... So that's from big idea to fun, smaller ideas. So you, uh, you were telling me something like you helped your buddy, your, I don't know, high school friend or college friend or something like this sell their dental practice. What, uh... Tell us, teach me about that. I, I don't know anything about that.

Episode duration: 1:31:47