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60 min read · 12,345 words- 0:00 – 1:23
Intro
- SPShaan Puri
All right, this is part two of the episode with Jeremy Giffon. He is the first employee at Tiny. He was there from the beginning when they turned $5 million of equity into roughly $500 million of business value and took the company public just by buying businesses. So last time we asked him, you know, about those early days, about the first businesses they bought, the mistakes they made, the lessons they learned. This episode is different. Now we're asking him, if I was doing Tiny today, how would I do it? How can I do the same thing that they did? What, what businesses would I buy? What trends, what opportunities does he see? And he tells us the single best investment opportunity he sees today and why he's putting his money behind that. So this is a fascinating episode, part two with Jeremy Giffon. Enjoy. [upbeat music] So I wanna ask you about opportunities. So what business opportunities, trends, um, or ideas do you have that people who are listening can kind of expand their, their scope? Right. I remember when I was trying to be an entrepreneur, one of the big, big problems I had was I only thought the world was this big, tiny little circle, and I was only looking for opportunities in that, inside my tiny circle. And it was only when I listened to podcasts and I kinda wish... MFM is a podcast I wish existed at the time, but it's like only when I would listen to certain people talk or hang out at a dinner, I would hear some idea that was not something I'd ever considered. So my circle got bigger and bigger and bigger, and then the more that circle got bigger, the more opportunities I saw.
- 1:23 – 5:48
Idea: Build businesses for people with audiences
- SPShaan Puri
So I wanna go through a couple of trends or opportunities you see. So if I told you, um, what are the juiciest opportunities that you see right now that somebody could, uh, could do or that y- you know, you think a smart person could go, go for?
- JGJeremy Giffon
The, like, second most interesting opportunity, i.e., what I'd be doing if I wasn't, if I wasn't, um, raising a fund to, to do these, these buyouts, it would be finding people with audiences and either buying businesses for them or building businesses for them. So I think that, I think it's like a anomaly, like a, uh, the business is in its toddler stage, that the way most people with audiences monetize is through ad reads or sponsorships. I think it's kind of like Hollywood when you, you know, if you're a big star you'd get paid to, to hold up a, a glass of Coca-Cola or something. And I think every, um, person with an audience will eventually, the money that they make from equity in a business that they own will massively dwarf the money that they make from ad rates, uh, or, or sponsorship reads. But the big problem here is, like, generally if you're a great podcaster or content creator, the last thing you wanna do is buy a business, for one, like that's risking capital, that's hard, or even start and run a business. And so I think there's a big opportunity to basically build a business around someone with an audience and come to them and say, "Look, like I will be the CEO of this thing. I think like, you know, um, this is the perfect product for you guys to like really organically use and like and talk about for a long time and I will run it and, you know, we'll split the equity," or something like that. Um, you know, Joe Rogan did this with ONnit and sold that company for, for, for a lot of money. And there's other examples, Doug DeMuro with his, um, Cars & Bids and... The people are starting to do this, but it's still very early. And I think that, like if I was just gonna start a business de novo I would say, "Okay, w- what's, who are content creators that I really like and what is the perfect product for them?" And then just like make it easy, you know? It's a pretty low risk proposition for you guys, for example. Um, but if you do it right, like a, even if an au- like with an audience of your size you can have nine-figure exits, you know, over four or five years and that'll obviously dwarf all the money you make from advertising.
- SPShaan Puri
If anyone wants to do this, shaan@shaarpuri.com, feel free to hit me up. [chuckles] By the way, this is how, uh, Tiny's doing this. Y- uh, Mateína, which is the, the, um, the drink they're doing with Huberman. They bought a yerba mate company and then they, he's, he loves mate and he's been drinking it for a long time. It's the perfect type of product. So they did that for him where if Huberman was like, "And now I'm gonna take a break from my science stuff to go become a searcher and go find a business, a PE deal to do," like that'd be crazy for him. But, but Tiny doing it makes sense. They also did it with James Clear. They built the Habits app, right? Um, so, so you know, another app versus ad read type of thing. So I think they're executing on it well. This is also the, how Congo Brands built Prime. So they, they did Alani Nu and then they were like, "Okay cool, we're gonna do Prime." They went and pitched Logan Paul and KSI and they were like, "Hey, you guys are gonna be the promotion engine of this. You get equity, um, you know, significant equity in this and we're gonna be the operational backend for this and we know, we know how to do this. We can build a," in their case what's probably gonna be a $10 billion plus company-
- JGJeremy Giffon
Yeah
- SPShaan Puri
... off of that, that brand.
- JGJeremy Giffon
Yeah. It's, it's definitely starting but I think, and like the Chernin Group has been very good at it with, um, you know, they did Doug DeMuro and, um, [lip smacks] Steven Ri- Ri- Rinella with the, the hunting stuff and it's definitely starting to happen. But I, I think like a more, you know... This is a little bit exaggerated, but I think most people in a YC batch could find a podcaster and just say, "Okay, you're gonna be the audience co-founder for this thing and we're gonna give you 30% or something and we're gonna work with you and it's gonna be a product that you can sell very organically." Um, and 'cause, uh, the, the broad thesis is that these audiences are still super underpriced basically, um, that the equity you're giving up is, you'll be more than compensated for and I think that'll last for, for, for quite a long time. And the long tail is really good too, right? Like you could do it with a very niche YouTuber, um, and, and still sell a more expensive product or, or, or do it multiple times or whatever and I, I basically just think everyone with an audience will eventually have some really tightly integrated organic product to sell.
- SPShaan Puri
Love it. All right. So that's a great opportunity which is go find a content creator who's got a s- like a, a great audience, high trust, and basically buy or build the perfect business for them and have them be your audience co-founder. I think that's a, it's basically an un- a really unfair distribution advantage you could generate for yourself by doing that. All right. Love that. What's an- what's another one?
- JGJeremy Giffon
One other trend that I'm just
- 5:48 – 10:30
Idea: Wirecutter for products that won't kill you
- JGJeremy Giffon
really bullish on is, um, basically the idea that everything in the modern world is like poison and toxic.
- SPShaan Puri
[chuckles]
- JGJeremy Giffon
I live in New York, like the air is making me dumber. The water is like ruining my hormones. Uh, all the food that I eat at any restaurant is like full of seed oils and, you know, everything that I eat is like some combination of soy, corn, and wheat, and the wheat is all sprayed in glysophate and like just everything is really bad for you. But it's like this huge... And I'm kind of a freak about it, like I have water filters and air filters and buy all this specific food and stuff, but it's a, it's, uh, really mentally taxing. Um, and I really wish... I think it could even just take the form of like The Wirecutter, but for, you know, these are products that are not gonna kill you. And, and the thing is, it's such a nefarious problem that, like, it runs the gamut. It's like clothes that isn't made out of polyester, bedding that isn't bad for you, cleaning products. Like you could do every single thing in the house. I would love to have a Wirecutter kind of thing, which is a great business, for just like this is the version of this thing that is not gonna kill you. Um-
- SPSam Parr
Dude, check this out. So, uh, go to live-oasis.com. I found this website the other day. Uh, my coworker sent it to me and it's, uh, they say, uh, "Do you know what's in your water? 90% of the water sources contain toxins, microplastics, and other contaminants." And then they rank which water, as in, uh, the cities, but also which water bottles have-
- JGJeremy Giffon
Oh, yeah
- SPSam Parr
... like the water, the water brands.
- SPShaan Puri
[chuckles] I see one that I used to have. Uh, it's very bad. It says [laughs] out of 100, it's in the very bad category.
- JGJeremy Giffon
Well, that's the thing, right? Even you try, you think you've done it, and then it turns out the thing you bought doesn't even work. Like it's very complicated.
- SPSam Parr
Well, I, and I go to this and like I'm scared because I also see the thing that I have and it says bad, and then you click it and they make you pay $5. And this is, uh, definitely a thing that I purchased recently. I'm like, "Fuck, I gotta see which water bottle is-"
- SPShaan Puri
Like Trump. Like you click one, it's like sad. [laughs]
- SPSam Parr
Yeah.
- SPShaan Puri
Horrible. [laughs]
- JGJeremy Giffon
I just want like, okay, like I need a shampoo. What is the one that like Huberman and Attia and Rhonda Patrick all agree on? And I'll just buy that one, you know?
- SPShaan Puri
Yeah.
- JGJeremy Giffon
Um, and that can... I think that can exist for almost every single thing in your house.
- SPSam Parr
Ask Shaan why he's drinking that water. I know why.
- SPShaan Puri
Yeah. We, we hosted this event, this Camp MFM event, and it's, we do it at MrBeast's house, so we're in like remote North Carolina somewhere. And, uh, we all show up and this billionaire shows up. He's got like, you know, his security guard with him or whatever, and I'm just fascinated. I'm like, "Oh, how does this guy travel? He flew in private. He's got a security guard." But then the thing that really stood out was he's got... Security guard carries this case of waters. So we had Fiji bottles of water, which is like, it's in a plastic.
- SPSam Parr
And you probably g- got that 'cause you thought you were being fancy. You w- you wanted to make a good impression.
- SPShaan Puri
He'd be so impressed with my choice here of Fiji. Like I went, I went for it. And instead he's got his own like Aquapana glass bottles and he was just... He'd always be drinking. He didn't say anything, but I was like, "Hey, what are you doing?" That-
- SPSam Parr
Except, except he made the noise [spits] whenever you, when he, when he saw you drinking out of that, he just [laughs]
- SPShaan Puri
He'd be like [sighs] like-
- SPSam Parr
"Shaan, what are you..." [laughs]
- SPShaan Puri
I switched to Aquapana for my drinking water for my family. I bought an Afina shower head filter. So 'cause the other thing is like, oh, you're drinking one thing, but then you'll go shower and bathe your naked body in tap, in like the dirtiest tap water with like a 30-year-old, you know, shower head in my house. And so if, uh, afina.com, uh, I bought the shower head from there. This like filters that water. And so I'm just like one by one replacing different parts of my, my house to try to, try to get rid of some of the, the bad stuff.
- JGJeremy Giffon
Yeah. The tr- traveling with a crate of mineral water, that's a, that's a good, that's a good way to spend money. I like that.
- SPShaan Puri
All right, so two good ones. I like, I like The Wirecutter for products that don't kill you, by the way. It's like, it's just Wirecutter is kinda like value-based.
- JGJeremy Giffon
Yeah.
- SPShaan Puri
And in this case it's health-based, and I think that's just like a s- such a simple model that somebody could do. It's probably like 10 years of awesome execution and real like love and care. Like the only the right person should start this business. It's not like-
- JGJeremy Giffon
Yeah
- SPShaan Puri
... anybody can do it, but I do wish somebody did it.
- JGJeremy Giffon
I mean, Examine did it really well for supplements. Like it, it certainly can be done. It's just, I, I would know. I would use it every day.
- 10:30 – 14:55
One chart business category: Regulation
- SPShaan Puri
show. Let's do a couple more trends and opportunities. Uh, you had talked... I, I asked you a question when we were hanging out, uh, yesterday, which was, what are, what's a business type that you really love? Maybe you guys didn't even make an acquisition in this space, but like what are categories that you really loved? And you mentioned, I don't know, like a regulation compliance type of category. Can you explain that one?
- JGJeremy Giffon
Yeah, for sure. So like anytime a government anywhere introduces some kind of arcane rule-
- SPShaan Puri
[chuckles]
- JGJeremy Giffon
... you have to fol- like you, if you don't follow it, you go to jail. So it's like the ultimate kind of motivation to buy, right? And, uh, sometimes it can be really difficult. So, you know, we looked at, uh, a bunch of examples. One, one was, um, there's this great company, a software company in Italy that just did banking regulation for all, make sure all the banks are compliant with all these things. And that's like an amazing business because first of all, you're going along Italian regulation, which is probably a great trade in and of itself, but like in the future, Italy is gonna have more rules than it does today. And then aside from that, it's like a bank is not gonna rip that out ever. And it's, it, you know, it hits that golden criteria, which is it's relatively cheap, but mission critical. That's like a really great one. Um, and there's a bunch of these. There, there's all these, you know, for buying a house for, um, for vetting tenants for, um, KYC and AML. Um, uh, if you, if you start looking for it day to day, you see it a lot. Like I just rented a car and there's like a process there where they check my license against some database, and I'm sure that's a piece of software. Like, those are great because I love it because it's like a low lift and the downside is super high, and you don't really wanna mess with it once you've got it working. Um, and the other interesting thing about them is that exists for every country, at least every Western country. And so you can go find the software that does that for- ... you know, Europe or, or one specific country or whatever, and there's gonna be multiple versions of those. Even Canada, like Canada has different rules than America, and so it's either it's, you know, two different software products or two different companies. So I love, I love those, those businesses as well, and they're also like fairly AI resilient I think because it's really... Again, it's like medical stuff. It's really high downside, so you don't wanna like trust it with AI and then it turns out you weren't in compliance and you're gonna get a huge fine or go to prison or something.
- SPShaan Puri
Yeah. I, uh, I made a bet recently in the regulat- r- uh, regulatory compliance, uh, type of space and I was like, you know, we have this thing on the pod that we talk about, one chart businesses, which is like a business that you don't need a, a full business plan for. You can just put one chart up on the screen and you say, "That's why I'm doing this." And, um, y- the one in this case was basically that regulation only goes in one direction. It only goes up and to the right. Nobody ever rolls back any of these needs. It's only gonna increase, and so if you can become, you know, maybe the go-to provider or like a key piece of software in a space like that is... It is just such a bet, such a bet you wanna make because you know that regulation only goes up. You know that like these compliance, compliance requirements, they don't just say, "Yeah, you know what? Forget 'em. We don't need all that compliance stuff anymore." Like this is never gonna happen. It's only gonna go in one direction. And like you said, you do it or you don't get customers or you get, you go to jail. It's like, well, that's a pretty strong motivator, so like, you know, I think people are gonna wanna either get customers or avoid jail and, um, it, it's just like the right type of space to be in. It's the type of space that 24-year-old me would not have known or appreciated that that's a better business to go into than what I was doing at that time, which was like dating apps, social network, like cool new sexy, you know, thing. And, uh, now I'm like, it's kinda like what's sexy now is like a knee-length skirt. It's like, uh, you know, show me a compliance business and I'll, uh, I'll show you my interest.
- JGJeremy Giffon
The other big opportunity for someone who, who's wanting to start a business is like you can front run these things, right? You can see what's gonna pass, you can see what's just passed, and you can be the first provider for that and have a huge leg up, especially if it's a fairly niche thing. But you could very well be the only option for a couple of years, which is a huge advantage, right?
- SPSam Parr
Why don't you start these things instead of just investing in them?
- JGJeremy Giffon
I don't, uh, I don't like operating businesses. I'm not... I don't think I'm very good at it, and it's not what I enjoy doing. And so I think everyone should try and do, like really stay in their zone of genius as much as they can. I think that it's like personally very good and also good for the world if that happens, and so I'd rather like be... allocate capital to the... 'Cause I think I'm good at allocating capital to the person who maybe needs capital and is really excited
- 14:55 – 19:19
Opportunity: Become a protege
- JGJeremy Giffon
about building something.
- SPSam Parr
All right. Two more things on here. The first, I, I actually don't have context on this, but I'm very interested just because of the title, The Boy Versus The Guy.
- JGJeremy Giffon
Yeah. So [chuckles] The Boy Versus The Guy. So, um-
- SPSam Parr
It could go, it could go a bunch of ways. It could go a bunch of ways.
- JGJeremy Giffon
It could... Yeah. Yeah. There... And, and there are a lot of different readings, uh, especially depending on what co- coast you're on. Um, yeah.
- SPSam Parr
[laughs]
- JGJeremy Giffon
Basically it's, it's like, it's the idea of, uh, being a lieutenant or being like a protege effectively would be the, the, the classier way to say it, I guess. Um, and so, you know, i- generally there's like, there's the trusted lieutenant who is, um, you know, just the solid number two, really important, but their whole identity is being like a lieutenant to the number one person. And then there's this other genre, which is like, um, uh, on the West Coast it takes shape as a chief of staff a lot, um, where it's just you're kind of this like you're this young rising superstar. There's this sense of like you're really gunning for number one. Um, and, and the idea, like the, the... What made me notice this, um, originally was especially in the Valley, every like billionaire has one or two really young, smart boys generally who just kind of like float around them, and there's this kind of tacit agreement of like, "You come work for me for two, three years. You shadow me. You, you, you're my apprentice, and then I will back you and like open doors for you." Um, and it was kind of funny. Like at, at, at some point, you know, I was in like social situations where it's like, oh, like it's kind of like flying under the, the flag of a lord or something. Like everyone is, you know, uh, the... everyone is like, you know, going on the private jets of these principals or whatever, and they themselves are probably broke, but like they very much live this lifestyle because they're like under the protection of a lord. Um, and so I think it's like there, there's another, uh, a new kind of piece of information that I've figured out about this is it's also an age gap thing. So if you're within 20 years of the founder or the number one person in the organization, you're almost always gonna be a guy. Um, and if you think of like all the great firms or even, you know, companies where someone has become the new number one, there's almost always at least a 20-year gap between the person just because otherwise you're too close. And so I think that dictates it a lot as well. Um, but it's these two different things of, uh, the other way to put it would be that like the principal really sees something in this young person and wants to... You know, can tell they're like on a rocket ship. They're not gonna be an employee forever or whatever, but it's like, you give me two or three years and I can really accelerate things for you. And I think like that pairs very nicely with the cold email thing, which is, um, you know... I, I generally think like if you wanna start a company, you should just start a company. Don't go like work somewhere to get experience or whatever. But I think this might be the sole exception, which it can really open doors of either investment or vouching or connections or whatever. And, you know, there's lots of examples of this like, um, uh, I know like Ben Casnocha like very, wrote very publicly about being Reid Hoffman's chief of staff. Um, you know, Blake Masters with Peter Thiel. Um, uh, you know, uh, Sam Altman was this to Paul Graham. Like there's, there's kind of all these examples of it, um, that I think are, are really instructive.
- SPShaan Puri
I just recorded an episode with Joe Lonsdale, who was this for Peter Thiel. Like, uh-
- JGJeremy Giffon
Yeah
- SPShaan Puri
... he was basically Peter Thiel's protege and now has started, I don't know, more Billion-dollar companies than anyone else, um, in the country. And, and I think, you know, he's a fascinating guy because when he was 18, 19, 20, he was an intern at PayPal.
- JGJeremy Giffon
Yeah.
- SPShaan Puri
He-- Then he was at Peter's family office, then he started P- Palantir with him, and then, you know, then eventually, you know, went on to do his own thing.
- JGJeremy Giffon
And Joe's done this for a bunch of people. Um-
- SPShaan Puri
Yeah
- JGJeremy Giffon
... one of my close friends was, was his, his chief, one of his chief of staffs, and it's an amazing launching pad. And it-
- SPShaan Puri
If anyone out there, I'm looking for a boy. Uh, never thought I'd say that, but-
- JGJeremy Giffon
[laughs]
- SPShaan Puri
... under this context, I am sure, uh, sure enough looking for a young boy. [laughs] So-
- JGJeremy Giffon
We need to start a-
- SPShaan Puri
... there you go. That is
- JGJeremy Giffon
... we need to start a community. We'll call it, uh, We Dem- We Dem Boys. Uh [laughs]
- SPShaan Puri
Jeremy, I don't know if you know this, but I've had four people who are kind of in this bucket, and I, I hired them when they were, let's say, s- between the ages of 16 to 20, and, uh, that have gone on to either become, you know, that have gone on to become millionaires, and in some cases millionaires and, like, successful content creator, podcaster type of folks as well. And, and it's happened four times already, so I'm looking for my fifth.
- JGJeremy Giffon
Yeah, I think apprenticing is really underrated. You know, you think about it in the context of being like
- 19:19 – 22:00
Philosophy students better than Business students
- JGJeremy Giffon
a blacksmith or a carpenter or something, but I think for a lot of these things it's the single best way to learn.
- SPSam Parr
Hey, I've got a question. Y- I noticed that you studied... Did you study philosophy at Columbia?
- JGJeremy Giffon
Yeah.
- SPSam Parr
That... So I remember as a kid, I, I saw this crazy stat that, um, I think it was the majority of people who scored really high on, uh, not the bar, but the test to get into law school, um, they actually, most of them, uh, the LSAT, most of them were, uh, they studied philosophy. That was their, their undergraduate degree. And then I saw you studied philosophy, and that's kind of an interesting way to go because now you're raising this massive 100 million-plus fund. Um, w- did that-- What, what did you learn in philosophy that you think is gonna help you make a good business person?
- JGJeremy Giffon
Yeah, I don't know. It's, it's, uh, there's a ba- it's a big club, you know. Uh, leave it to a philosophy major to know every philosophy major, but, um, there's tons of names. You know, Reid Hoffman, Peter Thiel, Peter Fenton, um, Stewart Butterfield. It's like this weirdly overrepresented thing. My favorite stat about philosophy ma- majors is that, um, it's something like in the top 10% of earners, they're the highest earning of all people. So if you take the top 10% of every major, they're the highest earning. In general, they're not the highest earning, but, like, there's that kind of like group at, at the far end. I don't know exactly what it is. I mean, I, I can speak to my own experience. I think it's just like if you're gonna spend four years thinking about a set of questions, thinking about the most fundamental questions is just really appealing. Uh, that's certainly what it was to me. I don't think I really learned anything, um, that's super... It, it's, it's funny, like, you know, uh, I'm Canadian. I had to get a visa to be in America, and, uh, a big thing, thing with visas is like, is what you studied relevant to what you're working on? And, you know, the answer for philosophy, as far as the US government cons- is concerned, is no, it's not relevant to anything. But I'm always like, "Well, no, it's relevant to everything." It's like, how should I live? What should I, you know, what should I hope for? What can I know? These are relevant to every field. Um, and I, I think maybe the other way, uh, maybe the other cut at it is it's just like being interested in the most fundamental and the most abstract versus, like, learning, uh, you know, something more applied. It's something about that just kind of draws these very kind of curious, uh, I, I, I guess, like intellectual, and I don't really mean that in a complimentary way, just like people who think, like to think a lot. Um, but there's also a big difference between people who study philosophy in undergrad and then move on, and people who study philosophy for their whole lives. Like, those people are really people who just like... Th- they thought, they, they, they think like, "You know what? I actually wanna think about, like, what is a good way to live for the rest of my life?" And I think that's a little crazy, right? Like, at some point you wanna
- 22:00 – 26:14
The myth the holdco
- JGJeremy Giffon
go, "Okay, I've, like, explored this. Now it's time to go, go move on."
- SPShaan Puri
I wanted to ask you about, um, holdcos, which seem to be the new trend, or people buying businesses. I think a lot of them take inspiration from Tiny and what you guys did. What's your take on, you know, the holdco trend or influencers out there who are like, "I own 500 businesses," you know? Like, what, what's your take on all that?
- JGJeremy Giffon
Bragging about how many businesses you own is really weird and probably like a contra signal to how good you are. Um, and by the way, like anyone who owns a lot of businesses will, will and should tell you that. Like, I know Andrew would certainly if, you know, if he could have Tiny with one business, that would be much better. Um, and so it's always a weird thing to say, like, "Oh, I've acquired 100 businesses," or whatever. Um, I guess unless you're like, um, a Constellation or Shore Capital or something where the whole point of it is that you, like, buy a million businesses. Um, 'cause yeah, it's always better if you can have the results from one company, that would be way better than, than having to own a bunch of them. And that leads to the point about holding companies, which is the thing that people don't understand about holding companies. There's two, like, there's two real reasons why you would start a holding company versus a fund or some other structure. One is because you wanna hold everything forever, and I think that's a fairly faulty premise. So usually when people think... Because, so people look at, generally they're looking at two places when they think about the merits of holding everything forever. They look at Buffett or they look at venture capitalists. Um, you know, y- you don't wanna be the person who sold Google at the IPO or whatever and, and, and Buffett famously owns everything. Although that's like not actually true. Buffett sells stuff all the time, um, to your point, Sam, about him being a little bit different than his public persona. Um, but like, okay, so both of those groups, Buffett is talking about railroads and insurance companies and energy companies. These are companies that ostensibly will exist for 50 or 100 years. And venture capitalists, even more than that, they are looking specifically to find the one in 1,000 company that will be a 50-year company. But most companies are not 50-year companies, especially not $5 million software companies, you know? Like, it's, it's kind of crazy to buy a Chrome plugin and say like, "Yeah, I need to own this thing for 40 years." It's like, no. It's first of all, like software is really difficult.
- SPShaan Puri
My kids will inherit this Chrome plugin [laughs] .
- JGJeremy Giffon
Yeah. You're not buying one of two railroads in Canada, you know? Like you're, you're buying a Chrome plugin. And so, um, first of all, just thinking like, "Oh, I need to hold this forever," I think is a bit flawed. And then second of all If you get the chance to sell it for a great price, like that is probably the way that you maximize returns, um, if you're actually interested in just making the most money. And so that's one thing with holding companies. Um, the other is that I think when the more investory type start them, they really don't appreciate... A holding company is, a part of it is like your holdings, the other half is a company. Like you just run a big operating business, you know? Uh, T- Tiny has, I can't remember, it's like north of 1,200 employees across the portfolio. Like that's a big business that you're running, and for most investors, that is a completely contra skill. Like if you're a good investor, the last thing you should be doing, y- when you meet a great investor, you're, you're not thinking, "Oh, you'd be great as the CEO of a 1,200 person company." You know? Like generally those are very far apart. And so what can end up happening is you spend a ton of your time actually just operating a business and you're not able to invest, which is the thing that you're probably the best at. And so yeah, in general, I think they're quite, they're quite overrated.
- SPSam Parr
And you also actually said you're like, most Harvard guys who are trying to buy a plumbing business, they shouldn't buy a plumbing business. They should just go and start a plumbing business.
- JGJeremy Giffon
Yeah. This one always cracks me up. It's like your resume is, you know, Harvard, Goldman Sachs, Harvard Business School, Bridgewater, and then it's like Ohio Plumbing Company. And you're always... [chuckles] I always think like I get it. I, I, you know, the math works, it can be lucrative, whatever. But I always think like, imagine if you had, you know, you're this brilliant young person, if you had just moved to Ohio when you were 18 and started a plumbing company. You'd probably control all the plumbing in the state. You know what I mean? Like you just wipe the floor with them, and it's always weird that people wanna go through all these loops. I think a lot of it is just to make themselves f- feel very fancy. Like, oh, you know, I set up this deal and this acquisition, these investors and stuff. But a lot of these businesses, I think if you just started them, you could really
- 26:14 – 28:17
The pre- and post- fall
- JGJeremy Giffon
wipe the floor with, uh, with the existing competition.
- SPShaan Puri
Uh, you have one more thing that you're known for, which is something like the pre- and post- fall. I don't know what this is. Can you explain this? Somebody texted me this. They go, "Oh, you gotta ask him about pre- and post- fall."
- JGJeremy Giffon
So I define fall, it's like a pseudo-biblical idea, but, uh, I really define it as like a period in your life where you've really been brought to your knees by whatever. It could be a death or a breakup or, you know, a health scare or, or, or bankruptcy or all these kinds of things that like really just kind of humble you, um, truly. Not like how most people say humbled, which is like, "Oh, I just got on the cover of Forbes. I'm so humbled." It's like, no, yeah, it's actually the exact opposite. Um, but like truly, truly humbled. Uh, and I really think that that changes someone, um, for the rest of their life, and I think it happens to everyone. I think it happens totally at random times. It could be early in life, it could be late in life. Um, but you can just kind of see it of, you know, the, the, the extreme example of this would be like a, a veteran who's been in a lot of combat. Like nothing is really gonna shake someone who's been in a bunch of firefights, you know? And, um, and I think that applies too is if you've been through really hard, really dark experiences. I think a lot of entrepreneurs, they have their fall while they're building their business. You know, it can get really difficult and hard and lonely. And, um, yeah, the best way to describe it is like after when someone's post-fall, you can just kind of see it in their eyes that they've been through worse. And so they're not gonna... It's just not gonna shake them that much versus someone who's pre-fall. And by the way, you can become very successful, you can be late in life, but nothing bad has ever really happened to you and, and I view that as kind of a liability in some sense of if you're gonna partner or work with them of like, boy, like when something goes off the rails here, this might be a really big blow up. 'Cause of course, like, you know, if you're a broke kid, it's one thing, but if you're like a high-flying person, the, the way in which you can blow up is far more spectacular. And, um, and yeah, it's really just like, have you really been humbled by life in like a true way? And, uh, and I think when you look at it that way, it's quite evident
- 28:17 – 32:15
Idea: “Special situations" I.e. Distressed Venture
- JGJeremy Giffon
that, you know, p- people either have or haven't, and I think it makes a big difference.
- SPShaan Puri
Do you wanna talk about the special situations, distressed venture stuff or, uh, or do you wanna to save that?
- JGJeremy Giffon
Uh, yeah. We can, we can talk about that.
- SPShaan Puri
Okay. Tell us what, what is the-
- JGJeremy Giffon
[laughs]
- SPShaan Puri
... what i- what is the opportunity here?
- JGJeremy Giffon
Yeah, so the opportunity is, this is like really combines a lot of the factors that I love, which is effectively there's this whole class of venture-backed companies where they raise too much money, um, in especially in tw- '20 and '21. And so you get this like strange phenomenon where you can have a business that's doing $10 million a year of revenue and growing 30% a year, but maybe it raised $40 or $50 million. And, um, such that like the founder is probably not gonna make any money because the pref stack is so high. And then the, the other part is the investor is really not gonna make any money, not in the sense that they want to. So a venture investor, they like, they want a good investment to return the fund, um, generally. And so it's like this weird thing where you have this great asset. You know, if, if, if you guys owned a business that was doing 10 million of revenue, growing 30% a year, you'd be very happy with that. But if it's owned by a venture investor and run by a founder who's got this pref stack, the founder's not gonna make any money. The venture investor doesn't really care about it. So it's kind of this like in some sense, it's actually a worthless asset. And so, um, you know, I... we've done these deals at Tiny before and, and what I'm really interested in is doing a lot more of them personally. And so I've been talking to a lot of founders and talking to a lot of GPs about this, and there's just this huge opportunity, and the opportunity is really, um, to take a business that's because of its cap table, it's just broken. It's not working for anyone, and turn it into a business that works. So like say the founder owns 10% and, you know, the pref stack is 50 million, turn it into a business where they own 30% and they can run it profitably and it can be like a great business. A question that I always ask founders is, "What would you do if you just bootstrap this thing or if you own the whole thing?" And generally, that's a different answer than if they were in their current situation. Um, and it's a service for the g- uh, venture investors as well because they, you know, they have to be responsible for these things. They gotta go on the board, they gotta audit them, they gotta think about them. And to the... A lot of these companies take up a lot of their time, and they're not the ones that are gonna drive returns. And so it's just this weird kind of vestige of the fact that venture returns have been so high that there's all this waste. Like, there's these $10, $20, $30 million a year companies that are not really making money for anyone. And there's this weird situation, right? Because, um, there's nothing wrong with the business, but you can get them for cheaper than you would otherwise because there's this, like, weird second and third order incentive set.
- SPShaan Puri
Right. Normally a distressed business, the business is broken.
- JGJeremy Giffon
Yeah, exactly.
- SPShaan Puri
Here it's that the cap table is broken, that the, the goals of the investors don't line up with the realities of the business. Is that right?
- JGJeremy Giffon
Exactly. Exactly.
- SPSam Parr
Is that what you're gonna do?
- JGJeremy Giffon
Yeah. That's, um... I love special situations. I like all different types. You know, I think when Tiny, when Tiny started, bootstrap businesses were kind of a special situation. Um, and now it's way more popular, and I view this as kind of the next-
- SPSam Parr
A special situation is a really nice way to... I, I love a good special situation. I mean, that's a [laughs] that's such a better way to-
- JGJeremy Giffon
Yeah. That's, uh, that's totally, totally-
- SPSam Parr
Special situations sounds a lot nicer-
- JGJeremy Giffon
... totally an investor speak, I guess
- SPSam Parr
... than distressed asset. [laughs]
- JGJeremy Giffon
Yeah, yeah. Yeah, yeah, for, for sure. But it's, it's like, it's like this idea of, oh, there's all these people that want different things, and if you can just, like, arrange the bricks, so to speak, uh, that everyone gets what they want, you can, like, unlock this puzzle. And, like, with what I'm doing, everyone is better off. The VCs are happy, the founder is happy. Like, everyone's better off. Um, and I love those. I love those situations when you can do them. And then it also, to go back to our, like, initial thing, it's a very specific thing, so you're gonna come to me because you know that's what I do, and I'm gonna get stuff that other people don't get because I'm doing this very specific thing. And I, I... For my particular form of laziness, I love it when people just know what I offer and then they just come to me. It makes things so much, so much easier
- 32:15 – 40:19
Working hard vs working winning while lazy
- JGJeremy Giffon
than having to go to them and convince them to do something, you know?
- SPShaan Puri
It seems like you are like me, which I love because I like people who are like me.
- SPSam Parr
[laughs]
- SPShaan Puri
But it's also, it's also rare.
- SPSam Parr
You remind me of myself. I, I think that's why I love you. [laughs]
- SPShaan Puri
Yeah, you're great 'cause I see part of me in you. But, um, it's the opposite of what most people come on the podcast and say. Most people come on the podcast and say you gotta work super hard, hard work is everything. And both me and you are like, we ask a different question, which is like, "How can I be lazy and win the most?" And, uh, we're like, yeah, I, I take pride in a certain form of laziness. I'm gonna be super active in one area, but I d- I absolutely reject a certain type of sweat. Um, that's how I think about it. Do you think about it the same way?
- JGJeremy Giffon
Yeah, totally. I, I, another, like, archetype I have of this is, like, you can divide the world into the, um, into the, you know, the Arnold Schwarzenegger kinda type and then maybe the, the Sam Altman type. And it's not to say that Sam Altman doesn't work hard and Arnold Schwarzenegger isn't smart. They are both examples of doing both, of course. But like, you know, Schwarzenegger, it's all... Literally, like in the biography, it's about, like, laying more bricks, like lifting more days, more hours. It's just grinding. And when he becomes an actor, it's like more auditions, more movies, more practice versus maybe someone who, like Altman, who, like, found this big opportunity and, like, was really early on it, was really clever about how he set it up and everything, and it's more about making these, like, moves. And probably like you, Shaan, like I, I find there's a certain elegance in, um, in doing things with, like, the least amount of moves. And other people aren't like that. Like Sam, I, I bet you're probably more like, uh, people who work really hard, grind it out, like put in the hours. I know you, you love Shackleton. I think Shackleton's a lot like this, like, just like outwork everyone else.
- SPShaan Puri
Sam, you're acting like you don't like... You looked around like, "Well, I don't know."
- JGJeremy Giffon
[laughs]
- SPShaan Puri
But you are like that. You're like hard equals good because hard means I'm hard, whereas I'm like easy equals good because it means that I'm clever, right? Uh, it's like you admire a different attribute.
- SPSam Parr
No, uh, yeah, I mean, there's value, I think, in just sweating sometimes. Like, uh, you know, I think that sometimes because a thing is hard, therefore it is good for you. I definitely believe that. But I mean, I only work like 40 hours a week. I work a normal work week. Um, but, uh, yeah, I mean, I c- I fall a little bit in the middle. I do think that, like, just doing a hard thing for the sake of it being hard, there is like some type of like divine goodness within that.
- JGJeremy Giffon
Yeah. And you gotta do both. Like there, there, there's, you know... For the lazy person, there's periods of really hard work and, and vice versa, but, um-
- SPSam Parr
But I think when people say they don't work hard and they still like achieve greatness, I think they're full of shit. Like Shaan, you say that you are lazy. Dude-
- SPShaan Puri
Yeah, for sure
- SPSam Parr
... you, you'll, you'll te- you'll... He'll, he'll text me a paragraph like a book at like 10:00 PM. Like you're still doing shit. You're just, you're laying on the couch while your wife is watching TV and you're on your phone. Uh, you know, you're not at a desk.
- SPShaan Puri
I view laziness as not that you don't do anything, it's that you don't do things you don't wanna do. Um, I just do all the things I wanna do at full force 'cause that's how I... 'Cause I like them. I want to do them. I just don't do a lot of things that I don't wanna do. I, I, I'm very selective or, um, cheap about how much effort I'm willing to put into things that I don't actually wanna do, and I'm willing to be lazy on those, right? It's kinda like the definition of work versus play. Work is, you know, work is... Uh, how do you define work? One way of defining work is it's the stuff that you don't wanna do voluntarily. Uh, and play is the stuff that you do wanna do voluntarily. And I just opt into a lot more of play than I think most people do. Um, and I'm, I'm... I have a lower tolerance for work that I don't wanna do than I would say the, the average successful person. And the reason I like Jeremy coming on is because it's cool to see examples of a different play style. 'Cause we've seen a bunch of the other play style 'cause it gets a lot of, "It sounds amazing," the David Goggins, the work harder, grind more, show up early, leave late. You know, like that... I get that. That's a cool play style. It's just not what everybody wants to do, so I like hearing other play styles.
- JGJeremy Giffon
Yeah. I mean, Sam, you're, you're definitely right. Like I'm, I'm sure I, I do a bunch of stuff that I'm not even conscious that I'm working a lot harder than other people 'cause it, it just feels innate. But I think, like, another way to look at it is there's certainly a type of person who the way you soothe yourself. So, like, some people will just soothe themselves by putting in way more hours, like, you know, working on that, like, diminishing marginal return piece of like, "Oh, if I just put in a few more hours on this..." And other people, I think it's like, "I just gotta figure out the exact right thing to do here," like what is the exact right move, and you spend all your time thinking about that.
- SPSam Parr
You guys wanna do a 50-mile race with me in August? [laughing] Dude-
- JGJeremy Giffon
Yeah.
- SPSam Parr
... I've been training for this thing, and I had to run 10 miles on Sunday, and I haven't ran that far in forever, and I'm just, like, depleted. So you wanna come work hard? Come, come join this race with me.
- JGJeremy Giffon
Yeah, that's probably a good one. Everyone who loves, like, the super endurance stuff is probably a grinder at, at heart-
- SPSam Parr
Yeah. [chuckles]
- JGJeremy Giffon
... 'cause it's just, like, about if I do so much of this, it'll just be better than everyone else.
- SPSam Parr
It sucks.
- SPShaan Puri
So-
- SPSam Parr
I just, it sucks
- SPShaan Puri
... dude, but, so when we were in Austin last week, we were hanging out with, um... Do you know Isaiah Photo? Do you know who that is, Sam?
- JGJeremy Giffon
No.
- SPSam Parr
No, I don't.
- SPShaan Puri
He, he l- he's a YouTuber who lives in Austin, and he's got probably, like, 10 million YouTube subscribers. And, um, if you go look at, like, what are his popular videos or, like, what kind of was his break, he would do stuff like these challenge videos or these kind of, like, grind videos where he-
- 40:19 – 42:30
Hanging around the hoop
- SPShaan Puri
about that same idea but in a different way. Um, so I'm gonna give you my observation, and I want you to, I, I w- I want to know if you have any specific stories that, that line up with this. So my observation, we, we talked about does Andrew grind, uh, right? He comes on here. He acts super zen, super calm, super philosophical. He wants to be like Warren Buffett. He's playing bridge half the day. He's reading. And then once or twice a year, he just blesses us with a beautiful investment, right? Um-
- JGJeremy Giffon
[laughs]
- SPShaan Puri
... but, you know, one thing I have seen Andrew do is he may not work super, super hard, but he works very fast. He is incredible at sniffing out opportunities. He is incredible at fast follow-ups. Um, he moves really quickly when he's excited about something. That's the first thing I noticed. Um, the second thing I noticed about Andrew is not only does he move really fast when he's excited about an opportunity, he'll just keep texting you about it or he'll keep prodding until he finds out more information. He'll, he'll fly to meet you right away. But he also will f- will be persistent. So, like, I think with some of the businesses, it's like, yeah, I used to e- I love that business, so I emailed him every month for, like, five years. And then finally one month, they were like, "Yeah, I am willing to sell the business." Um, and I think that was the case for maybe Letterbox or Dribbble, where he was just emailing the founder continuously. AeroPress, same thing. He was just emailing the guy like, "Hey-"
- JGJeremy Giffon
Yeah.
- SPShaan Puri
"... have you thought about selling this month? Hey, have you thought about selling this month?" Uh, some version of that question hanging around the hoop. In fact, when we sold The Milk Road, same thing happened. We tried to sell the business. We walked away from these guys at the last minute. And if I'm them, I'm like, "Oh, hate these, you know, hate those guys. Screw them."
- JGJeremy Giffon
Yeah.
- SPShaan Puri
"Well, let's, let's kill those guys." And instead, they were super professional about it. They were like, "Okay, no problem." Like, "Sounds like you have, you wanna go a different direction." And they hung around the hoop. A month later, he says, "Hey, I didn't see any announcement. Like, no deal went through?" Um, and we were like, "No, you know, we decided not to do it for this and this reason." He's like, "Well, we're still interested." And he-- I was like, wow, that was so different than how I, I would, I would have done that. So we made it a practice for us whenever we're buying businesses, it's like, um, A, don't get personally offended when it happens.
- JGJeremy Giffon
Yeah.
- SPShaan Puri
And B, we schedule the automated reminder. A month or three months later, let's just follow back up and just make sure that we check in and say, "Hey, is there still an opportunity here? We still like the business. We liked it then. We like it more now." You know, like, if there's, if there's still an opportunity, let us know.
- 42:30 – 43:55
The most successful people respond immediately
- SPShaan Puri
That, that idea of hanging around the hoop. Are there any other stories either on Andrew's- Moving fast and/or being persistent and just following up over and over again that you remember?
- JGJeremy Giffon
Yeah. I mean, on the fast thing, it, it's annoying, but it's true. The, the most successful people in the world respond instantly. I cannot believe... It's kind of infuriating how true it is. But, uh, when you email the billionaire CEO, it's like a 30-second response. When you email his vice president, it's, you know, it can be a week or something. That is just so true. And, um, I, I, I really try and force myself to respond fast. I, I wrote this little script for, for Gmail that, um, it archives my email every 24 hours, so I, like, have to respond or it just disappears. And I feel like it's a really good nudge of, like, just send, send the simpler text messages, like, response. Um, and Andrew is, like, super, super high-paced, really energetic. Uh, the, the thing that comes to mind is when you're at, you know, lunch or whatever with him, if he thinks of someone you should meet, he will pull out his phone and, like, send the intro email before you've even, like, finished the sentence. And-
- SPShaan Puri
[chuckles]
- JGJeremy Giffon
... um, it's good and bad. Like, sometimes you're like, "Wait," like, "I don't wanna meet that person," or whatever. But, uh, but it's also just this, like, if, if you think about it in terms of iterations, it's so many more iterations of just making something ha-happen. And also, like, movement, especially when you're an operator, movement creates information. Like, you learn more by doing more things, and so it's a really powerful
- 43:55 – 45:15
Be Dennis the Menace
- JGJeremy Giffon
combo. And then, yeah, in, in terms of following up, um, I think just being a little... Andrew used to call it, like, being Dennis the Menace. Like, just after-- Just being a little bit more willing to just kind of, like, poke your head in, even when it might be a little, like, um, you know, gauche or, or whatever, can be really, can really be really powerful. It's kind of that just like, "Hey," like, "You still interested in selling? You still interested in selling? You still interested in selling?" Um-
- SPShaan Puri
That Dennis the Menace bit, that's a good one.
- JGJeremy Giffon
Yeah. And, and it-
- SPShaan Puri
That's a good one, though
- JGJeremy Giffon
... and he's willing to be the menace more than most people. Like, he's, he is willing to... He does menace. Like, people do say, "You're menacing me. Stop it." But it also, like, really pays off 'cause just like, uh, you know, it's... And if you think about it, it's like, okay, fine. Like, who's that guy who emails me every three months? Like-
- SPShaan Puri
Right
- JGJeremy Giffon
... maybe you had a bad day, or you're done with the business or whatever, and you're like, "All right. I guess I'll, like, see what that guy has to say," you know? Um, and, uh, yeah, it's, it's incredibly, it's incredibly powerful and, and more people should do it, and just generally be less afraid of... Like, I learned this doing a lot of cold email for sales. Um, you know, if you send out 1,000 cold emails, you're gonna get one or two responses that are just someone's going ballistic. Like, "If you email me again, I'll sue you," or whatever, [chuckles] you know? But the other 998, it's, like, either positive or no response or neutral, and it's just, like, all upside,
- 45:15 – 47:53
MrBeast shouldn’t be selling chocolate
- JGJeremy Giffon
basically.
- SPShaan Puri
All right. So I wanna shift gears to what I call the spicy hot take section, the semi-controversial opinion section. If this was, if we were in a club right now, this is that part where the DJ starts, like, the beat's about to drop, and we all know things are about to get a little, little crazy, a little fun. Uh, that's what's about to happen in this podcast. Okay, so here's the first prompt. I'm just gonna prompt you, and then I want you to kinda give us your rant on it. First prompt is about MrBeast, which is that MrBeast shouldn't be selling chocolate bars. Uh, what should MrBeast be doing instead of selling chocolate bars?
- JGJeremy Giffon
Yeah. I mean, I think it's a testament to how valuable audiences are that all the most valuable businesses that have been created are, like, the worst businesses. Chocolate bars, supplements, um, merch, that kind of stuff. Like, these are really bad businesses. Um, and so I, I always think, okay, what happens if Feastables is the most successful, like, creator brand? What happens when that is, um, you know, a really good business, uh, a, a bank or, like, a great software tool or something like that? Um-
- SPShaan Puri
And then by the way, explain why is chocolate bars or Prime from Logan Paul, why are those bad businesses? 'Cause somebody might say, "Oh, they're doing hundreds of millions of revenue," or they're, "They're gonna sell for a billion dollars." Like, but, but you're saying bad business at, at, as a characteristic, uh, like the underlying fundamentals of that category. So explain that.
- JGJeremy Giffon
Yeah. They're... The reason-- Like, you can still be, to be clear, you can still be very successful selling chocolate bars. Like, Hugh Kitchen is one of my favorite companies, and Jason Karp has, like, chocolate, and I know he's very successful at that. But it's, it's, it's kind of that thing of, like, you know, is it a restaurant or is it a, uh, you know, a SaaS company? Like, there's levels of difficulty, basically. And so, you know, there's just businesses, like if you con- contrast extremes, so a chocolate bar, low margin, not a repeat customer, uh, a pr- uh, not a, like, super, um, necessary product or anything like that, versus say, you know, something really low on the stack, like, uh, home insurance or property insurance or something, or, or, um, or Visa or Mastercard, or, like, something that you need every day. Like, th- there's just better qualities of businesses. And then the other way you can think about it is what would be the, like, enduring enterprise value of the business without the person? So Feastables is gonna have a way harder time without MrBeast than, you know, um, uh, if he built a bank, right? I- if the bank had hundreds of thousands of customers or whatever, ostensibly he could go away from that, and it might make the business grow slower or whatever, but it's still, like, a really great, great business. And so I actually view it as very, like, ver- it's very bullish for the creators. It's very bullish for the space. It's kind of like you're making it work on hard mode, and, and I wonder what it looks like when it's kind of on easy mode.
- SPShaan Puri
All right,
- 47:53 – 51:05
Billionaire is a state of mind
- SPShaan Puri
next one. Net worth is a silly metric. So why is net worth silly, and what's a better metric instead? You've told me something about, like, kind of personal cash flow or something like that is, is a better metric.
- JGJeremy Giffon
Yeah. Yeah. I mean, uh, so my, like, my other line on this is billionaire is a state of mind because the amount of billionaires... First of all, it's like, it's so bullshit 'cause it's, it's always, unless it's either, like, you have this in cash or it's your shares in a public company, it's always a complete matter of taste, you know? It's like, well, my company would be worth a billion if it were to sell. Um, and, and even in public companies, it's not even real 'cause most of the time, if you own a ton of the public company, if you were to dump it all, it would massively dr- you know, drop the price. And so I really think- Like, it's kind of this thing, one... It's more like this memetic label. Once you get labeled a billionaire, it kinda just sticks, and people just refer to it. Like, I see this a lot. Also, people, people use it as a way to describe someone who just kind of ha- is in a certain class. I actually think it's more of a class marker than anything. Like, you know, he lives a certain lifestyle, he hangs out with the certain people, he's like a billionaire. It really has nothing to do, uh, with, with whether or not you actually have a billion dollars or you own something worth a billion dollars. And the other, um, the other is, yeah, like cash. Like, liquidity is so crazy. The amount of people, j- billionaires, I've... That when you're like, "Okay, could you wire me 100 grand tomorrow?" The answer is no. Like, it's like, I've been shocked by this over and over and over.
- SPSam Parr
But wait, explain that more. What do you mean? So people who you have read about-
- SPShaan Puri
Maybe they're saying no 'cause they don't wanna wire you $100,000.
- SPSam Parr
Yeah. [laughs]
- JGJeremy Giffon
It's, it's fi- it, it's, it's definitely, it's definitely-
- SPShaan Puri
Have you had that?
- SPSam Parr
Is that the test?
- JGJeremy Giffon
It's definitely-
- SPSam Parr
Can you wire me 100? No?
- SPShaan Puri
Not a billionaire.
- JGJeremy Giffon
No, can't, can't do it. Um-
- SPSam Parr
Broke. [laughs]
- JGJeremy Giffon
But no, like, people, people don't keep a lot of cash. Uh, a- and, and it, it really is... Like, one way to look at this, uh, is in, like, a party seed round or whatever, I'm always shocked by, like, who doesn't wire the money, or you have to chase them down or whatever and... Or, or they have to wire it in tranches or anything like that. Like, and I think it's just that cash flow is so far from net worth. Um, and then, and, and so, like-
- SPSam Parr
Well, and-
- JGJeremy Giffon
Oh, that's-
- SPSam Parr
And you had, like, you had... Oh, sorry. Go ahead, Shaan. What?
- SPShaan Puri
Sam, we, we have a funny experience with this. We were at a lunch with somebody, and you were asking them, you were like, "What level of money made a difference? Like, where, what's the next level of unlock?" And you were like-
- SPSam Parr
Yeah, he said 25
- SPShaan Puri
... "I sold my company for this much." Or like, you know, you said a number that was, like, a net worth number, and he's like, "Yeah, that was a good number, um, you know, when I was doing that every year, then blah, blah..." And you were like, "Wait, annual ink?" You were like-
- SPSam Parr
Yeah
- SPShaan Puri
... "Annual cash flow was that?" 'Cause I was-
- SPSam Parr
We, we-
- SPShaan Puri
... kinda saying the whole net worth, and he w- and he was like, "Yeah, that's what I was doing in annual cash flow." And it was very clear that if you had that much in annual cash flow, you essentially had infinite money.
- JGJeremy Giffon
Yeah.
- SPSam Parr
Well, it was like a, uh... We were like, "I think 25 is, like, a good number." And he goes, "Yeah, I agree. Having that come in every year is awesome." And I was like, "Oh, yeah."
- SPShaan Puri
[laughs] I literally, like, in the booth of the restaurant just slumped-
- SPSam Parr
And shrank
- SPShaan Puri
... down to the bottom.
- JGJeremy Giffon
Yeah.
- 51:05 – 54:45
Silicon Valley guys envy hedge fund guys
- SPSam Parr
You... And, and did I read that you tried to create some kinda, like, equivalent, uh, like, like a chart of cash flow to net worth?
- JGJeremy Giffon
Yeah, yeah. I've thought a lot about this. So, so part of that is-
- SPSam Parr
Tell me
- JGJeremy Giffon
... is talking about... One, like, weird thing about Tiny is I've probably talked to 3,000 or 4,000 bootstrap entrepreneurs, and, um, the vibes that they give off, like, I don't know, I've met a handful of billion-dollar net worth founders, and the vibes between them and someone who makes, you know, $10 million a year from their Chrome plugin or whatever, very different. Um, and, and there's something about, like, just how free they feel when they have that cash flow coming in. Because there's two things. One is, like, maybe the net worth never actually translates into cash. Um, a very funny thing is, like, all the, all the Silicon Valley guys are really, when, like, behind closed doors, are really, um, envious of the New York hedge fund guys 'cause they're so liquid. Like, they might not actually be as rich per se, but they're so... They make so much cash that it's like it may as well be a whole different thing. Um-
- SPShaan Puri
How much do the hedge fund guys make in New York?
- JGJeremy Giffon
Yeah, this is another hot take, which is I always... When I started getting interested in making money, it was like the most common thing you hear is you cannot get rich on a salary. Like, you gotta own equity. You gotta own a business. Uh, in New York [chuckles] there are lots of guys, lots of guys making 5, 10 million. There's people making 100 million. I've met one guy at a big hedge fund who-
- SPSam Parr
As what? As, like, a, like, a portfolio manager?
- SPShaan Puri
Like a bonus?
- JGJeremy Giffon
Yeah. There's, there's, there's at least one guy out there who, like, makes a billion dollars in, in annual compensation. Um-
- SPSam Parr
But what's normal? Like, let's say you're, you're, you're hanging out with your New York finance friends.
- JGJeremy Giffon
It varies. It varies a lot. Uh, but in a good year, like, an analyst at a big hedge fund will make 3 to $5 million. Um, and in a really good year it can be a lot more than that, 'cause usually it's a, it's a percentage. And, um, you know, like, being, being a senior person at a big fund or whatever, you make a lot of money, and you kinda take no risk in some very real sense. Um, and so I think, like, that was certainly, certainly surprising to me. And yeah, the... Just to, like, come back to the cash flow thing, certainly, like, Andrew was always such a cash flow person. And, and really, like, i- in Canada at the time, like, there was just no funding, so you just had to live or die off cash flow. And it's, it's... I think it's more instructive to think about money in terms of, in terms of cash flow. 'Cause the other thing is when you have a net worth, like, say you sell your business and you just have a bunch of cash, even if... Like, psychologically, Sam, I know you're big on the, like, money psychology stuff. The idea that you're living off a fixed or finite amount just really changes how you view things, even if it's a ton of money, versus this idea of, like, I make, you know, whatever, $100,000 a month or whatever. Just the idea that it just comes in, it, like, it totally changes-
- SPSam Parr
Well, dude, our, um... Me and Shaan have this good friend who sold a business, and he walked away with $60 million. And I go, "That, that feels awesome." He goes, "It feels horrible, man." I go, "Why?" He goes, "I'm a Brown immigrant. I need cash flow. If I don't have cash flow, I feel broke. I need money coming in every month. I can't spend this."
- SPShaan Puri
I think we should wrap it up. Uh, Jeremy, where should people find you if they wanna get more of you, follow you, become big fans of you? Where should they go?
- JGJeremy Giffon
Uh, Twitter, jeremygiffon. Um, my DMs are open. Um, yeah, that's the best place.
- SPShaan Puri
Awesome. Thanks for doing it, man.
- JGJeremy Giffon
All right.
- SPShaan Puri
Really, really fun hanging.
- JGJeremy Giffon
Thanks for having me, guys.
- SPSam Parr
Thank you.
- JGJeremy Giffon
It was fun.
- SPSam Parr
That's the pod. [outro music]
Episode duration: 54:45
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Transcript of episode 7nWa1F3GJy4
