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Transcript
65 min read · 12,683 words- 0:00 – 3:24
Intro
- SPShaan Puri
All right, look. On YouTube, everybody talks about how they're crushing it. Every business podcast, every business influencer is talking about how great everything is going. But on today's podcast, my buddy Nick is coming on, and he's doing the opposite. He's talking about a bunch of the big mistakes he's made. He's eating humble pie publicly on the podcast today and talking about some of the things he's learned from it. So I want you to tune into this episode. He's talking about how he made the biggest acquisition of his life when he bought Somewhere.com, how he might have screwed up certain things, and how he's trying to recover from those. It's another side to Nick. If you know Nick, he's, he's, he's a popular guy online, but you don't always get to see the, uh, the humble side. And so I think it's a great episode with Nick. Enjoy. [upbeat music] All right, what's up? We got Nick Huber here, friend of the pod. Nick, what's up, man?
- NHNick Huber
Shaan, thanks for having me. Been a long time.
- SPShaan Puri
Dude, you, um, you wrote something. So we have every guest do a little prep doc of like, "Hey, what do you... What are some things on your mind, stories, ideas that you wanna share?" [chuckles] And you wrote one that I think is very interesting to people who've been following Nick Huber. So you built up this personality online of being confident, borderline cocky. You're, you know, you have strong opinions. You are not afraid to piss some people off. And you said this in the document. You said, "I've been humbled of my cocky attitude in my 30s." Is this a... Do we have a heel tu- uh, like... What's the op- a face turn, like in wrestling, where the bad guy becomes good? What's going on?
- NHNick Huber
Yeah, man, I think the last five years in business, I mean, five years ago, you guys had me on the pod. I, I felt like I knew everything, man, like-
- SPShaan Puri
[chuckles]
- NHNick Huber
And I think it was that irrational confidence early in my career that I wouldn't trade for anything because I think it led to a lot of success and me, me putting myself out there, but yeah, man, like, you just realize that business is hard. Business is really hard. So it's not the same as it was. 2024, 2025 are not the same as 2022, 2000, 2023 for any entrepreneur I know.
- SPShaan Puri
So g-gi-give me an example of, uh, how Nick, what Nick was thinking then versus Nick thinking now because there's this great phrase, "Everyone's a genius in a bull market." I think part of what you're gonna talk about is, like, back in 2020, 2021, 2019, like, during that era, it felt like you could do no wrong. But, like-
- NHNick Huber
Yeah
- SPShaan Puri
... give me a... Nick back then, he was thinking X, Y, Z about himself or the world, and now what is Nick thinking?
- NHNick Huber
I thought business was easy.
- SPShaan Puri
[chuckles]
- NHNick Huber
I thought building executive teams was easy. I thought customers just came. I thought I could do no wrong because I had this personal brand. Started all these companies, started 10-plus companies over a three-year period.
- SPShaan Puri
Right. Midas touch.
- NHNick Huber
Um, four, four of them have been shut down, so yeah. It's, uh-
- SPShaan Puri
[laughs]
- NHNick Huber
... not all roses.
- SPShaan Puri
It's not all roses. Uh, but you are, you know, I guess older and wiser now, and you've... I-it's... Sure, some things shut down, but other things you've sorta doubled down on and have started-
- NHNick Huber
Mm-hmm
- SPShaan Puri
... to work. What do you think caused that? Uh, was it just market kicking your ass a little bit in certain areas that m- that sort of made you reassess? Were you wrong about a specific thing?
- NHNick Huber
I thought with a personal brand that's strong enough, you could get into an agency business of any kind and go to the moon, whether or not you do a couple things right, couple things wrong, whatever. And then yeah, the algorithm changed. Like, the business got a little harder. People started really watching how they're spending money, so I just think it, it's harder now than it was, man. Like, uh, I know a lot of people who are making less money now than they were three years ago.
- SPShaan Puri
Right. Right. Okay. I wanna jump around into some of your new ideas, so things you're feeling, thinking right now.
- 3:24 – 8:49
Breaking down Nick's portfolio
- SPShaan Puri
So, you know, you mentioned being sorta humbled, and you mentioned your portfolio going from... How many companies did you have kind of like at your peak, and how many do you have now?
- NHNick Huber
11. Yeah, I, I started 11 companies from, uh, you know, 2016 was my first, or, you know.
- SPShaan Puri
You were like, "I'm gonna do an SEO company. I got a storage company."
- NHNick Huber
Yeah.
- SPShaan Puri
"I got a, um..."
- NHNick Huber
Yep.
- SPShaan Puri
What else did you have? [chuckles] You had a bunch of others.
- NHNick Huber
Yeah, I had a-
- SPShaan Puri
Marketing company
- NHNick Huber
... pay-per, pay-per-click marketing company called AdRhino. I had a sales consulting company called Huber Method. I had a business brokerage. I had, you know, um, on and on and on. So I went on a phase where I was like, "I can't... I'm... I got the hot hand. My audience is super powerful. Like, let's scale up some companies."
- SPShaan Puri
Do you remember at your peak what the group revenue or, um, of, of the companies you owned the majority of, uh, of group revenue or cash flow was at the, at the peak? 'Cause it wa- it was working for a little while, right?
- NHNick Huber
Yeah, well, group cash flow right now is actually way higher than it was, but it's only because of, like, a three-headed monster of the companies that rose to the top. So it's kind of like a power law thing, right?
- SPShaan Puri
Totally.
- NHNick Huber
But of the six bottom ones, I mean, up, we were up to half a million dollars a month maybe of total revenue.
- SPShaan Puri
Yeah.
- NHNick Huber
And I shut down four, and two of them are, are, you know, treading water right now.
- SPShaan Puri
Right. [chuckles] And so the, I think the most interesting lesson, uh, 'cause I've got to see it from the inside. I don't know how much of this you've shared, but we were both partners in a company called Somewhere. Actually, at the time it was called Shepherd. And, um, people don't know the backstory here. So the backstory is Marshall, who's the founder, uh, was the founder of the company, owned the majority of the company. Then me and Nick both had a, a, a good, a good chunk, but in the minority. And Marshall calls, and he says, "Hey, I got an acquisition offer. I think I'm gonna take it." [chuckles] And I was like, "Oh, wow, talk me through it. What is it?" And he tells us that Andrew Wilkinson, our buddy, other, other friend of the pod, he, he made an offer to buy the company for $52 million. And this was great. You know, this is a company that Marshall bootstrapped, didn't raise any money. Um, so you know, potentially a big exit, but it was a stock-based deal, and you know, Marshall was gonna take it. And Marshall had worked for Andrew when he was young. Uh, he had a lot of respect for Andrew. So I think it was like part of it was like this like almost like full circle validation moment. But, you know, personally, I think every entrepreneur can have that, where it's like, "Wow, Facebook wants to buy my company? This is unbelievable." And then there's the financial component to it. And on the phone I was like, "Well, let me give you my opinion." And I realized very quickly, I was like, "Oh, he's actually already decided." This was a, "Let me... I just wanted to let you know," disguised as a "what do you think" call. But you know, I'm, I'm a very opinionated guy, so not to be deterred, I was like, "Hey, listen, like, you know, we're growing really fast. I like our stock. Why would we trade our stock for, for other person's stock? Like, we should just keep our stock. It's growing. It's, it's a small company, so by nature it's gonna grow much faster than these larger companies." And, um, you know, that stock might not be that liquid. Are you sure this is the deal you wanna do? Then I call Nick, and I'm like, "Nick, what do you think? I had this opinion. You were very similar." And we had this idea of like, if he's gonna do, if he just wants to sell, maybe we could buy it. And originally, that was some of the idea, and I said, "Oh, look, my, my life will get too crazy and complicated. I don't wanna do this." But you were like, "I'm gonna do it."
- NHNick Huber
[laughs]
- SPShaan Puri
And so walk u- that's where, that's where the story begins.
- NHNick Huber
Yeah.
- SPShaan Puri
Walk me through what hap- uh, first of all, was that your same history? Did I mess anything up there, uh, and then-
- NHNick Huber
It was a, yeah, it was a $47, $47 million valuation. The company was three years old and growing really fast, about 150 employees. Um, I was a customer and, and then became an investor and had started to build worldwide teams. But yeah, here we are. M- Marshall calls me, "Hey, Andrew. Andrew wants to make an offer to buy the company." I realized, "Hey, I don't wanna sell any of this company. If anything, I want more of this business." And this was peak, this was also just peak Nick Huber, you know, not humble Nick Huber of thinking I can do anything and I can't go wrong.
- SPShaan Puri
And by the way, we had just tripled the business that year. So it wasn't like, it wasn't like we v- were, had any reason to not have confidence. Like, the business had just tripled in cash flow, and so, like, that was good.
- NHNick Huber
Yeah. [upbeat music]
- SPShaan Puri
Hey, I got something pretty cool to share with you guys. So if you're like me, you listen to podcasts or YouTube videos, and you like to take notes, you're here to learn, and that's a lot of effort. Sometimes you're on the go, and you can't do it. And so the folks at HubSpot, who are sponsoring the podcast, have done something pretty cool for you. They have created the MFM Vault. It's a place to go find notes and resources that they pull from the different episodes that we do. So if we have a guest on that shares their five-point framework, they write down those five points with the examples that the guest gave, and they put the notes there for you. So if you want to access the vault, it's totally free. All you gotta do is click the link in the description below, and you can access all the notes and the stuff in the vault. We're gonna keep adding to this, trying to make it better over time. Thank you to HubSpot. This is a very cool way for them to sponsor the podcast, but by instead of telling you to go buy their stuff, they're actually giving you something instead. [upbeat music] Okay, carry on. So you decide, I'm gonna... I tell you, "Hey, I think I'm probably not gonna do it." But you're like, "I'm gonna do this anyways."
- NHNick Huber
Yeah. I, I say, uh, you know, "Marshall, actually, I wanna be the one to buy your company. You shouldn't sell it to, to Andrew. You should sell it to me."
- SPShaan Puri
And his initial reaction is like, "You and what money?" [laughs]
- NHNick Huber
Yeah. He had a, he had a lot of questions. His jaw almost hit the floor. He's like, "Nick, this is insane. Like, are you kidding me? Like, this is life-changing money. You sell 51..." It was a 51% deal 'cause he still needed, remember, he still needed me and you in because we were sending-
- SPShaan Puri
Right
- NHNick Huber
... a lot of business in. He still wanted Marshall to have some skin in the game. Um, and yeah, man, the next, uh, three-month period, I c- I sold Marshall on the fact that I could raise 20 million bucks and negotiate a seller note for a chunk of it. Had to get very creative with how I structured this deal because I realized real quick that it's not the same as real estate and, and how much skin I can get in the
- 8:49 – 11:20
The deal structure and terms
- NHNick Huber
game.
- SPShaan Puri
So, so let's talk through this because a lot of people will give high level numbers.
- NHNick Huber
Yeah.
- SPShaan Puri
Valuation.
- NHNick Huber
Yeah.
- SPShaan Puri
Sale price. But terms is where, like anybody who's done deals knows, like structure and terms matter a ton-
- NHNick Huber
Yeah
- SPShaan Puri
... uh, in how a deal gets done. Like an all stock deal, all cash deal, up front, earn out, contingency based, seller finance. Th- that, you know, it's a big, there's a big array of different ways a deal can go down. So can you just give us the, the simple version of like what was the deal?
- NHNick Huber
Yeah, it was originally a $47 million offer from Andrew, but the business kept growing over the next six months that we kinda got this deal done. It, it became a $52 million purchase acquisition price, and let me be clear that Andrew, it was early on, it kinda felt like me and Andrew negotiating against each other. Holy shit, I'm negotiating against a titan.
- SPShaan Puri
This guy's bought 40 companies. You've bought zero.
- NHNick Huber
Yeah. [laughs] Publicly traded business, you know, billionaire on paper for a while, um, a great friend of ours, and then Andrew kind of just thought about some AI risk. He saw maybe some, some headwinds, and he said, "You know what, Nick, like maybe we'll do this together." It was kind of a conversation throughout. It wasn't as if we're, um, have any animosity between each other. Um, but yeah, it was, it was, I was gonna raise $20 million to buy 40% of, about 40% of the company from Marshall. I realized that if I go out and raise $20 million to buy this company, I'm only entitled to a 20% carry on top once everybody gets their money back.
- SPShaan Puri
Right. So the structure is you go to investors. Investors give you 20 million.
- NHNick Huber
Yeah.
- SPShaan Puri
Your deal with them is I get a 20% carry or profit share of, of that. So like, you know, you're only owning, so the 20, 20 million buys you what, uh, what percentage of the company?
- NHNick Huber
40%.
- SPShaan Puri
40%.
- NHNick Huber
So we'll, we'll do the whole numbers. It was 39.25 for like 20 and change, but let's say 40%, $20 million. I would need to get them all made whole, their money back, plus a hurdle to then get an 8% upside, which is 20% of 40 million. So my ownership stock would go from ab- about 12% to about 20%. I'd have to raise 20 million bucks. I'd put my name on the line. I would take all this risk, do all this work. Very quickly, I realized, like, I can't do this deal. Like, it would be foolish for me to do this. So I went back to Marshall and said, "Hey, I need to buy more of the company." And this is where we kinda got creative, and I, and I carved out an 18% seller note directly from Marshall to me.
- SPShaan Puri
And a seller note is basically the seller saying, "I will lend you essentially the money-"
- NHNick Huber
Yep
- SPShaan Puri
... "to p- to pay me, and you're gonna pay me every year, um, or every quarter," whatever you guys decided this. Uh, so what was that? That, that was eight, what, 18 million? What did you just say? How much was-
- NHNick Huber
That was-
- SPShaan Puri
No, that was 10 million
- NHNick Huber
... nine, about 9 million bucks for 18%-
- SPShaan Puri
9 million
- 11:20 – 12:24
Fail: Buying a domain for $400K, killing out traffic
- NHNick Huber
... of the company.
- SPShaan Puri
All right. So you, you're all in. You raised 20 million from investors. You get 9 million, 9-point-something million from Marshall.
- NHNick Huber
Yep.
- SPShaan Puri
So you're in $29 million, and now you're in charge.
- NHNick Huber
Yep.
- SPShaan Puri
And you've got peak energy, and I'm talking to you, and we both are like, "Dude, we've had so many ideas of how we could tr- turn this business, you know, from X to Y. This is gonna be great."
- NHNick Huber
Yep.
- SPShaan Puri
And then what happens?
- NHNick Huber
[laughs] Um, three things changed drastically. Number one, we changed the name from Support Shepherd. I'd sat over too many people's shoulders watching them spell Shepherd incorrectly.
- SPShaan Puri
Right.
- NHNick Huber
Smart people to know that, holy cow, we cannot grow a big company with this name. So we bought Somewhere.com for $400,000 shortly after closing Change the name from supportshepherd.com to somewhere.com. Our SEO, our search engine optimization, and our brand recognition vanished overnight.
- SPShaan Puri
[laughs]
- NHNick Huber
In that one fell swoop, we lost 300 leads a month of ab- of about 1,000 leads that we had. Um-
- SPShaan Puri
So you lose a third of your traffic-
- NHNick Huber
[laughs]
- SPShaan Puri
... on your brilliant name change. Okay, next. [laughs]
- NHNick Huber
[laughs] Yeah, let me, let me look at
- 12:24 – 16:49
Fail Elon bought twitter + I invited competition
- NHNick Huber
my notes. So number two, um, Elon bought Twitter. Elon bought Twitter and started drastically messing with the algorithm quickly.
- SPShaan Puri
Right.
- NHNick Huber
And it went from me being able to tweet about hiring somebody in the Philippines for $5 an hour and send, you know, 3,000 website visits and 200, 300, 400 leads to the company to virtually nothing.
- SPShaan Puri
Right.
- NHNick Huber
So my ability to send business to the company with my personal brand vanished.
- SPShaan Puri
Okay.
- NHNick Huber
The third thing is, um, I wasn't the only one to think international hiring was a beautiful business, and, uh, many, many competitors started over the next, uh, six months to a year.
- SPShaan Puri
Yeah.
- NHNick Huber
So-
- SPShaan Puri
And you guys were pretty loud about the acquisition, which also invites competition. Um, right?
- NHNick Huber
You tried telling me over the years, by the way.
- SPShaan Puri
I tried telling you this, but, like-
- NHNick Huber
[laughs]
- SPShaan Puri
... you know, everybody wanted to, to pound their chest. Natural, honestly. Like, and I get it. It is actually an upside to it too, right? I think the month we announced ac- To be fair, the months l- the two months after we announced the acquisition, it was actually peak growth because, like-
- NHNick Huber
Yeah
- SPShaan Puri
... a lot of people went and checked it out and realized, like, "Wow, there's a reason why all these people use this service. There's a reason why there's a high repeat rate of this service. It's probably pretty good." So it did initially cause a burst, but it also created, you know, it em- emboldened the existing competitors to go harder, and it-
- NHNick Huber
Yep
- SPShaan Puri
... it created, you know, 10 new competitors, let's say.
- NHNick Huber
Yep, and then, and then the economy started to shift. Like, interest rates went up. A general, like, silent recession happened in a lot of different industries.
- SPShaan Puri
Right. And, and our customer base, our customer base was not super well-funded AI companies or something like that where, where, m- you know, spending was, they're just spending, you know, sloshing money around. Like, we help real businesses, so it'd be whether it's, you know, a small business, a- agency owners who own 100% of the business and the cash flow matters to them.
- NHNick Huber
Yeah.
- SPShaan Puri
It's e-commerce businesses where you're already on tight margins, and that's why you leverage global talent because it improves your margins, but you might just stop hiring altogether, uh, right?
- NHNick Huber
Yeah.
- SPShaan Puri
Like, you might just actually shrink your workforce. Tariffs are coming. You don't know what's gonna happen with that, so you shrink your workforce. You know, we would serve tech companies that were, you know, more responsible with their cash, and so, like, all these business owners that are, are great customers to have and a big part of our audience, they are obviously cost-sensitive because they live in the real world. They're not VC-subsidized with, you know, $50 million rounds where you can just aggressively go higher and spend against macroeconomic headwinds.
- NHNick Huber
Yeah, eCom, eCom headwinds, home service headwinds, construction headwinds, real estate headwinds means less people are hiring, less people are growing their teams.
- SPShaan Puri
Right.
- NHNick Huber
Um, and I made a lot of bold, quick executive changes inside of Somewhere when I, when I acquired it. The company had grown very quickly. It was doing 95% of its hiring in the Philippines, executive assistants.
- SPShaan Puri
Right.
- NHNick Huber
Um, we started to invest in Latin America. We started to invest in South Africa, finance talent in Egypt, building executive teams in South Africa, performance marketers, you know, high-skilled, you know, actually how to structure and build a company from the ground up internationally.
- SPShaan Puri
It's an important part. I'm, I'm making fun of, of some of the, the fun decisions because w- because there is a happy ending. It all works out.
- 16:49 – 18:43
new owner syndrome
- SPShaan Puri
quite admirable. The second part of it is there was, there's something that i- in, uh, in sports they call a new, a new owner, um, sort of new owner syndrome, which is anytime a sports owner buys a team, they immediately start changing everything.
- NHNick Huber
[laughs]
- SPShaan Puri
And 'cause they're like, "Oh, I can, I can do no wrong. I know how to fix this. I'm gonna do all these great things in year one." And one of the things that I think is actually pretty interesting here is even though we run this global talent company, and we were finding talent all over the globe, we were mostly findi- finding kind of junior and mid-level talent. So, like, you know, whether it's assistants, executive assistants was like a big, you know, huge part of our business, sales folks, you know, whatever. There's folks like that. But C-suite folks, we would typically s- assume are, "Well, that's who I wanna use," you know, uh, you know, different, uh, local hires either, you know, in the same office as me or just American hires. Expensive, big pay packages, you know, got a lot of pedigree with companies I recognize, you know, whatever. And so we did that. You know, we hired a bunch of executives, and that was, I think, made total sense on paper. And I think one of the cool things that you figured out that I didn't see going into this was since then you have actually rebuilt not just the junior and mid-level but actually the executive team with executive talent elsewhere. And I kinda took that, and I was like, "Oh, I should do that in my businesses," 'cause that's actually, like, an even bigger ... hack 'cause you, you were like, "Dude, I'm finding... Here's this person in South Africa. They've got an MBA. They can speak perfect English. They've worked for international companies and, you know, American companies that do work internationally for, you know, 12 years. They've been a financial controller controlling these budgets, and you can hire that person at this price?" That's incredible. You know, you're saving, you know, huge amounts of money on really great talent and really hungry, low-maintenance, um, hard worker, hardworking talent all around the globe. And so that was, I thought, one of the bigger surprises to me and, like, things we got wrong that we kinda cal- corrected, and I don't know if you wanna say a, a quick thing about that.
- 18:43 – 27:18
How to hire overseas talent (10-min masterclass)
- NHNick Huber
Yeah, I have six Americans at Somewhere out of 160 employees. Ari Kosteg, another company in my portfolio that's growing really fast, 130 employees, seven Americans. Bolt Storage, six Americans out of 60 employees.
- SPShaan Puri
Right.
- NHNick Huber
Um, and they're all in sales and account management because I just can't replicate the Americans' ability to close deals, um, high-ticket deals. Now, we're close with a couple South Africans, but a COO at Ari Kosteg, Johannesburg, South Africa. Head of performance marketing in Bogotá, Colombia. You know, head of finance and, an IT consultant who got me through SOC 2 compliance, we got our certificate this week, in Cape Town, South Africa. So I used to think, like, "Okay, I need, I need repeatable tasks, and I need to outsource those to the Philippines, South Africa, Colombia," whatever. Now I'm realizing that the people who can run my company can do it-
- SPShaan Puri
Right
- NHNick Huber
... better and cheaper over, inter- internationally.
- SPShaan Puri
And I don't want this to be a Somewhere plug, but you, you were like, "Dude, I could tell you how to do this without Somewhere." [laughs]
- NHNick Huber
Yeah.
- SPShaan Puri
I was like, "Oh, that's good," like an anti-ad. [laughs]
- NHNick Huber
Yeah.
- SPShaan Puri
So great, and you can use Somewhere, but here's how you do it without us. Uh, so how do you do it without us?
- NHNick Huber
So we get, we get 60,000 applicants a month. Um, half those are from LinkedIn and Indeed and Monster promoted job postings. I can tell you... I'm gonna tell you exactly how we do it. The other half are from referrals and ads that we run out on the open market for people that already have jobs. But yeah, if you wanna make your own hire, go on LinkedIn, post a job. I'd, I'd recommend Colombia, Brazil, South Africa, and the Philippines. Those are the four hottest places to hire in the country. If you're looking for finance, there's Egypt. You know, um, engineers, um, Eastern Europe and some other, in some other countries. But go on there, promote the job on LinkedIn with $100 a day, and run it for five days. Post the job in those countries on LinkedIn, promote it with $100 a day, run it for five days. So you're in, what, for maybe two grand, you're gonna get 1,000 applicants.
- SPShaan Puri
All right. But that's too many. How do I filter?
- NHNick Huber
Yeah, so we have figured out, and I'm gonna pass this on to you, is that of our 60,000 applicants every single month, 85% of them can't type 35 words per minute. And if we're talking about remote work in any role, from engineering to marketing to graphic design to admin to sales to executive leadership-
- SPShaan Puri
So your, your easiest immediate filter is typing speed English test, basically.
- NHNick Huber
Yeah, we're getting that down, we're getting that down to 5,000 people a month that are coming in the door.
- SPShaan Puri
Cool. So you wipe, you wipe out, whatever, 80% of people right away. Great. Uh, what's the next easiest heuristic to find great talent?
- NHNick Huber
We're gonna send them a request for a one-minute video-
- SPShaan Puri
Okay
- NHNick Huber
... where they film themselves introducing themselves for one minute. 80% of people are just not willing to do the work. They're not that serious about looking for a job.
- SPShaan Puri
Right.
- NHNick Huber
So the other 20%, you're left with maybe 1,000. Um, this is our talent pool. You know, you and, with your job post that you got 1,000 applicants, you're left with maybe 40, 30 or 40 people that can type over 30, 35 words per minute and have sent you the video. You watch the videos. You look at the, the professional maturity. You look at how they communicate, which is a big part of the job, and you pick your favorite five to hire. Um, and then I love assessments. If there's, if they're, if they're coming into a sales role, I love sending them five calls from my sales team and saying, "Hey, break these down. Record a three-minute video on how-
- SPShaan Puri
Right
- NHNick Huber
... you would, you know, missed opportunities or how they would improve." Um, and that's, you know, then you're gonna be left with three or four really great candidates and hire them.
- SPShaan Puri
Right. Task-based test over, uh, interview is huge. We do that in, in all of our stuff.
- NHNick Huber
I didn't even mention the interview, I guess.
- SPShaan Puri
Well, I don't, I don't even, I don't even get to an interview at this stage. This is how we do it-
- NHNick Huber
Yeah
- SPShaan Puri
... when, when I do this with, uh, with Ben and our companies, and part of it is actually useful for you. So when you sit down, you say, "All right, if I was gonna give somebody a test that they could do in something like 60 to 90 minutes-
- NHNick Huber
Mm-hmm
- SPShaan Puri
... what would most closely simulate the type of stuff I wanna see them be able to do?"
- 27:18 – 30:17
Peter Thiel's Stanford class
- SPShaan Puri
I'm curious, man. You are always meeting interesting people, partly due to having a presence on Twitter, partly just, you know, you have, like, one foot in the sweaty startup world, one foot in the tech world, the online m- media world. I'm just curious, like, who have you met recently that kind of either inspired you or, like, you know, broke your frame in some way, or somebody who you think is doing some cool stuff?
- NHNick Huber
I, I have one person in mind who's building a pest control, like, monster of a company. I don't wanna out him. It's just s- incredible to me. You know this. You've actually taught me a lot of this stuff, is that they find one thing that really works inside their company, and they just run the same play for five or 10 years to grow a monster business.
- SPShaan Puri
Just hammer it. [laughs]
- NHNick Huber
I didn't think that business worked that way.
- SPShaan Puri
Yeah.
- NHNick Huber
That you could do one thing really well and everything else... You know, you're not hiring internationally. You're, you're not doing the latest software. You haven't even looked at AI.
- SPShaan Puri
Right.
- NHNick Huber
You're not answering the phone past 5:01 PM.
- SPShaan Puri
Right.
- NHNick Huber
But you do this one thing well, and you're worth $100 million.
- SPShaan Puri
Right. Dude, there's a, uh... Have you ever seen Peter Thiel taught a class at Stanford, and they put the class notes online, and it's been there for a long time. It's called the, the Blake Masters Notes or something like that. Did you ever read those?
- NHNick Huber
No. What's, what's the main takeaway?
- SPShaan Puri
So he's got one, which is he's like, um, you know, "I get a lot of investor pitches, and yeah, I've invested in Fa- I was, you know, the seed investor in Facebook." So you get, if you have some huge winners and you have a bunch of losers, what do you notice with them? And he's basically, he's like, "One of the biggest poker tells with a business is when they have seven revenue streams that actually they think... They come in puffing their chest, being like, 'Look, we've got seven.'" And he's like, "All they've told me is they don't have one great one."
- NHNick Huber
[laughs]
- SPShaan Puri
"And same thing with distribution channels. When I ask them, 'How are you gonna get customers?' or, 'How do you get customers today?' And, um, if they tell me seven things, all that tells me is they don't have one amazing thing." He's like, "All the best companies," and this is the best companies, "they find one, they basically end up with one distribution channel that really, really works and one revenue stream that really, really works." And so it's like, you know, for Facebook, for example, the distribution channel that worked was viral photo tagging on, uh, campuses initially-
- NHNick Huber
Yeah
- SPShaan Puri
... and then eventually off campuses. And then the monetization was ads. And Facebook didn't need to sell stickers and didn't need to do, like, a thousand other things that all the other social networks were actually doing. Like, home, M&M's did a homepage takeover, and we've signed this deal with this movie studio, and they're gonna do, like, a, a cool campaign with us in partnership. And, like, Facebook was like, "Self-serve banner ads will be the thing, and this, a- and this will be the growth tactic."
- NHNick Huber
Brad Jacobs. Brad Jacobs with how he grew United Rentals and several of these other companies. He ran the same plays.
- SPShaan Puri
What was his, what was his play? I actually don't know.
- NHNick Huber
I'm sure he had several different plays, but how you make a few billion dollars [laughs] is, like, you find a way to grow a, you know, equipment rental business through, is it local ads? Is it, is it outbound sales? They were, they had a really good outbound sales team for contractors, and then boom, that business skyrocketed. He pulled his same executive team, pulled his main players out of that company once it went public, put them in the next one, and boom. You know, that's how you grow five companies in a row, figuring out-
- SPShaan Puri
Right
- NHNick Huber
... figuring out what companies that play will work for.
- SPShaan Puri
Right.
- 30:17 – 34:23
Suli's brutal advice
- SPShaan Puri
I- I've told this story, I think, before, but, um, I ... It's, it's probably one of my most, like, I don't know, humbling a- and, uh, insightful moments. Yeah, like you ... A, a hard lesson learned very quickly. A, yeah, a Band-Aid that got ripped off for me. So we have a buddy, um, Suli, who you know, and Suli's like, to me, my business Yoda. Like, if I got a business problem, I go to Yoda.
- NHNick Huber
He sure can.
- SPShaan Puri
And he, he, he gives me the, like... He can't even really explain. He just sort of, like, he sees through all the noise that I bring him, and he just finds the, the thing. So, um, my e-commerce business was, was... Early on it was growing. And so I think we were at maybe, um, 100,000 a month in revenue. So, like, you know, like, kind of like a million dollar thing. It was, like, early on. And our... How did we get there? We were doing Facebook Ads. So he told me, "Do Facebook Ads, and focus on Facebook Ads." And I was like, "But what about Google?" He's like, "But what about what I just told you?" And I was like, "Okay, cool." So Facebook Ads is working. I feel super accomplished. We've gone from zero to 100K in, like, three months. This is awesome. So I go to him and I'm like, "Dude, it's working. I'm thinking now we should do influencers, and we should do Goo- we should spin up Google," 'cause, you know, of course, who doesn't do Google? But, like, "I really think influencers could work. Here's this cool influencer idea I have." And he just basically just cut me off, and he was just like... He's like, "You wanna win, right?" And I was like, "Yeah." He's like, um, "Cool. Don't say the word influencers until you're at 300,000 a month just off of Facebook."
- NHNick Huber
[laughs]
- SPShaan Puri
And I was like, I was like, "But would it be bad to let's, like, do both?" And he's like, "Well, here's the thing. Is there any reason you believe that Facebook can't get you to 300,000?" "No. I've... It's got us to 100. Why couldn't it get us to three?" And he's like, "And if we couldn't get Facebook to three, do you think any amount of influencers is gonna save us?" It's like, no. Like, a, a successful e-com brand should be spending basically 1 million-plus per month in just Facebook Ads, right? Which means you're making more than a million dollars off of Facebook. Like, that's where you're trying to get to. That's the goal. And, like, you kinda have a broken company if you can't really get there. Like, fa- most e-com companies win off of Facebook Ads, so, like, you should just try to win off of Facebook Ads before you go do all this other shit. And he, and so just to... And I was like, I had expected when I was, like, gonna get advice from him, that he's gonna give me these amazing strategies, these, like, new hacks, these brilliant tactics. And actually, the most useful thing he did for me was just say, "Don't say the word influencers until Facebook is cranking 300,000 a month to your business." And just, and by the way, we kept it going. [laughs] After 300, we did 500. After 500, we did a million. It's like you just keep going, um, off of just those two... Guess what? I still don't do influencers. Like [laughs] it's now five years later. We didn't need it, uh, you know? And, and I definitely would have distracted myself with what sounds like a good idea, and it comes back to the Steve Jobs quote, which is focus is not about what you say yes to, it's about saying no to otherwise great ideas.
- NHNick Huber
One of my companies was making, you know, spending upwards of $150,000 on paid ads a month. We realized that, hey, our ROAS is barely breaking even. We calculated it down to the profit and realized that that piece of the company was making us maybe 15 to $20,000 a month in profit.
- SPShaan Puri
Right.
- NHNick Huber
And we were spending tons of executive time and energy to try to get that to work. And we looked at our other part of our, you know, revenue stream, and it said referrals. Referrals coming in the door is generating $250,000 of profit per month on, you know, maybe $30,000 of referral fees and discounts. Um, why, what would happen if for six months our entire executive team laser focused on growing that referral number, and do we think that we'd, we'd be better off than, you know, maybe the last year and a half we've been trying to get, you know, slam a, a round peg into a square hole?
- SPShaan Puri
Right.
- NHNick Huber
And I think it's, it's unbelievable. The job of a CEO sometimes is literally just to tell your team no and to get them focused [laughs] on what's already working.
- SPShaan Puri
Yeah. Yeah, exactly. And not hedge. Like, you know, I would, uh, I would say no, but then we kinda green light this little test, or I would say no, but then, like f- two weeks later we just do it anyways. What happened to our no?
- NHNick Huber
Mm-hmm.
- SPShaan Puri
Was that not a real no? And I think there's all these ways where you can think you're compromising or you're, you're having your cake and eating it too, but actually you're just spilling your cake on the floor. Um, and-
- NHNick Huber
Yep
- SPShaan Puri
... and it's better to, to not do that.
- 34:23 – 36:04
Holdcos is overrated
- SPShaan Puri
You said, "Running a holdco is overrated. I think the trend will die down. Most rich guys I know are focused on one big business and built it for a long time." So holdcos or these portfolios of businesses like you were doing was a very, very big idea or popular idea in our circles, in our bubble about five years ago.
- NHNick Huber
Yep.
- SPShaan Puri
And it's not a new idea. Holdco's been around for a long time. Give me your updated thoughts on the holdco.
- NHNick Huber
Man, I think over the last three or four years I've been kinda labeled as one of the holdco guys. You know, there's several more of us. But I've had a lot of people reach out, you know, "I got this plan to... You know, I'm gonna buy more companies, I'm gonna do this, I'm gonna do that, I'm gonna grow to five, eight, 10 companies, and the synergies and all this stuff." I think you really gotta know your shit to run more than one company.
- SPShaan Puri
Mm.
- NHNick Huber
And the majority of people that I know who run more than one company, they ran just one company for a long time, made it really good, made it really profitable, learned how to build executive teams, learned how to build compensation plans, learned how to, um, work the funnel and convert at the highest rate all the way down the funnel.
- SPShaan Puri
Right.
- NHNick Huber
If you don't know those things and you start going around buying different companies, especially if you use leverage, borrow money to do it, buy companies, whatever it might be, things can go really wrong really quick. Because unlike real estate, which was my first business, where you get a couple clients in and they pay rent every single month, operating companies, man, you can have massive swings in revenue, in profit. Um, so yeah, I think everybody thinks it's cool. Um, another thing about it is you just solve freaking problems all the time. Like, the, the biggest problems in each individual company bubble up and come to you.
- SPShaan Puri
Mm.
- NHNick Huber
Um, so yeah, I, I don't know. Like, when I look at some of the wealthiest people I know, the, some of the wealthi- wealthiest people that you've had on your pod, almost all of them focused on one thing and made that one thing really big. So I think there's something to that.
- SPShaan Puri
Right. [laughs] One source of problems rather
- 36:04 – 38:52
The tortoise always wins
- SPShaan Puri
than 10. All right, another one you have here, "Consistency is underrated." You're, you're on the consistency train. What, what's your take here?
- NHNick Huber
Yeah, I think it's really easy to get excited about something and jump in and be delusionally, like, focused on one thing for One year, even two years, whether it's business, a certain idea, your physical health. I know people who are, they're either running a marathon and cutting, cutting calories and super fit and super clean and super healthy, or they're totally falling off the rails and doing [chuckles] the opposite while they're focused on something else. Um, it's kinda sexy to just jump in and be totally, um, all obsessed with something. The people who win are, like, even keel. Maybe they're not working 70, 80 hours a week. Maybe they work 50 hours every single week for their whole career or even 20, 30, 40, whatever it is. But it's hard. It's hard to stay excited about something for a long time-
- SPShaan Puri
Mm
- NHNick Huber
... without getting burnout. But I think it's a superpower. Like, if you can be even keeled in all areas of life, I'm not just talking about business, but mostly business, um, if you can just keep from gaining weight up the first time, it's gonna be a lot easier to stay healthy the rest of your life. You can just stay-
- SPShaan Puri
Right
- NHNick Huber
... focused on one business or a certain way that you do things and, you know, get after it, you can really win. I know a lot of guys who, they're either kicking ass inside their companies or they're, like, totally checked out and, like, ignoring the hard decisions.
- SPShaan Puri
[laughs]
- NHNick Huber
Um, I think that's-
- SPShaan Puri
Yeah, how... And, and, and they wouldn't have thought they would get there, but how do you get there? Uh, you get there because you, you didn't understand how to s- have a sustainable burn. You had a bonfire and then it goes out. Um-
- NHNick Huber
Yep
- SPShaan Puri
... you know, I used to be in college, um, like a, um, a proud procrastinator. I would wait till the last minute, I'd pull an all-nighter, I'd study, I'd pass the test, and I would wear that like a badge of honor and it became, like, a terrible habit and sort of identity to build around, was this thing of like, "Oh, when I turn it on, I have this crazy intensity. Nobody can work harder than me for that 72 hours, but then I'm gonna crash and I'm gonna procrastinate because I know I always have that in the tank." And it's this sort of tortoise and hare thing where you just realize that the tortoises win in life. And the tortoises that just keep putting one foot in front of the other every single day, they win. And so, like, I've actually s- far shifted my philosophy where now when I hear about somebody who has that same attitude I used to have of the badge of honor of, like, how hard they go and how, how crazy they're working, it's a sign of weakness. It's like, "Oh, you just don't have systems or you don't understand leverage. You don't have good judgment. You don't know where to put your energy, so you're just putting it everywhere."
- NHNick Huber
Right.
- SPShaan Puri
Because I used to be that guy. I slept in the office. When I was 24 years old, I remember I slept in the office 224 days out of a year. I thought that was me grinding. Actually it was me highlighting to everyone, waving a flag saying, "I'm an idiot. I don't know, I don't know what to do."
- NHNick Huber
[laughs]
- SPShaan Puri
"So I'm just here all the time just manically doing anything I can think of," right? And now,
- 38:52 – 47:25
one big thing
- SPShaan Puri
um, I have a totally different productivity routine which is basically, uh, I call it the one big thing method. So every morning I decide the one thing that matters that I'd get done today, the one thing I put all my core focus on, and I give myself two hours to focus on it. First thing in the morning, no distractions. Don't check stocks, don't check the mail, don't check Twitter, don't check anything. And I just focus on that one thing for two hours. And after I'm done with that one thing, anything else I do with the day is gravy. I can go play with my kids, I can go work out, I could do, I could do a little more work if I wanted to.
- NHNick Huber
Mm-hmm.
- SPShaan Puri
But it doesn't matter because what I realized is the person who wakes up every day, 365 days, identifies the proper single thing that matters and puts full focus on that one thing for even a two, two and a half hour time, time spread-
- NHNick Huber
Mm-hmm
- SPShaan Puri
... they will crush the average person who simply doesn't even identify the one big thing. Because you do that for 365 days, you have a hell of a year.
- NHNick Huber
It's the ability to zoom out. So many entrepreneurs, they're so focused, they're so intense, they're so jammed up in the weeds inside their company. And look, sometimes you gotta do that. [chuckles] Like I'm, I've been in the weeds in several of my companies, but the people who can really zoom out, like you're saying, what really matters here? And you do that for four or five years, six years, 10 years, 20 years-
- SPShaan Puri
Right
- NHNick Huber
... man, Father Time, like it's really sexy to build businesses fast and ex- exponential growth and, and you hear about all these stories, we read about them and, and it takes over media, especially social media.
- SPShaan Puri
Y- well you, you've seen that meme almost at, at this point. It's not mos- supposed to be a meme but it, it looks like a meme now. It's like fastest company to 100 million ARR and it's this, these charts and it's like well Slack took seven years and then it's like we did it in two weeks. [laughs] There's like the new AI company that's got a straight line up and then, then somebody else comes in and says, "We did it in two minutes. We did it in two seconds." And that's what they're, they're all trying to just beat each other to this like sprint to r- to low quality revenue. And I think it's so funny, it's like in The Big Short where he's like, "W- uh, why are they confessing?" And he's like, "They're not confessing, they're bragging." And it's like, um, I think they think [chuckles] that's a great thing and it's like the more impressive chart is the one that looks like Qualtrics. You know, we had the founder of Qualtrics on and he said he has a huge sign in his home office that just says, "Tune out the noise, play the long game."
- NHNick Huber
Yeah.
- SPShaan Puri
And he was like, "Dude, for seven years nobody cared what we were doing. We were single-mindedly focused on getting 150 universities to use our thing 'cause we knew that was super important. If we did that we had a real business. And it took us time but we just stayed scrappy, we stayed focused and we just did that for years before we ever got any press, any social media, any anything." And it's like that's who you don't wanna compete against is somebody who can do that 'cause they're building this giant foundation of what they're trying to do. Doesn't mean go slow, it just means don't get fooled into thinking that you need to, you know, sort of quickly sprint and just grab some revenue number out of thin air, um, as like what success looks like. Success is this sort of durability over time.
- NHNick Huber
There's expectations. Like people have to realize that the expectations of yourself as an entrepreneur in your career, they depend on your last six months, your last 12 months, your last, you know, two years. If you've had that hockey stick exponential growth like think about how you have to follow that up and I think some of those entrepreneurs kinda dream of a world where there's no investors, nobody watching, growing slowly over time, building something sustainable.
- SPShaan Puri
Yeah. What, uh... Okay, you have some other ones here. You said, um, [laughs] "Being a YouTuber is the hardest job in the world." [laughs]
- NHNick Huber
[laughs]
- SPShaan Puri
I think some like coal miners might disagree but go ahead.
- NHNick Huber
Well I think social media's changing. Like we can talk about how the X algorithm's changed, how it feels to be a, a, a content creator is totally different now. You almost have to be video first. I don't know if you feel this, Shaan.
- SPShaan Puri
Yeah.
- NHNick Huber
Like if you aren't on YouTube you are not growing right now.
- SPShaan Puri
That's true. Uh, uh, I think there's always exceptions, but it's largely true, and I've said this before. Video is the language, the, the native language of the internet. So it's like going to a country. If you don't speak video, then you are not gonna be able to communicate 'cause that's h- that's what everybody here speaks is video.
- NHNick Huber
Yep.
- SPShaan Puri
Short form, long form, doesn't matter.
- NHNick Huber
Yeah, as an entrepreneur, I'm, I'm really hesitant to get on that hamster wheel because I-
- SPShaan Puri
Yeah
- NHNick Huber
... I see, I see what the life is like of, okay, you got this banger video, your influence grows.
- SPShaan Puri
Exactly.
- NHNick Huber
Gotta follow it up the next week, you gotta follow it up the next week, you gotta follow it up the next week, and you gotta be on. And then we go back to that consistency conversation that we just had. Living that life for 10 years, living that life for 10 years, like, how would that look? How would that feel?
- SPShaan Puri
Right.
- NHNick Huber
I think it's a very difficult job. I have a ton of respect for people who do it. Um, I think it's still worth it, but in my opinion, the value of a personal brand, um, on all things not video is going down, in my opinion.
- SPShaan Puri
All right, one more spicy opinion here. This might be the spiciest of all. "AI is bullshit and unsustainable and will decrease quality of life for the 99%." Wow. Say some words about that.
- NHNick Huber
This is just like the internet boom where, you know, .1% of the companies will survive whatever happens when, when the bubble, you know, changes, and will, will go on to change the world over the next 20 years. I'm not doubting the long-term power of AI. I'm just looking at the money, the hype, the energy that's being poured into it. I'm spending a lot of time inside of my companies trying to implement AI. We're adding tools, and I'm just not seeing it, Shaan. Like, AI is unbelievable for, you know, me having a doctor in my pocket or me doing recipes or my wife, you know, you know, d- doing little things [chuckles] , but man, like, where is the long-term value? And then when I think about where it's going and I'm seeing my energy bill in Athens, Georgia, which is not an energy, you know, like, an area with an energy crisis like some areas of Texas and, and California. My energy bill's went up 60% in the last three years. They've raised it six times.
- 47:25 – 51:07
Roofing
- SPShaan Puri
different question. You mentioned pest control. Are there other businesses that, uh, you've found interesting or, like, you know, you've been surprised at how well they're doing or a niche that you-
- NHNick Huber
Mm-hmm
- SPShaan Puri
... you know, you're, you're, you nerded out about a little bit?
- NHNick Huber
Everybody wants to start a marketplace. I think maybe I'm, I'm five or 10 DMs a month of somebody saying they found, you know, there's a kitchen cleaning. You know, you go, you go in at night and spray down hoods and clean the inside of a kitchen. I want to start a marketplace that connects restaurants to these people.
- SPShaan Puri
Right.
- NHNick Huber
And then I was doing my roof on one of my commercial properties, and our bid came in to do this roof, it's about a 10,000 square foot warehouse, at about 70 grand to do the roof, and I'm like, "That seems high. Like, let's, let's do some more work." And I found out that I can hire a sub for 30 grand worth of labor, and I can buy, you know, 15 grand worth of material. And I can-- That's the hard cost to do this job, and these roofing companies are making the spread.
- SPShaan Puri
Right.
- NHNick Huber
They're making the spread. So they literally don't do any work. They sell the job. They quote the job. They carry insurance, and then they show up and stand there and watch and make sure the crew does a really good job and make $20,000 in a, in a two-day job. By getting a sub and actually selling the job, putting their name on it, billing the customer, collecting the money, pay the sub, and move on. So is that sexy and exciting? No. But are there roofers running around every town in America making five, 10 grand a day? Yes.
- SPShaan Puri
Dude, I'll give you a fun example. So at my daughter's, um, school, I've gotten to know some of the other parents. I say, "Oh, cool. What do you do?" One of the guys, he does... And, and I'm so lack of handy that I, I, I don't even really know these terms, but he does, like, framing.
- NHNick Huber
[laughs]
- SPShaan Puri
Framing I think is like you put up the wood.
- NHNick Huber
Yeah, carpentry, yeah. Yeah.
- SPShaan Puri
But you don't like... You, like, you kinda build part of it or whatever.
- NHNick Huber
Yeah.
- SPShaan Puri
You frame the, the building that you're gonna build. I was like, "Cool. So how's it going? You know, where, where's the project? Have I seen it? You know, what do you do?" He's like, "Oh, I do hotels." "Have you s- Have you s- Uh, is there one I've stayed in here?" He's like, "Well, I do all my work in Alaska." And I was like, "Alaska?" And he's basically like, again, work smarter, not harder. You know, his take was basically, "Look, I can be the 1000th best framer in California right now," coming in as, like, a new guy into the space who doesn't have 20 years of referral relationships with all the other contractors, and try to scrape and claw and do business with expensive labor here in, in California and have... And be, you know, competed down to the bare margin, 'cause they can bid it out to 30 guys, and whoever comes up with the, you know, the lower priced option's gonna win. He's like, "But if I go to Alaska, it turns out they just don't really have that many, very many framers." He's like, "It's easier for me to get on a flight once a month and go to Alaska than it is to me, for me to build that business here." And it's like, I, I saw that and I was like, man, there's, there's like, you know... B- uh, Munger has this great quote, you know, "The secret to winning in life is, is weak competition." And it's basically like go where there's fish but not other fishermen. And it feels like, it would feel so foreign to me and most people if you're doing a business to be like, "Well, how do I... I live here. I kinda feel like I should do something about or something familiar where I see it." It's like we will go into a knowingly harder situation because it's more familiar than take on some unknown where there might be a total greenfield opportunity. And he's not innovating. Like, it's not like he had to be the, to use some n- new technique in framing or whatever. He just went to a place where there's just not a lot of people offering that service.
- NHNick Huber
Yep.
- SPShaan Puri
And I just think, like, that one principle, you know, if you're a hardworking person, like, that one principle can be the difference between, again, being the 1000th contractor here with r- razor-thin margins and making great margins and having to get on a flight once a month. And I just think, like, I w- I, I think about a lot of people in my life who there's more people who could benefit from that principle of just go where it's, where the, where the supply is low or the con- competition-
- NHNick Huber
Yeah
- SPShaan Puri
... is low, because it's unfamiliar for most, and you, you might prosper.
- 51:07 – 54:58
Self-storage
- NHNick Huber
We built our first self-storage facility six hours from where we were living. Borrowed, borrowed $2 million from a bank, spent $3 million to build a self-storage facility six hours away.
- SPShaan Puri
Yeah.
- NHNick Huber
And now I'm in Athens, Georgia, which is another different city, and people are like, "Oh, you, you have- you're in the self-storage business. Like, which one in town do you own?"
- SPShaan Puri
Right.
- NHNick Huber
And I'm like-
- SPShaan Puri
Yeah
- NHNick Huber
... "They're nowhere near here. I'm sorry." [laughs]
- SPShaan Puri
Yeah. In storage, what was the insight on location for you? So, um, did you find like, oh, this, a certain strategy on location worked well for you?
- NHNick Huber
Yeah, we didn't even, we didn't even talk about real estate. It's been a chaotic, you know, three years in real estate as interest rates have risen, just total carnage in the business. Luckily, we've done some things operationally that, you know, give us a little bit of an advantage, but-
- SPShaan Puri
I'm sorry. Explain why that is. So for somebody who's not in real estate, why does interest rates going up create, as you said, carnage in the real estate market for you?
- NHNick Huber
Yeah. Because the biggest line item, the biggest expense for a real estate investor, developer, syndicator, anybody who buys real estate and holds it and tries to cash flow is, is debt.
- SPShaan Puri
Right.
- NHNick Huber
It's our biggest line item. We, we're gonna borrow anywhere from 50% to 70% of the value of a building, and if you go from paying 3.5% on that debt, you know, 35 grand to service $1 million in debt, to serve, to, to paying 7%, 70 grand. Like, it's, it's... Imagine if your labor cost quadrupled in a service business.
- SPShaan Puri
Right.
- NHNick Huber
That's essentially what happens in real estate, so it drives the value, what people can afford to pay, down.
- SPShaan Puri
Right.
- NHNick Huber
So all the buildings that you bought in '21, '22, I mean, there's guys that are, there's guys that are going broke in the real estate business right now in real time that I know.
- SPShaan Puri
Yeah.
- NHNick Huber
It's total carnage. Because they can't sell their buildings for what they were worth because nobody else can afford to pay that higher amount of debt interest either. Does that make sense?
- SPShaan Puri
Right. What's going on with your properties now? 'Cause that was, that was the time when you were buying too, so how, how are you doing?
- NHNick Huber
Yeah, we bought a lot, and we had some stress, dude. Like, we had some tough conversations. We, we got out without raising any additional money from our investors, and we replaced all of our loans, meaning we refinanced them, and we didn't have to call a single dollar from our investors. That's a massive win.
- SPShaan Puri
Gotcha.
- NHNick Huber
Many people else are calling capital calls or they're actually losing properties. We were able to increase revenue quite a bit when we bought a building, and we've done things now, like we, we replaced our inbound sales team with South Africans who are actually sales trained, and our conversion rate went, from when we were in the Philippines, from 30% to, to 42% in this, in South Africa. So revenue's up 15% year over year. Um, but yeah, man, it's, it's not easy. It's, it's brutal.
- SPShaan Puri
Is the future for Nick Huber buying more storage facilities? Is it just running Somewhere and growing that? Is it something else, you know, five years from now? Like, uh, do you know? What, what's the future for Nick?
- NHNick Huber
You know, I've, I have, my, uh, my ego has, has written a lot of checks over the last five years.
- SPShaan Puri
[laughs]
- NHNick Huber
Now I gotta go cash them. [laughs]
- SPShaan Puri
[laughs]
- NHNick Huber
No, I, I'm, I'm pretty focused on, on growing Somewhere. I wanna grow RE Cost Seg, and I wanna buy more storage. We have a couple deals under contract now. The company's in a good place, and there's just so much less competition in the real estate business right now, so it's a double-edged sword. Um, I just think business is naturally cyclical. It really is. Like, there's really good times, and there's harder times, and sometimes the hard times are good because you gotta buckle up. You gotta operate. You gotta make things to make your business more efficient, and it washes out the people that can't do that, and it becomes less competitive.
- SPShaan Puri
Right.
Episode duration: 54:58
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Transcript of episode R4uQlm2xF1I
