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00:00What is the fastest path to money?
00:02Find out what you're good at, and then you need to use it to get ownership.
00:05You can be W-2 and have all the benefits they're in while simultaneously having ownership.
00:09The agenda goes like this.
00:11You leave here knowing how to get a percentage of a company with your mind.
00:15That you learn to never trade your time for money again, if you don't want to.
00:19How to set up structures that pay you for the work you've done today for years to come.
00:24This is going to change my life forever.
00:26The speech to make you more money than anything else on the internet.
00:31What do we think about that?
00:32Does that sound like a fun idea?
00:34All right.
00:35Or what I am calling how to build bank accounts so big that you get to choose to work but never have to again.
00:43And I don't know, but when I think about big bank accounts, I think about this guy.
00:47Lauren Sanchez comes with it, doesn't come with it.
00:50You guys get to choose.
00:51But the idea here is that I have a belief that money is purely a tool.
00:56And it's a tool on which you get to decide what world gets architected one way or the other.
01:02And I'm really not that big into big boats, big butts, any of this.
01:09But I am into architecting a world that we think should exist as opposed to having to live under somebody else's rule.
01:16And so what I'm going to talk to you about is how to flip the script a little bit.
01:21And this is the process that I used to build all of our companies at Contrarian Thinking.
01:26So whether it's Contrarian Thinking Capital, which is our venture capital fund,
01:30whether it's Main Street Holding Company or Holding Company, whether it's our media company,
01:34it all started with this tiny little seed of an idea, which is usually how things work out, right?
01:39And so today I've got a pretty quick agenda for us.
01:42The agenda goes like this to start.
01:44There's five points to it.
01:46Point one is you leave here knowing how to get a percentage of a company with your mind,
01:52which is something that I didn't think was reasonable.
01:54I'm not talking about magic.
01:56Point number two is this, that you learn to never trade your time for money again if you don't want to.
02:01I end up working a lot because I like it, but I want to choose.
02:05Step three is how to set up structures that pay you for the work you've done today for years to come.
02:11So how do you annuitize the work that you do?
02:13And step four is a little counterintuitive.
02:16Why you should actually charge less money now for a bigger percentage later.
02:22And we're going to flip the lid on how most of us were taught to negotiate.
02:26And then finally, how do you make offers so good that the owner that you're going to get a percentage of their business from asks you to do the deal?
02:34How do you get other people to proactively ask you if you will take a percentage of your business?
02:40That is the idea today.
02:43And I'm calling this expertise to equity.
02:45Anybody know what tender to means?
02:47No, it's not an Elvis Presley song.
02:49Anybody know?
02:51Tender is a word that means to offer in finance.
02:54Tender offer basically is a way to make an offer,
02:57which is what apparently the man, the myth, the legend, Jeff Bezos named his boat.
03:03So we're going to talk about how the billionaires make offers in a way that nobody else does.
03:09And what's crazy is I learned this with a bunch of people who had way more money than I did on Wall Street who had done deals for decades.
03:17And I was a little public school kid.
03:18And I, you know, used to think that a mutual fund was like mutual fun, like everybody has a good time.
03:24I had no financial literacy whatsoever.
03:27And I remember one day this guy, whose name is Dan, he showed me a picture.
03:32We were traveling around Latin America.
03:33I ran a big investment portion of that portfolio then.
03:36And he showed me a picture of his new house.
03:39And I was like, Dan, this thing is huge.
03:41I'm like, how did you afford that thing?
03:43And his answer really surprised me.
03:45I thought the answer was going to be something like, I have worked at the firm for a long time, so I have a big salary.
03:54Lots of people in finance make millions or tens of millions of dollars a year as employees.
03:58But the real answer was something totally different.
04:01The real answer was this, very simply.
04:05You need to find out what you're good at, and then you need to use it to get ownership.
04:09And I have used that one sentence to make tens, if not hundreds of millions of dollars over my career.
04:18And I want to explain something to you a little bit.
04:20So in finance, if you were to talk to like an ex-Bain investor, so Bain Capital, or an ex-Goldman Sachs portfolio manager,
04:30or an ex-KKR, like the big private equity firm,
04:33if you were to ask some of the partners at that company how they make money, and they would tell you, which they would not tell you, so good luck asking.
04:41But let's say you got them to do it.
04:43What you would find out that's fascinating is they don't earn their money from salary.
04:47Lord, no.
04:47They want long-term capital gains, right?
04:49They want distributions as opposed to salary.
04:52And what's interesting is if you talk to somebody at these big firms, they make their money in little chunks.
04:58Every deal that they do when they're a partner, they get a piece of in perpetuity.
05:02When they have a fund they're a part of, they get a piece of that fund in perpetuity for the rest of their lives.
05:07And so if you become a partner in the firm, and a partner in multiple deals, and a partner in multiple funds,
05:14you can be W-2 and have all the benefits they're in while simultaneously having ownership.
05:20And I remember when somebody really broke this down for me, when Dan broke it down for me,
05:24I thought, this is going to change my life forever.
05:27This small thing.
05:28And so I share it again and again, and we're going to break down the details of how it works.
05:33And then I started to realize this truth.
05:35That if you want to be rich, you should actually try to figure out the fastest street to riches.
05:41And so typically, you know, we do this in every aspect of our lives, right?
05:44You want to go somewhere to, you need to get to the airport quickly.
05:48What do you do?
05:49You go online and you use Waze, right?
05:51And you try to find the fastest direction.
05:53In no way, shape, or form are you just like, I'm going to try a bunch of streets.
05:57And whatever street I'm like, most comfortable with, I'm probably going to just like, continue
06:01on that one for a while.
06:03That would be dumb.
06:05And yet, in most of our lives, that's what we do when we make money.
06:08We don't actually think, what is the fastest path to money?
06:11We think, this is the path that I am closest to, and let's take it.
06:15But let's break that down for a second.
06:17Bear with me graphs and numbers at the end of the day.
06:20I know.
06:21But I don't want to be a dancing bear.
06:22I want you guys to make some money.
06:23So let's play this game here.
06:25So basically, what you're looking at is since 89 to 2010, the difference between the S&P 500
06:32and private equity, which are really just private assets of anything.
06:36And what you can basically see here is a big delta, a big difference between the two.
06:41Okay, one interesting time period.
06:42Well, let's look from 2000 to 2021, private equity, public stocks, big delta.
06:49What also is interesting on top of that is let's look at what's called a risk return profile.
06:55So when I look at the risk return profile, the least risky thing I can do is what?
07:00Cash, right?
07:01Except in this environment under Biden.
07:04But neither here nor there.
07:05Now, in cash, typically, you're safer.
07:09In emerging equities, like in Latin America, you're less safe, right?
07:13You're probably more likely to lose money if you invest in Africa, theoretically.
07:18If you invest in Honduras, then you are the U.S. government, at least historically.
07:23Okay, so that's the risk.
07:24Now, from the return profile standpoint, you've got emerging market equities, one of the highest
07:30return profiles, but you've got private equity.
07:32So just think about this for a second.
07:34If you just want to know the fastest way to get to your destination monetarily, you want
07:40to figure out where can I have the least risk but the highest ROI?
07:44And what is the answer?
07:45It's private equity.
07:47So why would you play any other game?
07:50If you know that you have a higher statistical likelihood of winning with a path that is predisposed
07:55for more people, why pay anything else?
07:58And sometimes I just sit back and I look at this image of Jeff and I just think, this
08:02is what it must be like to be a billionaire.
08:05You know?
08:06He's just like...
08:07And I think I want to be so rich that when I laugh, I look like a maniacal dictator.
08:12And I'm not there yet.
08:14But I'm like, you know, hopefully getting close.
08:16So if I wanted to be this rich, the data tells me I want to own private companies.
08:21I want to own private companies over the long term and let me prove to you why one more
08:26time.
08:27Anybody know these strapping gems?
08:29Somebody knows Robert Smith.
08:31I bet it's not before he donated a bunch of cash.
08:34Bet you guys didn't know him prior to that.
08:36Anybody else know the other guys?
08:37Okay.
08:38We've got Leon Black, who was the head of Apollo, worth $9.9 billion.
08:42We got Henry Kravis, one of the partners at KKR, world's biggest private equity company,
08:47$8.5 billion.
08:48And we got Robert Smith, Vista, $6.7 billion.
08:50They doing all right.
08:53How did all three of these guys make their money?
08:56Private equity.
08:57Here's my rub, though.
08:59Here's my rub on this.
09:02Sometimes I think that the people who get really rich probably shouldn't.
09:07This guy, Leon Black, ended up paying $138 million in fees to Jeffrey Epstein.
09:14Not a great look.
09:16Robert Smith ended up paying $139 million for tax evasion.
09:20Biggest payment ever to the IRS.
09:21So I have a problem categorically with when 28% of the Forbes 400 richest people in the
09:30world's list are all from private equity.
09:34And yet they own most of the companies in the U.S.
09:37I have a problem with that.
09:39I think instead of the few owning everything, and anybody being so big they get to write
09:47a $139 million ticket to the government like a parking ticket, probably not being awesome.
09:53I think this room should have more ownership in multiple people's hands instead of a bunch
10:01of ownership in the hands of the few.
10:03And so we're going to talk about how to push back on this trend.
10:06And I think that this may be the most important thing we do in this country, and maybe around
10:12the world, but I know the most about this place, is that we figure out how to have normal people
10:17like me and you own our communities.
10:20Ladies, you guys hold the hand down to the next generation.
10:24And I really want everybody in this country to be rich, but I especially want the people
10:29in this country to be rich who are going to help the next generation, not going to keep
10:32them.
10:33And so, I want to talk about how you can become owners in private companies.
10:40This is not my best look.
10:43Now, this is where typically people go, Cody, that sounds awesome, but I forgot to tell you
10:49that my mom never gave me the Silverstone, and so I don't have millions of dollars to
10:55buy small businesses.
10:56I don't have millions of dollars to invest.
10:59So how do we do it?
11:00And we're going to focus on this one main idea.
11:03Find out what you're good at.
11:04Use it to get ownership.
11:05And this is what I call my expertise to equity framework.
11:09Typically, I only talk about this in my business buying community, because I think that when
11:14you become an owner, it comes with a lot of responsibility.
11:17So I'm very careful who I pass the baton to.
11:20And if you're going to ask for a percentage of some owner's business for nothing but your
11:25mind, you better deliver.
11:28So if I tell you guys how to do it, you guys promise to do right by the owners that you get
11:32it from?
11:34All right.
11:35All right.
11:35I don't want to hear about you guys paying bills to Jeffrey Epstein, okay?
11:39All the dudes are like, this is getting weird.
11:42All right.
11:42So let's talk a little bit nerdy.
11:45Are you guys okay with me getting technical?
11:47We got spreadsheets in here.
11:49We've got graphs.
11:50I want us to focus on making a little money today.
11:52All right?
11:53So let's talk about expertise to equity.
11:55Words mean things.
11:57And when you understand the definition and terminology used by those who run the world,
12:00you can speak their language.
12:01When you speak their language, you can manipulate the language.
12:04You can manipulate the language.
12:05You can make money from the language.
12:07So what do I mean?
12:08This means that you contribute your time, effort, or expertise into a business, and you
12:14get a percentage of the business for that.
12:16There's sort of three ways I like to do these deals.
12:18It's a revenue share, a profit share, or an exchange of value, which we'll just call
12:24straight equity.
12:26So when you do a deal, you can either say, if I give you my expertise, I want a percentage
12:31of the top line revenue of the company.
12:33Or you can say, I want a percentage of the profits of the company.
12:36Or you can say, I want a percentage of equity.
12:38So if you sell, I own part of the equity of the company, and I get something when you
12:42sell.
12:43Make sense?
12:43I want you to remember this line.
12:45You can't eat equity.
12:47The past two years have been absolutely crazy.
12:49We have taught 3,000 people how to buy businesses.
12:52We have done more than 100 deals over the past 10 years.
12:55We actually invested $12.5 million into businesses just last year with mostly my own money.
13:03And I realized through this whole process that, oh man, we made so many mistakes.
13:07I learned all the things not to do again and again and again.
13:11And somebody asked me three years ago, which is why we started Contrarian Thinking, can you
13:16create a process to show us exactly how to buy businesses like they do on Wall Street?
13:20And so we started doing that.
13:21But I've learned a lot in those last three years.
13:23So I created something, and I'm talking about it for the first time ever on YouTube because
13:27I usually don't.
13:28I don't know if all you guys want to buy a business.
13:30But I created something just for all of you.
13:31It is a step-by-step accelerator on how to buy a business and on how to use both your
13:37expertise, your time, money, SBA loans, and lots of different mechanisms in order to figure
13:42out, do you want to buy a business?
13:44And if so, how do you do it?
13:45If you guys want more information on that, there's a link below.
13:48The truth of the matter is, business is hard.
13:50Buying businesses is hard.
13:51But I don't think I've ever met somebody who regretted learning dealmaking.
13:55Learning dealmaking was the most impactful thing that I ever did in my life.
13:58I think it might be in yours too.
13:59So click the link below if it's interesting to you.
14:00If not, let's get back to this video.
14:02So when you're doing these deals, the number one thing you can mess up is doing them just
14:06for straight equity, not cash flow.
14:08So do me a little favor.
14:09Promise me that you'll do what the private equity guys do, which is you take a percentage
14:13of either profit, revenue, we can slight this 15 ways from Sunday, and also value or what
14:20is straight equity.
14:22The next thought here is that you want to do deals that feel so unfair to you that you get
14:29slightly uncomfortable.
14:30Now let me tell you why.
14:31Because any time you promise to give me a part of your beautiful mind in order to have
14:36a future potential profit, aka percentage of equity of my business, who knows more about
14:41the business?
14:42Me, who's offering my brain, or the business owner who already owns the business?
14:48The business owner.
14:49So you are at what?
14:51An information disadvantage.
14:53Because of that, you need to require what?
14:56A deal advantage.
14:58So never feel bad for doing lopsided deals when you don't understand somebody's business
15:02like they do.
15:03But what I will say that's really, really important is I want you to remember why we're
15:08doing this.
15:09You don't just want to get rich.
15:11You want to get free.
15:12And so when you're doing deals that trade a little bit of your brain for a little bit
15:16a bank account, I want you to make sure that you're not trading yourself into a job you
15:20can't get out of with equity you can't eat just for hopes and dreams in the future.
15:25That is a path to ego and not bank account.
15:29All right.
15:30So there's three levels of thinking, typically, in doing deals.
15:33Level 101 is basically, how do I get monies?
15:38And whenever I think of monies, I think of this guy.
15:40Anybody else?
15:42Monies.
15:42I like the first mindset shift I think you guys already have.
15:47We don't trade time for money anymore unless we really, really want to.
15:52202 level thinking is you use other people's money, right?
15:55This meme gets me every time.
15:57How many of you guys know private equity guys?
15:59They're like, I don't know about you, but my pipeline's pretty big.
16:02This is a private equity joke.
16:03Gets me.
16:04You use other people's money, right?
16:07The third level is what I'm going to teach you today.
16:10And this level is all about how do you get a percentage of a business that you have no fucking
16:17qualification to get?
16:18Welcome, Ryan Reynolds.
16:20Why does a comedian own a percentage of Mint Mobile that made a billion dollars?
16:27How do you structure that deal?
16:28And oh, by the way, do you know how much money he put into this deal?
16:32Zero dollars.
16:33Well, he did it because he understands expertise to equity.
16:37He had audience, right?
16:39So he had buyers.
16:40He had marketing expertise.
16:42Funny.
16:43He has a name that is a trust transfer.
16:46Team.
16:47He brings them in his marketing chops to this.
16:49And zero dollars.
16:50That's how he gets expertise to equity.
16:52Now this one's interesting.
16:53Anybody know who this guy is?
16:55Drew Brees.
16:56All the dudes.
16:57Yes, I did it.
16:57My husband had to tell me this one.
16:58But what's fascinating, this company reached out to me down here.
17:02Look at these companies.
17:04Drew owns part of a garage company, part of a healthcare company, part of a mosquito company.
17:12Why?
17:13Do you think people are watching Drew Brees going, wish I could buy some mosquito repellent
17:17off that guy?
17:18Probably not.
17:19And yet the reason that he does is because he partnered with a group called Franworth for
17:24his audience, maybe, but probably not.
17:28For his name trust transfer, definitely.
17:31Maybe the team, but flipped.
17:34Drew probably does no work with these guys.
17:37He just pings people and goes, hey, you want to do a deal with these guys?
17:41And people go, ah, that's Drew Brees.
17:43And then they maybe do a deal.
17:45And so you start to see that there was this lie we were told, that you cannot buy things,
17:49you cannot own things, you cannot get things unless you have money.
17:52And that is actually not true.
17:53You have a bunch of other assets in today that we have never had in history.
17:58So we're not just focused on money, we're focused on how do you get it even when you
18:02don't have the dollars.
18:04Now right about this point, people go, that's awesome, Cody, I forgot to tell you I'm not
18:07the rock.
18:08So I'm not sure how I'm going to use my trust transfer from me and my mom in order for me
18:14to own part of a business.
18:15And I get it.
18:17But I'm going to show you at least how I did it.
18:20Because I think one of the best ways to learn goes back to how they used to teach us in
18:24universities, which was the Socratic method.
18:27You use by questioning and you use by case study.
18:30So we have a VC fund.
18:32And right now, which is probably going to make my husband who runs it in the back really
18:36unhappy, I'm going to show you exactly how we do deals that are totally unfair in a way
18:39that I haven't shown anybody before.
18:41Sound good?
18:41Chris is like, no, okay.
18:46This is our venture capital fund.
18:48It's called Contrarian Thinking Capital, where we invest in boring businesses plus technology.
18:53And what's interesting about this, and you guys can see more, I think, on the next couple
18:58slides if you want to copy our homework, we don't just do normal deals in this.
19:03Because I think deal making is your key to wealth.
19:06Let's give you two really specific examples.
19:09So we have company A, where we got a 2x cash investment of additional advisory shares for
19:15every dollar we put in.
19:16So that would be like if I gave them 100k, they give me 200k back.
19:20And then company B, we got 20% of contract value generated by us.
19:25And then we use that contract value to buy additional shares.
19:28What does that mean?
19:29Basically means if I said we invest $100,000, and then we generate for you another $100,000,
19:35I want to have 20% of that in equity for your company, up until a certain point, which is
19:41called a cap.
19:42Up until a certain point, that's a cap on the return that you can get.
19:46Now, when you start thinking this way, you will never do deals the same.
19:50Because what just happened?
19:51I took $1, and I turned it into $2.2 with one transaction done intelligently.
19:58And I want you guys to think this same way.
20:00There's a beautiful statement I'm sure you guys have heard before called, riches is in
20:05niches.
20:07Right.
20:09And I used to think that meant that when you got rich, you got it by what?
20:13Focus.
20:13You focus on a niche, and then you know it really well, and then you get rich.
20:17Right?
20:17That's kind of what they taught us.
20:19But it's actually different than that.
20:20It's when you are in a small market, and you can be a big fish in a small, relatively
20:25niched pond, you have unfair deal access.
20:27And so I want you, while you're listening to this, your brain cells to start spinning.
20:33The idea at CT Capital is that small checks make a big impact.
20:37We don't ask for a lot of your company because our checks are small, but we are going to ask
20:41for upside.
20:42In order to get it, you have to be able to show what you can deliver.
20:46This is called your investor flywheel.
20:48So here, you can basically see every investment we make goes into our giant audience and community
20:54and drives additional dollars.
20:55If you guys are out there investing in deals, make your own flywheel.
20:59The second thing that you can do that's interesting is you can do what we did for one of our investments.
21:04We basically said, let's try and experiment.
21:07If we post about you and you do a bunch of demos, could we get more equity in a company?
21:15And they said, yes.
21:16So every single deal you do, how much less risk do you have if you decrease the amount
21:21of money that you put in and you immediately give yourself 100% more potential upside?
21:25You have netted out your risk in the deal in many ways.
21:29So there's two ways to learn this.
21:31You can learn by investing.
21:33My two cents, every time I go into a market, I start by letting somebody else who's an expert
21:39invest my money.
21:39Because the fastest way to learn is by watching an expert do it and having skin in the game.
21:44And the second way is by doing.
21:46Then you go out and you do the same thing.
21:48So there's five things I want to cover to figure out for you guys, how do you get the rock level
21:54equity with normal everyday biceps?
21:58You know?
21:59And that's what we're going to focus on here.
22:01Very nice.
22:01How much?
22:02Everybody remember this line from Borat?
22:04Gets me every time.
22:05And I want you to think that in your head.
22:06Very nice.
22:07How much?
22:07How much can I get out of this transaction that I'm going to do because I'm worth more?
22:14So we're going to teach you four questions that when you answer these in your head, you
22:19will know very nice how much every time you do a deal.
22:22Okay, that's my last Borat impression.
22:23I promise.
22:25All right.
22:25We're going to start with understanding your value.
22:28These are the four questions.
22:30What's your experience and expertise?
22:32What can you give instead of money?
22:34What are you willing to do?
22:36What is that worth?
22:38Let's break it down.
22:39The first one, you start by listing specifics.
22:42You're going to put your marketing and sales experience on the left.
22:45You're going to put your industries to the right.
22:47But I bet a bunch of you guys have an ancillary industry.
22:50It might be MTR.
22:51It might be STR.
22:52It might be that you understand hotels.
22:55So that's your industry.
22:56Now we know your specific niche.
22:58Your skills are simply someone else's needs and we're going to help you find those.
23:02So now that you understand what your experience is, the next level is, what can you give instead
23:08of money?
23:10Now, this is juicy because I want you to take this graph and use it later.
23:15If you're in finance, you know there is nothing better than stealing somebody else's model
23:19and I don't mean Giselle.
23:20Okay.
23:21Now, time.
23:23First, you want to think about how much time do you want to spend on something.
23:26Second, you want to think about what is a specific deliverable that you can deliver.
23:31Third, are you an expert and so smart on something that you could give advice instead of money?
23:37And then connections.
23:38Could you get them to the one person that would change everything?
23:42Finally, the most important, the holy grail to you getting more in every deal that you
23:46do.
23:47Can you promise them an outcome?
23:48If you let me invest X, I will make you Y.
23:51That is how you get the easiest dollars in.
23:54The next one is, what are you willing to do?
23:57Lots of people will tell you what they want.
23:59They'll tell you their goals.
24:00But the secret between people who achieve their goals and those who talk about them for
24:04a long time is those who achieve them tell you what they're willing to sacrifice, not
24:08what they're willing to want.
24:11So let's think about this for a second.
24:13Normal people go, I will take a 5K upfront plus a percentage of any business if I fix it.
24:19If I do advertising for it, if I drive sales.
24:23I want you guys to do the opposite.
24:25I want you to say, I will take only one-fifth, one-third, 0% of my upfront fee, but I want
24:33upside if I hit my goal.
24:36And then lastly, how do you decide what all of this work you're doing is worth?
24:40And this is where we're going to get slightly technical.
24:42I want you to go from effort to results-based.
24:48Effort is how we got talked to value our work.
24:51I'm going to work 40 hours per week.
24:52I'm going to work 60 hours per week.
24:53I'm going to work the next three months on this.
24:55Who cares?
24:56Do I care if you worked 100 hours per week if you didn't achieve the thing?
24:59Bosses, you know the answer to that.
25:01It is no.
25:03Don't care.
25:04Achieve the thing.
25:04If instead you can say, my expertise will increase the value of this business by 3x,
25:10you're in the money.
25:12So there's two ways to value your expertise.
25:16The first is profit value creation.
25:18I will drive x in profit.
25:21The second is performance metric.
25:23I will do x action.
25:26What is x action worth to you?
25:28So I like to break it down like this.
25:32Let's go really simple.
25:33So tell me, what do you do for a living?
25:37Cameraman.
25:38Social content.
25:40All right.
25:40So do you make money by charging people for growing their social media, for covering their
25:46social media?
25:46Correct.
25:47Okay.
25:48So in your instance, you could say something like, if I can guarantee that my videos will
25:55drive 300,000 impressions to your business, would it be worth x percentage of the revenue
26:01off of your Instagram account?
26:03The difference between you having to work the rest of your life behind a camera lens,
26:09if you don't want to, if you want to, that's a different story, is can you get somebody
26:14to pay you not a dollar now, but a dollar in perpetuity?
26:18And so we want to switch the flip on how many of you guys charge and how you charge.
26:23But the beautiful part about this, and we'll get to how this works, is I'm also going to
26:27teach you how to make an offer so good, Jesse is going to ask you to do it.
26:31Okay?
26:31Now here's the value matrix.
26:34We're getting technical, public math, pull out your calculators.
26:39All right.
26:39We got scenario one.
26:42A current business, in order to ask for a value, you have to know what something's worth.
26:46Right?
26:46If I was to guess what this event cost and drove in revenue, how hard would that be?
26:54I'd go, well, two, four, six, eight, there's probably about 700 people in the audience right
26:58now.
26:59Okay.
26:59700 people times X ticket price equals Y outcome, and then I'd probably Google average margin
27:08on events, which might be 10 to 20%.
27:10And just in three steps, I could know how much money Jesse makes on this event.
27:17Now, if I knew that, I might be able to put together a proposal for Jesse that looks something
27:23like this.
27:24I'm making up numbers here.
27:26I think you made a million dollars in revenue off of this activity.
27:31The average profit multiple or the average profit or margin at an event is 20%.
27:35So I think you took home 200K.
27:38The multiple of continuous revenue, so events wouldn't be good for this one, but if he had
27:43an event company, like he did a million dollars in revenue every year from his event company,
27:48then I could say the multiple or what a business sells for in the events industry, because I
27:54Googled it, it's 5X its profit number.
27:57So five times 200K, a million bucks.
28:00All right.
28:01Now we know what a business is worth without anybody sharing anything with us.
28:04Easier than you thought, right?
28:07The second line would be, how can I show if I drive this revenue, if I drive 300K at 20%
28:15margin, how much I could ask as a percentage of the business?
28:18And inside of three minutes, you have figured out how to completely change your offer, how
28:23to, if any, is anybody in here like a freelancer?
28:27Does anybody in here do consulting work?
28:30So let's call it 30% of the audience.
28:32Does anybody in here pay people for consulting work and freelancers?
28:3720% of the audience.
28:39So 50% of you today could either own a business that you vend to, like this, by switching this
28:46deal structure around, or you could change how you negotiate cash right now in every single
28:51transaction you get with one model.
28:55Now the risky part here is we've got to make sure that we don't piss Jesse off, right?
29:01Because then he's going to hire another camera guy.
29:03He's going to go, this guy's greedy.
29:05He's coming, he's asking for all my monies.
29:06And we've got to figure out how do we make an offer so good that Jesse likes it, that
29:12he asks me to do this.
29:14And the way to do that is that you ask to drive value for them before a dollar for you, like
29:22Dan Sullivan did.
29:23And the way that we do this is you say, if I give you X of my business, if you give me
29:29X of your business, and I give you X result, are we aligned?
29:32And I'm going to give you two things that I want you to snap quickly.
29:36Anytime you can steal somebody's script, how much faster can you learn how to close?
29:40A lot faster.
29:41You're going to steal my script one.
29:43You're going to steal my script two on how to get a revenue increase.
29:47And you're going to steal my script three, which is my equity equilibrium rule.
29:51The more value you give, the more value in equity you get.
29:54Now, the interesting part where people most go wrong is he got 3% equity and 3% profit
30:02share instead of $400 an hour on a business that netted him $375,000 a year instead of
30:0925K with three minutes of work.
30:12Now, the last thing I want to cover is you might go, okay, now I get it.
30:16I get how to negotiate at a really high level in 10 minutes.
30:19But how do I find people who will do this deal for me?
30:24And I want you to look for companies that have the exact problems you can solve.
30:28And here's how you do this.
30:30You go.
30:31All right.
30:32Remember when we talked about your experience and your skills?
30:35Remember when we talked about your industries that you're in?
30:38And then we talk about the pain points in those industries.
30:41So where is there somebody who needs your sales, your marketing, because they maybe don't have
30:50a big enough budget to pay for an agency?
30:52And thus you could do an upfront model.
30:54Where do we not just go to the surface level problem, aka what business owner goes, God,
31:02I wish I had an upfront marketing model and better funnels?
31:05Nobody.
31:05What do they say?
31:06They're like, I want more money, faster, less annoying employees, and higher profit.
31:11And so you want to go to the deeper problem, the deeper pain, not the shallow pain.
31:17And then I want you to steal two more scripts, maybe three.
31:21I think I'm going to give you right now.
31:23Script one, how will you know if you provide value?
31:26Script two, this is called the equity leverage teeter-totter.
31:31The less profitable, stable, and slower growth of business, the more you can ask for more money.
31:39The more profitable, stable, faster growth business, the less money you can ask for.
31:45And the opposite is for you.
31:48The more you are valued, trusted, know how to work, the more money you can ask for, and
31:53the less you have, the less money you can ask for.
31:56So you should make it your singular goal to be on the right side of the teeter-totter.
31:59The last nerdy part I want to go over with you guys is I want you to copy this.
32:07And over two slides, you're going to see really quickly how to do a deal that will get you
32:12a percentage of equity every time you do it and how to value it.
32:17You take the current profit, profit added, the profit increased by, and then you figure
32:23out your valuation multiple.
32:24And you realize that you're going to drive 100% growth in the company, so maybe you ask
32:30for 40% of that, 25% of that.
32:33If I came to you right now, and tell me your name.
32:36Dan?
32:37Danny.
32:38Everybody say, hi, Danny.
32:40Say, you do great pictures, Danny.
32:44I don't actually know that.
32:45I'm sure they're wonderful.
32:46So if I go, Danny, let's say that your business right now makes $100,000 a year.
32:51If I take your business to make this year $300,000, I charge you nothing for that, could
33:01I own 20% of your business?
33:04What would you say?
33:07Yeah.
33:08Now, he might have questions.
33:09He might go, what if you don't do it?
33:10He might go, how much work would it take?
33:12But it's an offer that would be thoughtful enough that he would have to consider it.
33:17And this is the thing that nobody thinks about.
33:19Now, the bigger the business, the harder it is to get the equity, right?
33:23So you've got to know that if you go to our man, Jeff Bezos, and you go, what if I increase
33:28your profits by $300,000, he would probably say, get f***ed.
33:32Yeah.
33:33Something along that.
33:34I don't know.
33:35Same thing, really.
33:36Now, Dan Sullivan got a percentage of equity in a company through this process because he
33:42followed how to make offers so good the owner thanks you for them.
33:46And the model is really simple.
33:48The more pain and problems times by potential profit solving those pain and problems could
33:55get, the more you can ask for.
33:58That's it.
33:59That is the only math equation you need to have.
34:02Now, the last part of this is you cannot get what you do not understand.
34:07Anybody ever tried to pick up a chick at a bar and you've never picked up at a chick at
34:11a bar before?
34:11How did that go?
34:13Not well.
34:14You're like, hey, do you like Brazilian jiu-jitsu?
34:18They're like, absolutely not.
34:19Go talk to your other guys in the corner.
34:21Of course not.
34:22You have to understand the owner if you're going to do it.
34:24And there's only three things you need to know.
34:26You need to understand, do they have an inability to get what you are offering elsewhere for a
34:32better price?
34:33You need to realize that it's not going to be about you.
34:36It's going to be about them.
34:37And you're going to use one model to do it.
34:40Likeability plus understanding plus belief.
34:42I call this the lub formula.
34:45Likeability basically means, if I was to come to you, what's your name?
34:50KP?
34:51Nice to meet you.
34:52If I go like this, if I go KP, what do you do for a living?
34:56Real estate.
34:57Real estate?
34:58What particularly?
34:59Tell me like one sentence about your company.
35:00NCR.
35:01Okay, you do midterm rentals.
35:02Anything special about what you do?
35:04Sorry?
35:04Anything special about your business?
35:06Property management for MTR.
35:08Property management for MTR.
35:09So if I go, hey, that's a terrible business.
35:12And then I go, let me tell you how to make your business better because it sucks so bad, KP.
35:16Let me tell you.
35:17You're going to go, bye?
35:20Like, no, what?
35:21So you have to start with complimentary likability.
35:24This sounds like a really interesting business.
35:26It's incredible how hard you've worked at it.
35:28I know that you've had probably many a sleepless night worrying about this business.
35:32He goes, yeah.
35:32And I think that I see where you might have a problem.
35:37Maybe right now you can't get enough cash for your deals, right?
35:39You're like, man, if I had more cash, I'd do way more deals.
35:42Maybe you're like, I'd like a few more clients.
35:44And then belief, because I understand your pain point, I'm actually really uniquely skilled in this.
35:49I've done X and Y and Z, and I'm part of a community that gets more people into MTRs.
35:54Would it be interesting for us to do a deal together?
35:56That's the love method.
35:58Offer so good, the owner asks you to do it for them.
36:02Understand this, and you will never be poor again, or ever.
36:07And it's as simple as Karun says.
36:10It's as simple as Ross Crandall says.
36:13It is as simple as this truth.
36:15If you master negotiation, you will be rich, because you can negotiate just about anything.
36:22I want to go past a few of these, because I want to get to a very specific example.
36:27Pure 50-50 split.
36:30This is an interesting one.
36:31So basically think about it like this.
36:33Ross went to his buddy.
36:35He was sitting at drinks with a pal.
36:36You guys ever had this experience?
36:37The pal goes, Ross goes, how's your business going?
36:39The pal goes, man, it's kind of tough.
36:42Like, I'm starting this new thing.
36:43It's not going that well.
36:44You guys ever had a conversation like that?
36:46Mm-hmm.
36:46Me too.
36:47And he goes, interesting.
36:48Tell me more about it.
36:49I need more sales for an online store.
36:51I don't really know how to grow an online store.
36:53He goes, don't you know a lot about that, Ross?
36:55And Ross goes, I do.
36:56I help e-commerce businesses grow.
36:58Cool.
36:59Can I hire you?
37:00Ross listens to me, because he's a part of our community.
37:02So what does he say?
37:04Actually, I don't take new clients.
37:06I mean, he might, but he says I don't.
37:08I don't take new clients, except if I partner with them.
37:11So Ross ended up owning the entire online store, and for $0, until they hit a certain
37:20amount, Ross took all the capital and then gave 50% to the owner.
37:24Very simplistic deal.
37:26Now, everything that we've talked about today, I'm going to give you our term sheet and all
37:32of our deals.
37:32So you guys, I shouldn't have told you to take all those pictures.
37:35You're just going to get them for free.
37:37If you can speak the language, you can manipulate the language.
37:40If you can manipulate the language, you can make money off the language.
37:43Until you can do that, you'll never be rich.
37:46I love it.
37:46In front, she goes, get out of the way.
37:48I'm trying to skip.
37:49Can you move it?
37:51Everybody gets it.
37:52You get a term sheet.
37:53You get a term worksheet.
37:55You get a term worksheet.
37:55Nobody wants Oprah.
37:56They want deals.
37:58We have rapid force fed you something that takes most people years to learn, which is deals
38:04structuring with your mind, not money.
38:06And there's much more to go there.
38:08But I want to leave you with one thing.
38:10This is about so much more than money.
38:14Do you know the happiest man that I've met recently?
38:18He's a garbage man.
38:19This is Spencer.
38:22Happiest dude I've ever met.
38:23He's also tall.
38:24You're right.
38:24I always, I text him and I go, how's 5'8 feel?
38:27And he gets really upset.
38:28Tall people are used to people calling them tall.
38:29I go, you're tiny.
38:31Now, Spencer's the happiest man I know.
38:33The second happiest group of guy I know, two window washers.
38:36And, you know, I was kind of like having a little crisis thinking about this for a second.
38:42Why are these people happy?
38:45How many, I'm Latino.
38:46Are there a bunch of Latinos in the audience?
38:47I kind of see you guys.
38:48Yeah, yeah, yeah, yeah.
38:49How many of you guys had parents that did jobs like mine did?
38:55Laundry, car washes, you know, cleaning windows.
38:59And how many of your parents went, I hope you do the same thing.
39:03Any of you?
39:03Yeah, silence.
39:04All the Latinos are like, be a doctor.
39:06Go into debt.
39:08And I realized that we were told so many lies.
39:12Not just Latinos, all of us.
39:14We were told that this would make us happy.
39:17We were told that shoving our face in front of a screen, working for somebody else in a corporate job, making a lot of money, but on somebody else's dime at the worst tax regime out there, was what success looked like.
39:31That a credential from a university, that a credential that says doctor or PhD meant something.
39:38And instead, what have they done?
39:40They have enslaved us.
39:41When you leave university $100,000 in debt, when you go and work for a W-2, and then at the end of it, they fire you in a series of layoffs, like what's happened in the last three years, we were told lies.
39:54And we are also very vitamin D deficient.
39:56And I think that part of the secret of life, that there is no greater truth and no greater joy than this, than the acute but beautiful pain of ownership.
40:13How many of you guys have owned a small business and have sat in your living room, dead in the night, head in your hands, completely lost as to what to do next?
40:25Who have felt what it's felt like to maybe not make payroll, to have felt what it's felt like to fail so abysmally, when our entire definition of self is one word, and that is founder or owner.
40:40How many of us have felt this?
40:42And yet, there is no more beautiful thing than being the rarest of all, which is an owner.
40:50Because let me tell you what is worse than head held in your hands, difficulty owning something, it is asking for permission from somebody else to rent it.
41:01And so I have a belief that you in this room are what's needed to take back this country.
41:06That if you do not understand ownership, if you do not get it, if you do not pass it on, we become a nation of serfs when we started off as owners.
41:13And so if I teach you nothing else, if you forget every model and spreadsheet that I showed you, I hope you remember this one thing, which is, how many people have you ever met who became an owner of a business and then said,
41:29now I'm a happy employee, I'm back working at Microsoft, have you met any of them?
41:34Because I sure as fuck haven't.
41:35And yet, all over the internet, people every day will say, it's too hard, you can't, you're not able, you can't buy a business.
41:42Those are lies by people who want you to be their employees instead of creating your own opportunity.
41:48And so it starts with each of you.
41:49I want to thank you so much for having me here today, and I want to tell you, in a world of people who are telling you to shrug, do not shrug.
41:58You can hold the world, and in fact, we depend on you doing it.
42:01Thank you guys so much.
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