- 17 hours ago
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LifestyleTranscript
00:00Welcome, and thank you for participating in this chat.
00:14Eric and I have known each other for quite some time, and we typically have conversations
00:19about a number of things that's going on broadly in the market, what's going on in the economy.
00:25And what we've done is we've taken some of those conversations that we have, and we're
00:29really trying to give an opportunity to share some of those thoughts.
00:32And as you'll learn from Eric, and Eric has the name Dr. Doom, the Prince of Darkness, he
00:42is one that has a perspective on the economy, but I would say that we look at the economy
00:47almost the way that one would look at the weather.
00:49There are certain factors that we look at to be able to gauge what the conditions are.
00:54And as founders of business, or even as individuals, it's important to understand what those parameters
01:00are so that you can better manage your lives and manage your business.
01:05In the world of the economy, it's looking at inflation rates, it's looking at things like
01:09unemployment, it's looking at things like productivity.
01:12And those things would be akin to the temperature, humidity, those things that really affect the
01:18weather.
01:18So I'm going to look at this as we're going to provide a weather report today on what's
01:24going on out in the world and how you can better prepare yourself.
01:27Because one thing we do know as both individuals, and certainly individuals of color, we know
01:32that when it's sunny and hot outside, it's not quite as sunny and hot for us.
01:37And we know when it's cold and wet outside, it's colder and wetter for us.
01:41So as the world begins to change in terms of the weather, it's important to make sure you
01:46have the appropriate years to go out.
01:48So part of what we want to do is just simply set the stage on what's going on in the economy.
01:53I know a lot of things have been going on in terms of inflation, things about the possibility
01:57of a recession, maybe we're already in it.
02:00But I want to give a perspective of what is going on.
02:03So I'm going to just have Eric sort of provide a sort of overview of the weather, so what's
02:10going on in the weather.
02:12You know, so a bit of background on myself.
02:15I have a private equity firm.
02:18We specialize in literally buying and selling businesses.
02:22Is that my time?
02:24It's on, right?
02:25Raise that.
02:26Is that better?
02:27Yeah.
02:27Okay.
02:28So I've got a private equity firm.
02:30We specialize in buying and selling businesses, specifically small businesses.
02:36There are about 30 million small businesses in the U.S.
02:40And so when I think about this weather report, so to speak, it's especially important for
02:46me because whatever's going on in the economy, whether positive or negative, is going to disproportionately
02:53affect small businesses.
02:55And then as Daryl mentioned, if you actually look at not only the ownership of the businesses
03:02that we invest in, if you look at the C-suites of the businesses we invest in, you're going
03:09to see a disproportionate amount of black and brown people, which, as Daryl mentioned, when
03:16it's sunny, it's not as sunny on us.
03:18When it's cold, it's a little bit colder.
03:19The big thing that everybody's thinking about right now is inflation and rates.
03:26You know, you guys have probably noticed gas prices are a little bit more expensive.
03:30It's so interesting.
03:31Gas is like the everyday person's economic bellwether because you drive down the street
03:38and you see $6 or $7 gas and that's your signal that something is wrong with the economy,
03:43something's gone wrong.
03:44And what the U.S. Federal Reserve is effectively trying to do to stop that is to pull money
03:54out of the economy by raising the Fed funds rate, raising the interest rate, effectively
04:00raising the rate at which banks lend to one another, raising the rate at which banks lend
04:05to consumers, lend to businesses.
04:07And so, this is all like sort of hocus-pocus-y, right, unless you're an economist, but let
04:12me give you a real-world example of how this affects all of us.
04:18You know, two years ago, you probably could have gotten a mortgage.
04:22Let's say, you know, you're buying a $100,000 house, right?
04:26You know, you probably could have gotten a mortgage on that, call it 3%.
04:30Let's say you put 20% down.
04:33So, you put $20,000 down and you borrow $80,000 from the bank.
04:40You know, let's say your payment is like $500.
04:44Now, in order to maintain that $500 payment, right, assuming that's the portion of your income
04:51that you've dedicated on a monthly basis to paying off your mortgage, or maintain that
04:56$500 number, if rates go up just 2%, from 3% to 5%, the price of that home has to come
05:04down from $100,000 to $80,000, from $500,000 to $400,000, from a million dollars down to
05:12$800,000.
05:14And that's just based on rates.
05:16We haven't even started talking about, okay, well, what if folks start losing their jobs,
05:21which is already starting to happen?
05:22What if, you know, the economy starts to really shrink?
05:27What if the stock market starts to decline?
05:29Well, it's already down 25% year-to-date.
05:32What if people's savings start to get depleted?
05:34What if people's 401Ks start to get depleted?
05:37So, all of these things, you know, when it rains, it pours, all these things are sort of
05:41happening simultaneously.
05:44And I'm not talking, for the record, I'm not forecasting.
05:47I'm telling you what's already happened.
05:48Like, the first six months of this year have shown us that the stock market has shrunk,
05:55which is sort of a leading indicator of the economy, that rates have risen, and the Fed
06:00has really openly stated that they will continue increasing rates.
06:05And I think what you sort of have in the short term is things continue to get a little bit
06:11more expensive, and then you have a retraction.
06:15And all we're seeing on the stock market side is a sort of forward indicator that that is
06:20exactly what's happening.
06:22The thing to remember with rates, I always think about HOPE, H-O-P-E.
06:27Whenever rates rise, four things happen, and they happen in this order.
06:31One, housing comes down.
06:35Two, orders, you know, H-O-P-E, orders start to slow.
06:40Three, profits start to shrink.
06:43Four, unemployment starts to go up.
06:47And it's usually on a six- to 24-month cycle.
06:50And we're effectively at the three- to six-month mark.
06:57Eric, the HOPE acronym is great.
07:03It makes it accessible in terms of how people can think about their own circumstance.
07:08Because the macros, as Eric was talking about, the inflation, as he's talking about unemployment,
07:12as he's talking about productivity, those things happen at the top level.
07:17Ultimately, what it means as an individual or as a company, it means you have to start
07:22making some hard decisions.
07:24You have to start allocating your resources in a way that makes the most sense.
07:29I mean, if you know that it's cold outside and you know that winter is here, you have
07:36to break for it.
07:38You have to wear the boots.
07:39You have to put the hat.
07:40You have to have the gloves.
07:41You have to have the coat.
07:42Now, we often see people in, you know, everybody knows in a cold climate, there's always somebody
07:46out there with shorts when they shouldn't be even short.
07:50You don't want to be that person because that person may get lucky and be able to find
07:54refuge somewhere, but more likely they'll just be cold.
07:58So part of what we want to be able to think about is how that individual reacts and how
08:06you react personally to the application of your resources.
08:09And Eric, I know you're thinking about it, particularly as it relates to your business.
08:15What are you telling your business as they look at the climate that's out there?
08:19What type of decisions do they have to make with respect to their resources?
08:23So when I'm investing, I think about three really simple things.
08:31Growth.
08:32So how quickly do I think that this company is going to grow?
08:34So now, you know, let's like just give some high-level examples.
08:40Say you are running a chain of optometry clinics.
08:44You know that people are generally going to continue to get their eyes checked.
08:48They're going to continue to buy lenses and frames using insurance.
08:52Eye clinics, that's generally something that grows with CPI.
08:573% a year, something like that.
08:58But, you know, let's say that you've got a upscale restaurant, fine dining.
09:08When we hit a recession, that's the kind of thing that starts to pull back.
09:11So I'm giving you these examples because you've got to know where you are and where you fit within a cycle.
09:17One of our businesses was a chain of all-you-can-eat buffets.
09:22So I grew up Baptist in southern Texas.
09:24We did Golden Corral every Sunday after church.
09:27So I knew this.
09:27I felt like I knew the business pretty well.
09:30But I also knew that in a recessionary scenario, people actually trade down from TGI Fridays and Chili's into the restaurants that we bought.
09:40So knowing where you are, you know, sort of in the economic cycle, not only from a timing standpoint, but also from a business standpoint, is really important.
09:49So that's the growth question.
09:51How fast are you going to grow?
09:53And then assuming there's a recession, you've got to start to cut into what those assumptions are.
09:59If you assume normally 3%, maybe you don't grow at all.
10:02Maybe you decline slightly negatively.
10:05First thing I think about.
10:06The second thing I think about is what we call valuation.
10:12So we're very conscious of what we pay as a multiple cash flow for businesses.
10:18But where this matters for everybody in the room is you've got to be thoughtful about what you're paying for goods and services.
10:26You know, the reason prices shrink is because people start to balk at the prices.
10:30And as consumers, it doesn't matter if you have a business or buying a business or an employee, mid-level senior, junior, becoming a lot more thoughtful about what you're paying for, whether or not you actually need that good or service.
10:47That's how you start to protect yourself.
10:49And then the final thing is leverage.
10:53So, you know, everybody in here remembers the great financial crisis, right, 08, 09, 10.
11:01The biggest reason that was so painful and the biggest reason there was a shock to the bottom, or excuse me, a sort of race to the bottom, is because of a lot of leverage.
11:11People were borrowing a lot of money that they did not have.
11:14And that's all well and good until prices start to move a little bit on you.
11:21You know, going back to that mortgage example, let's say you have a $500,000 house, you put $100,000 down, and you borrowed $400,000.
11:32Well, what I just told you is that a 2% increase in rates, that house may now be worth $400,000.
11:40Let's say that it's more than a 2% increase in rates.
11:44Let's say it's 3%.
11:45Now it's less than $400,000.
11:47So you owe the bank $400,000, but the house is only worth $350,000.
11:52And so now you've got to come out of pocket for $50,000 to cover what you owe the bank.
11:58God forbid you also lose your job, et cetera.
12:00So leverage matters.
12:02The amount that you borrow vis-a-vis the actual income that you have coming in, whether you're a business, whether you're an individual, whether you're a family.
12:11It really matters.
12:12And in times like this, it behooves us to think very carefully about making sure we have cash, because cash is king, and trying to decrease leverage vis-a-vis how much income we actually have coming in.
12:27And everything you describe, both at the company level, also relates to the individual level.
12:35Absolutely.
12:36Same thing.
12:37It's like Mitt Romney's quote, companies are people too.
12:39That's exactly right.
12:41That's exactly right.
12:42Now, one of the things you mentioned, you talked about the first half of the year, the stock market.
12:47I mean, a lot of people in the stock market, both directly and indirectly through 401ks and the like, markets down over 20-odd percent for the first half of the year, worth performance in the market since 1970.
13:00Does that make sense in terms of the context of what's going on, why the market has declined?
13:08So does it make sense in looking back?
13:11Will they come back the same way?
13:13Yeah.
13:13So let me caveat, this is not investment advice.
13:19But does it make sense?
13:21Absolutely, yes.
13:23Not just because of the rising rate environment.
13:25But we have this saying on Wall Street, don't fight the Fed.
13:33And what it effectively means is that, you know, in 2020, March 2020, the U.S. government basically started handing people money, which was necessary at the time.
13:44Paycheck protection program, right, so they were handing businesses money, they were handing people money, unemployment claims also went through the roof.
13:56But as a result of that, and I'm not talking about fraud, by the way, right?
13:59Fraud is always going to be a small percentage.
14:01But as a result of that, there was just a lot of money flying around the economy.
14:05Like, buying things like speculative assets like cryptocurrency, you know, buying things like G-Wagon, buying luxury goods, buying homes, buying baby formula, everything, right?
14:17So, like, the prices of everything went up, profits went through the roof.
14:22But the problem is that everything always ends up regressing to the mean.
14:30And what I mean by that is that the stock market, you have to think about it as a function of how much income those companies are actually generating, right?
14:39So, we talk about price-to-earnings ratio.
14:42That's a big indicator of how to value the stock market or value businesses.
14:47Something we pay attention to a lot.
14:48And if you think about if we were to actually go back to that 08, 09, 10 timeframe, the market would have to go down another, like, 20 to 25%.
15:01Like, if you really wanted, if you're really saying, hey, 08, 09 is a good parallel to what we should be experiencing from a cyclical standpoint, we're only halfway to the bottom.
15:15Now, I don't know what's going to happen, right?
15:20We might go back up.
15:21You know, we might go down.
15:22But what helps me, at least, is contextualizing it with what's happened in the past.
15:29And we know in the past, every 8, 9, 10 years, we go through these economic cycles.
15:37Now, what I pay attention to is the fact that in the midst of these cycles, there's actually a lot of opportunity.
15:43And, you know, you hear me say this all the time, don't play away games.
15:50You know, when there's a lot of money flying around in the economy, you saw people playing away games.
15:56You saw people on Instagram advertising investment advice.
16:00Right.
16:01Pay me $9.99 a month and I'll give you investment advice.
16:06Why?
16:06Because the market was going up and to the right, so everybody felt like a genius.
16:08And what I mean by don't play away games is every single one of you in this room knows something about a subsector of the economy or a region of the country or you have a network that is different or better than anybody else.
16:24And I think it behooves you to think, be really thoughtful about what that is.
16:31You might know everything there is to know about barbecue restaurants in New Orleans.
16:38Well, you can do something with that.
16:39And in a time like this, I think the way you really create wealth for yourself over the next six, eight, ten years is by taking advantage of what we call a sort of asymmetric information.
16:55You have information that others don't have.
16:56And you make a great point because I know one of the pieces that we operate on is asymmetric information.
17:04You knowing something that someone else doesn't know.
17:06You have an inside track.
17:08Or in the case of technology, you have a technology or a capability that someone doesn't have.
17:14But to the point of sort of staying and not playing away games, and this is an area that I know a lot of folks have an interest in and maybe even made investments in,
17:23and that's cryptocurrency, right?
17:26And that's my away game, right?
17:29So you look at the market, and most of us that follow cryptocurrency, I'm sure if you know anything, you know more than I do.
17:37It's an area that just fundamentally doesn't work for me.
17:43My mind doesn't get around it the way that it usually does on a lot of different things.
17:48And this is maybe one of those points where I show my age, as I say, to my kids.
17:52So one of the things that certainly is going on right now is the cryptocurrency market and probably NFTs as well.
18:02What's your take on what's going on in that space?
18:06Because there's a lot of disruption that's going on there.
18:09Look, I think both are real and here to stay.
18:12So I'm not going to sit up here and say it's a hoax.
18:18I sort of have two problems.
18:21Everything that I just talked about when it comes to rates, inflation, is affecting real businesses.
18:29Like, I know all y'all have seen gas prices go through the roof.
18:33I know it's eating into everybody's paychecks here.
18:35And so the Fed is in the middle of unwinding one of the most speculative bubbles in the history of this country, in the history of this economy.
18:47And I just wonder what happens to the most speculative end of that speculative bubble, which is obviously crypto.
18:55So that's my first problem.
18:58My second problem is that when I say don't play away games and stay home, I mean, take advantage of where you have an asymmetrical information advantage.
19:17But really also what I'm saying is that there's somebody who, if you go and play an away game, you're playing on their home turf.
19:27Right?
19:27They've got an advantage.
19:29And I've never really felt that black people in this country had any kind of information or technological advantage when it came to crypto.
19:39You know, as far as I know, we didn't create it.
19:42If you think about the largest broker-dealers, you think about the largest funds, you think about the largest pools of capital playing around in cryptocurrencies and NFTs, it's not folks who are blacking around.
19:57I haven't seen any real sponsorship of African Americans from that particular corner of the economy.
20:03I haven't seen any real acceptance.
20:05So, and I can't help but worry that as folks are waving this flag saying, hey, there's free money over here, come get involved, they're getting rich on the backs of all of us.
20:25And then, you know, the salt in the room is they're not even given it back.
20:30So, I just, I mean, you know, we were talking in the back, right?
20:37Like, if you want to gamble, just go to the casino.
20:39You know, at least they'll give you free drinks in your room.
20:43Yeah, exactly, right, in a, you know, free suite or something.
20:47But that's kind of how I feel about it.
20:49That being said, I mean, the technology is obviously amazing.
20:55You know, I used to play a lot of video games growing up, so I've purchased NFTs.
20:59I've been purchasing NFTs since I was a teenager, right?
21:02Like, you play StarCraft or World of Warcraft.
21:05There's, like, little things that you can buy within the game that only exist within that discrete digital platform.
21:11So, that is real.
21:12That is real.
21:13And there's real demand for it.
21:15Also, as we're building more technology, when it comes to virtual reality, augmented reality,
21:21you have to recognize that there's not necessarily big advancements in travel,
21:27but your mind can travel through VR, through AR.
21:33And so, I think there's going to be a ton of demand for these kinds of products in places like emerging markets.
21:39Because, guess what?
21:40There's a lot of people.
21:41You know, Nigeria has over 200 million people.
21:43There's a lot of people in Indonesia.
21:45There's a lot of people in China.
21:45There's a lot of people in India, and they might want to come to Essence Festival one day, right?
21:50But they can't get on a plane and come.
21:52And so, what is the product that we're going to use to get them here?
21:59They can see.
22:00They can witness.
22:00They can be a part of this.
22:02I believe it's actually rooted in a lot of that technology.
22:06Yeah.
22:06Agreed.
22:07Let's go back to one of the other sort of weather indicators that's out there.
22:15Unemployment.
22:16Right now, unemployment is 3.6%.
22:19Yeah.
22:19Before the pandemic, end of 2019, unemployment was 3.5%.
22:25And the throes of the pandemic went as high as 14.7%.
22:29It's now back at 3.6%.
22:32Two jobs for every person that is looking for a job is available now.
22:37One of the toughest things that we certainly find in the companies that we work with is trying to find people, trying to find labor.
22:45Wages have gone up, not as high as inflation, but they certainly are moving in the direction of a positive.
22:52How do you see the unemployment changing as the Fed continues to push interest rates, as the economy continues to deal with energy?
23:02How do you see the employment picture changing?
23:05So this is a complicated one.
23:09I'm just going to throw out a bunch of random bullet points, and we'll try to morph it into something that's a cogent point.
23:15On that unemployment number, the denominator, as in people actually looking for work, is lower than it was pre-pandemic.
23:33And so these aren't apples-to-apples numbers, because there are literally less people looking for work.
23:40Where they went, people have a lot of different ideas, but that's one thing.
23:45I mentioned H-O-P-E, right?
23:47These are like, I didn't make up economic rules.
23:50These are inevitable.
23:51So employment is going to change.
23:53I think it's going to change to the worst eventually.
23:57But I do think that there's real opportunity that should disproportionately help our community in really two ways.
24:06One way I'm focused on, the other way I don't really have much to do with.
24:09The other way is, politically, I think there's going to be an opportunity to really push through a federal minimum wage.
24:18Obviously, again, I'm not involved in the politics of it.
24:21But, you know, when Amazon in Milwaukee is struggling to find people to man their factories at $18, $19, $20 an hour, you know, you would think that $15 isn't crazy.
24:35And so in this sort of short-term inflationary period, you know, you might see some movement there.
24:45What I'm particularly working on is, you know, so we've got a company that manufactures interior doors in Alabama, northeastern Alabama.
24:59The unemployment rate in the county that we're in is 1.9%.
25:03And so it's mostly unskilled labor, literally people putting together doors.
25:09We manufacture about 24,000 doors a week.
25:14And the reason we can't manufacture more is because of labor, right?
25:18It's really hard to find folks who are trying to go to other counties.
25:20And I suggested, well, you know, why don't we think about people who are formerly incarcerated or currently living in halfway homes as a way to supplement our labor force?
25:34People look at me like I was pretty.
25:36But, and by the way, you know, formerly incarcerated in Alabama basically means black.
25:41A lot of, I think there's going to be a lot of opportunity there to think about the most marginalized communities in our society that now folks from an economic perspective are being forced to go to because they need their help.
25:58And the question is, how do we create real staying power for those marginalized communities when things start to revert back to the normal?
26:07And the only way that you're going to be able to do that is to get them into the labor force, get them into the economy, make sure that it works because things are sticky, right?
26:20If you've got people who are formerly incarcerated on the floor and they're doing a good job in a really tight labor environment, you know, you reduce the chances that when unemployment turns, all of a sudden folks are saying, well, yeah, we've got to get rid of DeAndre because he's formerly incarcerated.
26:38They're like, hold on a second.
26:39He's been, you know, he's been manufacturing 200 doors a day for the last six months.
26:43Why would we do that?
26:45So that's kind of something that I'm focused on.
26:47But, you know, look, unemployment comes and goes in cycles.
26:51If you're on LinkedIn, you can already see people starting to post about how they, you know, tragically have lost their jobs, et cetera.
27:01That is what it's going to be.
27:04But the hard part about this, and this happens in politics, this happens in the economy, whenever things get tough, there's a list of people who start getting cast out.
27:17Right?
27:20And at the top of that list is people who are black and brown.
27:24And at the very top of that list is black women.
27:27And so I just think that there's an opportunity to begin to change that narrative during this time period where they need you, they need us.
27:36Yeah, no, I think that's exactly right.
27:39And one of the things that we're focused on, obviously, at Essence, at DBEV, and everything that you'll hear from eSuite today is really trying to provide the tools that you'll need to be able to withstand what is clearly a difficult period that we're in right now.
27:56And Eric and I have had this conversation before about how we better educate ourselves, better train ourselves to be in a position to address those storms that are clearly out there.
28:12And Eric, we always talk about the power of the black woman.
28:18New Voices Fund was founded on the premise that the black woman is the core of the black family, what will hopefully continue to transform the black community.
28:30What are some of the concerns you have, particularly as it relates to black women?
28:36What are some of the concerns the current environment offers, and what are your thoughts around that?
28:43Well, here's the hard thing about bias.
28:49Everybody thinks you can show people information or show people statistics, and it's going to change bias.
28:57And that's not really how it works, unfortunately.
29:00Folks have run studies showing that if you put a woman on the board of a publicly traded company, the stock price goes up.
29:11Harvard has run studies showing that groups of people where you have mixed that group up by gender and race, you know, literally problem-solve better, right?
29:25If you put a group of people in the escape room and they all are the same, they're not going to have a more difficult time than a mixed group.
29:30They're not going to have a lot of different backgrounds.
29:35I think we have to watch out for a few things.
29:40One, everybody talks about investing in black-owned businesses.
29:45Everybody talks about stakeholders.
29:47But we don't want to go back to running the risk of making black people and black women specifically solve their own problems, right?
29:59We're 13% of the population, so black women are presumably 6% to 7%.
30:03And to say that, hey, y'all need to figure it out, y'all need to get jobs, y'all need to get C-suite appointments, you guys need to start businesses in order to solve this racial and gender wage gap,
30:19because you're fighting two things, not one, I think would really be missing the point and missing the opportunity.
30:25But, again, you come back to that ugly subject of bias.
30:31And from what I've seen, the only way that we solve that and change that is to come up with sustainable economic scenarios where you have black women at the forefront, and that's what sticks through cycles.
30:50And so that's something I've spent a lot of time working on, a lot of time thinking about.
30:57Every single deal that I do is entrepreneurship through acquisition.
31:02So I've got this whole database of operators, and what I've done is I've created an algorithm where I actually over-index based on race and gender.
31:13So, except another way, if you are a black woman and you come to me with an opportunity to roll up, you know, Burger King, apples to apples, you will literally run through my investment process faster than somebody else.
31:29I'm doing that so I can, again, pump out more statistics.
31:32But what's going to actually happen is that the people in those businesses who are witnesses to this sort of changing narrative are going to go out and continue to spread that narrative.
31:43And that's how I think we start to change it.
31:46But, again, we would make a mistake in putting it on 6% of the population to try to solve the last hundreds of years of wage discrimination, housing discrimination, you know, you name it.
32:06Yeah, no, look, I think being in a position that you're in, that New Voices is in, to be able to really provide the resources and the support for black women is going to be critical in terms of this transformation of our history.
32:22In terms of what has been built, men or black women, it has been very episodic in terms of what we consider to be the big hits, in terms of people who have been able to transform significant wealth.
32:37Part of what this education is about, part of what Essence is about, part of what Trident is doing, New Voices is doing, is to make it more sustainable.
32:46To use the same economic paradigm that we've used in this capitalist community forever and apply it to an underserved market that probably has more resiliency, not probably, has more resiliency, more persistence, and opportunities in a very different way.
33:07So, look, Eric, I'll give you a couple of minutes to have some closing thoughts on today and what we talked about.
33:17Yeah, well, I just want to shout out the work that the Dennis family is doing, that New Voices is doing.
33:24You know, I'm going to brag, these guys have created 33 black millionaires in the last five to seven years.
33:31And I can tell you, being one of them, I can tell you that what happens when you do that is you're creating a community that then continues to embrace its own community and others, right?
33:56So, like, they kind of came up with this idea of community commerce, I stole it, now I'm using it for my own business.
34:02But it's this idea that, hey, look, if you light that candle, now that candle has the opportunity to light others.
34:12And I just want to say thank you guys for all that you've done for me, all that you've done for the community, because I know it's making a big difference in other people's lives.
34:21And also, what you've done has inspired me to give back and do the faith.
34:26That's great.
34:27No, no, really, really appreciate it.
34:29And Eric is absolutely right about the way, and I know he's building his businesses the same way, that this is a community effort, that our success is driven by the success of others.
34:41Eric is in a room with a number of founders with various degrees of success, but what he knows is that he owes them the best of himself to help them guide their businesses.
34:55So, we use our community to help educate, to help be there in this journey, because the journey is long, the journey is not easy.
35:05And to have and to know that there are folks out there who are experiencing similar is a big part of what we think will create the successes that are in the market.
35:14So, really appreciate everyone's time today and really enjoyed it.
35:20Any questions, obviously, you can ask us at any point in time we're around.
35:25If there's a question now, we're more than happy to take it, but really enjoyed it and appreciate the opportunity to talk.
35:46Yeah.
35:50So, it really is going to depend on how you learn.
36:02And so, you know, you could probably do a Google search and start finding, like, that's how you learn.
36:09For me, personally, it's always about people, because I learn the best from other people.
36:15And while you're probably not going to be able to pick up the phone and call Elon Musk and say, hey, you know, walk me through the metaverse and the NFTs, or call Mark Zuckerberg and say, hey, I know you're putting $10 billion a year into the metaverse.
36:29Talk to me about it.
36:30Keep your crypto in their bio, and there's a bunch of them.
36:44Start reaching out to people.
36:45Right?
36:45Reach out to 100.
36:46Reach out to 1,000.
36:48You're going to get a few hits.
36:49You might get 10.
36:50You might get 15.
36:51Schedule a 15 to 30-minute Zoom meeting.
36:53You don't have to go see them in person now.
36:5515 to 30-minute Zoom meeting.
36:57Ask them questions.
36:58Use that information to form better questions for the next 30-minute Zoom meeting.
37:04And just keep going.
37:05And you're going to find one of two things.
37:07One, you're going to get information.
37:08And two, you're also going to figure out if you're actually passionate about it or not.
37:12You know, I think sometimes we end up, like, I stumbled into loving investing.
37:19You know, I started working at Goldman Sachs after school.
37:21Why?
37:22Because I wanted to get rich.
37:23Right?
37:24You know, I grew up in southern Texas.
37:26You know, like, a Mercedes in the yard was the coolest thing I'd ever seen.
37:31And then all of a sudden, I'm seeing all these millionaires and billionaires around Wall Street.
37:35I'm like, I want to be like them.
37:36And they went to Goldman Sachs.
37:38So that's why I went.
37:40So in the process, you know, I sort of had that drip campaign and started talking to people and said,
37:45but actually, I really, really love what I'm doing.
38:04Yeah.
38:04One of the top private equity businesses that is in the process of raising $20 billion for a fund.
38:34Just push their own expectations off six to nine months.
38:38And this is like for like a fund 15.
38:41So meaning they've had people that have been investing with them for 30 years.
38:45Every single time they invest money, they give it back to them.
38:50And there's just an expectation that they're going to roll their money in.
38:53It's like, like, assuming we've known each other for 30 years.
38:56You've been investing in me and all I've done is make you money.
38:58And I'm saying now, it's going to take me six to nine months to get your money.
39:05What that means, unfortunately, for all of us, right, is that we have to push our expectations back as well.
39:12It means conserve cash.
39:15It means the sort of 4Q deals that you saw get done in October, November, December are gone and they're not coming back.
39:24I just want to set that expectation.
39:27I will sit here and pray that you do better.
39:31But, you know, I think you should go in with the baseline expectation that it's going to take me way longer than I thought it would.
39:39And to Eric's point, I think what you have to do is begin to prepare your business for that in terms of how you think about going forward decisions that you have to make, the allocation of the limited resources that you have.
39:53You have to maybe scale back the number that you're looking for.
39:58If you were looking for a million, maybe it's a half a million, how do I make it work to be able to get to some level of profitability?
40:07Because I think what's going to be important, I know you're a consumer, so what's going to be very important on a consumer of business, and now even technology, you're going to have to be able to get to that profitable level.
40:21Because people want to invest in growth.
40:23What they don't want to support is the losses that they can't see the visibility for.
40:30So I think that is the way, I think, in terms of thinking about it, think about the business.
40:35Even if you have to scale back, even if you stay flat for a year, right now this is a game of survival, right?
40:41Survival and sustainability is what you're looking for.
40:44This is not necessarily the time that you need to expand and grow.
40:47Keep it tight.
40:49The weather will change.
40:51The sun will come back.
40:53And you want to be there when the sun comes back.
40:55So sometimes you just simply have to say, you know what, this is bad for you, that I'm just going to keep it flat, tighten it up, prepare myself for better days.
41:07And I think that's the realistic way you have to.
41:13Good?
41:14All right.
41:15All right, guys.
41:16Thank you very much.
41:18Really appreciate it.
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