611: Codie Sanchez - How To Build Extraordinary Wealth Through Ordinary Businesses (Main Street Millionaire)

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I think the best way to get into a game
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is to go where the game's already played. There's always
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really room for greatness done slightly differently.
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Main Street Millionaire, how to make extraordinary wealth buying ordinary businesses.
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There are some people these days that say that imposter
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syndrome isn't real, and I think that is likely sociopathic
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behavior because guess what you're not god i'm not god
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and we're often wrong what are.
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The first few things i should do to get started
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buying businesses first i would.
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Say don't quit your job a lot of people today
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will tell you quit go all in they have survivorship
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bias we've been sold a lot i'm gonna understand money
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Because I think that if I understand money, I can
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build things. And that is what stops people from doing
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things I don't want them to do. If you're obsessed
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enough with something, you can find the commercialization in it.
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You can find the money. Are you picking something because
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you want it to be your passion? I prefer you
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pick a business because you want to profit off of it.
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And then you add not passion, but obsession to it.
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Profit plus obsession eventually leads to passion.
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with your best foot forward. Welcome to the Learning Leader
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Show presented by Insight Global. I am your host, Ryan Hawk.
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Thank you so much for being here. Text Hawk. 66866
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to become part of Mindful Monday. You, along with tens
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of thousands of other learning leaders from all over the world,
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will receive a carefully curated email from me each Monday
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morning to help you start your week off right. You'll
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also receive details about how our book, The Score That Matters,
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will help you become a more effective leader. Text HAWK
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to 66866 now. On to tonight's featured leader. So good.
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Cody Sanchez is the founder and CEO of Contrarian Thinking,
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a financial advice enterprise with over 2.5 million million subscribers.
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She's also the co-founder of Unconventional Acquisitions focused on small
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business acquisitions. Cody is the author of Main Street Millionaire,
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How to Make Extraordinary Wealth Buying Ordinary Businesses. During our conversation,
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we discuss how to buy your first business on the side,
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even if you don't have a lot of money in
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the bank. And then Cody shares an amazing story about
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how to earn a job that you might not be
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qualified for. Then she talks about why it's important to
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be a contrarian thinker and the benefit of changing your
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mind after a debate. Ladies and gentlemen, please enjoy my
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conversation with Cody Sanchez. I'm curious about your upbringing, particularly
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your dad. I read that he had said to you, Cody,
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you're not going to be a princess. You're going to
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be the president. What effect did that statement from your
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dad have on you?
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Well, I didn't wear a lot of pink growing up,
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despite the jacket that I have on now, but you know,
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I had the best dad in the world. I have
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the best dad in the world and for many reasons,
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but one was that he always said that I could
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do things on my own and not in a, you
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don't need no man type of way, but just in a,
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you are an independent center of gravity and you should
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add massive value to the world and to those around you.
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And you should expect whoever else comes along for the
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ride to do the same thing. And so he would
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famously tell me things like, I remember one story where
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somebody was saying something to him like, oh man, you
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got a daughter, she's kind of cute, she better watch
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out for all those boys. And his response was, those
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boys should probably watch out actually. And so he was
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just my biggest champion always. And my mother was the
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exact same way, but I talk about my dad a
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little bit more because he was an entrepreneur. And so
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I think a lot of our audience wants to be
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a business owner, wants to be good and successful at
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what they do. But a lot of that the things
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that shaped me in my childhood came from having two
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parents who really gave a shit.
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If you were talking to dads of daughters, which you
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are speaking to one right now, what advice would you
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give to them in order to raise tough, independent, resilient
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daughters to become productive members of society as they grow up?
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Well, first of all, I would say that I'm really
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in awe of dads in our generation. I actually think
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you guys, you got in a bad rap in a
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lot of ways. But man, I mean, I see a
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lot of my friends that are young fathers. This is
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an incredible generation. My dad was rare. My dad coached
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the softball team. And if anybody has ever watched a
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weekend of softball, especially in Phoenix, Arizona, during 120 degree heat,
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that is sainthood, basically. And he did that for the
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better part of a decade. And that was no other
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girls fathers were doing that very, very few. And yet
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now when I see a lot of my peers and
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people your age who have have children, you guys show
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up in a really serious way. And so one, I
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think you should probably just give yourself a pat on
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the back, because I think you're a lot more rare
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than people realize. And the other part is you're so
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incredibly important. My husband always has this joke that he says,
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jokingly to his parents about the fact that he's a
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Navy SEAL. And he found it from a comedian, and
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we altered it slightly. And it was thanks for not
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fucking me up enough to become a drug addict, but
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just enough to become a Navy SEAL. And I think
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there is this idea that with young men, a lot
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of you guys do really well with a little trauma, actually.
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Like daddy issues are a fuel in a lot of ways.
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And I don't think the same thing is true for women.
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It does not appear that women who have really tough
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relationships with their fathers have the same internal drive. It
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seems that we actually need our fathers quite a bit.
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And my dad always said, you can bake a cake,
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but you can't make more time. And it's like the
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one thing you can't make more of. And he just
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gave it to us pretty religiously. The other thing that
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I think he did different for me than other little
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girls is he took me along on all of his rides.
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So he didn't craft the world according to what I wanted.
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He was like, we're going to go hunting this weekend.
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We're going to go track some elk. We're going to
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go play some sports and we're And then with my mom,
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I would go to the library. She was always really
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big on reading books. And so I fell in love
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with that. I would go and plant things with both
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her and my dad. My dad's super into plants. And
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so he kind of took me along for the ride,
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which was another thing I really like. It wasn't like
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I got to do whatever I wanted to do. I
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just got to come with them everywhere. And so I
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remember from a really young age going with my dad and,
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God bless his soul, wanting to take me on a
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duck hunting trip. And I didn't quite understand what happened
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with duck hunting. And so we're laying down kind of
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at the end of a pond waiting for these ducks
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to come in. And he's explaining to me what happened.
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So the ducks come in, they come low, then we
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shoot them. And I'm like, shoot them? Why are we
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shooting the ducks? Like, why would we do such a thing?
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That seems mean. And he's like, don't know. It's okay.
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That doesn't worry. And my famously, I jumped up right
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as the ducks were landing. And I'm like, fly away, duckies,
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fly away. And my dad was not very thrilled about that.
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But he proceeded to not tell me that ducks circle back. And,
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and as I laid there kind of really excited about
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the fact that I had scared these things off talking
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to him about it, he went ahead and got a duck.
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And so on the comeback, so I'm not sure that
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I could ever give any advice because I don't have
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kids yet. I hope one day we're so blessed, but
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it really was. Can you take me along for the
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ride on the things that you do? And can you
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spend a bunch of time with me doing the things
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that you love? And then I started loving them too.
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Just like they value and want your presence more than
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your presence, right? Just being there and being fully there.
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It sounds like that's what your mom and dad were
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and are for you. That's really cool. Hey, Cody, I
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read that your favorite book is called Letters to a
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Young Contrarian by Christopher Hitchens. Is that still your favorite book?
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And if so, why is it?
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Yeah, it's definitely up there. I read Hitchens when I
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was very young. He's a very controversial guy, famously an
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atheist for many decades of his life. And until he
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finally found Jesus at the end of his life when
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he was sick, and famously a communist and a socialist
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for many years of his life, until he at the
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end sort of realized that he might be a capitalist.
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And he was always quite ornery, but very open to
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the idea of changing opinions. And I named my company
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actually after that book, Contrarian Thinking, because he had a
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line that said something to the effect of, every chance
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we've you should have a little debate. There's no room
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for quarrels in the grave. And I kind of liked
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that idea of we should question everything, even ourselves, and
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maybe especially ourselves, because that's how the truth is founded.
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And so he taught me a lot about that in
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the book. And they're these short, very brief letters to
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a young person on how to think and how to
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push back and how to ask questions. And so that
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is certainly one of my very favorite books. And the
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quotes from Christopher Hitchens are just incredible. He was a
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very eloquent man till the day he died.
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You mentioned that's what you named your company, Contrarian Thinking.
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And it started as a blog, right, about four or
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five years ago, but then has evolved now into a media...
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and business education company. So was there a specific moment
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or a turning point where you made the decision that
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this is going to go beyond just the blog and
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become a real business?
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Yeah, I love to write. So I think oftentimes when
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you can find the thing that you do, even when
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nobody pays you, when you can become so obsessed that
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nobody can compete with the numbers of hours worked, that's
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when you found your unfair advantage. And so I was
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obsessed with writing. I always have been. That became my
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unfair advantage in the blog. And then as obsession happens,
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I think obsession eventually, if you're obsessed enough with something,
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you can find the commercialization in it. You can find
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the money. And so famously, Andreessen Horowitz, the venture capital firm,
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likes to say, I believe it's Marc Andreessen, that they
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often don't invest in people who haven't lived and breathed
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the problem for 10 years plus. They want somebody who
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is the founder of a company that has been so
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obsessed with this thing that they're entrenched in it. Like
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they know all the aspects of it. And that is
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when they will invest in the founder. It's not somebody
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who says like, oh, well, the other day I realized
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that this phone could charge faster with this. It's like
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somebody who's just, they've had like, they've had something in
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between their teeth for a while and they're like working
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it and working it and working it. And so that's
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how I am with writing. I find my best thinking
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happens when I write. And because I started going in depth,
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Then it led to, huh, actually, I think there's an
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opportunity here for a 21st century media company. And that
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is a commercial pursuit. And I think we could do
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it in a way that it hasn't quite fully been
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done yet. And we're actually at this precipice. Even back then,
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I mean, if you remember when I started, there were
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Substack newsletters everywhere. I felt like everybody had a newsletter.
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Everybody was Substacking. They were like, the market's full. There's
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no more room. And there's plenty of room. There's always
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really room for greatness done slightly differently. Not that mine's great,
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but just something that's a little bit off. And so
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I finally realized about a year and a half maybe
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in about this idea of a media company. And that's
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when I realized, well, it's going to be more than newsletters.
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It's going to be video and it's going to be
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audio and it's going to be me. And then it's
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going to be communities and then it's going to be
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academies and then it's going to be courses and it's
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going to be books. And then eventually it's going to
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be more than just Cody. And we're on our way.
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We'll see if I'm right.
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You mentioned how writing is a... I think it's the
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ultimate clarifier for thinking. If you want to get clear
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or if you want to truly understand something, try to
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write about it. It's like your book, Main Street Millionaire.
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I'll be curious to hear this part of the process
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because I know for my three, when I've sold the proposals...
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a little bit or a good chunk about the material.
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And then you got to write the whole thing. And
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that's when you really learn about the topic because you
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got to get very clear on everything that you had
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promised that you're going to write about. How does writing
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clarify your thinking?
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Yeah. The funny thing about writing is, is if you
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wrote the way that you think you would probably be committed.
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You can stop a sentence mid-sentence, go to another paragraph,
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hit to another topic, circle back around, add an exclamation point,
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followed by a parentheses, finalized by a period. And you
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can do that all verbally and it's okay. And somehow
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we humans, we can follow each other like some sort
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of schizophrenic tennis match. But if you write that way, whoa,
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that's crazy land. And so what I've realized is that
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because your brain is allows us to fill in these
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gaps in the same way that when you visually see
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the world, we're actually not noting everything around us at
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all times. Famously, if I was to ask your listeners
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or your viewers right now to show me everything in
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my image right now that was blue, you would be
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able to pull a bunch of blue things. But if
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I asked you then following to tell me the number
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of things that were green, you'd probably be able to
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pick out less than 25% of them because you were
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preordained or pre-told to pick out blue versus green. And
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so visually, we actually fill in gaps all the time
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in a way that is just continuous and we don't
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even notice. And then Verbally, we do the same thing,
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but to a lesser degree. Written, you can't do that. Written,
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you really have to almost follow the sentences, which is
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why it's quite hard for us even to go back
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and read like Shakespeare because the dialect was so different,
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even though the thoughts might be clear. And so when
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I'm writing, I have to be a better version of
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the thinker that I am. And so I obsess a
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little bit on can we be clear and can we
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be brief? You also don't, it doesn't allow for interjection.
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It's a one-way communication. And so I think there's a
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lot of reasons why great business people like Jeff Bezos,
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for instance, make their employees put together a brief before meetings.
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Everybody reads the brief in the meeting and then they
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discuss because otherwise you can get too easily distracted and
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things can move too quickly when you do it verbally.
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So that was always my thought.
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Interesting. I loved that. learning about your career path. And
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you've said that I don't believe that humans have linear
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paths ever. Anyone who has had an interesting career, keyword,
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in my opinion, has had a completely divergent set of experiences,
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which you certainly have. And you're still in like the
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early stages of your career. Can you talk me through
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parts of your career and why you've chosen to do
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such different roles, work at big companies, be educated, be
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a journalist? Now, this media company and writing and publishing
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a book, I'd love to hear just your overall philosophy
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on your career path and then career paths in general.
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Yeah, well, it was funny for the book, we did
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this whole chronology of my background, because I'm a little
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bit older now. And so Charlie, who I was my
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editor for the book, he'd be like, well, so when
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did you buy the first laundromat? Like, how old were you?
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How much money did you have? What was the exact amount?
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And it was so funny going back, because I was like, fuck,
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I can't remember. Was that 2007? Was that 2009? Like,
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Was it 120K there or how much was it down?
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And so we had to do this whole chronology to
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make sure that everything matched up and was correct because
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it's like I've had like a 20-year career by now
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because I started working in high school. And so what
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was interesting when we went and looked back is one,
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I think most careers and mine is no similar. It's
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not like I grew up knowing anything about finance or
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how to buy businesses. And if this book had been
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put in front of me as a roadmap for, to
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financial wealth when I was first starting out in college,
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I would have many more eight figures in net worth.
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But I didn't think about the world this way. I was,
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from a young age, interested in politics and interested in journalism.
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Those were the two things that interested me. I wanted
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to understand what I think are two of the biggest
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levers in the world of power, the third being money.
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Politicians run the world. They decide what is right or wrong,
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what is good or bad, aka law. journalists fill the
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national narrative. And so they tell us one way or
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the other what to believe, what not to believe, what's happening,
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what's not happening. And then money is the thing that
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allows you to assert your will on the world one
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way or the other. And so I was interested in
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all three of those. I started out interning for some
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politicians when I was quite young in undergrad, John McCain
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being one of them. And then I realized that politics
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was kind of gross. And it just felt like a
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It was a lot of networking and you had to
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make people like you and you had to say things
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to them. And I was never very good at that,
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even in the corporates field. I didn't play politics very well.
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And so I decided that was not going to be
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for me. And so then I thought, well, maybe it's journalism.
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And so I went to journalism and I worked along
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the US-Mexico border and I wrote some really heart-wrenching stories
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about border conflict and what happens to people who have
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no money and no power. but a great need, such
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as a need for safety and a flight of trying
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to get into this country. And I saw things that
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I'll never forget as a young woman. I remember very
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vividly the first time I saw a body dangling from
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an overpass. And that was when the cartels were really,
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really tough in Juarez at the time. I believe it
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was the Sinaloan and the Sonoran cartel were at odds.
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And And I think there was a three-year period in there.
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I would have been there around like 2008, where 10,000
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people were murdered over that three-year period in Juarez. Even
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last year, there were 2,000 people murdered there. So I mean,
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we're talking about massive violence. And I remember seeing that
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and thinking, huh, I could write about these stories. And
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in fact, we did. And we won a bunch of awards.
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And nothing changed. And the subjects that we talked about,
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they didn't get saved. Nothing changed for them. I went
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back to give a few awards to some of the
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people I covered in a story called Generation Abandoned. And
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their life changed not at all. And I remember very
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vividly one said to me, her name was Carmelita, this
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is amazing. Now America knows. Now you're going to help us, right?
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And I was 21, I guess, at the time. And
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I hadn't even thought, like, I just was so, like,
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proud of myself. I hadn't even thought about what their
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reaction might be. And so I was pretty dejected and
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went back to actually my law professor at the time
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because I was considering going to law school. And I said,
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what is the point of this? We cover things, nothing changes,
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and it just feels like voyeurism at some point. And
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so he said, well, what do you think would make change?
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And so we did this fun theoretical exercise. I wish
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I could remember what his name was. And the exercise
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basically came to this idea of Why is my last
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00:20:40.569 --> 00:20:46.910
name Sanchez? These people's last name was Gutierrez Fernandez. And
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why did I have such a different life than them?
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It's not because I was American and they were Mexican.
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It's actually just socioeconomically, I had more money than they did.
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And so because I had more money, I had more power.
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And so that's when I was like, fuck it. I'm
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going to understand money. Because I think that if I
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understand money, I can build things. And that is what
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stops people from doing things I don't want them to do.
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I don't think journalists have as much power. And so
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that's when I started climbing up the corporate ladder of
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a bunch of Wall Street firms, financial firms, until I
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00:21:17.859 --> 00:21:19.779
remembered that I never wanted to be in finance in
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00:21:19.799 --> 00:21:23.019
the first place. I really wanted to just understand money
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00:21:23.059 --> 00:21:25.720
and have more of it. And so I started buying
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these businesses on the side to escape a thing I
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00:21:29.619 --> 00:21:31.619
never meant to do originally, which was work on Wall
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Street and own my own series of small businesses, have
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my own little empire. And then I wanted to share
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with other people the things I wish I knew back
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in the day. And so it kind of came full
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circle back to this idea of sharing and journalism because
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they let me in to the boys club and maybe
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they shouldn't have.
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How did you get in? Because you're a journalist. You
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had self-proclaimed, said you didn't really know what those people
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were doing. And then you became, at least you didn't
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00:22:00.349 --> 00:22:02.890
become one of them, but you worked alongside them on
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Wall Street at some of the biggest and most prestigious places.
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How did you get in?
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Yeah, I think the best way to get into a
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00:22:10.779 --> 00:22:12.559
game is to go to get where the game's already played.
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00:22:12.700 --> 00:22:14.799
So at the time, I was at Arizona State University,
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00:22:14.880 --> 00:22:18.680
Harvard of the West, really, but huge university 60,000 people,
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not a lot of handholding at all for you to
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progress in your career. I didn't really know any rich
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people at all. And so I was like, how am
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I going to get into finance? It seems like everybody
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wants to get into investing in finance. It seems hard.
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All my friends are going to be marketing majors, and
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they're going to go and be a journalist and make $ 30, 000
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a year or go and try to be marketing at
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a company. And so I didn't really know how I
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was going to learn about money. But I usually was
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pretty good at finding where the people were that had
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the story I wanted. That's what a journalist major does.
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I would go to the clubs in Juarez at the time.
435
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There were like these nightclubs where we knew that some
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of the one group of gang members versus another group
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00:23:04.569 --> 00:23:06.269
of gang members would be there. And we would kind
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of like make buddies with some of them because we'd
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00:23:08.930 --> 00:23:12.279
want to understand who was coyoting who across the border.
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And so we wouldn't like go knocking around to gang members.
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We would go with like a group of us and
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like cozy up to them and get to know them.
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And so I was like, yeah, I bet these guys party.
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I bet they're drinking at night. And this is not
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00:23:22.849 --> 00:23:25.029
a good idea. Basically, I do not recommend this now.
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00:23:25.089 --> 00:23:26.609
But back in the day when I was a young idiot,
447
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it seemed like a good idea. And so I went
448
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where the game was played at Arizona State. And I
449
00:23:31.160 --> 00:23:32.690
was like, well, they're not going to let me into
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any of the business school classes because I'm not in
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the business school. But I bet there are a bunch
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of conferences. And so I started looking for finance events
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and conferences. I went to every one I could find.
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And then I thought, well, there's a lot of people
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at these. That's not going to be perfect. So then
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I was like, huh, how can we narrow this down?
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I'm like, well, are there Latino conferences for people in finance?
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Are there conferences for women in finance? Let's go to
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all those. I bet there's less people there. And there were.
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So I famously went to, I think it was a
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Latinas in Finance conference. And I really didn't want to go.
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I was super tired. I had a bunch of, I
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don't know, sorority parties to go to or something. And
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so I ended up going to this event and just
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started asking people questions. Sat down next to a woman
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and got really lucky that one of the women I
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was sitting next to at the table was a recruiter
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at Vanguard. And everybody else at the table was talking
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about where they were going to go and what they
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were going to do. And I just asked her a
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ton of questions. And at the end of it, she
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was like, let's keep in contact. And I was like, yeah, sure.
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Sounds great. And we did. And I followed up with her,
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asked her a few more questions until finally she asked
475
00:24:37.450 --> 00:24:39.509
if I would come into the office and interview for
476
00:24:39.589 --> 00:24:42.680
one of their positions. And I did. I ended up
477
00:24:42.740 --> 00:24:45.380
interviewing for a rotational development program that allowed me to
478
00:24:45.420 --> 00:24:47.700
go to a bunch of different areas inside of the company.
479
00:24:47.759 --> 00:24:50.039
But it wasn't because I was super smart. It was
480
00:24:50.079 --> 00:24:53.390
just because most people love talking about themselves. And so
481
00:24:53.410 --> 00:24:55.349
if you ask them a lot of questions and you
482
00:24:55.410 --> 00:24:59.170
seem curious and you take their advice and you follow
483
00:24:59.329 --> 00:25:02.049
up on it, you are 1%. And so that was
484
00:25:02.130 --> 00:25:03.730
basically all I did to get in the door.
485
00:25:05.569 --> 00:25:09.109
Genuine curiosity is a form of respect. It's how I
486
00:25:09.150 --> 00:25:11.220
think a lot of people show love and receive it.
487
00:25:11.819 --> 00:25:14.960
And it's interesting that that seems to be the way
488
00:25:15.039 --> 00:25:20.380
that you, regardless of your background, got into a place
489
00:25:20.440 --> 00:25:23.559
that is tough to get into is by being curious,
490
00:25:23.619 --> 00:25:27.960
asking questions, and then follow up, follow up, follow up.
491
00:25:28.039 --> 00:25:30.200
It's some of these things are so basic, Cody, but
492
00:25:30.640 --> 00:25:32.440
people don't do them. And so if you do, like
493
00:25:32.460 --> 00:25:36.119
you said, you become part of the 1%. You're right. Yeah.
494
00:25:36.140 --> 00:25:38.670
I mean, the other thing that I remember was thinking
495
00:25:38.769 --> 00:25:42.150
that like lots of people make it too big of
496
00:25:42.190 --> 00:25:43.809
a deal. They'll be like, well, you'll be my mentor
497
00:25:43.990 --> 00:25:46.130
or I want a job. And so you come out
498
00:25:46.210 --> 00:25:48.039
and you ask the girl to marry you right when
499
00:25:48.059 --> 00:25:50.539
you meet her, which would be ridiculous in real life.
500
00:25:51.849 --> 00:25:54.309
But it's not that different with mentorship and business. And instead,
501
00:25:54.809 --> 00:25:57.109
I learned quite early that it was much easier to
502
00:25:57.250 --> 00:26:00.549
ask for very small things. So if I met somebody
503
00:26:00.589 --> 00:26:02.269
that I knew was going to be illegally crossing the
504
00:26:02.309 --> 00:26:04.789
border at some point, and I wanted to follow them
505
00:26:04.930 --> 00:26:08.119
to see how they went and what happened. I wouldn't
506
00:26:08.200 --> 00:26:09.880
ask them to follow them the first I met. I
507
00:26:09.880 --> 00:26:11.779
would be like, tell me about you. What's your story?
508
00:26:11.799 --> 00:26:13.680
Where are you coming from? How long have you been here?
509
00:26:13.980 --> 00:26:16.119
Are you thinking about making the crossing? When might that be?
510
00:26:16.140 --> 00:26:18.700
That's amazing. What do you need? You want to go
511
00:26:19.170 --> 00:26:21.369
over there and we can get some food together or whatever?
512
00:26:21.650 --> 00:26:23.769
And so you would have these tiny little steps. And
513
00:26:23.789 --> 00:26:26.849
I think that's the same in business. So for her,
514
00:26:26.990 --> 00:26:30.349
it was quite easy to be curious because I was
515
00:26:30.369 --> 00:26:34.390
and then send a couple of follow ups. So it's like, hey,
516
00:26:34.450 --> 00:26:36.539
you told me to read this book. So I read it.
517
00:26:36.650 --> 00:26:38.299
And I had like these two questions on the book,
518
00:26:38.690 --> 00:26:42.619
like very little tiny snippets. You told me that this
519
00:26:42.720 --> 00:26:45.920
was like the favorite fund that you guys had at Vanguard.
520
00:26:46.299 --> 00:26:48.839
It's really interesting. I didn't understand this word. And so
521
00:26:48.920 --> 00:26:51.259
for that reason, I got in. But I do recall
522
00:26:51.400 --> 00:26:53.539
on the first day that I got into the company,
523
00:26:54.160 --> 00:26:56.319
looking around at where everybody else came from. And it
524
00:26:56.359 --> 00:27:00.180
was like, I don't know, Stanford and Wharton and all
525
00:27:00.220 --> 00:27:03.420
these fancy schools. And then they were like, what'd you
526
00:27:03.460 --> 00:27:06.480
do to get here? And the beautiful part was it
527
00:27:06.519 --> 00:27:07.920
was just asking a couple of questions.
528
00:27:09.279 --> 00:27:11.279
Did you feel a bit of imposter syndrome that day?
529
00:27:13.460 --> 00:27:15.349
Surely. There are some people these days that say that
530
00:27:15.380 --> 00:27:18.950
imposter syndrome isn't real. And I think that is likely
531
00:27:19.410 --> 00:27:24.970
sociopathic behavior. I think that most people have a self-worth
532
00:27:25.210 --> 00:27:27.670
issue at some point in their life. I don't think
533
00:27:27.690 --> 00:27:31.799
I've ever met human who at some point did not
534
00:27:31.960 --> 00:27:36.680
doubt themselves that's actually really healthy to doubt yourself because
535
00:27:36.740 --> 00:27:39.440
guess what you're not God I'm not God and we're
536
00:27:39.589 --> 00:27:44.009
often wrong and so even though I've been doing deals
537
00:27:44.369 --> 00:27:47.829
for 10 plus years you're crazy if you don't think
538
00:27:47.869 --> 00:27:50.029
that sometimes I'm like maybe I don't I wouldn't say
539
00:27:50.069 --> 00:27:52.269
imposter syndrome but I might be like God am I
540
00:27:52.309 --> 00:27:54.210
ready to do the size of a deal is this
541
00:27:54.250 --> 00:27:57.680
deal like in my right wheelhouse, am I missing something?
542
00:27:57.720 --> 00:27:59.480
Does somebody else have to look at this and say,
543
00:27:59.519 --> 00:28:02.039
I mean, do I believe this fully that I'm thinking
544
00:28:02.160 --> 00:28:05.119
right now? I think that's actually quite healthy. And so
545
00:28:05.339 --> 00:28:09.119
I've had plenty of that. And then I think there's
546
00:28:09.160 --> 00:28:13.369
some gender portions of it. Women in particular seem to
547
00:28:13.400 --> 00:28:16.210
feel like we need a lot of credentials. So I
548
00:28:16.250 --> 00:28:18.130
was like, well, I'm going to get the Howard F.
549
00:28:18.170 --> 00:28:20.109
Buffett grant for print journalism. And then I'm going to
550
00:28:20.150 --> 00:28:21.990
go to grad school. And then I'm going to layer
551
00:28:22.019 --> 00:28:23.839
on a PhD. And then I'm going to go work
552
00:28:23.880 --> 00:28:25.740
at Goldman. And then I'm going to get this title.
553
00:28:25.819 --> 00:28:28.000
And then I'm going to learn Portuguese. And so it
554
00:28:28.099 --> 00:28:30.420
felt like I had to keep adding all of these credentials,
555
00:28:30.519 --> 00:28:33.000
which is that part's not so healthy. At some point,
556
00:28:33.019 --> 00:28:35.119
you just have to say, I think I'm good enough.
557
00:28:35.400 --> 00:28:38.980
But I think in the beginning, it's totally reasonable for
558
00:28:39.039 --> 00:28:41.180
you to think, maybe I'm not good at this yet.
559
00:28:41.259 --> 00:28:44.180
And also, if you're a high achiever, you should be
560
00:28:44.240 --> 00:28:47.660
feeling that way multiple times a year, because you should
561
00:28:47.720 --> 00:28:52.400
be progressing the curve of your capability. Otherwise, you're stagnating,
562
00:28:52.460 --> 00:28:54.700
you should, you should, if you're not feeling kind of
563
00:28:54.779 --> 00:28:58.700
afraid from pushing an envelope too much, then you're probably
564
00:28:58.759 --> 00:29:01.720
not doing anything very interesting. And I think often of,
565
00:29:02.319 --> 00:29:06.700
I remember vividly the video where Elon Musk has the
566
00:29:06.740 --> 00:29:10.619
Tesla on the stage. And they shoot, like, I don't know,
567
00:29:10.640 --> 00:29:13.180
they throw like, They shoot a bullet at the windshield.
568
00:29:13.220 --> 00:29:15.779
They throw a rock at the windshield or something. And
569
00:29:15.819 --> 00:29:17.859
it's supposed to be bulletproof and not break. And the
570
00:29:17.900 --> 00:29:21.039
thing breaks. And his reaction isn't like, oh my God.
571
00:29:21.359 --> 00:29:24.000
His reaction is like, oh, well, I guess that didn't work.
572
00:29:24.859 --> 00:29:29.099
And so he was pushing himself too far. And I
573
00:29:29.119 --> 00:29:31.019
was like, huh, yeah, we haven't figured that out yet.
574
00:29:31.180 --> 00:29:32.640
But he didn't let it break him.
575
00:29:34.180 --> 00:29:36.130
Your husband would know this probably better than anybody. I've
576
00:29:36.170 --> 00:29:38.029
had a handful of Navy SEALs on the show over
577
00:29:38.049 --> 00:29:41.240
the past decade. And one of the things I know
578
00:29:41.319 --> 00:29:45.819
that they look for and others to be surrounded by
579
00:29:45.880 --> 00:29:49.799
are people who are regularly pushing their edges. And that's
580
00:29:49.819 --> 00:29:53.240
like a phrase I remember Jay Hennessey, 26-year SEAL, used is,
581
00:29:53.319 --> 00:29:56.730
I want to be surrounded by others who are pushing
582
00:29:56.769 --> 00:29:59.880
their edges at all time to ensure they're getting better.
583
00:29:59.920 --> 00:30:03.299
By pushing your edges, meaning regularly doing things that are
584
00:30:03.539 --> 00:30:07.220
really hard and really uncomfortable because then they become less
585
00:30:07.259 --> 00:30:11.539
hard and more comfortable doing things that were previously really tough.
586
00:30:11.720 --> 00:30:14.849
I think that's a good sign in a person. I
587
00:30:14.869 --> 00:30:17.309
know you're hiring leaders and you're choosing who to partner
588
00:30:17.349 --> 00:30:19.549
with or who to work with. People who are pushing
589
00:30:19.569 --> 00:30:22.180
their edges and who make the hard a little bit
590
00:30:22.319 --> 00:30:26.700
easier by continuously doing hard things. That's a big time quality.
591
00:30:26.759 --> 00:30:29.119
I have to feel like that in somebody that you'd
592
00:30:29.160 --> 00:30:31.470
want to work with or hire to run one of
593
00:30:31.509 --> 00:30:32.049
your companies.
594
00:30:33.490 --> 00:30:37.230
Very true. I mean, you are either in a process
595
00:30:37.609 --> 00:30:42.819
of improvement or stagnation and then eventual decay, right? That's
596
00:30:42.839 --> 00:30:46.400
like the law of thermodynamics basically. And so you're either
597
00:30:46.859 --> 00:30:50.319
having forward looking action or you're having backward action. And
598
00:30:50.359 --> 00:30:54.640
so Nothing is ever actually truly static. And I think
599
00:30:54.680 --> 00:30:57.059
about that a lot in business. If people are like, no,
600
00:30:57.099 --> 00:31:00.339
I'm comfortable here. That's a bad sign. That's a really
601
00:31:00.380 --> 00:31:04.000
bad sign. Actually, in contrarian thinking, which is the main
602
00:31:04.039 --> 00:31:06.970
business I run now, we sort of have a saying,
603
00:31:06.990 --> 00:31:08.609
which is one, it's really important how you start and
604
00:31:08.650 --> 00:31:12.450
finish your team meetings. If you come into a meeting frazzled, oh, yeah,
605
00:31:12.470 --> 00:31:13.849
how are you guys doing? It was crazy. And the
606
00:31:13.890 --> 00:31:16.009
thing is, I couldn't do it. That's terrible. That's negative
607
00:31:16.029 --> 00:31:19.369
energy transfer. And you shouldn't do that. You also shouldn't
608
00:31:19.450 --> 00:31:22.549
end a meeting like that. Okay. Like, okay, thanks. Bye guys. Whatever. No, no, no, no.
609
00:31:22.910 --> 00:31:24.690
Start on a high note and on a high note.
610
00:31:25.130 --> 00:31:27.190
And the other thing in that same vein is none
611
00:31:27.230 --> 00:31:29.680
of this. We are busy. We are doing lots of
612
00:31:29.740 --> 00:31:33.940
things thing. Everybody's busy. Everybody's doing lots of things. Nobody
613
00:31:33.980 --> 00:31:35.839
wants to fucking hear about it. Like what have you
614
00:31:36.039 --> 00:31:38.240
ever met a human, even one who doesn't have a job,
615
00:31:38.740 --> 00:31:41.720
doesn't have kids, doesn't have a husband or anything to
616
00:31:41.759 --> 00:31:44.380
take care of. That's not busy. It's like the perpetual
617
00:31:44.420 --> 00:31:47.400
state of humanity. So I'm not more busy than anybody
618
00:31:47.480 --> 00:31:50.500
else is. We've all made choices, and those choices lead
619
00:31:50.539 --> 00:31:52.980
to activities. And those activities are by and large a
620
00:31:53.019 --> 00:31:55.500
byproduct of our choices. And so that's a big pet
621
00:31:55.539 --> 00:31:57.680
peeve of mine. It's like, how are you doing? Oh,
622
00:31:57.900 --> 00:31:59.480
a lot. I don't want to hear it. Not in
623
00:31:59.519 --> 00:32:02.440
my company. And so I try to say the same
624
00:32:02.460 --> 00:32:05.769
thing myself. And there's a lot of data that supports this.
625
00:32:06.529 --> 00:32:08.490
I don't know if you've ever worked in an office before,
626
00:32:08.609 --> 00:32:08.950
have you?
627
00:32:09.410 --> 00:32:10.130
Yep, I have.
628
00:32:10.410 --> 00:32:14.009
Yeah. So one of the studies I was reading the
629
00:32:14.029 --> 00:32:16.430
other day is there are people that work in offices
630
00:32:16.609 --> 00:32:22.200
that do like the loud breathing and sighs, like, whatever.
631
00:32:22.359 --> 00:32:24.859
You heard that before? I remember a person I used
632
00:32:24.880 --> 00:32:28.960
to work with, like, exactly. And there's like always a
633
00:32:28.980 --> 00:32:31.220
type of person that does that. Like they just want
634
00:32:31.269 --> 00:32:32.849
the attention from the heavy breathing.
635
00:32:33.309 --> 00:32:33.650
Exactly.
636
00:32:33.950 --> 00:32:36.509
And it it rubs off on you. And so what
637
00:32:36.549 --> 00:32:39.130
that actually does is that's like negative energy transfer. And
638
00:32:39.150 --> 00:32:41.990
so if you sit next to somebody like that, over time,
639
00:32:42.069 --> 00:32:45.400
you actually decrease your happiness at work. And it was
640
00:32:45.539 --> 00:32:49.359
one study, but I think about that often. And so
641
00:32:49.700 --> 00:32:51.700
one of the things that we do back sometimes is
642
00:32:51.740 --> 00:32:54.259
we just mimic because it makes the other person more aware.
643
00:32:54.799 --> 00:32:56.950
So we'll go back to another person at the company
644
00:32:56.970 --> 00:33:00.069
and be like, if they're like, oh, then we'll be like, oh,
645
00:33:00.460 --> 00:33:03.220
And if you're just slightly more dramatic, it brings awareness
646
00:33:03.259 --> 00:33:05.440
to the thing the other person is doing. And I
647
00:33:05.460 --> 00:33:07.200
think you've got to push edges, but you've also got
648
00:33:07.880 --> 00:33:09.680
to bear the pain in silence.
649
00:33:10.019 --> 00:33:12.910
Yeah, I like that. One of my friends and mentors,
650
00:33:12.930 --> 00:33:14.849
Tom Ogburn, said to me when I got promoted for
651
00:33:14.869 --> 00:33:17.150
the first time in corporate America, you no longer get
652
00:33:17.170 --> 00:33:20.970
to be energy neutral. You're the thermostat now. You get
653
00:33:21.009 --> 00:33:24.029
to set the dial for the energy in the room.
654
00:33:24.410 --> 00:33:28.400
So think about that before every meeting you start, whether
655
00:33:28.480 --> 00:33:32.339
virtually or in person. about you're setting that dial and
656
00:33:32.359 --> 00:33:34.440
you don't get to be energy neutral anymore like you
657
00:33:34.480 --> 00:33:37.059
were when you were a follower. So you have to lift,
658
00:33:37.559 --> 00:33:41.339
think about like actually lifting up that room with the
659
00:33:41.400 --> 00:33:43.940
juice that you bring to it, or you're going to
660
00:33:43.960 --> 00:33:46.190
do the opposite. And I've never forgotten that. I think
661
00:33:46.210 --> 00:33:49.849
about how to start, how to finish, how to inject.
662
00:33:49.910 --> 00:33:51.630
And if I don't have anything for a meeting, we're
663
00:33:51.650 --> 00:33:53.039
going to cancel and we're not going to do it.
664
00:33:53.069 --> 00:33:53.210
Right.
665
00:33:53.509 --> 00:33:56.730
And I think like those little things become really big things.
666
00:33:56.769 --> 00:33:58.920
So I love that, that mimicking. I love that idea.
667
00:33:58.940 --> 00:34:00.400
I think that's That's really good.
668
00:34:00.559 --> 00:34:02.099
I'm going to steal that you are no longer allowed
669
00:34:02.140 --> 00:34:06.160
to be energy neutral. I love that because it's really true.
670
00:34:06.180 --> 00:34:09.000
What's interesting is everybody wants to be a leader and
671
00:34:09.059 --> 00:34:13.039
everybody thinks they're a leader, which is also fascinating, except
672
00:34:13.300 --> 00:34:17.130
real leaders who often are very concerned with how good
673
00:34:17.230 --> 00:34:20.230
or bad they are as leaders. Real leaders also have
674
00:34:20.269 --> 00:34:23.670
a lot of self-doubt. And so this, I found a
675
00:34:23.710 --> 00:34:26.030
lot of people say, well, I'm a great leader. Why
676
00:34:26.070 --> 00:34:29.619
do you think that? can you back that up with
677
00:34:29.760 --> 00:34:33.260
data for me? And often they can't. And I think
678
00:34:33.440 --> 00:34:35.519
one way that you can tell a really good leader
679
00:34:35.579 --> 00:34:37.880
is how do you feel the second that person walks
680
00:34:37.920 --> 00:34:40.519
out of a room? Do you feel like you can
681
00:34:40.579 --> 00:34:43.309
go run through walls? Is that like a, do you
682
00:34:43.329 --> 00:34:45.469
feel like you're ready to go run the treadmill or
683
00:34:45.489 --> 00:34:46.909
do you feel like, fuck me, I'm sort of tired
684
00:34:47.110 --> 00:34:48.809
way down on this couch right now. Cause I got
685
00:34:48.849 --> 00:34:52.010
fucking low energy Jeb around here, not doing anything for me.
686
00:34:52.530 --> 00:34:54.769
And so I think that's really clever. And I'm going
687
00:34:54.789 --> 00:34:57.429
to say that to my team because I've been struggling
688
00:34:57.469 --> 00:35:00.489
to think about that idea of what does it mean
689
00:35:00.530 --> 00:35:01.820
to be a leader? And I think a lot of
690
00:35:01.860 --> 00:35:05.260
it is, yes, it is tactics and yes, it is techniques,
691
00:35:05.320 --> 00:35:08.539
but a lot of it is, is inspiration actually. Yeah.
692
00:35:08.800 --> 00:35:11.340
Yeah. How do you, it's, it's kind of goes back
693
00:35:11.420 --> 00:35:14.539
to the basic Girl Scout rule of leaving people, places
694
00:35:14.599 --> 00:35:16.900
and things better than you found them. That's what leaders
695
00:35:16.940 --> 00:35:20.239
do too. You, you leave, if when you leave the room,
696
00:35:20.300 --> 00:35:23.780
your people are better for you having been there and
697
00:35:23.820 --> 00:35:26.099
you make them better. And there's a lot of different
698
00:35:26.139 --> 00:35:28.550
ways and there are tactics, but I think at its
699
00:35:28.860 --> 00:35:31.289
fundamental level, that's what you do. So let me paint
700
00:35:31.309 --> 00:35:35.130
the picture of an avatar, Cody, of who I talk
701
00:35:35.190 --> 00:35:38.630
to who listen to this. And that's like a mid-level
702
00:35:38.889 --> 00:35:44.250
corporate leader who has some curiosity about what you do.
703
00:35:44.869 --> 00:35:47.719
They may have some extra money. They may want to
704
00:35:47.739 --> 00:35:49.760
get out someday, may not, may want to do this
705
00:35:49.820 --> 00:35:52.980
on the side, but they have an interest in buying businesses.
706
00:35:53.730 --> 00:35:57.650
You have called them boring businesses at times, laundromats or
707
00:35:58.010 --> 00:36:00.909
landscaping companies or whatever. You can get into it. So
708
00:36:00.949 --> 00:36:04.349
let's think about that person who is currently working as
709
00:36:04.469 --> 00:36:08.150
a mid to high level leader within a Fortune 500 company.
710
00:36:08.170 --> 00:36:10.599
And they're doing well. They're doing well. They don't hate it.
711
00:36:10.989 --> 00:36:14.179
They don't love it, but they're just good. So they
712
00:36:14.219 --> 00:36:16.820
got a little extra money. What would you say to
713
00:36:16.880 --> 00:36:18.719
them if they're like, Cody, I don't even know how
714
00:36:18.760 --> 00:36:20.380
to get started. I don't even know what to do.
715
00:36:21.269 --> 00:36:23.429
What should I be looking at? I should obviously read
716
00:36:23.469 --> 00:36:25.909
Main Street Millionaire. But after that, what are the first
717
00:36:25.969 --> 00:36:29.429
few things I should do to get started buying businesses?
718
00:36:30.769 --> 00:36:34.070
Yeah. First, I would say don't quit your job. If
719
00:36:34.130 --> 00:36:36.150
you work in a corporate job right now, you have
720
00:36:36.170 --> 00:36:38.300
the most beautiful thing ever, which is you have other
721
00:36:38.340 --> 00:36:42.900
people's money, aka salary, coming in on a biweekly basis
722
00:36:43.340 --> 00:36:45.960
for your skill set. A lot of people today will
723
00:36:46.000 --> 00:36:49.980
tell you quit, go all in. They have survivorship bias.
724
00:36:50.530 --> 00:36:54.349
They have the belief that because they survived, everybody else will.
725
00:36:54.650 --> 00:36:58.909
And that is just not statistically true. And so my
726
00:36:58.949 --> 00:37:03.750
belief is that unless you have plenty of cushion and
727
00:37:03.769 --> 00:37:07.809
or a giant belief in yourself and really comfort, a
728
00:37:07.849 --> 00:37:10.789
lot of comfort with risk, it is perfectly fine to
729
00:37:10.809 --> 00:37:12.969
keep your job while you are thinking about buying your
730
00:37:13.010 --> 00:37:16.829
first business. And now, is your employer going to love that?
731
00:37:17.750 --> 00:37:21.019
Probably not. So you're going to have to manage the
732
00:37:21.059 --> 00:37:23.840
fact that you shouldn't be the future employee you don't
733
00:37:23.960 --> 00:37:27.280
want to have. Karma is a real bitch. So I
734
00:37:27.320 --> 00:37:29.860
think if you are working in a corporate culture, make
735
00:37:29.900 --> 00:37:32.519
sure you are still a high performer. Make sure you
736
00:37:32.539 --> 00:37:35.179
don't give yourself the bad corporate karma of, hey, I'm
737
00:37:35.219 --> 00:37:36.610
going to go do this thing on the side and
738
00:37:36.630 --> 00:37:38.789
I'm going to really let my, I'm going to quiet quit.
739
00:37:38.809 --> 00:37:40.590
I'm going to let my work not matter. I think
740
00:37:40.630 --> 00:37:42.510
that goes around. It is not a good thing you want.
741
00:37:42.570 --> 00:37:45.110
And one day you're going to be an owner, just
742
00:37:45.150 --> 00:37:46.829
like one day you're going to be a parent and
743
00:37:47.070 --> 00:37:49.030
And all those things you said parents should never do
744
00:37:49.110 --> 00:37:51.869
or all those things you said owners just don't get,
745
00:37:52.070 --> 00:37:53.389
you're going to see the other side of it for
746
00:37:53.429 --> 00:37:56.730
the first time. So I'm thoughtful on don't quit your
747
00:37:56.769 --> 00:38:00.420
day job, but don't be a shitty employee. And it's
748
00:38:00.460 --> 00:38:02.380
the hours outside of the nine to five that are
749
00:38:02.460 --> 00:38:05.360
yours for learning how to buy a business now. And
750
00:38:05.530 --> 00:38:08.969
here's the good thing about corporate individuals. If you're like me,
751
00:38:09.530 --> 00:38:11.590
you're a high performer. You're good at what you do.
752
00:38:12.070 --> 00:38:16.050
You are qualified and you're skilled. You just never had
753
00:38:16.110 --> 00:38:19.139
a brilliant startup idea that was going to cash flow
754
00:38:19.179 --> 00:38:21.539
enough to make up for the salary that you had.
755
00:38:22.039 --> 00:38:24.900
You just didn't have that spark or you had a
756
00:38:24.940 --> 00:38:28.449
few sparks and they died and flamed out spectacularly, which
757
00:38:28.530 --> 00:38:30.829
I did too. And so you're kind of looking for
758
00:38:30.909 --> 00:38:33.289
what is the thing that could actually replace what I
759
00:38:33.329 --> 00:38:38.159
do or meaningfully impact my income. And the truth of
760
00:38:38.199 --> 00:38:40.719
the matter is, is that we've been sold a lie.
761
00:38:41.159 --> 00:38:43.880
The lie is that we have been told that the
762
00:38:44.000 --> 00:38:46.300
way that you leave a company is you either go
763
00:38:46.380 --> 00:38:49.400
from one company to another, one job to another, or
764
00:38:49.940 --> 00:38:52.429
you have a startup where you have a 90% fail risk.
765
00:38:52.739 --> 00:38:55.389
You have a startup where most people pay for the
766
00:38:55.510 --> 00:38:58.619
right company. to future potentially earn, which is what a
767
00:38:58.639 --> 00:39:01.239
startup is. It costs you money to start, it costs
768
00:39:01.280 --> 00:39:03.280
you money for years, and you have a very high
769
00:39:03.320 --> 00:39:06.980
likelihood of failure. I'm glad some people do it, but
770
00:39:07.000 --> 00:39:09.510
I don't think we all have to do it. I think,
771
00:39:09.570 --> 00:39:14.170
in fact, the faster, less risky way is to buy
772
00:39:14.190 --> 00:39:18.510
a business because the two main reasons why businesses fail
773
00:39:18.690 --> 00:39:20.989
are a lack of cash flow and a lack of
774
00:39:21.050 --> 00:39:24.639
product market fit. Well, product market fit is there when
775
00:39:24.659 --> 00:39:28.469
you already buy a business because you have a business
776
00:39:28.489 --> 00:39:31.619
that's been in existence for years. selling customers. Cash flow
777
00:39:31.659 --> 00:39:33.619
is there because you have a history of the business
778
00:39:33.639 --> 00:39:36.300
cash flowing. And so if you're in corporate, I really
779
00:39:36.340 --> 00:39:38.940
like the idea of buying businesses. Now, you don't have
780
00:39:38.960 --> 00:39:41.559
to start huge because maybe you've never run a business before.
781
00:39:41.940 --> 00:39:43.760
But you can, just like you would in real estate,
782
00:39:43.900 --> 00:39:46.739
start with a studio, then go to a one-bedroom, then
783
00:39:46.760 --> 00:39:48.579
go to a house, then go to a multifamily. And
784
00:39:48.619 --> 00:39:50.360
it's the same with buying a business. We just were
785
00:39:50.380 --> 00:39:51.139
never taught this.
786
00:39:52.780 --> 00:39:56.099
You bought that laundromat, you said, and when was your
787
00:39:56.119 --> 00:39:56.480
first one?
788
00:39:57.960 --> 00:40:00.340
I did it while I was still employed. So, I mean, God,
789
00:40:00.340 --> 00:40:02.409
10 years plus ago, probably.
790
00:40:02.429 --> 00:40:04.670
So what made you want to buy a laundromat at
791
00:40:04.710 --> 00:40:05.130
that point?
792
00:40:06.269 --> 00:40:08.269
I didn't want to buy a laundromat at all. There
793
00:40:08.289 --> 00:40:10.010
was no part of me that thought I should buy
794
00:40:10.030 --> 00:40:13.179
a laundromat. I said, I want... Four things. There's four
795
00:40:13.239 --> 00:40:17.099
things that every good business transaction has. I want the
796
00:40:17.139 --> 00:40:19.320
ability to cover my debt service. So if I have
797
00:40:19.409 --> 00:40:23.090
interest or payments, I want enough cash in the business
798
00:40:23.110 --> 00:40:26.230
to have an operator because I'm still working on my job.
799
00:40:26.269 --> 00:40:28.530
So I didn't want to leave my job. I wanted
800
00:40:28.550 --> 00:40:31.030
the business to have enough money to make me the
801
00:40:31.070 --> 00:40:33.510
salary or the income that I needed. And I wanted
802
00:40:33.590 --> 00:40:36.730
enough money in the business for operating cash in order
803
00:40:36.750 --> 00:40:39.510
to make sure that the business was stable. So I
804
00:40:39.530 --> 00:40:42.579
define a good business as one that covers those four
805
00:40:42.659 --> 00:40:45.579
things and thus gives me an income stream with a
806
00:40:45.619 --> 00:40:48.460
little risk buffer. I ended up going for a laundromat
807
00:40:48.500 --> 00:40:51.159
because it was in my deal box. I talked about
808
00:40:51.199 --> 00:40:52.940
this a lot in the book. How do you narrow
809
00:40:52.960 --> 00:40:55.980
down what type of business is right for you? And
810
00:40:56.019 --> 00:40:57.900
the business that was right for me was one where
811
00:40:57.920 --> 00:41:00.360
I had those four things. It wasn't that big of
812
00:41:00.400 --> 00:41:02.539
a business, so it couldn't bankrupt me. It was a
813
00:41:02.679 --> 00:41:06.239
simple business that I could understand. It was profitable. It
814
00:41:06.280 --> 00:41:09.269
had been around a lot, a long time, and it
815
00:41:09.349 --> 00:41:11.869
really hadn't been marketed. So I thought that we could
816
00:41:12.170 --> 00:41:15.530
market it more. And the first thing that we found
817
00:41:15.789 --> 00:41:17.789
like that was a laundromat. But back in the day,
818
00:41:18.130 --> 00:41:19.730
I mean, I think with my operator at the time,
819
00:41:19.769 --> 00:41:22.900
I was looking at laundromats. I was looking at car washes.
820
00:41:22.920 --> 00:41:25.079
I was looking at dry cleaners back then. They're not
821
00:41:25.099 --> 00:41:27.780
my favorite now. I was also looking at, do I
822
00:41:27.820 --> 00:41:30.139
just buy real estate? Do I buy like a strip mall?
823
00:41:30.420 --> 00:41:32.340
But that took a lot more capital and didn't have
824
00:41:32.380 --> 00:41:35.519
as much cash. And so we finally landed on a
825
00:41:35.539 --> 00:41:38.579
laundromat because of the financial component of it, not because
826
00:41:38.639 --> 00:41:40.659
I cared at all about an individual laundromat.
827
00:41:41.440 --> 00:41:42.340
Are those still good now?
828
00:41:44.699 --> 00:41:47.030
Really depends. I don't think that there is such thing
829
00:41:47.050 --> 00:41:50.929
as a good or bad business, actually. You could say, hey, Cody,
830
00:41:51.190 --> 00:41:54.690
buy this laundromat off me. It's losing $ 100, 000 a year.
831
00:41:54.769 --> 00:41:56.889
It's making no money. It's the bane of my existence.
832
00:41:56.949 --> 00:41:59.869
I'm super annoyed by this thing. please buy it for me.
833
00:42:00.210 --> 00:42:01.829
And if I get it at the right price and
834
00:42:01.849 --> 00:42:04.489
the right terms, and it fits in my deal box,
835
00:42:04.610 --> 00:42:07.570
that could be a great business. Because maybe your nightmare
836
00:42:07.869 --> 00:42:11.010
is actually the perfect add on to my other laundromat
837
00:42:11.050 --> 00:42:14.389
business where I have a great operator who just needs
838
00:42:14.429 --> 00:42:17.789
to clean up and handle some of the maintenance on
839
00:42:18.150 --> 00:42:20.650
your machines. And you need more marketing because you've been
840
00:42:20.670 --> 00:42:22.130
kind of shitty at it. And so I think that
841
00:42:22.150 --> 00:42:26.559
I could take that 100,000 loss and make it 100,000 positive. Now,
842
00:42:26.739 --> 00:42:29.000
I think turnarounds are tough, but my point being, a
843
00:42:29.460 --> 00:42:31.980
lot of people focus on what sector do I buy?
844
00:42:32.079 --> 00:42:34.260
And I hope they buy the book instead because by
845
00:42:34.300 --> 00:42:37.239
the end of it, you'll realize it's not about sectors.
846
00:42:37.860 --> 00:42:41.309
It's about like the right fit for you. And that's
847
00:42:41.349 --> 00:42:45.230
how we make more money in private equity than anybody
848
00:42:45.289 --> 00:42:46.670
else because they don't care. I mean, go look at
849
00:42:46.710 --> 00:42:48.989
like some of the biggest private equity firms out there.
850
00:42:49.030 --> 00:42:52.380
Go look at Sun Capital's investment list. It'll be like
851
00:42:52.389 --> 00:42:57.630
an airplane screw company And then it'll be a water
852
00:42:57.710 --> 00:43:02.800
fountain installation company. And then it'll be an airport kiosk company.
853
00:43:02.840 --> 00:43:04.820
I mean, they have nothing to do with each other
854
00:43:05.199 --> 00:43:08.199
because Private X Woody knows it's all about the price,
855
00:43:08.579 --> 00:43:11.980
the terms, the cashflow of the business, and that's it.
856
00:43:13.239 --> 00:43:15.469
What are the first things you would advise somebody to
857
00:43:15.489 --> 00:43:18.050
do after reading your book? I mean, that's a playbook
858
00:43:18.090 --> 00:43:21.039
and I highly recommend that. But for just our purposes
859
00:43:21.099 --> 00:43:23.219
of having this conversation, what are the first things somebody
860
00:43:23.239 --> 00:43:26.480
should do who doesn't really have a clue, but is like, yeah,
861
00:43:26.519 --> 00:43:27.300
this could be me?
862
00:43:28.739 --> 00:43:32.719
Yeah, well, I call it the 3-9-12 method. So the
863
00:43:32.820 --> 00:43:36.210
first three months of you thinking about buying a business,
864
00:43:36.650 --> 00:43:39.809
I want you to spend learning how to buy a business.
865
00:43:40.210 --> 00:43:42.269
There's 10 steps to buying a business that we teach.
866
00:43:42.570 --> 00:43:44.570
So I want you to go through the 10-step methodology
867
00:43:44.610 --> 00:43:47.070
all the way from, is this even an opportunity or
868
00:43:47.110 --> 00:43:49.820
a good idea? to how do I finance this thing,
869
00:43:50.039 --> 00:43:51.960
to how do I find this thing, to how do
870
00:43:52.000 --> 00:43:53.889
I close this thing, to how do I get a
871
00:43:53.969 --> 00:43:56.210
team in it, to how do I run it afterwards.
872
00:43:56.590 --> 00:43:58.110
So you're gonna spend your first three months doing that.
873
00:43:58.590 --> 00:44:01.630
You're gonna spend your next nine months looking for the
874
00:44:01.730 --> 00:44:05.250
perfect business for you and probably starting to dabble in
875
00:44:05.510 --> 00:44:08.679
maybe a few small deals, maybe you're doing a partial deal.
876
00:44:09.079 --> 00:44:11.260
And then I want you to spend your last 12 months,
877
00:44:11.320 --> 00:44:14.500
this is when you stabilize the business. So now you've
878
00:44:14.519 --> 00:44:16.920
spent your first 12 months learning to buy a business,
879
00:44:16.980 --> 00:44:20.250
buying a business, your next 12 months stabilizing the business,
880
00:44:20.489 --> 00:44:22.900
making it optimal for you to get money out of it.
881
00:44:23.230 --> 00:44:25.969
And then you might go to add-on acquisitions or maybe
882
00:44:25.989 --> 00:44:28.610
you go to sell. You're like, cool, I stabilized this business.
883
00:44:28.710 --> 00:44:30.940
I grew it a little bit. I realized this business
884
00:44:31.059 --> 00:44:32.820
isn't the one I want to own. So I want
885
00:44:32.860 --> 00:44:34.780
to sell it and get something a little bit different.
886
00:44:35.179 --> 00:44:38.619
So 3, 9, 12 is typically where I want people
887
00:44:38.659 --> 00:44:39.079
to start.
888
00:44:40.199 --> 00:44:43.739
And can you talk about the significance of Main Street
889
00:44:44.079 --> 00:44:46.309
and why you titled it Main Street Millionaire?
890
00:44:48.179 --> 00:44:51.929
Yeah. Well, one, there's a fascinating phenomenon, which is essentially,
891
00:44:52.849 --> 00:44:56.449
we call it the boring versus sexy curve. And the
892
00:44:56.570 --> 00:45:01.130
idea is essentially this, the sexier the industry, the fewer
893
00:45:01.289 --> 00:45:04.300
at the top that make all of their money from
894
00:45:04.400 --> 00:45:08.760
said industry. The more boring the industry, the higher the
895
00:45:08.800 --> 00:45:11.519
percentage of people in that industry make all of their
896
00:45:11.539 --> 00:45:13.880
money from that industry. So let me give you an example.
897
00:45:14.480 --> 00:45:18.730
They say that there's less than 10% of like SAG-AFTRA,
898
00:45:18.909 --> 00:45:23.389
the union actors and actresses that make enough money to
899
00:45:23.449 --> 00:45:26.590
cover their average income from being an actor or an actress.
900
00:45:26.650 --> 00:45:29.880
It's very sexy. There's lots of competition. The people at
901
00:45:29.889 --> 00:45:31.949
the top make a ton of money. Everybody else is broke.
902
00:45:32.960 --> 00:45:35.179
Then when you go down to the boring side, if
903
00:45:35.219 --> 00:45:39.699
you are in port-a-potties and you run a port-a-potty business,
904
00:45:39.739 --> 00:45:42.260
you make 100% of your income from port-a-potties because nobody's
905
00:45:42.280 --> 00:45:45.820
really doing that business just for funsies, right? And so
906
00:45:46.579 --> 00:45:49.239
So we have this like spectrum that we've been talking
907
00:45:49.280 --> 00:45:51.090
about for like the last three years. And now we're
908
00:45:51.110 --> 00:45:53.389
seeing the data start to support it. I used to
909
00:45:53.429 --> 00:45:56.050
say the sexier a business is, the less likely you
910
00:45:56.110 --> 00:45:57.829
are to make money in it. Now we have a
911
00:45:57.849 --> 00:46:00.559
lot of data that supports it. And so I think
912
00:46:00.599 --> 00:46:03.420
that people should be really thoughtful about the fact that
913
00:46:03.880 --> 00:46:06.300
are you picking something because you want it to be
914
00:46:06.340 --> 00:46:08.860
your passion or it is your passion? Or are you
915
00:46:08.900 --> 00:46:11.219
picking something because you want to profit off of it?
916
00:46:11.679 --> 00:46:13.659
I prefer you pick a business because you want to
917
00:46:13.699 --> 00:46:16.179
profit off of it. And then you add not passion,
918
00:46:16.449 --> 00:46:21.670
but obsession to it. Profit plus obsession eventually leads to passion.
919
00:46:22.150 --> 00:46:25.650
It is really, really fun actually running a profitable business.
920
00:46:25.960 --> 00:46:28.599
that you're obsessed with the process of being in business
921
00:46:28.679 --> 00:46:29.510
or playing the game.
922
00:46:30.650 --> 00:46:34.769
You just had a post about the richest self-made woman
923
00:46:34.969 --> 00:46:37.769
in the United States. Can you talk about who people
924
00:46:37.829 --> 00:46:40.610
might think that is and then who it actually is
925
00:46:40.659 --> 00:46:43.019
and what she does? Yeah.
926
00:46:43.099 --> 00:46:44.639
A lot of people, if you said, who is the
927
00:46:44.699 --> 00:46:47.320
richest woman in the world? This was two years ago,
928
00:46:47.360 --> 00:46:49.440
but who is the richest woman in the world two
929
00:46:49.500 --> 00:46:52.190
years ago? Some people might say, well, I've heard a
930
00:46:52.210 --> 00:46:54.690
lot about Taylor Swift lately. She's a billionaire. That could
931
00:46:54.710 --> 00:46:57.449
be it. Also Kim Kardashian. Maybe even if you put
932
00:46:57.469 --> 00:47:00.610
the whole family together, could be that. Hey, maybe it's
933
00:47:00.650 --> 00:47:03.940
like the Walmart heiress. And you would be wrong on
934
00:47:03.980 --> 00:47:07.340
all of those. It is actually a woman who owns
935
00:47:07.400 --> 00:47:11.119
a roofing company that she built. And you'll never know
936
00:47:11.159 --> 00:47:13.880
her name. You probably won't know her face, but she
937
00:47:14.019 --> 00:47:17.090
prints money while she sleeps. And this is true in
938
00:47:17.199 --> 00:47:20.079
so many industries. I mean, In the beginning of the book,
939
00:47:20.119 --> 00:47:21.380
we start out with a guy by the name of
940
00:47:21.440 --> 00:47:24.699
Wayne Huizenga, who's one of my favorite billionaires. And the
941
00:47:24.760 --> 00:47:27.619
man drove a garbage truck out of college. He went
942
00:47:27.739 --> 00:47:31.019
to college and the only job he could get was
943
00:47:31.159 --> 00:47:35.820
garbage truck driving. And he too saw what I saw,
944
00:47:36.159 --> 00:47:38.250
which is, wait a second, these guys who own these
945
00:47:38.289 --> 00:47:40.590
garbage truck businesses are making a ton of money. How
946
00:47:40.630 --> 00:47:42.150
do I get a piece of this? And he actually
947
00:47:42.309 --> 00:47:46.030
used varying types of creative financing and leverage in order
948
00:47:46.050 --> 00:47:49.460
to buy his first little garbage truck his first $ 500
949
00:47:49.300 --> 00:47:52.739
in supplies and turned it into waste management, one of
950
00:47:52.760 --> 00:47:55.679
the biggest garbage truck companies in the world. And then
951
00:47:55.739 --> 00:47:58.679
what did he do afterwards? Then afterwards, he bought a
952
00:47:58.719 --> 00:48:01.869
bunch of sports teams. He bought planes. He had all
953
00:48:01.889 --> 00:48:06.590
the fun. But I think these days, people confuse having
954
00:48:06.829 --> 00:48:11.610
fun up front with making money up front. And it's
955
00:48:11.650 --> 00:48:13.710
just not true. Your first couple of years of doing anything,
956
00:48:13.969 --> 00:48:15.699
it's going to be miserable. And so you should prepare
957
00:48:15.739 --> 00:48:16.019
for that.
958
00:48:17.780 --> 00:48:20.659
Cody, one more before we run. Speaking of that, let's
959
00:48:20.679 --> 00:48:24.059
say you're meeting with someone who's fresh out of college.
960
00:48:24.559 --> 00:48:27.179
They want to leave a dent in the world, but
961
00:48:27.199 --> 00:48:29.340
they don't necessarily know what they want to do. What
962
00:48:29.380 --> 00:48:32.300
are some general pieces of life slash career advice for
963
00:48:32.340 --> 00:48:32.860
that person?
964
00:48:34.639 --> 00:48:36.340
Well, I think before you go change the world, you
965
00:48:36.360 --> 00:48:41.530
could start with changing your local community. And the truth
966
00:48:41.550 --> 00:48:43.750
of the matter with Main Street Millionaires, all around us,
967
00:48:44.070 --> 00:48:47.440
we have small businesses that are closing. that have value
968
00:48:47.760 --> 00:48:51.340
in them that are somebody's 30 years of experience. Imagine
969
00:48:51.380 --> 00:48:54.820
you work for 30 years. You build a house over
970
00:48:54.840 --> 00:48:57.860
those 30-year period. You're ready to leave the house and
971
00:48:57.909 --> 00:49:01.590
move to Florida from Nebraska. And instead of selling the house,
972
00:49:01.610 --> 00:49:04.909
you naturally just light it on fire and walk away
973
00:49:04.969 --> 00:49:07.510
from it. You would never do that, right? You would
974
00:49:07.570 --> 00:49:09.389
never do that with a house. And yet we do
975
00:49:09.409 --> 00:49:12.469
that with businesses all around us. So in my mind,
976
00:49:12.510 --> 00:49:14.730
if I was graduating college right now, I would be
977
00:49:14.769 --> 00:49:18.630
going around and talking not to big corporate companies, but
978
00:49:18.650 --> 00:49:20.960
I would be going around and talking to people who
979
00:49:21.139 --> 00:49:25.360
own small businesses and saying, can I start apprenticing with you? Saying,
980
00:49:25.400 --> 00:49:28.780
what's your transition plan for the next generation? Don't be
981
00:49:28.800 --> 00:49:30.840
the obnoxious young person that's like, I'm going to do
982
00:49:30.880 --> 00:49:32.539
this and this and this to your business, but get
983
00:49:32.639 --> 00:49:36.360
curious about people who actually run our country and employ
984
00:49:36.360 --> 00:49:40.750
42% of the population. which is small business owners. And
985
00:49:40.769 --> 00:49:42.309
what you'll find is you might be able to get
986
00:49:42.369 --> 00:49:44.230
skin in the game a lot faster than you think.
987
00:49:44.369 --> 00:49:46.610
And skin in the game increases your bank account size.
988
00:49:47.929 --> 00:49:50.320
Love it. The book is called Main Street Millionaire, How
989
00:49:50.360 --> 00:49:55.000
to Make Extraordinary Wealth Buying Ordinary Businesses. Cody, this was fantastic.
990
00:49:55.179 --> 00:49:58.340
I would love to continue our dialogue as we both progress.
991
00:49:58.360 --> 00:50:01.320
I would love that. Thank you so much for having me.
992
00:50:01.340 --> 00:50:02.139
You made this so fun.
993
00:50:02.699 --> 00:50:09.559
Thank you. Appreciate it. It is the end of the
994
00:50:09.599 --> 00:50:12.639
podcast club. Thank you for being a member of the
995
00:50:12.679 --> 00:50:14.420
end of the podcast club. If you are, send me
996
00:50:14.440 --> 00:50:17.619
a note, ryan at learningleader.com. Let me know what you
997
00:50:17.679 --> 00:50:21.570
learned from this great conversation with Cody Sanchez. A few
998
00:50:21.610 --> 00:50:24.409
takeaways from my notes. I loved it. Her dad always
999
00:50:24.449 --> 00:50:26.889
said to her, you're not going to be a princess.
1000
00:50:27.210 --> 00:50:29.449
You're going to be the president. I think this is
1001
00:50:29.489 --> 00:50:32.929
a great reminder of the power we have as leaders
1002
00:50:33.489 --> 00:50:36.599
to believe in someone and to raise their level of
1003
00:50:36.659 --> 00:50:42.039
expectations to Because we see something special in them. And Cody,
1004
00:50:42.300 --> 00:50:44.039
I was looking at her as she was talking about
1005
00:50:44.059 --> 00:50:46.860
her parents and specifically about her dad. She was glowing.
1006
00:50:47.239 --> 00:50:51.260
Had that huge smile. And I love seeing the impact
1007
00:50:51.780 --> 00:50:54.630
that her parents have had on her and how she
1008
00:50:54.710 --> 00:50:57.269
still feels that to this day. And then how she
1009
00:50:57.489 --> 00:51:00.860
earned a job at Vanguard. When everyone else there is
1010
00:51:00.880 --> 00:51:03.179
from an Ivy League school and she's from Arizona State,
1011
00:51:03.199 --> 00:51:06.039
she went to conferences, she met people, she got in
1012
00:51:06.119 --> 00:51:08.579
the room and took action. And then when she got
1013
00:51:08.619 --> 00:51:13.400
her opportunity, she led with her curiosity, asked questions from
1014
00:51:13.440 --> 00:51:15.880
the woman she met with, learned a lot, read the
1015
00:51:15.920 --> 00:51:18.139
books that the woman told her to read, and then
1016
00:51:18.199 --> 00:51:21.469
she followed up. Follow up, follow up, follow up. So
1017
00:51:21.610 --> 00:51:25.730
show up, do extra, follow up. Those are a great
1018
00:51:25.829 --> 00:51:29.840
way earn a job that we might not be qualified for.
1019
00:51:29.860 --> 00:51:34.079
And then think about specifically how you start and how
1020
00:51:34.159 --> 00:51:37.579
you end your meetings. What type of energy do you
1021
00:51:37.699 --> 00:51:40.880
bring to the space? Remember, you no longer get to
1022
00:51:40.920 --> 00:51:44.630
be energy neutral when you're a leader. You're either lifting
1023
00:51:44.670 --> 00:51:47.369
the room up or you're zapping that room of that energy.
1024
00:51:47.409 --> 00:51:49.329
And we want to be the type of people that
1025
00:51:49.449 --> 00:51:54.059
leave people better than then we found them by lifting
1026
00:51:54.099 --> 00:51:57.099
them up, bring the juice, be energy additive to the space.
1027
00:51:58.179 --> 00:52:00.329
Once again, I'm going to say thank you so much
1028
00:52:00.969 --> 00:52:03.489
for continuing to spread the message and telling a friend
1029
00:52:03.550 --> 00:52:05.769
or two, hey, you should listen to this episode of
1030
00:52:05.789 --> 00:52:08.809
The Learning Leader Show with Cody Sanchez. I think she'll
1031
00:52:08.849 --> 00:52:11.510
help you become a more effective leader because you continue
1032
00:52:11.530 --> 00:52:14.099
to do that and you also go to Spotify and
1033
00:52:14.340 --> 00:52:17.940
Apple Podcasts and you subscribe to the show. You write
1034
00:52:17.960 --> 00:52:20.480
a thoughtful review and you rate it, hopefully five stars
1035
00:52:20.519 --> 00:52:23.900
by doing all of that You are giving me the
1036
00:52:24.000 --> 00:52:26.289
opportunity to do what I love on a daily basis.
1037
00:52:26.489 --> 00:52:29.849
And for that, I will forever be grateful. Thank you so,
1038
00:52:30.269 --> 00:52:31.269
so much. Talk to you soon.
1039
00:52:31.289 --> 00:52:31.510
Can't wait.