SPEAKER_02
My first Nellian. Let's go. My first baby mama.
My first catamine experience. My first addiction.
SPEAKER_00
I feel like I can rule the world. I know I could be what I want to. I put my all in it like the days off.
SPEAKER_04
Welcome. Here's what I want to start with. I love some of the things that you say.
And one of the things you said is, don't follow your passion. People who are already rich tell you to follow your passion. You should follow your talent.
Can you unpack that? Can you explain what you mean?
SPEAKER_02
I wanted to be an athlete. That was my passion. And then I'm going to UCLA was a blessing because I figured out pretty quickly that I wasn't in the 0.
1% you need to be in to make your living as an athlete. And there's a fair, there's some pretty basic axioms. There should guide your career choices around where you invest your most precious capital and that is your time, your human capital.
The first is the sexier the business, the lower return on investment. You want to be in fashion, the arts, movies, modeling, sports, unless you get really, you know, incandescent green lights from a very early age, you're going to be in the 0.1%. Try and make a living somewhere else and then do that on the weekends. And that is if you, the SAG-AFTRA, the most talented actors in the world, it's hard to get a SAG-AFTRA union card.
You have to actually ban something. These are the most talented actors in the world, 182,000 of them. 87% of them don't qualify for health insurance because they don't make more than $23,000 in a given year.
So the key is finding, not finding your passion, but finding your talent and then committing to developing mastery. And if you can develop mastery in anything that has a 90% plus employment rate, which 98% of sectors enjoy, the economic accoutrements, the camaraderie, the prestige, the relevance, just the sheer joy of mastery will make you passionate about whatever it is. And I'm passionate about taking care of my kids.
I'm passionate about being able to step in and help my aging father. I'm passionate about, I'd rather be Raphael Nadal or Federer, but kind of, I'd rather be me than the number three or number four tennis player in the world. Because I have financial security, I get to go to Wimbledon on my own terms and not be as nervous and not throw up or before a match.
So yeah, I'd rather be Nadal, but pretty much anyone else playing tennis, I'd rather be. And I got there with moreing companies. So the less sexy a business, the higher the return on investment.
So I would suggest that we stop, you know, think about, well, what could I be good at? I think that's what your 20s are for, workshopping stuff and also getting it wrong. I started in investment banking and I was terrible at it. I didn't like them.
They didn't like me. And I had to go back to business school and just start workshopping. Where could I be great? What industry could I be great in? So don't, you know, find what you're good at and then get great at it.
And then be a DJ on the weekends.
SPEAKER_04
Hey, let's take a quick break to tell you about our sponsor. You know, finding a service solution that keeps your customers happy can feel impossible. Like trying to remember the name of that guy you literally just met at that networking event.
And HubSpot Service Hub can help. So with the service solution part, at least it makes it easy. It brings service and success together on one powerful platform.
With an AI-powered help desk and a chat bot to handle your frontline tickets so you could scale support and drive retention and revenue. Visit HubSpot.com slash service to learn more.
SPEAKER_03
By the way, congratulations. Today is the release date of the book, right? Algebra of Wealth.
SPEAKER_02
Yeah, today is the day.
SPEAKER_03
So that's going to be huge. I read the Algebra of Happiness a while ago and I've been watching the videos forever. And so I kind of, I didn't get an early copy of the book, but I will buy it and read it.
And so you'll get my $23.
SPEAKER_02
I need you to. By the way, we're number one on Amazon today. I just thought I would drop that because I'm desperate for your affirmation, Sam.
SPEAKER_03
That's all right. I'll give it to you. I'll give it to you.
I won't starve you from that. You've got it. I look up to you.
I think you're the man. Thank you.
SPEAKER_04
Well, let me ask you about the number one on Amazon real quick. You're a pretty stoic guy. In fact, when you come on the pod, it's always surprising to me that you are so even keel, but it's the launch day of your book.
You worked on this thing really hard. Your number one on Amazon. How does Scott Galloway celebrate?
SPEAKER_02
Oh, you know, I'm not, I'm pretty flat. I congratulate the team. It feels great.
It's very gratifying. I love benchmarks. I'm addicted to me.
Everyone's addicted to something. I'm addicted to Stranger's Affirmation, which is kind of pathetic at my age. And that's a form of affirmation, but it's very rewarding because so many people work so goddamn hard on this thing.
Just not me, but you know, my research is my analyst, my PR people, my social people, my publisher, my book agent, you know, greatness is in the agency of others, which is very gratifying. And plus my podcast co-hosts got to number three on the best sellers list. So God damn it.
If I'm not going to get to number two, I must be to Kara Swisher. So, Sam, if you could go buy several thousand books, I'd appreciate it. And if you like it, write a review.
And if you hate it, please buy more and send them to an enemy. But yeah, I'm addicted to external affirmation. It's really pathetic.
SPEAKER_03
Well, so, I mean, the book, from my understanding, is that it basically talks about the people who have money and the people who don't. And what are the commonalities between the winners and the losers? And you have, I've read this for years. There was this awesome fast company article about you.
And I've seen you say this in videos where you were shockingly calculating when starting your last company, L2. I think you said something like, Deloitte did a study. They did a study that shows what's the difference between the people who sell their companies for five to ten times revenue versus those who just sell it for one or two times.
And you had these like four or five things and it was, they own a niche, they have recurring revenue. Tech is at their core and that they're international. And then finally, they have defensive IP.
And then you went on and said how like in your 40s, when you were starting L2, 40s and 50s, you were like only focused on money. You said, I worked my ass off. I was there at the office at 2am.
You said, but I don't regret it. You said it was totally worth it. And when you were starting L2, I don't really know too much about that industry or that business other than a handful of articles.
Were you that calculating with working backwards from an exit? And by the way, the story ended with you selling it for $120 million.
SPEAKER_02
160, boss. Jesus, get your facts right. And by the way, I'm number one on Amazon today.
I don't know if I told you that. Yeah, I didn't have a lot of money and for me, work was about getting economic security. I was very focused on money and I'm not saying that's the right way.
It was just my way. And I had done a lot of analysis in this study referring to said, okay, there are companies that sell in any industry, the lowest 10%ile, the upper-desile of the valuations they get taken out at. And this study looked at the common features of the companies that got sold in the top-desile.
And it was all the things you talked about. And that's literally how I shaped the business model. I opened a London office right away.
I'd set a charging consulting fee as I'd said, pay me a quarter of a million bucks a year and I'll answer your toughest questions using data. We focused on luxury and then consumer brands. We broadened our niche a little bit.
We spent, I raised $17 million to create a series of technology and scraping tools so that I could collect more data points than anyone in the world, such that when the inevitable guy from the analytics department came in with his arms crossed to play gotcha, they just couldn't argue with our data. We just collected more data than anyone in the world on these issues and tried to distill it down to something actionable. So I was very focused on exit.
We sold for eight times revenue. So yeah, man, my basic pitch to people was, you're going to work your ass off and I'm going to try and get you to, you know, I'm going to try and get you to where your parents were 20 years earlier. And if you're looking for balance, this isn't that place.
If you're really into management or other things, tell me and I will try and like shape a role around what's important to you. But we are a small business going all in to try and create economic security for us and our families. With Prop Team Media, we're about 14 people now.
I purposely didn't take outside capital. I'm not on that hamster wheel again. I'm not trying to, Jones for an exit, I'm trying to build something interesting that has relevance, that has a little bit more impact on the social issues we think about.
And also pair people really well. I used to pay people below market and give them equity and I was throwing nickels around like their manual covers because I wanted to have a profitable company I could sell. Now my priorities have changed and the people who joined the company, I tell them this isn't the kind of company that gets sold.
But what I'll do is I'll share, I'll give you equity or participation in my book deals. You know, you are a junior analyst, you get one or two percent of any book deal I get. You get, you know, try and create some economic upside for them.
My natural starting point is that people come to work to develop economic security for them and their families, to increase their currency, their currency and the marketplace experience, and also to develop relationships. The workplace is a great place to meet friends, mentors, additional, you know, co-founders. And we spend a lot of money on, we saved, with COVID we gave up our office.
We save about $800,000 or $900,000 a year on an office because of course as a narcissist I had to have this amazing office in Soho, which was stupid. And I have this rule at work, or not this rule, but this benefit. If any four of them are together, they get my credit card.
They can go to Broadway or they can go to Tulum and they've done those things without asking my permission. As long as there's four of them, they got my credit card. And the number one source of retention, I think the key to building a small business is retention.
Because if you find good people, you just don't want them to be with you a year or two years and go to Google. Because the switching costs are enormous. And if you find someone good, your job as an entrepreneur or the CEO is just to create an environment where they want to stick.
Retention of employees, in my opinion, is just huge. And I find, or I read a study, another study on this, and it said the number one source of retention, or the number one lever for retention. People think it's compensation.
People think it's culture. It's whether or not that person has a friend at work. If they have a friend at work, they look forward to going to work and they are less likely to leave.
And so what I try and do, everybody interviews everybody when we hire people, but these kids, it's really inspiring. They'll go, like six of them will go on vacation together. They'll say, oh, Scott, you're speaking in Hamburg, Germany.
All six of us are going to come. And they have a great time together. They like each other.
And it's really, it's a powerful kind of business weapon, if you will. Now, I don't think you can do that with its company scales beyond 50, 100 people. But I found for a small business, it's really powerful.
SPEAKER_04
And is the trick there that you don't try to be their friend? Because I've had that problem before. I wanted to be the friend and that made the management a little bit messy. And I realized it is much better for me to not be the friend and not be included in the hangs.
The whole company functions better. Even though, even personally, I was like, oh man, they're all going out without me. But actually, it was far better that it went that way.
SPEAKER_02
I always had a healthy sense of what the border was. Me and my president and my company and the partner at L2, we're both about the same age. And we have the same view.
We have parties all the time. We show up early as soon as shit starts getting a little like crazy, we leave. A, we don't need to see them drunk.
They definitely don't need to see me drunk. And my attitude is, what you're saying, Sean is really interesting, and that is, I'm just coming to the realization as a dad. I'm not their friend.
I'm their dad. Because it was really upsetting to me that my kids didn't kind of, I don't want to say they don't want to be my friend, but I just naturally assumed that my kids would adore me and be really into World War II history and CrossFit, because that's what dad is into. Guess what? They're not.
And what I realize is, I'm not their friend. I'm there to be their dad. And it's kind of the same way I think, I work with such young people.
I think the average age is probably 30 or 34 because I'm there. But the median is like 25. It's basically a bunch of kids, overeducated, super ambitious kids.
And it's easy. They're doing dinner and drink somewhere. I show up for dinner.
I leave before dessert. And then they can enjoy each other without thinking they're being judged by Scott. So yeah, I don't, I draw sharp relief between work and fun with those guys.
I love it. I go out with them, but I go out for the first couple hours and then I disappear so they can have their own fun.
SPEAKER_04
I love the, if four of you together, you get my card. That's an amazing little tidbit. I'm here to collect little lessons learned from you today, and that's one immediate one for me.
Thanks, man.
SPEAKER_03
So like, obviously you're kind of, I don't know if you're at the peak, but you're killing it right now in terms of your pod and kind of being a public figure in the books and everything. And then before that, you had the company, so you had a huge financial outcome. One of the things that I think it's kind of brushed over in your history is what you're doing with kind of being an activist investor.
I know you were on the board of New York Times and you made a few other like pretty like substantial investments. I know you were working with a hedge fund to do that. What were some of the deals that you were doing? What were some of the kind of the best deals? What are some of the worst deals? What were some of the signals that you had where you were like, this is an interesting deal.
I should pounce on this.
SPEAKER_02
Sure. So there's a bit of a backstory there. I started coming to Ren Envelope and went public.
I was on the board. I got into a fight with arguably the most successful venture capitalist in the world. Spoiler alert, he won the fight.
I was kicked off the board. So I was kicked out of the band that I started, which was like emotionally and mentally very taxing for me. And then I got angry.
I was a really weird time in my life. My mom was dying and I moved in with her. And during the day, I would take manager health care at night.
She was living in Vegas. I'd go downtown and get shitty drunk with strippers and quote unquote friends and then go back and manage my mom's health care and watch everyone loves Raymond and Jeopardy with my mom. It was a strange time in my life.
I was also very angry because I'd just been kicked off the board of Red Envelope. So I took a half a million dollars in my money and I filed a proxy to replace the entire board. And I learned everything about activist investing and shareholder governance and I tried to kick everyone off the board.
And I own 10% of the company and I think I got 12% of the vote and my proxy solicitor said that 2% was probably a mistake. So basically no one voted for my slate and that was kind of a low moment for me. Okay. Now the world has told me they don't want me involved in this corporation or in public companies. And then six months later, I got a call from a hedge fund that said, you're crazy, but you're our kind of crazy.
We have some stakes in companies and we need someone to kind of go in and rattle the cage. And it just struck me that at your lowest moment, you really don't know where that might lead. And I got backed.
I went into a company called I bought 10% of a company called United Retail, which was a plus size clothing brand. I basically showed up and said, let me build your website. You don't have a website.
This was a while ago where I'm going to try and replace the board. This had fine stock went from two to eight and I'm like, wow, this is easy. And I did it at Sharper Image bought a big stake there went in there.
The company seemed like a mess. Stock had gone up a little bit. I got out.
I did it at Gateway computer went on the board there. That was more difficult. We made a small amount of money, but I'd never lost money doing it.
So then I went and raised $700 million and became the largest shareholder in the New York Times and went on the board there. And timing is everything. And in this case, I went on the board in March of 2008 and the stock went from 16 to three in about five months.
At one point, I think I was losing 10 or $12 million of other people's money every day. And we almost lost the business. The company almost went bankrupt.
I don't know if you guys remember that, but in the world of media, people just stopped advertising. They just stopped. It was like our tap of revenue just got turned off.
And it was sort of the great financial recession. It kind of ended my career as an activism because one, I don't think I was very good at it. And two, I was getting to a stage in my life where I just didn't want to be combative anymore.
I didn't want to go to war with CEOs. I didn't want to. I was just exhausted by being an antagonist.
I thought, I'm never going to go on a board again unless the CEO wants me there. But I did that for a while. I learned a lot.
I made a little bit of money, but I was in my early 40s and quite frankly, just trying to figure out a way to make a living so I could stay in New York, which isn't easy. And I think I was flailing a little bit, but it was a great experience. I learned a lot about human nature, about shareholders, about governance.
I get called a lot by boards when they're being challenged by an activist because I was one. And I think I have some insight into how these people think. But yeah, it was just a strange time in my life.
But it was interesting. It was fun. I just wasn't very good at it.
SPEAKER_04
Yeah, that's cool. You've had a bunch of different careers and I like that. I like variety.
I like people who have different chapters and sagas of their life. And you mentioned like your 20s are for figuring out what you actually like to do or what you're actually good at or the intersection between those two. It sounds like yours went past your 20s and you just kept experimenting.
You know, along the way. Is that a fair assessment for you?
SPEAKER_02
Yeah, investment banking, no good at it. Business school started a brand strategy firm called Profit. Grew it to a couple hundred people, sold it for 33 million.
What do I want to do? I know I want to teach. The dot-com implosion took me to, you know, from what I thought was being wealthy to not being wealthy. Teaching wasn't going to help me maintain the lifestyle I needed or wanted to maintain with two young kids in New York.
So I needed to find other ways to make money. And I did the hedge fund thing for a while, did boards and then saw an opportunity in analytics and benchmarking and started that company. I think 09 or 010.
And that was my kind of a big win. And the timing is everything. I got swept up into what is the greatest bull market economy in history.
08 to present is probably going to go down as the greatest extended bull market run in history. People don't understand just what an anomaly the last 16 years have been relative to the history of the market. And just as I was coming into my prime income earning years, you know, the winds just filled up my sales.
And I caught, you know, I finally got all the moons sort of lined up, if you will. But I've always said, you know, you got to be humble when things work because a lot of your successes in your fall. At the same time, I wish I had been more forgiving of myself when things didn't work because I have trouble forgiving myself.
I struggle with anger and I the person I get most angry at is myself and I have trouble getting past shit. You know, I was on a I was at a book thing last night and I said something and it just came out wrong. And I like sitting in bed and I can't get past that one thing.
It went really well, but I can't think that way. I focus on what's what's wrong. And that would be my advice to people is be humble when you have wins because a lot of it isn't you, but also forgive yourself because, you know, again, a lot of it isn't you.
SPEAKER_04
Hey, let's take a quick break to tell you about our sponsor. It is a podcast that we want you to check out. It's called D2C Pod.
It's hosted by Ramon Berrios and Blaine Bolas. It is brought to you by the HubSpot Podcast Network, the audio destination for business professionals. And this is a podcast about all things direct to consumer D2C.
It's e-commerce stores. It's how you optimize your brand. And they're talking with founders, marketers and the platform creators about all kinds of things that you need to know for D2C.
You know, website conversion, paid ads, Facebook ads, consumer trends, email marketing. If you want to know the stories behind your favorite brands, this podcast is for you. They did an episode recently about scaling creator growth and influencer incentives.
I thought it's pretty cool. So check it out. Listen to D2C Pod wherever you get your podcast.
My roommate in college had the poem If on the, I think Richard Kipling on his wall. And one of the great lines of that poem is, you know, if you can meet triumph and disaster and treat those two imposters just the same. And that's always stuck with me.
That's kind of what you're talking about. Like your greatest triumphs, maintaining the humility and then in your, your greatest failures, not beating yourself up too much. You're a big proponent of stoicism.
And that seems like a pretty stoic way to be. Give us the like, you know, there's a lot of people listening to this right now that may be familiar with stoicism. Don't practice.
Don't, don't kind of know how it applies to their life. Like make your pitch. What's, why stoicism, why stoicism matters to somebody?
SPEAKER_02
Well, just your own mental and emotional health. And Ryan Holiday is kind of my Yoda on stoicism and he distills it this way. Life is not about what happens to you.
You can't control that, but you can't control how you respond to what happens to you. And I've tried to always remember that and I have trouble practicing it, but congenit, the ultimate stoicism piece of art in modern history or modern media is broke back mountain. If he, he can't fix it, you got to stand it.
And that is trying to focus on the things you can control and you can control your emotions. It's very difficult to control what happens to you. And, you know, just also recognize, and this is more atheism than stoicism, everyone on this podcast, everyone we know, everyone we care about what they think of us, they're going to be dead in a hundred years.
In a blink of the history, nothing you say or do or what anyone else thinks of you is going to matter for very long. And something that really has helped me when I was embarrassed or I thought I didn't equip myself very well is what you realize is just imagine yourself when someone says or does something stupid. You say, you think to yourself, oh, that was stupid.
And then you go back to thinking about yourself. And, you know, people aren't thinking about you, your wealth, your failures, your successes as much as you are. And so the key is just trying to be comfortable with yourself and comfortable in your own skin.
And not only that, really kind of focus on what your spouse thinks of you is your spouse happy. Do you have a good relationship with your kids? Because what Twitter thinks of you really isn't that important. And because I had so much trouble actually footing my emotions to that logical notion, I know it doesn't matter with people on Twitter or the Twitter mob think of me, but I couldn't emotionally separate myself from it.
I don't have those skills. So a role model of mine is again, Sam Harris. He's like, oh, I got off Twitter.
I can't handle that. He's like, why don't you get off of Twitter? I'm like, yeah, I can. So I stopped.
I'm off of Twitter for the last nine months and it's been one of the most accretive things to my mental health. And I didn't like to admit this, but I would say five or six weekends where I just got really bummed out by something, probably two or three of them started on Twitter. I thought, why am I on something that's making me on a regular basis upset? And there's an addictive nature to it.
I think it must be just, and that's what freaks me out. I can modulate it. You know, can my 13 year old son, and I even know that he's upset when he goes, we have a rule in my house, bar boys aren't allowed to go into their rooms with their phones alone.
Because I think this thing can literally take a teenager, especially a teenager girl down a rabbit hole and kind of zero to 60 really fast and then start serving her content. Oh, you're worried about dieting? Well, here's extreme dieting tips, despite the fact we know you're 5'10", 95 pounds. Oh, you're depressed? Well, here are some videos of people considering suicide.
We're going to normalize it for you. And I don't think parents are really in touch with just how ugly and how fast it gets really ugly. So, you know, I'm trying to be very thoughtful about what it is as a, you know, stoicism, controlling what I can't control, and then trying to be in better touch with my emotions and recognize that when you're down, it's more about the chemistry in your head than any legitimate reason to be down.
You're going to look at the end of life, the biggest regrets. My colleague at NYU, Adam Alter, did great research on people who are very near death and palliative care. And their biggest regrets are one, they'd wish they'd stayed in better touch with friends.
They wish they'd lived the life they wanted to lead, not the life society or their parents wanted them to lead. But their biggest regret is they wish they'd been less hard on themselves. They wish they'd forgiven themselves.
They wish they'd allowed themselves to be happy. And that's kind of been, that's something I've been very focused on. It's like, okay, stop beating yourself up.
You're going to be dead soon. Why wouldn't you squeeze as much juice out of this lemon as conceivable and like afford yourself the opportunity to be happy and be sad if you need to be? But I think of stoicism as, again, life isn't about what happens to you. It's how you respond to what happens to you and decide what is in your control.
And, you know, try and be good to yourself, try and forgive yourself and also just try and be humble. You are never more prone to a really big mistake than right after a big win. Because here's the thing, you start thinking you're good at picking stocks.
You start thinking you're so skilled at work, it wasn't that someone senior to you took an interest in you and championed you. You start thinking, oh, I'm great at real estate. I just didn't get lucky and buy a home at the right time.
So be trying just try and ignore the market when the market tells you your failure. And this is personal too. You know, there's been moments in my life where I thought, I don't think I'm ever going to be able to work again.
I think I've ruined everything. I don't think I'm ever going to make a very, very good living. I remember thinking saying to my partner at the time, let's move to a low-cost neighborhood of Charlottesville or Raleigh Durham.
I'm going to teach, try and write, you know, make decent livings and just have a really nice life. And my partner's like, that's giving up. I'm like, well, it's not giving up.
But I thought this is it. I just need to substantially downgrade my expectations. And I don't mean to say that that's not a great life.
I remember thinking after my divorce, like, I don't think I'm ever going to have someone who I can share my life with again. I'm like, this just is never going to happen to me. Unattractive, broken man who's never going to find like a partner again.
I believe that for a short time. And I think that it's important that everybody recognize that, you know, you are the answer to a firm's problem. You can find someone who you can love and is going to love you a great deal.
The key is getting up, putting in yourself in a place of success, getting out of the house, being friendly, being risk aggressive, surrounding yourself with people and exercise nutrition that makes you feel good about yourself, such that when the winds kick up again, your sales are up. And I've always tried to do that. I've had a lot of failure, but I was always had my sales up such that when the winds kicked up again, I was in a position to rumble, so to speak.
Because I have a lot, I know a lot of people who are very successful and then they hit some failure, a personal failure, a death of a parent, they can't quite get over a divorce, a company that fails, and they get stuck. They can't forgive themselves. They can't forgive others.
They can't forgive the market or they don't, they lose their mojo, whatever it is. And two, three, five years, seven years goes on and they just haven't progressed and they start, their skills start atrophying. Their confidence starts atrophying.
So what I say is put a statute of limitations. Whenever anything bad happens to you, you got to put a statute of limitations on it. A parent dies, you know, within 12 weeks, you should still be sad and thinking about your parents, but you should be able to function.
You know, you go through a real emotional trauma or a breakup. Well, how serious was it? How much time? What's the statute of limitations? A business goes out of business? Okay, mourn for a little while. What is that? Two months, three months? But if you are better, if you are back sending out emails, trying to raise money, going out, trying to meet new people, whatever it might be within that timeline, you need to reach out for help and get unstuck.
Because time goes really fast and your skills atrophy in a sort of a downward spiral. And something I've always been able to do is mourn and move on. Churchill said the key to success is the ability to move through failure without losing your sense of enthusiasm.
And I've tried, I've been pretty good at not losing my sense of enthusiasm.
SPEAKER_03
You've got brilliant ideas. I think you're a good business person, but you talk about not just following your passion, but your talent. And I think that what you're most talented at is communication.
I've seen you speak live. I've seen you, I listened to the pod. I've seen your videos.
You do such a good job at picking really sharp words and sharp phrases and just small examples like a kutcher man. I've noticed that you love that word and I've never heard anyone use it as much as you. And I'm like, oh, I love that word.
The one who uses that word, it's a beautiful word. Or you sign your emails with, life is rich. You've got beautiful phrases.
I think that, by the way, I even had a chat, GBT, where I uploaded like 150 of your blogs. And I would ask it questions to help give me ideas for phrases because you're really good at that. Who do you steal from when it comes to, or who are you inspired from when it comes to language? I mean, you seem like someone, if I had to guess, like you're a George Carlin guy, something like that.
Who do you steal like some of your delivery from or inspired by for writing? Because you're really good and do you have like a bank of like, when you see a phrase, you're like, oh, I'm going to take that phrase and use that somewhere.
SPEAKER_02
If you don't have a kitchen cabinet of people that you learn enough about that you can mimic them, you're trying to play a team sport, so you're on the field alone. And I didn't figure that out until I was older. So I absolutely, when I see something inspiring, I read maybe one book a year.
People think I'm well read. I'm not, but I'll find a book that's really meaningful and I'll try and read it two or three times so I can adopt it into my gray matter. Like Daniel Kahneman's Thinking Slow and Fast.
I've read that book a few times and I know everything about loss aversion theory. I know a lot about the relationship between money and happiness. I read Observations of the Byte Standard by Peter Drucker.
I read Sapient several times. I want to like really, really, you know, embed stuff. Lately, I write down things in my phone that I just think are fucking hilarious, like jokes.
You know, when my, I wrote down something today as a prank when my doctor walks in, I put on gloves. I'm going to try that. I love my doctor.
I love the idea of him walking in and me snapping on gloves just to see his reaction. We were talking about Trump today and I saw this great quote that said, consequences rarely show up lubed. I love that.
I just, whenever I see something that really, I just think, you know, I love going out in the public except for the fact that the public is there. You see these things every day and I will write them down and incorporate them into my rap and especially great phrases, you know. Greatness is in the agency of others.
I remember my VC said that. I'm like, that just makes so much goddamn sense. I'm going to use that over and over and over.
So I have a lot of inspiration. I surround myself with really intelligent young people. I know that's ages, but I think young people have a different frame on things that help me.
So, but to not, to not sort of, if you're just reading something and not, you don't take away stuff you're going to remember, you haven't really read it. You haven't really absorbed it, but it's all manner of stuff. I think you're right.
I'm totally inspired by George Carlin. I think he's fantastic on society. I've been inspired by Ricky Gervais.
I'm inspired by this comedian named Michelle Wolf. I think she's fantastic. But yeah, I've read a lot about Muhammad Ali.
I think he's, you know, be courageous, be poetic. But yeah, absolutely every young person should find a couple of people they find really inspiring and try and learn everything about them and what they said such that you can kind of turn on your Muhammad Ali. And, you know, Madeleine Albright, Secretary of State, you know, four foot 10.
I find her inspiring around policy or geopolitics. So I've read a lot about her. Our, you know, our memory is long and our reach is far.
I love that she used to say that about America to its enemies, right? Basically a really eloquent way of saying, don't fuck with us boys. And I just love that this 410 woman only in America can wield, you know, the most powerful nation in the world in terms of our foreign policy abroad. And I found her and she was an immigrant.
I just found her inspiring. So I wanted to learn more about her so I could be her on occasion. Anyways, yeah, build a kitchen cabinet of people.
SPEAKER_04
I got a, my notes app here. It's called Funny Phrases and I just, I collect these. I'll give you, I'll give you three of my funny phrases on here.
They're completely out of context. So you won't get it, but you'll get it because you do sounds like you do this too. When somebody's thick, you could say that they're built like a baguette.
I like that somebody's got the body of a baguette. Okay, next one. If you want to talk about something that other people are avoiding, you say, look, I'm going to address this like an envelope right now.
SPEAKER_02
That's a dad joke.
SPEAKER_04
Another one would be for CEOs who have bad, you know, a terrible sense of vision of the future. If this CEO was the shooter at JFK, he would have died of natural causes. I love these little, little isms, little phrases, little sentences.
SPEAKER_02
You're going to lose this game. Okay, so he looks like a suicide bomber that's having second thoughts. This is more serious.
I absolutely, I absolutely love this one. This is more true life advice. Your goal isn't to get the apology, but to forgive the perceived debt.
I love that. I love that. I wrote this thing down.
This is really bad. I'm teaching my son about sex ed. He walked into his room with a banana in a condom and he said, what's the banana for? And I said, I can't get hard on an empty stomach.
I literally think that's the funniest fucking. That just hit Sam. That literally just hit Sam.
I just think that's so inappropriate. And so anyways, sorry guys.
SPEAKER_04
All right, I'm not going to, this is like getting into a rat battle with Tupac. I'm not, I'm not going to, I'm going to put away my swipe file right here, even though I just had a good one. I'm going to give up.
You win. What are you excited about right now? Like what are some things that are going on in the world or products or ideas or trends? Like, you know, I think you talk a lot about like, you know, stuff that's wrong with America, with the world culture, with society, but I want to know the opposite. What are you, what are you pumped about?
SPEAKER_02
That's not easier for me. I mean, I'm to be blunt, I'm a glass half empty kind of guy. I think a lot about loneliness.
I think a lot about struggling young men. I think about the threats of AI. What am I excited about? I have a work with a really talented group of people that are really inspiring.
I love the work we're doing. I mean, I just really enjoy it. I get to travel a lot with my kids.
I got kids that are at a great age and I get to do a ton of fun stuff with them. That's really intoxicating. You know, I'm just, I get to have a really nice life at this point and I'm just enjoying it with a partner, just really leaning into my kids.
You know, just the hallmark shit. I'm just really having a nice time with the people closest to me and I'm healthy. I got good healthy kids.
You know, the boring stuff, man. It's not anything kind of, I mean, I'm going, I'm on my book tour this week. I go to LA for Bill Maher and then I'm meeting a bunch of college buddies and I'm going to stage coach and then I go to Miami for a bunch of speaking gigs and then I go home to London.
I mean, I just have a, I have a really nice life right now. And everyone I care about is healthy. I feel relevant.
So I just have such a wonderful life and I'm trying to slow time down so I can really appreciate it because, you know, there's no getting around it. I had lunch with Ted Sarandos, which I realized is a name drop, but I'm desperate for your guys affirmation. But his wife wrote a book on grief and there's this great line.
She has this great line and that is grief is loves receipts. And I just love that. I just, if you really care about, I didn't have a lot of grief until the age of 40.
And I realized it was because there's one in my life that I really loved or really loved me other than my mom. And so, you know, what I would bless or wish for anybody is they have a lot of grief in their life because what it means is they have loss. And when you have loss, it's because you had something wonderful in your life and you miss it.
So I'm just trying to appreciate how just nice things are and really, you know, I don't, you know, I'm not really excited about, you know, the Euro finals in Germany. Although I am excited about the European finals in Germany. I'm just enjoying myself.
I'm rounding third. I have a really nice life right now. I'm just trying to enjoy it because I know everything everywhere ends.
SPEAKER_04
You say for people who are not rounding third, like people who are, you know, just just batting lead off right now. So you talk a lot to young people. One of the phrases I really liked or one of the quotes I really liked was that opportunity is a function of density.
You said, yeah, you get to a place that is crowded with success. What do you mean by that? Because that seems like really good advice for people.
SPEAKER_02
Well, and sort of the motivation for the book was, you know, that study that you are kind of the average of your five closest friends. There's this weird study that peer group, the five people you hang out with, you end up being the same body mass index. You end up with similar political values, same jobs, same neighborhood.
It means it's weird. You become the same person. What's different though with this greater variance is that of those five people, even though they make kind of similar incomes, one will end up poor, three will be okay, and one will end up quite wealthy.
And I tried to understand the behaviors that are different and the strategies between the person that ends up financially secure and the others that are less financially secure. And there's some general best practices around youth. You absolutely want to get to a city.
If you're ambitious, I'm not suggesting this is the right way. It's just my way. If you're ambitious and you want to have influencer economic security, before you collect dogs and kids, you got to get to a city.
Two-thirds of economic growth is going to happen in just 20 cities. And so if you're really ambitious, I mean, get to the biggest city in your nation, then get to London if you're in Europe or New York in the U.S. or if you're in Texas, San Francisco, because those cities are really competitive and you're going to be playing. You know how when you play tennis against players better than you, your game elevates? When you're in this big city, you're playing against the best players in the world.
It's hard to live in Brooklyn. It's expensive, which means you got to be really good at what you do and you're surrounded by people who are going to inspire you and who really will elevate your game. And at some point, you'll probably have to move out of the city because it's difficult with kids.
But while you're young, get to a big city. Try and find really high-character successful people to hang out with. Just find people you want to be like or that you admire professionally and personally and try and establish those friendships and try and hang out with them because you rise or fall to the level of your peer group.
And the thing about cities is you're just bumping off opportunities. And I've moved to London and my reductive analysis of the US versus Europe is the US is still the best place to make money. Europe's the best place to spend it.
So if you're in the making money part of your life, it's hard to beat the US. I didn't appreciate the American economy until I left it. People start from yesterday.
How can we work together? How can we build something together? How can we make money together? London, it's sort of like a very polite, indefinite maybe. There's very little actual organic value creation in London. It's people servicing other people's wealth that they made elsewhere.
There's nothing like America that says to a young person, if you work your ass off and you're really good and you get a little bit lucky, things can happen for you here.
SPEAKER_03
All my British friends, they say that they grew up being afraid of tall poppy syndrome, meaning they didn't want to stick out because their teachers would tell them, shut the hell up, get in line. Whereas in America, if you do something interesting, even if you fail, you're rewarded as being a hero of like, well, that's awesome, man. You got after it.
Even if it sucked, the outcome wasn't good. We praise you for getting after it. And I think that's a very unique American thing compared to Europe.
In Europe, if you stick out, you're chastised.
SPEAKER_02
Well, not only that, but people say in America we embrace failure. That's not true. But we do tolerate it.
And so only one out of seven businesses succeed. So my strategy has been to start nine businesses. And I got to two wins.
And all you need is one. And if you aren't trying really hard and taking risks and failing and then knowing to pull the plug and move on, you're not taking advantage of the American embrace of risk and failure. I've never had trouble raising money because of past failures.
People didn't mind that. As long as you treated your investor as well, as long as you were a decent person, you didn't do anything stupid or unethical, people don't have a problem funding you again. I've had a lot of failure professionally, but I've never had.
.. Let me put this one. When I couldn't raise money, it wasn't because I had failed before.
And that's true in relationships. So yeah, the embrace or the acceptance of failure in America is singular. And it's a wonderful thing.
And if you aren't trying and taking a lot of risk here, you aren't taking advantage of an economy that's one of the few in the world, one of the few societies. I mean, if I was born in China, I'd probably be in jail because I'm outspoken and say stupid things. If I was born in Europe, you know, I think I'd be a talented business person, but I wouldn't be an entrepreneur that had recognized this success because they don't embrace failure or that's wrong.
They don't tolerate it the way we do.
SPEAKER_03
Can I ask you a question about hard work? And the reason being is I found some what read as contrary things in your work, or at least in your story and what you write. And so Sean and I have talked a lot about this, about hard work. And I think people who say they work 80 hours a week for a really long time, I think they're either lying or they did a lot of bullshit work.
I think it's to work 80 hours a week for an extended period of time. It's incredibly challenging. And you talked about in this book, as well as some of the other blog posts, you're saying, in my 40s, I grinded my ass off.
All I was focused on was money, and it worked out. But that's all I did. And I'm happy I did it, but it was really hard work.
But then I read about how you delegate a ton. I think you said something even as crazy as like, you have someone pick out your clothes and you wear mostly the same thing. You have your workout outfit and then your work outfit and how you have Prophety Media.
You said something like, you only meet with your executive producer twice a month. You only have one hour meeting once a week with the editorial team. You haven't planned vacations in 20 years.
And all you do is focus on a handful of things. But even though you're crazy productive now, I don't know, are you still grinding and looking back, knowing what you know now, could you have gotten to where you've gotten without that 80 hour a week for multiple years work ethic?
SPEAKER_02
Well, things have changed dramatically for me now. I'm not working nearly as hard. And I hire a lot of people and I'll over not over hire, but everyone works hard.
But I don't I mean, when you have a small business and you don't have a lot of money, you know, you just you got to get everyone needs you need to work hard. You need to set an example and you need to create an environment where everyone's working hard. I'm not sure I was ever working 80 hours a week consistently.
I definitely had weeks like that. But when I look back on it kind of, I don't know, 10, 20, 10, 15 years, I don't remember much else other than work. I mean, I worked out when I had kids, I tried to spend some time with my kids.
I still found time for fun and vacations. But, you know, I would vacation two weeks a year. Now I vacation a lot more than that.
And but I don't see any way around it. It's really my kids when I say my kids, my students, I'll ask them how much money they expect to be making by the time they're 35. And about 90% of them expect to be in the top 1%, which is $750,000 a year in America.
And then they'll talk about that. Like that's what I expect. But I'll say, what's most important to you in your life and moving forward.
And a lot of the time they say balance. And I'm like, so you expect to be in the top 1% by the time you're 35, but you also believe you're going to have balance in your life? I mean, I don't, I've never seen that. I don't, you can have it all.
You just can't have it all at once. And by the way, that's, that may not be the way to go. You may sacrifice, you may say, I want to live a nice kind of balanced life.
I'm going to move to a suburb of St. Louis, coach Little League, work 40 hours a week, be a good citizen, find a good partner. You know, coach Little League, have a nice life.
Nothing wrong with that. But the majority of the people I know, the young people think they're going to be in the top 1% and also have balance in their life. And I just think it's ridiculous.
I'm like, okay, the only way to get there to achieve that is if you have one thing and that's rich parents. Otherwise expect to go all in on your career or scale back your expectations around your economics and your influence because it's a competitive market. And one of the things people can control is how hard they work.
I don't think you want to, I don't think you want to work so much that you sacrifice your health or your relationships. There is going to be some trade off with your relationships. I didn't see my kids a lot when they were little.
I was divorced. I think it was a contributor to that. I was always working in services companies and never saying no to any opportunity.
The CMO of Samsung, can you be in Seoul tomorrow for a board meeting? Sure, I can. You know, I mean, I just said yes to everything to try and move the company forward. But I, for a long period worked very, very hard and sacrificed a lot and it takes a toll.
And I did it such that I could have a lot more balance now. But yeah, I don't, this notion, the myth of balance, get over it. If you expect to be influential or economically secure, you're not going to have a lot of balance for a long period of time.
Some people are such geniuses that they can work a modest amount of time, make a lot of money, work out, have a great relationship with their parents, be fit, donate time at the ASPCA and have a food blog. Assume you are not that person. So just have a sober conversation and also have a sober conversation with your partner.
How much money do we expect to have? Who's responsible for making it? What's your approach to spending? Where are we going to live? You know, the number one source of divorce is not infidelity or lack of shared values. It's usually got something to do with money and also 70% of divorce filings are filed by women who still, and we don't like to say this because we like to pretend women have no agency and that they're just doey little foes. Is the man loses a business, becomes broke or has a mental breakdown? When a man loses his status as a provider, he's very inclined to be on the wrong end of divorce.
So I think a lot about young men. I think a lot about financial security. I think every man should start with the notion that he's going to be responsible for the economic well-being of his household.
And by the way, sometimes that means getting out of the way and being more supportive of your partner who happens to be better at that money thing than you. And that's a wonderful thing. But start from a position of this is my responsibility.
And make sure you're aligned with your partner around this stuff because the thing we don't talk about is that your kids are going to have higher blood pressure if you're economically strained. Kids in low-income households have greater systolic resting blood pressure than kids in middle and upper income homes. You're much more likely to get divorced.
You're much more likely to have a stroke. You're much more likely to be the victim or the perpetrator of domestic violence when you don't have money. You know, America becomes more like itself every day.
And that is it's a loving, generous place for people with money. It's a rapacious, violent place for people who don't have money. So all this bullshit that money doesn't buy you happiness.
Oh my God, is that a myth? I'm not saying you need to be incredibly wealthy. The middle-income people are happier than poor people and wealthy people are happier than middle-income people. That's the bad news.
The good news is that it tops out. You get diminishing returns. And you have to be cognizant of when you do get to some level of economic security, that's the means.
The ends is such that you can have an exhale, release the anxiety that you feel, and then use the opportunity to really spend a lot of time with your loved ones and cement those relationships. And the problem is you get on the sadonic treadmill and you get so absorbed in your own success and your professional identity and money and making more money that you never get to the ends. You wake up a wealthy person or someone who's financially secure, who's always thought about their economic well-being, and you don't really have a great relationship with your kids, or you never really leaned into your partnership and thought, okay, let's take time to really enjoy each other's company.
Let's do nice things. Your parents died before you have a chance to really spend time with them as adults. I think that happens to a lot of people.
They just get so caught up and I need the next promotion. I need the next amount of money. And once I get here, I have someone very close to my life.
It's a family member and I'm taking them to Africa and they're like making excuses, but our kids in the choir, they weren't making excuses. I'm like, you realize this is your last chance to go to Africa before you're dead, right? You're 50 fucking years old. When do you go when you're 70? But you got to get back to work an extra day.
I mean, what are you thinking? We're going to be dead soon. And I just think so many people don't realize how fast it's going to go by and never really, never really like super, not only super lean into the relationships, but just allow themselves to have a great time. I'm going to stagecoach this week.
I'm going to go to country music festival. I can't stand country, but I'm going. I'm going to buy a pair of boots.
I'm going to have a great time and I'm going to do an edible and I'm going to drink a shit ton and I'm going to have arrested adolescents with my friends and I'm going to look ridiculous. And it's like, yeah, why not? Why the fuck not? What am I going to do? Watch C-Span all weekend? Anyway, I can't stand it when people who are blessed with being in this country have some level of economic security, have people in their life that love them and they love and they don't like crazy lean into it because you guys are younger than I can. It just goes so goddamn fast.
It's just crazy. It is just crazy how fast it goes. Anyways.
SPEAKER_04
Well, I don't know how to respond to that, Scott. Here's what I do know. I feel like I learned something and I feel a little bit bad inside.
At the same time, I feel a little bit good and you made me feel a little bit bad and I need to go and I need to like burp or something. I need to get a little bit out of my system. I just need to unwind from that.
Do they not have Zoloft in London?
SPEAKER_02
I haven't hit the anti-depressant. I just had ketamine therapy though. That was a trip.
No, I'm trying to just, you know, the good news is I hate my life less and less every day. So I'm sort of getting there. I'm sort of getting there.
SPEAKER_04
You're like if Mitch Hedberg had a podcast and opened an LLC.
SPEAKER_02
Are we going to talk about my book? Do you think I got to number one talking about like doing therapy with you guys on these Joey Baggedonan's podcasts? Are you going to bring up my book?
SPEAKER_04
Yeah. Tell us about the book. Okay. We talked a little bit about the book, but tell us the floor is yours. Take your case as to what I'm going to get out of this book because I'm going to buy it and I'm going to read it.
Thanks for that. But I'll read it with a different level of enthusiasm if you give me a little teaser of what I'm going to get out of it.
SPEAKER_02
Okay. So the algebra of wealth is the following. You know, find your talent, focus, workshop your 20s in an industry that will pay you.
Once you have a certain amount of momentum professionally, really try and develop a savings muscle. Wealth isn't about how much you make. It's about how much you spend.
Try and just get to the point at a fairly early stage where you spend less than you make. That is very difficult. The brightest companies and minds in the world are all here to convince you that an upgrade from economy to economy comfort to economy plus to business classes and investment in yourself.
No, it's not. It's consumption. Don't try and impress other people with your shit.
No one's as concerned with your shit as you are. You don't need to order a bottle of vodka at a club for 450 bucks. Get a Hyundai for God's sakes.
Travel coach, save money. Start saving money early. Lean in.
If you're young, lean into your advantage. And that is you have a lot of time. Develop that savings muscle.
Diversify the moment you have any real capital. Start diversifying that way no matter what happens. You have Kevlar.
You can have a stock of zero and a bullet hits you in the chest. It doesn't kill you because you're diversified. And then take advantage of the flaw in the species and that's time and recognize that time will go faster than you think.
And if you're just a little bit of discipline, a little bit of maturity, a little bit of that savings muscle early, that the S&P is up 11% a year since 2008. Well, that sounds boring. Now that means every 21 years your investments are up 8x and that 21 years will go really fast.
So hope you sell a bestselling book. Hope your company goes public. Hope you, you know, your album goes double platinum or some rich uncle dies and leaves you everything.
But just in case, make sure you're financially secure. And I can get you there. If you follow these principles and show a little bit of discipline, a little bit of maturity, because the good news is I can get rich.
The bad news is the answer is slowly. We can get you there.
SPEAKER_04
So the algebra of wealth equals focus plus stoicism times time times diversification. That's the formula. That's the formula.
You're the formula guy.
SPEAKER_03
Like you, you, you've, a lot of your talks, you use formulas to explain stuff. You've had the algebra of happiness. Now the algebra of wealth.
All right. Is this going to be a whole algebra of blank series? Cause anytime I see that I'm into it. If it's an equation, I'm into it.
Yeah.
SPEAKER_02
So humans need constructs to remember things. You can read a book and if it doesn't have constructs or visualizations, it's pretty easy to forget about it. So I really like constructs equations.
I read the algebra of happiness, algebra of wealth out today. And I just, I'm about to sign a three book deal. I'm writing the algebra of masculinity, the algebra of work and the algebra of mating.
Those are three topics I'm super interested in. And I want to try and do enough research where I can distill it down to some best practices that people can hold on to.
SPEAKER_04
Well, I want to talk about the first variable in this. You said focus. Cause we talked about stoicism.
I know about time. I know about diversification, but teach me about focus. I'm pretty bad at, at focus trying to get better.
Give me a couple of words on focus as part of this, this equation.
SPEAKER_02
If you have a side hustle, you need to find a different main hustle. You're better off with the time you spent on a side hustle, investing that incremental effort in your main hustle. And if you constantly find a side hustle is fine if you're investigating a new main hustle, but the way you get wealthy is not a variety of things.
It's being really great at one thing. So that's the focus and the term we use is mastery or ninja like capability, but try and find something you could become great at. And that is, you know, that's not, that's not easy, but also fine.
Again, we talked about this before finding it in an industry that's not very sexy. Cause if you're in the top 10% of tax law or of installing HVAC or energy efficient HVAC, or you're in the top 10% of people who know how to install soapstone kitchen counters, you're going to make a really good living. And taking care of your kids is just so much fun.
Being able to be there for your parents is economically is just, is just really exciting and a really a lot of fun. And I think young people mistake passion for their hobbies, not recognizing when they get older to be able to give money away, to be able to do nice things, to be able to relax with your partner. You know, it's just super enjoyable.
It's almost as fun as, you know, spinning to, I mean, that shit is fun. That is really enjoyable. And so put yourself in a position when you're a little bit older, because it'll go really fast to just do wonderful things with people you care about.
And the way you get there is by making more than you spend saving. But the first thing you got to do is find a focus, you know, find something. You know, we are living, we live in a specialist economy.
Find something like that's here. Try and just think, could I be great at this? Could I be great at this? That's not the question. Because if you become great at it, trust me, you'll become passionate about it.
And you can't become great at anything you hate. That's not, that's just going to be automatically screened out. I'm not suggesting drudgery is the way.
If you find something drudgerous or whatever the term is, you're just not going to be great at it. But I found consulting. I never, I didn't know what consulting was when I was in college, even business school.
I figured out, wait, people will pay you to wrench your brain? Wow. And I was always really good at establishing these proxy father-son relationships with powerful men. And then basically my core deal with them is, I understand brand better than you.
You're the CMO. I'm going to make you the CEO in three years. In exchange for that, you're going to pay my company a million dollars a year to answer very deep, hard questions.
And I figured that out at kind of my late 20s, which was a blessing. And then when I sold the company, I'm like, I don't want to be in services anymore. It's a young person's business.
I'm sick of being on planes. So I had to workshop my life again. And then I figured out, okay, I'm a good teacher.
What does it mean to be a good teacher? It means you have to be a good storyteller. But what if I story told in different mediums? Could I make money in books? Could I make money speaking? Could I make money in podcasts? And I figured out, yeah, I'm good at this. I could even be great someday.
And that mastery has led to a really nice, nice life. But I've always tried to spend reasonably, spend less than I was making, sometimes more than others. I finally learned to diversify the hard way.
I lost everything twice in 2000 and again in 2008, because I thought it was so awesome that whatever is my focus, this is naturally going to be successful through my sheer force of character. That's not true. So I started diversifying.
And just kind of followed these basic principles and let time take over and really started saving a lot of money in my 40s. I deployed an army of capital to start fighting and killing for me and my family and my sleep. And that army just grew in a bull market.
And came home with just immense spoils for me. Because I deployed this army early and often and I kept adding to it. I was like, here's a tank.
All right. Okay, I'm saving money. I'm not going to have the fat apartment.
Right. Okay, here's some more artillery. Go kill more people and come home with money.
That's a little bit much.
SPEAKER_04
Anyways. We're still working off of that one.
SPEAKER_02
Yeah, still working through that one. Wrong choice of words. Accoutrements.
The accoutrements of my army.
SPEAKER_04
Scott, thanks for coming on, man. And everybody go buy the book, the algebra of wealth. He has to be number one on the charts because he needs our affirmation and let's give it to him.
SPEAKER_01
Thanks guys. Thanks for your success. Thanks, Sam.
Thanks, Sean. And thanks, Ari.