SPEAKER_01
Welcome to the show. Yeah. Thanks for having me. First time here.
SPEAKER_00
Michael, Carn, Jin, Nap, Croot, Corn. How do I, how do I pronounce it? Got it right. Carn, Chin, Apricorn.
Okay, cool. We are in some group chats together. We've never actually chatted.
I followed your work a bunch. You know, you created Skillshare, which obviously is a huge education business. You created Otis, which was acquired by, you know, public.
com where I'm actually an advisor there. You were at Behance, which got acquired by Adobe and a friend of the pod Scott Belsky started that. And then Hop Potato, which was an OG New York startup acquired by Facebook.
So you've been around the block and seriously. And I've really been interested in your work recently because you're basically trying to figure out what's next and you're writing, you're starting a YouTube channel about creators. And why I wanted to bring you on the pod is to talk about how you're thinking about what's next and how you're thinking about money.
Something that we don't talk too much about on this podcast, but like straight up, like, let's talk about money today. Let's talk about money.
SPEAKER_01
I would say on what I'm doing next, I have like a document I read in the top, it's like rest and recover and rejuvenate. So it's just like a constant reminder for myself to like, don't sprint right now, just like have fun and recover. But as I had a lot of free time, I started thinking about money and just my relationship with money.
I didn't really come from a lot of money. So it was really important to me to have money. And I remember when I started Skillshare, like the mission was the big motivator.
And I kind of told myself that money wasn't, but it really was. I mean, if you really think about what makes the internet kind of run, it is people making money, you know, they're content creators posting because they can make money. And we start businesses because it makes money, but it also makes us money.
So I think the big change for me was thinking through like, what happens after you get to a certain amount and why accumulate more money when it's very marginal. So I've been very fortunate to, you know, working tech starts for a long time to be an angel investor, to be early in crypto. So I've had a couple of windfalls and through that, it just kind of flipped everything I understood about money.
So personally, I don't want to become a billionaire. I think every dollar over, for most people, 10 million is pretty marginal. It doesn't really add anything else.
I've done a lot of research into like what they call hectomillionaires. So these are people that are worth over 100 million network liquid, you know, either through Reddit or just talking to people there that much. And I heard a couple of themes that people just don't talk about.
Like one is you literally physically cannot spend that amount of money. It's just very difficult. So after you buy all the toys, you go through all the, you know, hedonic treadmill of, you know, buying something and then buying the next thing to get that same feeling.
There comes a point where you just don't have things to buy anymore. And you get really bored and you start questioning, you know, what your purpose and your mission is. And I realized a lot of these people are dealing with questions around self actualization.
And I've noticed that they all dealt with that in a very, very different way. So some people went back to work and I would say that sub sub bucket was either because they were very mission driven. So they felt like they're really making huge impact in the world.
And that was what they wanted to do. And some people went to go make more money because, you know, they were flying first class and then they were flying like small private jet life. And they rode on a private jet with their billionaire friend.
They're like, Oh, I want that. So they went back to work to pursue that or it was like related to their ego or what have you. But the short answer is I think money is good.
And we should talk a lot about it. But it does become pretty marginal at some point.
SPEAKER_00
How would you recommend people think about what their numbers should be? And should they even
SPEAKER_01
have a number in the first place? I think people, yeah, for sure should have a number. I think everyone has a few number, which is basically the number you would reach where you have complete control of your time. You could do whatever you want.
I think, you know, for those of you that haven't read my newsletter, I decided to dedicate a few bullet points to money. And at a high level, here's kind of what I wrote about. So I just pulled it up.
So one is money does buy happiness. I found this research report that says, you know, we've been told that happiness doesn't increase above 75,000. And all you really need is $75,000 and every other dollar after that's marginal.
But there's this new research that shows that, you know, the well-being rises with income and doesn't really plateau. So they weren't really tracking billionaires, but I would think that it plateaus at some point. And what money can provide is financial independence, you know, which also gives you freedom and allows you to choose and pick what you want to do with your time, which I think is one of the biggest factors for happiness in life is when you can wake up and say, and financially independent, and I could work on my own terms, I could work on whatever I want with whoever I want, and I don't have to worry.
The third thing I wrote about tied to that was most people when you read about money, it's usually related to like flexing, right? It's like, yo, I just got this new rolly or, you know, I'm just traveling around the world. I'm, you know, flying in these jets and, you know, like in the Maldives, you know, I'm human, like I like having that nice things, but most people should look at money as a tool to becoming financially independent, in my opinion, which gives you the ultimate luxury in life is freedom and time. So what is the right amount? So I think a couple of weeks ago, Jason Calcana wrote like a couple million, you're good.
10 million is your FU number for pretty much everyone and 25 million, you're really dangerous. Anything above that, who cares? I totally would agree with that. I would tweak this for the average person.
So I think he was referring to like people in tech, because with 25 million, you could start any company, you know, if you have that much, you know, you could do whatever you want. I think it's like 5 million if you live in a small town, 10 million if you live in a medium sized town like Phoenix and 20 if you're like in a major city like New York. If you look at like the current, you know, Treasury bills rate, it's a little under 5%, but if you have like 10 million, that's like half a million a year in passive income, which covers like let's just say you don't have like a lifestyle like inflation or not, that's not the way we're, you're not like your expenses aren't really, really high.
That covers most expenses for most people. But I do, like I said earlier, I do think that money has a diminishing return. So I think for most people, the goal shouldn't be to make as much money as possible.
It's figuring out what your number is and hitting that and then figuring out what your mission or purpose is basically and what you want to be doing with your time. If you want to just be relaxing, spang to your family, do you, if you want to start another company, you can if you want to become a content creator, if you just want to double in projects, you want to become artists, I think that is what most people should kind of reach. And it's not easy, right? So I'm not saying five or $10 million is an easy number to get to, but it kind of flips the notion on its head that, you know, because everyone, like our society idolizes billionaires, but it's much more realistic to become a millionaire.
And I think that should be the goal for most people, not to buy more things, but there was like an acronym called FIWOOD, because there's like FIRE, which is financially independent, retire early. And that didn't really vibe with me because I was like, I'm not trying to retire early. I have a lot of ideas, a lot of energy.
And I found another acronym was like FIWOT, which is become financially independent, but work on your own terms or work on own terms. I was like, dude, that's that's pretty dope.
SPEAKER_00
That's definitely what I want to be doing. That's our generation version of retirement. Yeah. Which is like to us, retirement isn't exactly go hang out on a beach and join a golf club or something and do nothing. Yeah. We want to be creative and we want outlets. But one of the reasons why we want money or I'll speak for myself, like when something unexpected comes up, maybe there's a medical emergency, maybe there's, you know, I just got a letter today that my condo building is increasing their condo fees.
The feeling of in your stomach, like, oh, like, you know, that bad feeling, I think we've all had that bad feeling of like something unexpected comes out or something's expensive. When you have money, you care less about those things. Yeah, that's like the second
SPEAKER_01
order effect of having money is I think we all, everyone has challenges in their life. Everyone runs into problems. That's just, that's just life.
But you can have obviously a life of a lot less stress when you don't have to worry about all those little things that kind of pop up on a day to day basis. And I've seen that in my own life where, yeah, that comes across and kind of like, okay, that's not a big deal. Where when I was much younger and much poorer, I was like, dude, that sucks.
Like, oh, shit, like that's that's a vacation out the door, or that's like, a reset on savings. Like, shit, I have to start over again and go from zero back up to a thousand or 5000. So money does help.
And I actually think it's a good thing if used correctly. I think a lot of what we see in in culture today is money being used incorrectly. Like when you watch, you know, on social and celebrities and how they're using it, it's obviously like if you grew poorer and you want, you know, in your car, whatever, or Porsche is like, yeah, you're going to go buy it, and you're going to show that off.
And you're going to feel good about that being a reminder of like where you came from. But doing that constantly is not, in my opinion, the best use of money.
SPEAKER_00
Yeah, I think, you know, there's money and then there's, there's wealth and I think they're different. To you, what's the difference between money and wealth?
SPEAKER_01
I kind of view a new version of wealth, right, which is all the intangible things that are valuable. Let's say something as simple as having great relationships with people, developing great experiences, learning, constantly improving, all you do like having sense of purpose, working on things that you want to be working on. And I kind of view that being wealthy, whether you're a millionaire or not, right? So I kind of view that as a new form of wealth, where money is just a tool that gets you there, right? So you don't need money to have that version of new wealth, but money does make it easier so that you don't have to go work a job, you don't want to work or things along those lines.
But, and I like that distinction, because from a wealth standpoint, you don't need to be rich to have that life. And I do see a lot of people with all different networks that are very wealthy. But that's kind of how I view the two, like one makes that version of wealth easier, but you don't need to have the money to get there.
SPEAKER_00
You recently moved from New York City, which I think is one of the most expensive cities in the world, definitely top five to somewhere in North Carolina. The concept of what Jay Cal was talking about, which is a couple million dollars for a small town, 10 million dollars for a medium town, and 20 or 25 for top tier city or whatever, did that play a role into your move? Or was it
SPEAKER_01
strictly personal? Strictly personal. I think it was in the middle of COVID and pandemic, we're living in New York, we didn't, we weren't planning on moving. It was just kind of like white families in North Carolina, let's just kind of go there for a few weeks and a few weeks or a few months and a few months or like, okay, let's just find a temporary house.
And then we're like, oh, this is actually not that bad. It's kind of cool. And then it went from like, are we going to stay here to like, or move back to New York? Well, let's just stay here.
And now it's kind of like, okay, let's plan route. So, you know, life throws curveballs like that, and you just kind of have to move with it. But what's funny is that while I live in like a, like, I would call it like a smidium, like somewhere between small and medium, like my expenses, I would argue would probably be a little bit less than New York is like, you have a house, and then you have cars, and you have to put gas in the cars.
And, you know, like, because in New York, you don't need to own a car, you can just take ubers or subway or bike. So it's just kind of like, on a monthly basis, it's, yeah, not it's cheaper. But yeah, New York is way, way, way more expensive.
But all those little things add up, like you send your kids to like school and that private school and that costs.
SPEAKER_00
Yeah, so it definitely adds up if you wanted to. There's definitely a jump in, like some quality of life that you're seeing by, you know, your dollar goes further in North Carolina than
SPEAKER_01
then New York City. Oh, for sure. I mean, the trade off for us was like being close to family, being close to nature, because in New York, there isn't, and we have today, you know, at the time, we had like a three month old.
So now the trade off is like, you know, where we live is a lot more family friendly. There's a lot more things to do outdoors. New York is a very social city.
It's like most gatherings or drinks, food, and, you know, cultural events. But it's not like you go on a hike, you know, to the top of the mountain within New York. If you're trying to make your
SPEAKER_00
first, you know, million dollars, five million dollars, 10 million dollars, do you recommend that person go to New York and network a lot, get those connections? Or do you recommend they go to somewhere like North Carolina where, you know, cost of living is a lot cheaper. They keep their costs down. Their saving rate, you know, doubles or triples or quadruples.
I think they should
SPEAKER_01
start something and own equity in something that compounds over time. And I think they should have a push versus pull strategy. So yeah, you can go to vent a network, but if you're not working anything, you know, like that networking that could lead to something one out of 100 people you meet could change a path that could change your career.
But if you'd start something, you would be kind of like a magnet that pulled people towards you. It's much easier network when you're building something. I think people younger should take a lot more risk.
I think as far as where you are in that risk spectrum is really up to you. Like I talked to go after a billion dollar outcome unicorn, you know, there are only 1000 of them and the odd to getting are very low. You could also buy business, you know, like a boring business, you could become a content creator, you could dabble in and try a new thing every year until something hits.
There's nothing wrong with getting like a $10 million outcome, like getting some savings in your bank account and taking a much bigger swing. Like you want to build some some crazy AI blockchain space spaceships, like go for it. But I think it really comes down to like where you are in your career and what your risk spectrum is and what level experience you have.
But if I were in my 20s, I would start a company or own equity in something and I would try to become, you know, a millionaire as quickly as possible. The challenge with startups is like, you're a liquid for some to seven to 10 years, minimum, the odds of you building a unicorn are very slim. And you can spend a decade of your life down that path and exit with nothing or, you know, a little bit above nothing.
So I think it's not for everyone and that's not what's often talked about. It's like kind of glamorized to build this billion dollar company and swing for the fences. But yeah, there are like a lot of companies that
SPEAKER_00
just don't make it through. So yeah, and they don't they also don't make it through sometimes not even because the founder or the team didn't do a good job, but because like the macroeconomic environment changes or, you know, their particular space falls out of vogue. One example of that is like friend of the pod Julian Smith who co-founded breather and breather had raised it was basically like an on demand office product, you know, they had raised like, I don't know, a couple hundred million dollars and ended up selling for scraps because, you know, we were imploded.
Yeah,
SPEAKER_01
people realize how much luck and timing goes into like majority of success, especially for what we do as within tech startups. You can have a great idea about the timing is off and it just will never work no matter how hard you try. Like it just won't work.
And then sometimes like you just work really hard and you just around for a long time where it just starts working because the timing just kind of shakes out to in your favor or you work really hard and like, you know, I'm thinking like bad run and gambling or poker just like things just don't go your way. And three, five years later, like, shit, that didn't work. And you have to like pick yourself back up and try again.
So I don't think people really factor in luck and timing, because most people believe that if they work really hard, they will become successful. But that's in my opinion, just not true. Like I know a lot of people that work really hard, they're just really unlucky.
SPEAKER_00
And it's just the way it is. Could we talk about the business of creators? I know this is something that you're really into right now. It's definitely in the category of like investing in yourself, because there's more control at least with an audience.
Like, you know, why are you interested in the business of creators? And yeah, let's start with that. Yeah, I would actually redo my answer.
SPEAKER_01
If I were my 20s, I would either take three paths. I had a really big idea that was really powerful for society, I would go after that knowing that like, okay, it might not work, but I have to try. Secondarily, I would say I don't have an idea, but I want to just make money right now and then figure out what's next, I would probably do like a boring business or, you know, something you know, something that was like low risk with like medium size returns.
And if I was creative and I had like a very unique point of view, then I would become a content creator. And the reason is, I think there is going to be a shift, you know, from like, people trusting celebrities to then trusting influencers to then trusting like, like very niche content creators. And the reason is for businesses, there's usually like two big factors or three.
Obviously, first at the product, second is marketing, and third is obviously teaming culture. From my experience, marketing has just become more difficult over time. As it gets more saturated, more competitive, you know, looking at all the chat GPT stuff, like do like this AI shit can like write better content than most content, you know, SEO specialists.
So if you look at like, any content creator or YouTuber, be built an audience, you can kind of leverage that into anything you want to do, like when I'm leveraging for recruiting, for fundraising, or for like marketing, a business that you launch. And that is something that you can do over and over and over again forever. So that's why that's what I would do.
And that's actually what I'm considering doing next to my career is like, providing value building audience and then kind of figuring out how I can leverage that later. And not even worrying about that right now.
SPEAKER_00
So let's talk about that. So you haven't really been a creator. I mean, you've been you've been tweeting just kind of, you know, you tweet thoughts and you haven't taken it a professional approach to creating.
And then recently, I saw, you know, you got a suite YouTube setup, you created a YouTube channel, you know, you're creating clips, like you're doing it. So how are you thinking about
SPEAKER_01
your 2023 content strategy? So taking one step back, I, you know, when I step down from doing tech startups, I was like, you know, everything in my life to this point has been very, very planned. Right. I was like, okay, I'm going to do this and do that. After that, I'm going to do this.
And then I was like, you know what, maybe for the next six months to year, I'm just going to see where things go. I'm not going to have any grand plan. The only plan I'm going to have is I'm going to purchase my health and spending time with my family, having fun.
Outside of that, I'm not going to really force anything. I just want to see where things go. And the YouTube channel just happened on Accent, Sep 1 emailed me.
He used to work with Sean Peary and wrote this really good, cold email. And I was like, okay, this is interesting. And the first thing I told him was like, look, I'm not, I don't want to start a YouTube channel.
And I definitely don't want to start one with someone else, you know, and then, you know, he kind of convinced me and then convinced me and I was like, look, maybe I'll do it just to learn, but I'm only going to commit to like five episodes. You know, just kind of one led to the other. So the short answer to your question is for 2023, I don't know.
I'm just kind of like, I think what I'm struggling with right now is if we're trying to figure out what my niche is and what I'm going to focus on talking about. But I do plan on creating a lot more content 2023. So the way I'm thinking about it is I want to create a similar review like my own personal holding company.
Within that starter incubate something every 12 to 24 months or 12 to 18 months. First business is content and audience building, because I don't really have any ideas I'm excited about right now, but I am excited about content. And I do look at that as giving back.
And if I could like, you know, change someone's perspective about money or help someone take a different path to become a millionaire, like do that's so impactful. So for 2023, I do plan on creating my own YouTube channel, possibly a podcast, and then keep doing what I'm doing with just Twitter and my newsletter and trying to do it in a way where I can be very authentic to myself and not dip too far into the cringe, you know, threads where it's like, Hey, I read, I watched 1000 hours of blah, blah, blah, blah. And here's what I've learned.
Because I don't even, you know, that's not even who I am. Like I don't spend 1000 hours researching. But what I'm trying to do right now, which is why I'm my Twitter and my newsletter are so random is trying to figure out like, yeah, what is the intersection of multiple things that I'm interested in that can help people right now.
It's money, because that's just what I'm thinking about. But maybe three months, it could be something
SPEAKER_00
completely different from an outsider perspective. I mean, I love all your stuff. Oh, thanks.
And I'm really interested in it. And to me, it's like the niches that you're in our personal holding company, money, and the business of creators. Like that's what I see.
I like that. I'm gonna write that one down. I think though, and we can use this as just like a live jam session, I think that if you want to be a successful creator, you have to be known as the X gal or Y guy in one niche.
Yes. Because like in people's brains, they just like bucket you as someone. Oh, Mike, he's like the personal holding company guy.
Oh, Greg, he's like the community guy. Yeah. And I think that you'll start seeing a lot more compounding once you commit to one one of those categories.
SPEAKER_01
So thought about this. And I've been, you know, for doing your live brainstorming, but I kind of look at like a major and minor, like you have to be known as the X guy, but you can have like a couple of minor things that you talk about, you know, secondarily. And what I actually want to talk about is like, how can one person live a really great life? And what does that mean? But you know, what I've learned is that nobody really wants to read that or click through it.
And it's just not that exciting for people. And I was like, that's what I've learned because I've written threads and articles or tweets on happiness and all the things. And like, I think when, you know, people are dealing with their own shit, they're like, dude, I don't want to read this stuff.
Then I started, then I flipped it. I was like, okay, what am I the most uncomfortable talking about? And it was money. And I was like, okay, why is that one is like from an ego standpoint, I want to be known as a money guy.
Like, what does that even mean? Like, I don't have I have money, but it's not like I'm like that rich, you know, so that was like one, two is like, okay, shit, where do I even take this from her? Because I don't want to become like a fintech influencer on YouTube and promoting like stocks, you know, like, like stocks and like, you know, how to flip your house on your BNB and all this other stuff. But then I realized it's like, okay, people seem to like that content. And it could back into that secondary minor stuff around how to live a good life or how to be good parent or, you know, how to like live healthy or, you know, because I am going to probably do a personal holding company and I might do a startup suite within this.
I could talk about that stuff too, because it's all related money. So I think I am leaning towards the money angle and just doing it, that's not like how to make a million dollars, you know, drop shipping or buying boring businesses, but doing it, you know, becoming content creator or startup studio or, you know, basically like how I would make money or how I am going to be making money
SPEAKER_00
and just talking about that. I think this is a really good exercise for everyone, which is if you believe that content is important, I mean, 99% of us would agree that having an audience and creating contents really important, thinking about a Venn diagram of where you want to hit. So, you know, in the middle, you need my opinion, like be known as the X or Y guy or girl, right? So like for me, it's like the community guy.
And, but I also have some minors. So I also have, like, I'm interested in Web 3. I'm interested in, you know, product design.
That's why we run an agency like, and you kind of like have these other interests. And for you, maybe it's like living a wealthy or happy life. And maybe there's these tools and minors, like, you know, personal holding company rolls into that.
I've never been happier in my life. And I like you, I've done the venture back startup thing. But the personal holding company has has been so fun for me.
And it's helped me live a happier, healthier and wealthier life. So it all rolls up to it, you know what I mean?
SPEAKER_01
Yeah, so a couple follow up questions that is like, how did you land on being the community guy? Was that something you've resisted? And have you ever thought about changing that, like as you have grown? And then the second is like, why, like, why don't you, why don't you talk about your holding company more online? Because I'm like, I think when we're chatting about what to talk about in the podcast, you're like, Oh, let's go through some holding company. I was like, dude, I don't know that many examples. Like, this is not a thing.
I think that's why people like the concept, because it's interesting. And most entrepreneurs are very creative. So I would just always, I would just curious about those two things like, how'd you land in the community? Have you ever thought about changing it? And why not talk about your holding company a lot more? So I landed on community
SPEAKER_00
when I had some, you know, in 2020, 2020, I guess, I left we work, whereas I had a product strategy, be an acquisition. And I had some time like you to think about what's next. And I looked at what is the common denominator of my entire career.
And literally everything I had have done, both professionally, and personally, at the core of it was community. I have never done anything that hasn't had community at its core. And I had a list of theses and ideas in that space.
And I was just like, okay, I'm going to make a conscious effort in 2020 to put out more content related to community. And I am completely okay being known as the community guy. Why? Because it's a small enough niche that, you know, at the time, no one was, not many people were, you know, focused on it.
But it's a big enough niche that literally community is at the center of everything on the internet. Like if you're a creator, community is at the center of it. If you're a Web three product, community is at the center of it.
If you're a cult like brand, community is at the center of it. So I think it's important for folks to pick something that is small enough that you can own, but large enough that you can kind of grow
SPEAKER_01
with it. Have you ever thought about changing or like, reposition yourself out of community? Like when you're deep into what three becoming like, what three community guy or, I don't know,
SPEAKER_00
like AI now or right, I just feel like I would look like a child wearing really big, like a really big suit. Like I would look silly, I wouldn't be able to wake up in the morning and just not like, yeah, put another way, like it's just not authentic. And although I would probably be able to grab another few hundred thousand followers, if I would, you know, pivoted my way into something else, I, yeah, I wouldn't be excited about it.
Yeah. And that goes back to the whole like, quote unquote, retirement, like in my mind, I'm retired. In that sense, right? Yeah.
You know, I'm doing things for, for style points more than money. And it's a good place to be. And the style points on doing something that I'm not excited about content wise, especially because you're putting yourself out there would not be cool for me.
And then why not talk about your personal
SPEAKER_01
holding company more? Because I remember when I like, went to your Twitter, I was like, oh, this is an interesting click on it. And I was just like, oh, I kind of understand it. But I feel like you could be a lot more vocal about it.
Because you are working on a lot of interesting things. And you are doing a lot of interesting things. And you could also be a great example for other entrepreneurs to follow.
So why not talk about it a lot more? I wrote a post in 2020,
SPEAKER_00
which was why the future of startups are studios. Welcome to the golden age of product studios. And I talked about my decision to create a studio, but more importantly, a personal holding company because I talk about, you know, service businesses.
And this is up on my sub stack for people to check out. You can just Google, Google that and it'll come out. And I talk about like why you shouldn't raise venture and why service businesses is actually a really good place to start.
And how to think about launching experiments and how to think about a thesis for your startup studio. I got some people excited about it. But then when I like compare that to like a post, a popular post I did like the unbundling of Reddit, like that got a hundred times more or a thousand times more traffic than the studio stuff.
So I should, the short answer is I should write more about personal holding companies because I'm learning about it in real time. And because there's not enough, it doesn't feel like there's a lot of information out there. This reminds me of like
SPEAKER_01
tech startups like 15 years ago when I when I first like entered that space of my career, there was just not a lot of information on the internet, right? So it wasn't like, it wasn't a Y Combinator. There's very little written about like even like how to analyze a term sheet. And then today it's like, dude, there's so much, there's like too much information.
And I kind of feel like holding companies are kind of similar, right? So holding companies like you Google it, it's like a lot of legal definitions and corporate holding companies. But there's not examples, just hearing you talk about like a startup studio and then the service business to start to then generate cash flow to then reinvest into all these other things you wanted. I'm like, oh, that's pretty cool.
And it's not a theory anymore because you've already done it for a couple of years now. So like what did it work? You know, what part didn't work? What would you do differently? You know, save me two years of making a mistake. So I have written a lot online and the holding company definitely over the past six months has been one of the bigger surprises because I kind of wrote it like walking down the street.
Oh, personal only coming. That's, you know, because I was trying to think of something to explain to someone without what I'm thinking about doing next. And that one tweet while didn't like get a lot of traction, it got enough for us like, oh man, there's definitely interest in this, especially in 2022 coming through.
SPEAKER_00
Yeah, I totally agree. I like I'm feeling like I don't know if it's the coffee or the conversation or both, but I'm feeling like actually pretty excited to talk about this more publicly. There is a lot I've learned, especially around the service service business stuff.
Like for example, we run this design agency and in the beginning we were doing a lot of like short term two week design sprint type deals. Now we've moved to, you know, I would say 90% of our revenue is long term 12 month plus deals with the largest companies in the world. And why does that make sense? Well, it's just predictable cash flow.
You know, one of the bad things about an agency model is you're kind of, you know, always on the hunt quote unquote for your next deal. Yeah. And I think what I love about our model is, you know, when you're signing these long term deals, like it's not that case at all. And that's like a lesson I would love to talk more
SPEAKER_01
about. And there's more of that. So if the money comes in from these big corporations, I'm assuming there's like a percentage of that that's kind of leftover profits.
Do you reinvest that? Where do you reinvest that? Do you take it out of the business? Do you invest to companies or buying companies or starting like, how are you thinking about, I guess, reinvesting that cash
SPEAKER_00
within the holding company? It's like super old school. If you think about it, but we do a good old fashioned profit share two times a year, which is actually really awesome for folks. Because like, you know this, like when you work for a startup and you talk about it, like you don't see liquidity for seven, 10 plus years sometimes.
So it's pretty awesome that folks who join like, check out like every six months, they're getting a check. I noticed like the Gen Z younger folks, like they love the instant gratification of like, cool, like I'm going to go on vacation or I'm going to go buy this like whatever. We do want to compound the money.
And that's why we have, you know, a pretty big budget for our startup studio where we're incubating our own products and companies as well as a budget for companies to buy. And I actually think that like right now going to 2023, there's, you know, going to be more and more distressed assets. There's going to be more and more companies that are venture funded that are not going to make it.
And there's opportunities to pick them up for reasonable and fair prices. So I'm trying to keep that cash so that we can be opportunistic and pick up several of those companies.
SPEAKER_01
You know, I feel like we could go a whole other hour or just talk through all this stuff because I'm like so curious now. How big is the holding company? And have you found it like a pain in the ass to like manage like all these people again?
SPEAKER_00
I have an incredible co-founder in COO who is like keeps the train on the tracks. So I don't even need to, you know, really think about the train on the tracks.
SPEAKER_01
How big is the team now? And because I imagine if you're like, got an agency, you know, be buying companies, so you're going to be scouting those and someone has to run those and then you're incubating things. So there's probably like a whole process around coming up with ideas, betting them and kind of like, you know, like V 0.1 just to like dip your toe in the pool.
And they're like, oh, that kind of worked. And then you have to like invest more. Resources and time into those things.
So that's a lot of things to be doing.
SPEAKER_00
It is. It's a lot of things. And that's the hard part about this model, I think is the focus.
You know, when you have a team, you know, I think we're like 40 plus team members. So when you have a team, you can do anything in terms of like you can build a startup, you can, you know, work on this, you can work on this agency. You know, I think that's the hardest part about building a startup studio or personal holding company is the fact that I think it was Scott Belsky actually who once told me constraint fuels creativity.
For sure. Definitely does. Sounds like a Belskyism.
It's completely right. And I think that that's another lesson I learned from personal holding companies and startup studios is that you do need to create some constraints on the business so that people can get to the point where you're like, you know, you know, you can do this so that people basically don't work on anything. And that also, you know, one of the things one of the constraints that we put on our agency business, for example, is we only accept one new client per month.
And we started doing that, you know, a year ago because we realized like we had a lot of inbound for for client work and we would just take client work and it's about taking the right client work. So just in general, I think like having constraints on your service business and then having constraints on studio is really, really important. I am really passionate and excited about PhDs personal holding companies because it allows me and my team I think to be the most creative version of themselves.
What I didn't like about working at a tech startup was that like, I was like pigeonholed into this like space for seven years or six years or whatever. And the Achilles heel that we talked about around you can do anything is also the most fun part about it.
SPEAKER_01
I can definitely relate kind of similar idea the whole tech serve thing and well this is like a limiting belief I would I told myself is like there's a very narrow definition of what a founder CEO should be very operational very analytical, like super visionary, blah, blah, blah, like conscious leadership and all this stuff and over time you know, I guess my career in that world is like 15 years but over time, as if you come less creative and it was just not fun anymore. So I that's what I like about the PhDs is, man, you have this like whole spectrum of things that you can possibly do, but it's so hard and you know it's like kind of what we're talking about, become a content creator is like figuring out what your ex you're going to be known for. So anything with like, where you're going to build do there's so many things you could possibly do and speaking of another belchism, which is like the idea to idea syndrome where you get so excited by the idea, kind of start working on it like this sucks.
What's really exciting is coming up a new idea. And then going down that path and when it gets hard to just keep flip flopping and then, you know, over a year or two, you don't actually execute anything. So I think that's probably the balance and the challenges nearing in and focusing within a world where you have like unlimited things that you can possibly doing.
But that's also what I love about it is, it just becomes so personalized to what you want to do and it's not going to be a one size fits model for anyone.
SPEAKER_00
I agree and I also think that while starting a PhD is very much playing for style points. There are also incredible businesses.
SPEAKER_01
Oh, yeah, for sure. I feel like most entrepreneurs should probably do that because one, you're diversified and the problem with tech startups is you're not like, still like, you know, majority of my net worth is tied into very illiquid stock. So you get to diversify cash along the way to reinvest or pull out for your personal use is extremely creative.
You know, something does take off. You know, like, you know, that's also the problem with a lot of like really early investing for pre seed pre ideas. Like, you don't really know what's going to take off.
And like, if I were to spend something out of a personal company, I would want to do it after I feel very confident that it has a great a good probability of scaling, not this grand idea I have that I'm convincing myself and you that it's going to be big. I know it's totally going to work because, you know, we already test out and this is like the 42nd idea that we've launched. So I know and then I know you and I've talked about this on Twitter too, which is raising zero outside capital or, you know, I talked about raising one round and keeping the team as small as possible, which is like every entrepreneur stream is like, I was super small team.
They're all like great what they do. They work on multiple things, and if something takes off and just blows up great, like we could, you know, triple down on that. But I hope that more entrepreneurs like take a different approach.
You know, I think right now it's very popular like repeat founders have some type of exit. So you do have that time freedom. But I do hope that people that are content creators can then, you know, they're perfect, I think for like repeat founders from tech world and content creators are perfect today for a PhD.
SPEAKER_00
Totally. Yeah, I think the biggest PhD founders are going to be content creators.
SPEAKER_01
Oh, I mean, we're seeing that with Mr. Beast. Yeah. And I think I don't know why all these YouTubers do DTC businesses because I'm like, dude, like, there's a whole world out there that's like, like digital where you don't have to ship like physical items. So I think what I think Mr.
Beast should do in the team general, I think you should launch a gaming studio or something that's more digital than physical products. But I think we will see a billion dollar PhD. I mean, I think I guess we've already seen it with Mr.
Beast. I think we'll see a lot more over the next couple of years.
SPEAKER_00
Mr. Beast is like he's involved with night media, right? Yes. So I don't know if he's a co-founder there.
Is he a co-founder there?
SPEAKER_01
I'm not sure. But from the light and analyzing, I've just done an all creators like, you know, Silicon Valley is Northern California, Hollywood's all the same base in Southern California. A lot of like the incubation starve studio is comes more from like the Hollywood model versus the Silicon Valley model.
So if you're like a YouTuber and you have like million plus, you know, tens of millions of subscribers, I would follow more Silicon Valley model. That's that's definitely what I would do versus like DTC or do both.
SPEAKER_00
Well, I mean, for DTC, like Mr. Beast, for example, you know, what's called Feastable's his chocolate bar. Is that what it's called? Like it's cool.
It's really cool. And I love how he did the Willy Walk of it.
SPEAKER_00
Yeah, exactly. It's really cool. But I think, you know, it's even cooler is like 97% margins on game on game.
SPEAKER_01
And a gaming company because he's also in the gaming too. He's like, dude, like launch the next fortnight, bro. Like North Carolina, like Epic Games is down the street from you.
Like launch a gaming company down the street from Epic, recruit like all the top people there and just create the next fortnight. Yeah. So maybe partner, right?
SPEAKER_00
Partner with someone like he can. Definitely don't do it in house. Like don't do it in house.
Buy a studio. I agree though. Like he should, you know, Mr.
Beast, if you're listening or team like.
SPEAKER_01
Please go digital. Yeah. You get higher multiples of your valuation. Yeah. You don't have to deal with, I mean, yeah, I feel like he's pretty diverse. And like if I was like looking as portfolio, like dude, you're pretty deep into physical products.
Let's let's try to do digital index. Let's just diversify.
SPEAKER_00
All right, man. Well predictions for, for content creators, like where does the world of content creation and creators look like in, in five years from now?
SPEAKER_01
I think we'll see a lot more billion dollar companies that are PhDs from content creators. I think I don't want to make predictions on like tech with AI and all the, you know, but I do think we'll see sizable businesses evolve out of it. And I can see a lot more creators taking that path versus what I call like the traditional playbook, which is like build audience, drop a course, drop some merch, you know, let me, you know, I could see them moving.
I'm like, okay, that kind of worked for a time. Oh, that guy's launched a business and it's sold for three billion. Let's do that.
And I could see that becoming more and more normal. I could see that being a clear path for a lot of, a lot of content creators, you know, once they kind of build an audience.
SPEAKER_00
I love it. All right. And if you want to hear more from Mike, where can we, where can people find you?
SPEAKER_01
Websites, Mike Carnes and my KK M I K E K A R N J.com or just my current on Twitter.
SPEAKER_00
Cool. Worth the follow. Great content.
And if you're listening to this and you want more PhD content from me and Mike, honestly, just tweet us and comment on this YouTube video with any questions you have about PhD. We can, we can use that as sort of a discussion ground. And of course, subscribe if you haven't subscribed already to the where it happens pod.
Thanks for coming on, Mike. You are the goat. I feel like we're going to be hearing a lot more from you on on PhDs content creation, money, wealth.
Not enough people talk about this. So thank you for speaking up.
SPEAKER_01
Thanks for having me.