The #1 Most Underrated Quality in an Entrepreneur

0:00 Josh Wolf has this phrase where he says, Chips on shoulders equals chips in pockets. Basically is when you meet an entrepreneur who's got an uncurable, unhealable You know, identity wound. Um That ends up being somebody who ends up doing really well. I feel like I could rule the world of nowhere. be what I want to

0:18 I put my law in it like no day song on the road, let's travel to the new. Sam Lesson. So Sam Lesson Uh, I think he was like an early Facebook employee and now he's an investor. Uh he's he says a lot of interesting stuff. So he did this tweet. Where he talked about uh revenge businesses. People who have started stuff because they want to get revenge. And an example of this is this guy named Parker Conrad. Basically he started this company called Zenith, which was fast growing company.

0:50 It kicked ass, whatever. He gets fired because it was like a broy culture. There's like people caught like having sex in like the stairwells, like people doing drunk dumb shit. Uh like there was also like some compliancy issues of like not everyone was like compliant. And so he got fired. And so we start this new company called Ripling, which has taken off like a rocket. And uh Sam Lesson, I guess, in invested in it same way. Palmer Lucky guy got fired from Facebook. He started Oculus, now starts uh what's it called? Andrel. Yeah, Andrew. Yeah. Uh and so anyway, Sam Lesson has this really cool line. He says

1:22 If you have in your diligence checklists, is this company a form of deep revenge? The answer is yes. Cut the check. And the reason I'm bringing this up is because oftentimes you'll talk to someone and they'll say, Hey man You got a lot of hate in your heart. You gotta let that you gotta let that out. You can't you know, you can't you can't hold that in your heart and you can't like live with that.

1:41 I've taken the opposite approach for like the last handful of years. I actually think that hate, if you have in your heart It can be really useful. Like revenge and rage is like a very useful feeling. So is shame. People will be like, Why are you guilting someone into like doing this or that? I'm like, Well, guilt is a wonderful emotion to improve. Uh and I wanted to get your opinion on his uh take here. I mean, I think it's honestly kind of genius. Um And I think people don't like to say things like this. But there are

2:10 A bunch of heuristics. For investing. That sounds so stupid. Or sound inappropriate. But are actually

2:18 True and useful. So, you know, for example, um And you and you can frame these different ways. But um I have a friend who was like, you know how Paul Graham talks about he wants to invest in fierce nerds. And a fierce nerd is basically it's a nerd

2:34 Who's Like overly competitive. And also like a little bit of a shithead. Yeah, exactly. You know, doesn't uh is looking to sort of break the system, beat the system, is is overly competitive. Maybe uh Unrefined in certain other areas of their life.

2:49 That's what you want. And my friend was like, Yeah, I look for fierce nerds who love money. He's like specifically the for love who for who love money is a is a multiplier on the fierce nerd concept. And you know, we've joked on this pod before about like You know. If in your pitch deck I'm like, okay, went on a Mormon mission or like, you know, grew up in s you know, s Slavic country, Eastern Europe, I'm like, yep, you know

3:12 little plus points are going off in my head. These are green flags in my head. It's not a for sure yes, but like I'm not stupid. Like eventually you realize God damn these people from Utah can sell. Or while these programmers from this area of the country are pretty pretty badass. Or um when somebody is you know it's like getting up being a Harvard dropout is a stronger signal than being a Harvard graduate.

3:35 There's all these things that sound silly but actually end up being true because if you're the type of person who can get into Harvard And then has enough conviction and an idea to drop out of Harvard against the social pressures of Harvard, that actually turns out to be a pretty good filter. Now, of course, these things can be gamed. If people realize that these are the signals you're looking for, right? Like people showing up to pitch bet pitch meetings and like acting a little extra autistic. It's like okay, uh we kinda know what you're doing here. You're trying to fit some pattern that this investor is trying to match against so all obvious all these things could be game, but the It's great when you can figure out

4:05 A signal that is not yet common and so this one of is this person, you know. Is this a revenge company is a great signal. It's a green flag signal. Have you seen the Ted Turner documentary that recently came out in HBO?

4:23 No. Everyone should go ahead and watch this. So Ted Turner has been one of my heroes for decades, uh uh because uh his biography was so good. And basically his story is that he inherited a billboard business from his father and it was a great billboard company. Like it was in the South and was thriving. He took the money from that and he started um a local TV station. He eventually bought the Braves for cheap. He bought the other cocks for cheap. Then he parlayed all of that and bet all of his money in CNN and was constantly on the brink of bankruptcy. Not because his businesses sucked, but because he was just like Pushing it.

4:56 One hundred percent all the time. And so there's this great line. It said This was about one of his employees. He goes Ted had a great sense. A paranoia within the company, a sense that we were the little guys fighting for our lives against some big unknown guys. And the truth is is that we are one of the biggest billboard companies in the South, one of the biggest in the country.

5:16 But it made we wanted to make everything seem more important than it probably was. And in fact, uh he insisted on taking his telephone calls outside on payphones because he wanted everyone to believe that his phone was being tapped. And And it's And if you watch his documentary, he does all these amazing things. Like, for example, he's like I have to launch CNN because Americans at at the time C and M was the first ever twenty four hour news network. He was like, We owe it. To America.

5:40 Like Americans need to have an option to know what's going on in the world. Like everything had this grand sense of like, We have to do this for America, or like they're trying to crush us. And it's like who's they? We're the we're the best. And that was a big takeaway from Ted that I loved. And uh this post kind of reminded me uh the same lesson posted uh about them. There's a a couple of other things that come to mind on this. One, um Uh, Travis Kalanic is kinda like this. So he had um He had gotten gotten screwed in his first startup.

6:09 Literally, I think by Michael Ovitz, um and other others. Basically it was like during the LimeWire Well, the background is Travis Kalanick, the founder of Uber. Before Uber, he started Red Swoosh, which was some type of lime wire competitor. File sharing service. Yeah. Peer to peer file sharing service. And he ends up not making a lot of money from it. By the way, Naval, same thing. He his Naval's first hit. Naval's now like, you know, this wise sage. You know, billionaire type of dude. But He was kind of like an angry, revengeful dude when he started a pi opinions.

6:40 Back in the day, the VCs kicked him out of the company. I think opinions ended up going public during the dot com boomer. It had like a kind of a big exit. He got nothing. He got screwed by his own VCs. He didn't make anything from that? No. And he ends up suing them. So he he does the thing that you normally in Silicon Valley, the founders are very afraid to fight back against the VCs. He publicly Sue's his own investors.

7:00 And ends up creating venture hacks. Which is a um a blog dedicated to helping founders not get screwed by VCs. He's like, dude, I didn't know how to read these term sheets and I didn't know what these contracts meant, and they just kept telling me the the dangerous words. Oh, don't worry, it's all standard. And he goes, There's nothing more dangerous than something that the than when when a lawyer or a VC tells you this is standard, don't worry about it. And he goes, Well was standard ended up getting me screwed. So he starts Venture Hacked a blog.

7:27 Um and that leads to Angel List. Which basically r took the power away from in many ways. the uh VCs and gave it to Angel investors, the founders, it created a marketplace. So you know, uh it created more transparency, more liquidity, more more competition in that marketplace. And Angelus becomes a multi billion dollar company. Elon is on a revenge tour right now. Literally the Democrats were attacking him or you know, cr demonizing him, sue you know, doing uh suing Tesla and SpaceX and all of his companies

7:57 and adding more and more regulation. And so he just flips the script, goes all in on Trump, go goes on a revenge tour. Now he's basically like a you know de facto President. Um And he's now going now, he's going in with Doge trying to like rip out the guts of the the the bureaucracy, right? Like

8:13 These v these revenge tours are really, really strong. Josh Wolf has this phrase where he says Chi on shoulders equals chips in pockets. Basically is when you meet an entrepreneur who's got a deep chip on the shoulder and it's sort of a An uncurable, unhealable uh you know identity wound um

8:29 That ends up being somebody who ends up doing really well. Dude, that's a ten out of ten phrase, by the way. Chip and shoulders of chips and pockets? Yeah, that's a beautiful He he knocked that one out the park. It's a good one. And I've actually had trouble with this. I used to go the other way. We would meet somebody And they would say something that just sounded like Oh, dude, there's a part of you that's broken inside. I like you really carrying this

8:52 This revenge against somebody I used to try to a convince them that that's not they sh they shouldn't hold that. Or be like This person, they're not like mature, they're not wise to it. And I immediately missed out on several big opportunities. And again

9:06 In that moment, my reaction. is to either a judge, which is gets you nowhere. Or distance myself and say, All right, this person's not as They're not like minded. They're not seeing the world the way I'm seeing it. And now what I've realized is no no no the I need the exact opposite reaction.

9:23 You go really close to that person. And you hand them a check and you say, Can I be a part of what you're doing? I'd like f for your crazy psychosis To be to my financial benefit. And so like I'll give you an example. So I'm I'm very close to this person and they have basically made Something they um they had a bankruptcy back in their twenties, uh late twenties, I think. So they were doing really well.

9:45 got to like a twenty five million dollar net worth, but were overextended. They're in the real estate game. Well a little bit overextended. They h they were doing development on behalf of this person who was expanding. There there's like a guy who is expanding A bunch of locations. So he's like, Cool, you're gonna do fifteen locations. Great, I'm in. I'll go buy these and I'll develop them for you. And then that guy got in trouble, that guy went to jail. So now he's holding the bag on these 15 locations that could only be used for one type of business. And

10:10 Uh so you're saying like it was like some guy, let's say it's like a fast food franchise was like I'm gonna be creating like fifty locations or whatever Well you you go develop'em and I'll and I'll meet you there. They did deal one it was great, deal two it was great, deal three was great. And so he goes, Awesome. Uh, you want to do 18 more of these boxes? Right. And he goes and gets them permitted for this exact thing. He does exactly what he's supposed to do on the real as the real estate developer. But then if that guy got in trouble for tax he hadn't been paying his taxes or whatever, he can he can no longer do this.

10:36 So now he's on the hook for like whatever eighteen payments. For a business he can't run. And he can't use for any other purpose and he can't really sell it because it's distressed and it's and this happened right in oh eight when the bank crisis happens. And so nobody's investing in real estate anymore. So he gets like Basically this series of events ends up going bankrupt.

10:53 Well He uh has a traumatic experience and he goes bankrupt. Not only is he goes bankrupt He was I think he was engaged or just gotten married. And all of a sudden he's back in his childhood bedroom.

11:06 With his wife. Uh, they've had to move back to his parents' better. He's sort of ashamed of that. And he had a twenty five million dollar net worth before that? Yeah. And you know, buying like a million dollar engagement ring, like that kind of thing. And They turn off the lights to go to bed and he's like he's telling her, he's like, You know, I promise you I will figure out a way

11:23 Like I don't care what the hell I have to do, I will fight back. I will figure out a way to make this right. Give me nine months. We're gonna be here for nine months in this room and like whatever. And he gives her this inspiring speech. This like gladiator speech and then he turns off the lights. And like he had like the stars from like his child, you know those like sticker stars on the ceiling? The neon ones that they start glowing and they just crack up laughing and he's like, Oh my God, where am I? And so and then he starts basically his revenge tour. He's in the ten years since then

11:50 has built up like a billion dollar real estate portfolio using only his own money, no outside investors. probably has, you know, I don't know, something like four or five milli million of his own equity in these deals and has, you know, really come back strong. And so I for years have been looking for a good way to invest in real estate. Like I looked at should I buy my own property? Should I have some rental properties? I think I think I kinda should take this internet money that I'm making. Like I'm all in on the internet and I think I should take like, you know, ten, twenty percent of it, have it in like

12:17 hard rock tangible assets you can go touch and feel. That seems like a smart thing to do, but I never knew how. Should I do it myself? Uh I'm a beginner. And that takes time and I don't want to go fix broken toilets. Should I give it to one of these funds or syndicators? And then you would like meet them and you realize these guys are just fee monsters. They they make all their money on the buy. They don't make any money. You can good luck on the sell. They make their money on the acquisition fees and uh management fees.

12:41 I didn't like them. And then when I met and then when this guy was like hey, you know, like Do you wanna do a deal with me? I was like, I'm all in because The chip on this guy's shoulder of proving his dad wrong and like coming back from that bankruptcy and all of this, like

12:55 Even though today he's super wealthy, he'll never stop. If you know if you're a grown man who knows what it feels like to sleep with your wife in a twin bed, like you know, that that sticks with you. You know, like the the feeling of like exposed ankles of blankets that don't cover your ankles, uh stays with you. If you've ever had to call top bunk with your wife, you've experienced a trauma that I would like to invest in. Yeah. When we were selling the milk road, I remember talking to I think I could say this. Uh I remember talking to some of the potential buyers. And was like, wow, you've been really successful. And I was like, what and I try to get to the root what what was the motivation? Like why did you even go this path?

13:34 Did it was it just you had an idea and or you had you wanted to solve this problem? And No, this girl rejected me in ninth grade and I just remember thinking like F that, like I'm gonna become somebody. I'm gonna be and he's like, Yeah, I know it sounds stupid and like

13:51 It was stupid, but it was effective. And the other one said the same thing. He's like I I was trying to uh live in a house. I we had six friends and we were all like, Hey, let's live together next year. And then we found this awesome house. But it was a five bed house. And they were like, Hey man, um it's only five beds.

14:09 He's like, I realized I was in the bottom of my group and I was like, F those guys, like every night they're having fun in that house. I'm gonna be building an empire. And I remember just thinking like, really? First of all, that was like twenty years ago, or fifteen years ago. Like that still bother like that still motivates you or and like Don't you feel kinda silly that that that bothers you so much? You know And they were like, No, I feel they were silly for ever counting me out. And I was like, Wow, okay

14:34 I am not wired like these people. I am not fueled by the same rage and like kind of revenge instincts. And I'm not I'm not saying that's the only thing that motivated them. But the fact that that was there still fifteen years later was very surprising to me, and I've now learned to bet on it. Uh I think that I'm not surprised that you've never had uh issues'cause you're I've said this a a bunch of times. You're you're very m emotionally healthy.

14:58 Dude, I use rage and like guilt and um like I wanna nicotine. I wanna and I wanna get back against someone like There's times that I remember my big brother like saying something smart, Alec, to me, and I and I still feel that like Oh, I'm gonna prove you wrong. Like I still feel it. Uh yeah, and that shit runs deep. But it is pretty helpful. Uh it it it it is it

15:21 makes you pretty miserable uh life, but it makes you like fairly productive. Uh Kinda jealous about it. Like I I think it i on the whole it's probably good I don't have that, but Does seem kind of badass when I hear it. It takes like it's crazy. What happens when so you know how I hate flying. I ha went through like ten years of therapy to figure out why I don't like I'm so claustrophobic. It comes down to when I was like ch uh in second grade, my brother put me in a full Nelson, you know like a full Nelson with like a big nose picture. And he dipped me under water in our pool. And he was like, you know, like

15:54 teasing me, but I sucked in a little bit of water and I legitimately felt like I was drowning. I distinctly remember like I'm dying right now. I'm about to die. And he kept dunking me and I was like you Fucking asshole. Like I'm dying right now. And like it's crazy how little moments like and since then, by the way, I cannot stay on elevators. I don't like take the subways. You'll swim You just don't swim. I don't like anything where I'm constricted and I can't escape. Uh it's it's rooted in like I can't escape. So if it's like a boat that like you're gonna go on and you can't see the shore, it's like no, I'm not gonna do that shit. The test unlocked on you, or you're saying you figured this out through therapy or something else? Therapy and hypnotherapy. Yeah. Like I've spent so much time and money to like figure out their root cause and how to overcome this. Uh all from like a A

16:38 sixty second interaction with my brother. Where he was a kid too. He was being innocent and just messing with me. Isn't that crazy how like the things that happen as a kid can like impact everything. By the way, does it help when you figure out The w the root cause or Like does it go away a little bit? Uh a l a little bit. Like I guess like

16:56 Uh there's this like idea of like uh getting over the stuff, it's called like walking to the gallow, where like when you get panicky, it feels like you're dying. And in order to overcome that, you just gotta be like, fuck it, I'm gonna go die. Like I'm gonna like experience this thing that I'm fearful of. And uh and you just have to do it. And it's like it's pretty it's pretty bad. But and like so you have to tell yourself all these stories to help get over it. And one of them is like I only feel this way because John did this to me long ago and I was fine. Okay, I was fine, I will make it through this. Uh and so you gotta like walk to the gallows, you gotta like tell yourself all these stories. And so that's like one of the many coping mechanisms. But it just all happens because of a small thing when you're a kid. So it could've been like some girl said this, some guy said this to you. Right.

17:37 And it like it's crazy, it just shapes like fifty years of your life. Dude, what a sick phrase. Walk to the gallow. Wow, what a What what is a gallo, even? Is that like uh that's where you get hung. It's it from a pirate I think it's either it's that the it's where you get hung. It's like so the gallo is like the structure where where you're about to get hung. And so like by the way, I try to break this the other day. I went on the subway for the first time. uh ever in New York. Uh I was like deathly afraid to go into the subway and I'm like, we're just gonna go one stop and I was like, fuck it, we're walking to the gallow. There's also this isn't just for business.

18:08 This is also like, you know, revenge body is a thing. And remember that that medium post we both love how to lose weight and four easy steps. And it's like portion control. Um, you know, avoid beer. And then it's like have your heart broken into not just broken, shattered into into a million itsy bitsy pieces. And it talks about basically it's the heartbreak that's like the the fuel for the gym. Like i in the same way that like You know If you want Adele to go triple platinum.

18:32 She just needs a bad heartbreak, right? It's it it fuels artists, it fuels fitness, it fuels business. And um I think it's sort of undeniable. I don't know if it's healthy, but it's it's definitely effective. Taylor Sw Swift wouldn't write hits if she had a successful, wonderful relationship. Well we'll see. Travis Kelsey. Well, she hasn't she hasn't had any new hits yet.

18:53 You know, she's she has hits for a reason. All right. What else you got? Um all right. So Something a little bit happier. Uh I saw this on sixty minutes uh I think two weeks ago.

19:11 I cannot stop thinking about this. So let me fill you the fill you in on the story. So there's a small country called Bhutan. Bhutan is in between India. And China. So it's but it's between these uh behemoth countries, and because of that

19:26 A lot of people don't know about it. And it's tiny, half the size of Indiana. It's tiny. I think their stock market is eighteen companies and the total market cap of their stock market is eight hundred million dollars, which is one seventy thousandth. the size of the US stock market. So it's like the super small country. In fact, I read that in nineteen ninety nine, that was the first year they got TV So it's like this tiny country. Well In the seventies, the king of Bhutan

19:51 Did a diplomatic trip to India. And uh According to the story, this Indian reporter goes, Hey King, um, you know, we're neighbors But I don't know anything about you. Like what's your deal? What what are you about? In fact

20:05 What's your gross national product? Like w like tell me, what are you guys known for? He goes Gross national product. What? What are you talking about? GDP? What are you saying? Uh in Bhutan, gross national happiness is more important than gross national product.

20:20 And it was this like offhanded comment that he made saying their biggest export is happiness. We care about happiness. And that Totally hit. It went viral. Everyone was like, this little country is apparent they must be the happiest place on earth. The king says that they care more about gross national happiness than money.

20:38 And the king was like Oh, people like really resonate with that. Let's make that our thing. And so over the next five, ten years, they actually implement this and make this its uh their thing. And so in this country, Bhutan to this day. Uh every five years surveyors travel the country and they ask the people about uh education level, salary, m and material possessions, so like a lot of like normal stuff. But then they also say like Do you have negative thoughts? Do you have positive thoughts?

21:07 How much time do you spend working? How much time do you spend praying? and sleeping and the de si and the data that they get is factor in Uh to a lot of their um A lot of the rules and and things like that that they make. And I thought it was like a great story, uh, about how you can

21:25 seemingly important, like happiness. And I had uh well, you know what I mean, like it's like you know, we care about like money and like stuff. Yeah, the touch of feeling. Yeah. And there is a few critiques, which is like according to the World Happiness Report, uh Bhutan is like

21:41 Average. Like it's like not. Kicking ass, but But like, you know, I don't know if that's a measure matter of like different w ways of measuring things like that,'cause happiness is like a way like it's kind of hard to measure happiness. Is it like that fleeting moment that you feel in like the thirty seconds after you've eaten a good meal, or is it like I feel contentment, whatever. But I thought it was cool for three reasons. One The king just said some shit and it hit and he ran with it.

22:05 Yeah. Yeah. It's like wearing a certain outfit in fourth grade and you're like I guess this is my identity. Yeah, like I'm a the chainwall is my guy. Like I'm a chainwall guy. Like that's just my thing. Uh because the teacher said that. that um I do think it's like pretty fascinating that in a culture that you and I are part of and and America's a particularly because we're such hard workers, uh it's all about work, work, work. But that's not really like the point of all this. It's like to be happy. So I thought it was cool that they're measuring that. But Another third and final point. uh thing that this makes this interesting. Have you ever heard of a pairing metric? Yeah, basically like two metrics that

22:47 Let's say you have uh revenue on one side, but you might have profitability on the other in order to make sure that like If you over optimize on just revenue, you might totally nuke your profits or If it's about uh growth, you want, you know, NPS score. Make sure your customers are happy. Is that what you mean? Yeah. And so when Tim Ferris invested in the hustle, we I got to hang out with him for an hour or so. And I was telling them about how many subscribers that we were growing by. He's like, Well, you need like a parimetric. You need

23:12 uh you know, not just top line like subscribers, email subscribers, but like are they engaging, are they opening, whatever. You have to have a parimetric, otherwise uh it kinda ruins the whole thing. And and that was like kind of fascinating to me. I I never heard that phrase And I didn't think about having a pairing metric with like government policy or you know, like anything other than business. And this is like a really great example. of a parimetric where it's about GDP traditional Metrics, but also you know, make sure that your your people are are are happy along the way. So I thought it was pretty cool.

23:43 Yeah, I I love this story. I I I think I was telling you before this I think we both somehow the odds of us both having Bhutan on our list are so Weirdly low. I think maybe we both saw the same thing. I saw the sixty minutes. What did you think? First of all, it's so funny. When you watch sixty minutes, sixty minutes look so old, dude. It looks and it's six six minutes is basically just a YouTube channel.

24:05 It's great though, right? It's great, but why does it look so old? Like I like literally the person on there is old. The clock they use for the sixty minutes thing is so old. All of the editing is so old. They don't know like Well like a jump cut is, it's insane. I think it's uh a fun fact. I almost positive it's the only TV show without a theme song. It's literally just tick, tick, tick, tick, tick, tick, tick, tick. Yeah, exactly. It's crazy. So when you watch sixty minutes, it's it's interesting to just look at it and be like, What is this, dude? Anyways.

24:35 Here's a couple of the things that stood out to me about this. So first, why do I why am I interested in a country? I'm interested in a country because In the same way I'm interested in companies that are run in interesting ways, or if a company had a unique mission or business model or a unique way of doing things, that'd be interesting to me. Countries are just big companies. And I found this pretty interesting that if you looked at it like a company. Where it was like Oh, what what's our main metric? It's not revenue, it's happiness.

25:00 So it's like instead of the GMV, they're looking at at how much happiness they're producing in their own economy. And I like that they measure their own and like did you look at their their happiness index kind of zero to one and how that all works? Yeah, it's like a weighted score, right? What what and what were all the metrics or basically it's a weighted score then they they sort of um they ask people a bunch of questions about their um you know psychological well being, their health, their time, you know, their education, all these different things.

25:29 And they end up with like, you know, basically There are seven point A point seven eight one on their scale, which is pretty good. And they measure oh it that's up three point three percent since last year. And basically nine and a half percent of Butney's people are deeply happy, thirty-eight percent are extensively happy, forty-five percent are narrowly happy, and six point four percent were unhappy, according to them.

25:48 And um And they're uh yeah, what I thought was cool was that A couple of things. Number one, it's a one of the very few cases where someone in power gives it up. So they had a king. And he voluntarily is like you know what?

26:02 This could just go to my son, but we need a democracy. And and the funny thing is the people there were like, No, no, King, stay king. He's like, No, no, no, we need a democracy. They're like Democracy, you see, India's a democracy, Pakistan's democracy. Look at those places. They're always at war, it's violent Forget democracy. We don't want it. We're happy. And he was like well

26:20 If I just keep giving this you know power down by birth, this won't end well. So I thought Seeing somebody relinquish power in their prime. Is so rare. Yeah. That you just overlook it when you have on the surface. But if you actually think about that deeply, that actually is like a really noble And very cool and very unique.

26:37 thing. How few p you know Biden didn't want to give up power and Trump doesn't want to give up power. Nobody wants to give up power. Power is one of the most addictive things in the world. And so I just thought that was really noble and really cool of him, um, to voluntarily go to democracy at a time of peace, which is which is not usually what happens. Usually if a democracy happens, it's after a time of violence or war, people need change or The Western country comes in and helps and tries to force a democracy on them. So I thought that was cool. Did they say that was the only time that's ever happened that way? It's the only one I know of. Yeah, they they kind of reference that that's that's never really happened before, that a democracy happened in a time of peace voluntarily.

27:13 Also crazy that just like, you know. Until nineteen until the seventies. Like in nineteen seventy four. There's people listening to this podcast that are born Before nineteen seventy four. They didn't have a currency. It was barter. Even up until nineteen seventy four. That's crazy. And the crazy thing was even though there was barter

27:30 they still had to pay taxes and it was like you could pay your tax with like giving them giving the government like a cow. Or if it's like oh you don't have livestock, all right, uh do labor then. And so then they built these amazing buildings because your taxes was basically community service. It's like hey, I'll go donate like You know, a hundred hours of labor to pay my tax for the year. And then because of that, they built these really cool buildings. Side weird note, uh you know, but our friend uh Shiel, friend of the pod, Shield uh. I think he posted this thread it's a threat of him going there, he like meets the king.

28:01 'Cause he's like, It sounds crazy to meet the king, but like He's like, I was at a bar and I was talking to this guy and that guy was the former pr like whatever, he was the former like pr d prime minister or whatever. He's like now he's a surgeon and he's just drinking at this bar and he's like, Oh, you wanna meet the king? Yeah, yeah, I can introduce you. And so he meets the king. And so he's like going he's talking about his experience there. One of the crazy things he points out is like

28:21 A lot of the buildings have penises painted on them. In like artful ways. So Yeah. Uh the other crazy thing is the bitcoin stuff. Did you see their bitcoin stuff? I know they have uh the they ha they own more bitcoin than the total market value of their stock. Stock market. It's like a billion dollars in in in Bitcoin.

28:42 Yeah, they basically have made themselves wealthy for life. They use their like their vast nature. So like, you know, they use hydroelectric mining. to mine bitcoin and it's r it's believed that they have A billion of Bitcoin. But that was uh like I think that was reported like uh

28:59 You know Eight months ago. So I it it's it's as as if they have double that now. You know what I mean? Like it's been a g they've had a great run. The US has it'cause they seize the Silk Road, right? So they have yeah the the uh the US has twenty billion.

29:14 China has twenty billion, UK has six billion, El Salvador, which has been buying and holding Bitcoin. Um has and the guy on that sixty minute show, he did a great job of saying He's like, We're human. We still want to be rich and we want stuff and we want all this other stuff. We also want to Be happy. And so'cause people were like, Well, so if you're just about happiness, why are you buying Bitcoin and all this it's like well

29:40 I still want nice shit. Yeah, yeah, more prosperous we are, the the happier we'll be. The other thing that I thought was cool, you know, they do free education, free healthcare, all that good stuff. Uh, but they also were like, Hey, sixty percent of the land is gonna be like dedicated to nature and but there's no I think you they don't allow mountain climbing. They like have these amazing mountains'cause they're in the Himalayas. Yeah. But you're not allowed to and he said this great line, he goes

30:02 He goes uh nature is he goes nature is not meant to be conquered. He's like man has this thirst to just conquer everything. Oh, there's a mountain I gotta climb it and put my flag on top. And they just had a different attitude. Nature is beautiful, it's meant to be enjoyed, meant to be it's sacred, it's meant to be sort of revered and not conquered. And I just thought, man, these people roll to a a different A different beat.

30:22 And I respect it. I'm glad that these little experiments live. I had the exact same feeling, which is I saw him talk and and they sort of fit a lot of the stereotypes that you would have with like a Nepal uh w the Dalai Lama, like this like wise'cause and I think they're like uh They have like a national outfit or something like that and it looks like the boot and they are Buddhist, but it looks like that uh like whatever the Dalai Lama uh like the Shaw or whatever he wears. So they like jeans. Yeah. We love J Yeah, the national sport is grinding. Uh, they had this like cool vibe of like wisdom and shit. And it was very shocking to see that because I'm like watching this on a Sunday night as I'm gearing up to talk about money and gearing up to make it to get after it, crush the week. And then I see this guy who's like Uh talk about happiness and shit. And I was like

31:14 This is incredibly refreshing. It was pretty cool. It uh it seems like it's uh a great country. I think, by the way, there's all these like other downsides. I think Sheel even said he was like It's a pain in the ass to get there. Like I don't even think they have an international area. Like the roads are not very developed. Like there's yeah, there's other There's other thing. When you prioritize happiness above all Maybe a road maybe your reds kinda suck. Yeah, so like It was pretty sick, dude. I I thought it was great. I was very inspired, so I wanted to bring up Boutique. Well there is one other piece to it, which I I guess a bunch of young people are leaving the country.

31:42 Um, did you see that part? I I didn't fully follow that, but they they were then gonna build a new city. In Bhutan. The mindfulness city. And it was gonna be like they they launched like a hundred A hundred million dollar bond and then they're basically

31:56 Trying to make it a city where it's like walking and cycling and green spaces for meditation and mindfulness based education and ecotourism, like All the shit Bology talks about with like a network state. Or like the practice guys are trying to do these guys, you know, Bhutan is building a new city with like a s its own cultural values, trying to use that to attract. Well you want to hear a funny story is not a little bit more than a little bit of Um

32:17 Biology is in a lot of these crypto guys are in on this new thing called American classes. It's that uh monument that they are proposing that they build in the Bay Area. I don't know if it's it will never get built very likely. But The same architect who's on board with that is doing their is the that was the guy in the sixty minutes episode. He's the guy who's building Bhutan's new city.

32:38 And so there is this like weird um crossover of the crypto guys and and these people who are like let's what's a n what would a new city look like and Bhutan. Yeah, it's pretty inspiring, honestly. It makes you think bigger, right? It makes you think about Things that you just take for granted. They just seem set in stone. They seem like they were just They were already here. They'll always be here. It always was this way. It'll always be this way.

33:00 And then you hear about somebody, you know, these people who are who are trying to like Shake that and you realize oh wow it's all the whole world is more malleable than you thought. Yeah, and they also were approaching it in an interesting way. I forget the quotes, but he said something about how he's like we know that this is like a fifty year

33:19 Project. Like we're gonna go slow because we don't wanna hurt the environment. And it it was and the guy was like, But you're gonna be dead when they like do that. And he was like Isn't that awesome? That's something will like outlive me. Like it they had a very so if you're if you're listening to this, uh this on YouTube for free. So Google Bhutan sixty minutes. It was like awesome segment. All right.

33:43 Now that we talked about baton and happiness. And how there's more life than money. capitalist bloodthirsty moves that I've seen. Uh In a while. You know how the in boxing they say steal the round'cause like in the last ten seconds that's what judges remember. They don't remember the first

34:00 A hundred. They don't remember the first hundred and twenty seconds, but they remember the last ten seconds. Whatever you say last is what I'm gonna be most inspired by. So let's we skip to the sit down, but you had your moment. Yeah. Tell me how I can go cut some fuckers. All right. This is a private equity roll up. in the education space that I I found pretty interesting. All right. What is what does that mean? So I I went to high school and Texas for the first two years and then my mom and dad came to me one day and they were like, Hey Check this out. Doesn't this look like a cool house? I'm like, Yeah, it looks pretty cool. And they're like, We're gonna live there.

34:36 And I was like, Okay, where uh and they're like, It's in Beijing. And then my family moved me to Beijing in tenth grade. And so they went to Yeah. Yeah. That would have been super cool. They moved me there and they moved themselves. So they're so they were like, hey, you know, all those friends you've had, like You're not gonna see them anymore. And so um they also lied to me and said my dog couldn't come and and told me that China doesn't all allow dogs and the later in life found out that was a huge lie. Um, so you know, that's maybe that'll be my revenge tour, dude. That's it. That's the thing. Wait, so they leave the dog?

35:11 Yeah, we sold our dog because oh we dogs can't go to China. I was like, What? Oh my god. There's no Google at the time. This is pre Google. So um so I'm I finished high school in China and I went to this school called the International School of Beijing. And it was actually an awesome school and it turned out to be great for me to move and all these awesome things happened to me there. But As one of these things again. I just I go to the school, I just take it for granted. There's a school here, I don't know, schools are part of government they're just like from the land. I don't know, God put it here. I don't know what puts these international schools here. And now I'm like in my thirties and I'm reading up and I realized, oh shit.

35:46 These international schools are an absolute juggernaut of a business. And so um I'd like to tell you about this roll up that happened called uh Nord Anglia. Have you ever heard of this? Yeah, uh my friend Anand from C B Insights uh is obsessed with it. And so th here's what these guys did. So the the founding story is Back in the seventies, you know, things like fifty years old. There was one school in the UK, or there there wasn't even a school. It was like

36:12 Making materials for other schools to teach English as a foreign language. to people who are trying to learn English in the UK. And then they g expand that into Eastern Europe or whatever. And then they start their own school. They're like, Oh, we'll we'll do our own school for teaching. international people and will teach them in a in a sort of English, second language kind of way. And over time the thing grows and it goes from one school to multiple schools.

36:36 And they create this Like business that eventually becomes A fourteen billion dollar Conglomerate.

36:45 Of Eighty plus international private schools. Can you say the name one more time? Nord Anglia. N O R D. And then Angle as A N G L I A. So

36:57 What do they do? Uh, and by the way, remember remember when IMG sold IMG, which is like the sports prep academy and it sold for a billion dollars. We're like wow. Nord Anglia bought it. So this bought IMG. And the reason they bought IMG, they're like IMG's a really cool sports focused brand, but it's all in the US. We are we know how to basically create

37:16 International schools That the richest, wealthiest, or expats living overseas want their kids to go to Um to be able to get into, you know, maybe US US uh colleges. So they bought it for a billion dollars, being like cool, we're just gonna take the IMG brand and we're gonna pop it up in China and India and

37:34 in all these different countries in order to to to get those types of students who are sports focused, whereas their schools are more You know. Teaching the the the uh the I B curriculum, which is like the the kind of international baccalaureate, the it's the equivalent of AP in the United States is I B. So like I took the IB. Program. Um

37:52 And so and but the cool thing about this business is actually for the first ten years, it was just a slow burn. And these businesses fascinate me. Like I don't even really fully understand how you can go from Kinda like a a consultant selling teaching materials. At one point they had a daycare, like a nursery built in. It was like just this slow, sleepy business for like ten years. Was it like a family run thing? Yeah, it was like privately owned. And then they hire the CEO and then they start expans they start their own schools, they start expanding, then they start buying other school friend school like chains. So they bought like A six school chain.

38:24 Um That had like a presence in, let's say, France, and then they buy another one that has a presence in Latin America, and they're just rolling up as many international schools as they can buy. They buy five schools in India for two hundred million dollars. Um and so now they got five five international schools in India. And um Basically this company ended up going public.

38:44 A um it And then had a take private offer. And now is valued at fourteen billion dollars, which is pretty pretty wild. And there's one PE firm, this Swedish private equity firm that has just made an absolute killing. It's called EQT. On this entire like

39:00 20 year run of this business. Um, so you know, let's say 90 nine here's the timeline 1970s, it's teacher training language programs. Nineteen nineties. So now this is like, you know, twenty years into the business. They pivot to owning and operating their own international schools. Two thousand and eight. Now another eighteen years goes by. The Swedish PE firm comes in, gives them a bunch of money to rapidly go expand and acquire schools. Twenty fourteen they go public. Twenty seventeen they go private again for four billion.

39:27 Twenty twenty four, it's acquired fourteen and a half billion dollars. And um two thousand eight when they did the uh The private equity round, they were at forty million in Ebida. And you know, about two hundred million in revenue.

39:40 And so these things trade at like eight and a half X. uh IBA basically and they only own like ten percent of the international school market. Still ninety percent of the international school market is fragmented and and not owned by by anybody. Well now they do A billion in revenue, it said. Yeah, now they're do a billion in revenue with, you know, hundreds of millions and even uh and and actually it's I think it's even I think it it might even be m even more than that. But like

40:04 Just to give you an example, here's a slide. But like this is like one of their schools. So they show like the profitability of a school. This is their one of their case studies, so it's like Dubai. They open an international school in Dubai. They opened it in twenty fourteen. It took seven and a half million dollars.

40:19 To build it and open it. And then basically they break even in year uh year two slash year three. And then it's basically making fifty five percent net, you know, cash on cash. Once it's at that mature level, once they get the enrollment up to like fourteen hundred, fifteen hundred students. And so you could see like the enrollment basically by year three, they're at almost fourteen hundred students, almost at capacity. How do they convince

40:43 Parents that they're worth it. 'Cause like uh with school it's tradition usually is what like uh you know Gets people buying. Um, yeah, so it's kinda the same thing. So if you go look at their pitch, it's basically that Um

40:57 Yeah, we have we have the best run schools, our kids get into top tier colleges. And you know, the uh X percent of them gr you know, huge like ninety something percent of them graduate. They do better than their peers on um, you know, the inner the standardized testing, things like that. It's basically like when Chick fil A started expanding to New York of and all the New Yorkers were like, Finally You know what I mean? Like people like know this

41:21 No, there's brand in Beijing, the school I went to, right, like we probably had like a hundred percent graduation rate. Like that no there's like no dropouts. Everybody graduates and then like ninety-eight percent went to college. So there's like it's like uh uh compared to like a normal school, the whole school I was going to in Houston before that. probably was like seventy five percent graduation and less than fifty percent would would Enroll in college the next year. And so, and then the school I went to, you know, that's a that's like a first grade through twelfth grade school. And every year you're basically paying college tuition. It was like forty grand a year. To go there.

41:52 As a first grader, and as a second grader, and as a third grader, as a fourth grader. But like the way my parents afforded to go there was the same way that many students did, which is When companies overseas,'cause come you know, let's say you know, my dad worked for a company, they wanted him to relocate to like build up their business in China. then the company basically pays for your kids' education as part of the relocation package. And that's like a really good perk. That's the perk. It's oh you know, and so these schools basically it's kinda like US schools.

42:19 How they make their money is because the government will give like student loans to anybody. Like anybody can get a student loan. So you can get like you know, two hundred thousand dollars a debt. to go to the school, whether you're gonna be able to pay that off or not, doesn't matter. So the schools are like great. That's why tuitions keep going up because they're like awesome. The government will just keep paying for this. This is amazing. International schools work v largely the same way, which is it's either very wealthy people there who want their kids to go abroad. Like if you're very wealthy in Indonesia or China or India, you want your kids to study in the United States.

42:46 And you're probably, you know, like very, very rich. And so you're you're happy to pay, you know, forty K a year. For like elite. Your elite education or the companies are paying for it. So it's this beautiful business model where you're only catering to that top kind of one percent. And and interestingly, I think that there's actually a blue zone in America because when you think of a for profit university I think of University of Phoenix.

43:08 Yeah. I th I think bad. I think they're the ones who let everyone in. Uh, and they just buy all the Facebook ads and Google ads and it's slimy. But for some reason when I look at these schools, I think Prestige. I think uh like like it can be done well. Do you know what I mean?

43:26 You know the one I wanna do, or like I've been very like tempted to do? Is the modern day Film school. So Like film schools exist in the States and that you know, you can go to US C or U C L A. These are like the famous ones that you can go to.

43:41 But like Media and content has changed dramatically from when those schools were founded. Right. And credentials are less important, I would think. And credentials are way less important. And back then, you know, let's say you were a student in the eighties and you wanted to work in film someday. Well, when you were in school, you really had no shot. You could go be an intern somewhere, maybe hold up you know, you're holding the l the lamp you know in the in the back and you're holding the light, and that's like all you would be qualified to do. Today

44:08 Let's say you want to m be good at creating films or content or music or whatever, you could literally be publishing on YouTube, on TikTok, on Instagram, on Spotify. You can be publishing everywhere and actually like you could be in the market. You can be a day you have the idea to do it, you could be published that night. Th you could be fourteen years old and be you could be the best in the world at doing Twitch streams or whatever it is, right? Like And so what and and the number one Dream of young kids. is to be a content creator. It's the number one aspirational profession, which you could judge and say that's stupid or whatever you want. The dream is the dream. That means there's a lot of demand for people who want to learn this.

44:42 Why don't I go to Mr Beast? Why don't I go to Jim and say, Hey Why don't you create With your brand A university that is the modern day Like

44:52 Content creation skill stack. So it's All the things you need to know, right? Відіографі, фотографі, скрит райтін. Um editing Sound production, you know, music production, all all the creative arts, basically.

45:06 But do them in a way where it's like a two year program. It's like a like a business school. So it's two years. And it's all project based. So you go there. And you have access to all the equipment. Which you normally can't afford as a young person, like the best cameras, the best recording studios, the best editors, terminals, all that stuff. Um animators.

45:23 And then there's people who have different disciplines. One guy wants to be an animator, one guy wants to be an editor, the other person wants to be a uh talent, whatever it is. And you work together on projects, you create content, you actually put it out on the networks. And you get judged based on The number of projects you create, the quality of the projects you create, you're getting real feedback along the way. And then you have mentors or teachers.

45:42 Like a Mr. Beast or like others who are gonna like drop in and basically teach you some of the fundamentals of maybe storytelling or different things that actually you need to do. And I think you if you did this, I mean, just the math of this stuff is pretty crazy, right? Like You get five thousand or ten thousand people. coming to your school.

45:58 And it's you know, twenty five K a year for two years. That That's that one batch of kids, ten thousand people in a in a in a class. If they're paying twenty five K a year. Um for two years. That's five hundred million in revenue.

46:14 What stopped you from doing this? You seem pretty hyped up on it and it seems like a very logical thing. Um Well I had the idea of like four days ago. So, you know, that's probably just no new idea. You've been talking about uh No specifically the media, I think. Like I've always been interested, like what would you do if you did it in new school? I always thought of it in terms of entrepreneurship. But I actually think a more like trade school style school is better. For sure. Because you can only you know teaching entrepreneurship is hard because A, there's not not a class for business really. The business school doesn't teach you business, it teaches you management. Like what you think of as Harvard Business School is actually a you know

46:48 Middle management to senior management. training program, right? That's what that is. Um So I think a tra when you actually learn a skill and learn a trade. That's good. The skill of business takes a lot of time and it's not one skill. It's like fifteen, it's a bundle of like fifteen skills. You got to know a little bit about strategy and negotiation and marketing and building and managing all these things.

47:08 So I think this trade school style is much better. There's an interesting example of this, by the way. Do you know what full sale university is? Yes. So I'm looking up IT tech, but I'm also looking at full sale. I know a few people that went to full sale and they had great things to say. Yeah, so full sale is kind of at it it's at that scale. So twenty five thousand undergrads, it's twenty six thousand dollars a year. It's a private for profit college. So you just do the math, by the way, twenty five thousand undergrads. Twenty six thousand a year.

47:34 So that's That's like the the annual revenue. Let's let's do some public math'cause Big numbers are exception. That's six hundred million dollars, six hundred fifty million dollars a year. Uh of revenue that they're generating from like a four year

47:47 Cohort? Um My friend Chris um have you heard of the company uh Linode? Yeah, yeah. He bootstrapped and sold it for I don't know, like eight hundred million dollars. He's from he he's from Nashville and I knew him when I was younger and he went to ful sale and he w and he's uh that's kinda how I learned about full sale. But they have like if you look at you know Jason Citron, the founder of Discord, he's one of the alums

48:09 Yeah. And so I think they do more than just uh Like I knew it as that's where you'd go to get like a uh like a if you want to become a music record uh engineer. Yeah, so it was like game design was one. That's why Jason went there because he wanted to build Video games. They have music and then they have the Dan Patrick School of Sport of uh sports broadcasting. So he liked that much a TV broadcaster. They had their own little program, a degree, a sportscaster degree program of just how does it work since it's uh not a normal un it's a for profit university. Does Dan Patrick actually get paid to use his name or did he didn't donate a licensing, a royalty, that's crazy. That's great. That's what I'm saying for like if you're if you're Jimmy, you're Mr. Beast, like why are you selling chocolate?

48:51 Like we should do this. And we just need to find like an operator and do do it with a physical campus and like do the whole thing right. Make the whole thing happen and There's like an in an enormous talent economy that needs to be made, not just for people who themselves want to be a famous YouTuber. But every single company has to create content.

49:08 Content is marketing. And so any company that needs you know go look at every co every corporation from you know like Nestle down to your, you know, nearby eyebrow waxing place. They're all got an Instagram, they all got a TikTok. They're all posting content on there. And so All every company needs

49:25 Media creation. Talents. And nobody teaches you that. It's something today it's something you learn on your own outside of school using your own social media as a testing ground. And I think that's a little bit crazy given the value of this thing. And so I think, you know It's the type of thing that could be built.

49:41 And be a, you know, multi billion dollar business. Within Three or four years ma e easily. Yeah, getting five thousand or ten thousand people to to enroll is not hard for s for something like this'cause it has tangible value too. Like When you walk out, not only will you have these hard skills

49:58 Uh new. actual content creation, all the all the the bucket of content creation skills. Well, you're highly employable. So whether you become a creator or you're or you go get a job, like you're highly employable with a uh a set of skills, especially if you make it elite. Like don't make it University of Phoenix.

50:13 make it more like Harvard where it's like, Oh, where do the talented people go, right? Uh what's it? Like Juilliard? It's like make it more like Juilliard, where it's this is where the most talented people go. And build that reputation. I think that's the key to get this right. This is an incredibly compelling pitch. Um I wanna know what the downsides are, uh, which I don't even know if you know at the moment because

50:33 Uh You're seventy two hours into the career transition. Accreditation can matter. So if you want accreditation, you can do that. Uh Does that matter? Does accreditation matter? I guess it I guess it does for optics, right? Uh no, it matters for for uh to uh funding. So how do you get funding from the government, how do your students get loans? If you're an unaccredited school, students can't get loans, they gotta pay for it out of pocket. Understood. And And so you want accreditation so that you're eligible for loans. Which would let students go there, you know, who don't already have the money plus

51:04 You know. It's much easier to spend money the government gives you when you're twenty, eighteen, twenty years old. Um, so you know, you wanna be eligible for that. But you can you can get accredited or you could buy a school with existing accreditation. So that's not a blocker, it's just like a thing you got to do. Um the hard part is actually running it and like doing it well and like actually providing quality education, right? You don't want to be University of Phoenix. So you gotta have some soul, you gotta have some Some energy, you gotta have the entrepreneurial energy. Why so why am I not personally doing this? Because I personally am not gonna be the guy running this.

51:32 I wanna kinda make it happen and find an operator who wants to create something like this and I can connect all the dots of How do we get the capital?'Cause it takes a lot of capital, you know, like Joe Lonsdale started a school in Austin. I don't know how much he how much that costs, but I think it's like a I wouldn't be surprised if that's like a fifty to a hundred million dollar project of like in the University of University of Austin. Austin University.

51:55 That's crazy. Uh I mean yeah. That's pretty wild. And if you look at like uh So billionaires have put two hundred million into funding That Uh, that's cool. So yeah, it's you know, it's it's a big capex.

52:06 lift um to to do it when you have a phys. And I wouldn't do it remote. I would do it legit. I would do it with a physical campus. And I would just try to make it like Awesome. And it's the same thing like we talked about the baton thing. It's a fifty year play. Like You wanna build prestige and legacy like a Harvard or a Stanford.

52:22 Where it's the reputation. The reputation and the brand is the value. You want the best people to pay top dollar to come to this thing and get the best education. Then you want all the companies you want to hire to value the label that you have. So to do that. You have to assume you're gonna be You want to do something that peaks, you know, like fifty later. Um in terms of brand prestige. Yeah, that's like an interesting thing, by the way. So

52:44 Um There's like been a lot of times where Uh People will sign up to for a university and the goal is that after ten or fifteen years the brand name has elevated. So you bought the price before it was full. You know, it's just like investing in a stock. And then there's other times

53:01 When a Yeah, where a a university will have a protest. Or something will happen and it hurts the brand and you're like For example. Uh let's say you graduated from Columbia, you're like

53:15 Shit. Like it's a controversial place right now. Is my I bought this brand, is that now worth less than what I was anticipating. And so there's this weird that that is like an interesting way to look at uh building a university brain of like I have to increase the value for the You know, so I can I can justify that the people buying they actually bought it when it was cheaper as opposed to what it is worth in twenty years. Dude, did you see Bill Ackman did a presentation about Harvard? Did you re did you see this? No. What is that? Oh my God. All right. Well, I know we're supposed to wrap up, but this is honestly incredible. Jim Grant asked me to give a talk on Harvard, buy, sell, or hold. In the same way you would do with a stock. I think the

53:56 The Harvard motto or slogan is Veritas and then the the title is Veritas question mark. Because you know he's on his like anti Harvard crusade right now. What's Veritas mean? Forever. Truth, I think. Truth. Uh. And so it breaks it down like it's a company. Yeah. The business of Harvard College is probably an education to students. And then it has like a graph. It's like enrollment has been flat. Over the last twenty years. Faculty growth has been modest, you know, growing at half a percent.

54:19 But administration growth has grown by forty percent in twenty years. So he's like basically like oh you're not growing students, but you're growing your admin, your OpEx on the back end, right? And analyzing it like a business. This is amazing. And the cost has grown, basically the cost has doubled in twenty years. He says you're growing by increasing prices, not by increasing the number of customers served. Exactly. And then it talks and then he he breaks down the PL. He breaks down where's the revenue stream. So how much is coming from donations versus tuition.

54:46 Um, how much of your faculty has diverse viewpoints. I mean, really obviously his agenda in this whole thing was to basically be like Harvard has gone too woke and the administration has gone like rogue and you're you're ruining the the brand and the mission of Harvard. The the operating margin would be a negative forty percent without distributions from its endowment. Yeah. And it says in sixteen forty three, that's how old Harvard is. In sixteen forty three, Harvard's first mission. was set up simply as Veritas or Truth. And he's got this old screenshot of like a hand drawn

55:15 logo of the shield. And then he reads like the the six the the laws, liberties, and orders of Harvard College. And it's like this handwritten document um about you know the the goal was to encourage Harvard students to seek wisdom And he's basically saying like you know, then then he shows how the mission charter has changed. So in twenty twenty It was instead of about seeking truth, it was like Uh it removed a bunch of references to the sixteen fifty charter and basically left it as more of like a DEI style mission. Yeah. And he's like, you know, paying attention to that. So, you know.

55:46 He's like, What you know what happened to new ideas? What happened to the truth? And then he goes and and he just breaks down like facult also like even in the faculty growth. He's like, Cool, is it growth in Computer science teachers? Or is it growth in African American studies Um, which you know, he basically shows that African studies grew like crack to economics or computer science. Um, but then he's looking at the number of degrees that people are getting and that's not growing. So he's like you're not meeting your supply is not meeting the demand of the consumer.

56:12 You're just your supply is growing arbitrarily, not not to match sub not to match demand. Like I think there was only uh What was it like? There was one degree recipient in twenty twenty three in African American studies and fifty seven faculty. This is wild. And do you know in in here I I if you go down all the way to the last slide. His verdict, he says. Is Harvard a buy?

56:36 Sell or hold. And his verdict as of now is Harvard is a hold. It still has many positive attributes. It has a strong brand, four hundred year operating history, fifty one billion dollar endowment and huge real estate. Uh, but it has many challenges. The quality of the education has deteriorated. There's so many competitors, many talented people aren't to go into traditional universities. They missed allocated resources and the endowment has been a chronic underperformer.

57:02 This is a very interesting way to look at many, many, many different decisions in life that are beyond just money. How awesome is this? This is the greatest this is this is a fantastic way to think. Yeah. This is so cool. Uh is this th all decisions I think I shi every big decision I have in life, I I need to put together a PowerPoint like this. We did this with our child's name, by the way. We put three names in a PowerPoint and like Sarah presented them and like argued like in her favor which name we were going to choose.

57:29 What what is that what is even in the slide? What do you say? Like I well, So the way that we make decisions in our house, oftentimes it's Uh like one person will present three options and then the other person can select the one option that they want. And so if it's like uh Chisket Factory, Chipotle, or so it's like uh if I'm selected the three, I will select three that I'm at least okay with, and then she could select the one that is of most interest to her. For baby names it was like uh She was like you s uh I wanna select a three and then you could select the one.

58:04 And so she made a PowerPoint and it explained, here's the three names, here's the background of the name. And I had like um parameters. I was like, I want something a l somewhat traditional. I prefer it be in the Bible because everyone in my family was named for someone in the Bible, whatever. And she's like, all right, here's the three uh that I like. I'm cool with all of them. Here's the background of each name. Uh here's what it means. Here's famous people named that. Here's uh where it ranks on the popularity list. Here's he's trying to persuade you towards one or it's a completely neutral, like Pros and cons of each.

58:38 In that case it was neutral, but yeah, oftentimes there there is an underlying persuasion bit, but the if you're the person who selects the three, you should select three things that you're you like. Uh you should you'cause you that's like you what you could do is you could select three things that I that you like, and then I, as the final decision maker, will select something and you're happy no matter what. It's a great way to make decisions, I think. And so she did this big presentation on three different names and I selected the winner. Uh, and that's how we got our baby's name. Last podcast you said every month we sit down at the end of the month. at our table. And we review the month's budget.

59:15 Financial decisions, key financial decisions that were made. We discuss unresolved issues that might be lingering I'm kinda into the Par Corporation. Par corp is uh Probably one of my favorite corporations to learn from. And I think the way you run your marriage Like a business partnership is

59:33 Both effective and hilarious. We did that great combo. before we got married, we did that, by the way. We said, uh, you know, this is going great. Like we really love each other, we like each other. I it it appears as though like marriage is in the cards, you know, we said that's like six months into dating. Uh Write down where you wanna be in ten years. Like what do you wanna do? Like let's how do you wanna raise a family? Where do you wanna live? And we like made sure that like our once and our interests, like were like all right, like we disagree here, but like

59:58 That's Okay, I'm malleable there, but here's like a deal breaker. What do you feel about that? So for hers, it was like I want to raise children in the New York area because I can be around my family. That's a deal breaker. And I was like, No, that's cool. I could I could I could fuck with that. Uh and so yeah, we do this type of stuff. It feels cold. I don't even like talking about it because people think'cause like It feels cold. Uh, but dude, this shit Works these type type of like discussions where it's like, all right, now's the period to discuss this. You have the floor. That stuff is so effective, I think.

1:00:28 Yeah, yeah. It's great. Before before you guys go to bed, you just shake hands instead of kiss. It's just nice, like to to just keep everything you know on the up and up and uh as calculated as can be. That's why I hate talking about it, because people think that everything's like systematic. It's like no, like there's like Two hours a month where like this is set aside to like have these like relatively formal discussions. But it's frickin' awesome. I think that I I think if you uh like have a lot of kids don't people do like family meetings? I know I saw it in like TV shows growing up, but it's not a thing. Uh yeah, I think family meetings are a thing. I think you guys just really uh

1:01:02 Take it to that next level. You guys are the McKinsey of family meetings, right? Like Vows.pdf before your wedding. You had it all set up. It's good. I like it. It works. I suggest everyone at least try it. It definitely works, I think. Um I think that's a killer episode, to be honest. I feel hyped up. I feel I have anest with a ha with a heart H that was a great episode. All right, that's it. That's the pod.

1:01:29 I feel like I can rule the world, I know I can be what I want to I put my all in it like my day's off On a roadless travel never looking back

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