I Made $50M Buying & Running Boring Businesses

0:00 So that was the first golden goose and then you said you started stacking geese like a rapper, you know, at the club. So what's the stack I hope that becomes a term that we can use stacking geese. Stacking geese. We we gotta get some shirts made. 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 song. On the road less travel, never look at it. So Brent runs permanent equity. You uh started off as a founder. You started buying companies. And you then started raising money to buy companies. So you raised like something like fifty million bucks for your first fund. You started buying companies with that.

0:37 Then a couple of years later, you raised about two hundred fift million dollars to buy more companies. And now you own, I don't know, something like sixteen companies that do over three hundred and fifty million dollars a year of revenue. And I believe what you said was fifty million dollars of free cash flow out of the portfolio now. Which is pretty incredible. So that's who you are. That's what you're bringing the table. And I think

0:59 Sam, where do we want to go with this? Because we could ask you about buying businesses. I have some questions around that, but I kinda wanna start with something light before we go into like Hey, can you teach me how to be private equity, please? Yeah, we could we could do the light stuff. I then you also you've got the we call it the off shucks Warren Buffett attitude where you've got uh a list of one lighters, you write amazing annual reports, you're a great writer. So we have a bunch of one liners that we want to ask you about as well. Sounds good.

1:24 What can you tell me what's the what what do you buy and what are the biggest companies? You buy like pool companies and HVAC companies? Yeah, I mean we typically uh we we've got everything from a children's clothing brand to a military recruitment firm to manufacturing, construction, business services. I mean it's really the sixteen companies, it's a you know, it looks like the island of misfit toys. Uh, for us they're they're companies that we love the people who we get to work with. Uh they're in industries that we feel like are not gonna be changing. And we can talk about how some of them maybe look like high change, especially like the children's clothing. uh would seem high change on the surface, but it's actually uh not.

1:57 And um Yeah, we try to partner with them for a long time. What's the biggest one in terms of revenue and profit? Let's see, our in terms of revenue and profit is probably uh our fencing business out of Dallas, Texas, is is probably the largest. So we um we have a big market share in the in the Dallas market. And um Yeah, it it's a it's a it's a pre sizable business. I was gonna ask you a similar question, like

2:18 You know, people are always like you can't pick a favorite kid. And as an investor. You can. You have this portfolio and like some are better than others and that's okay. It would be weird if all of your companies were equally successful investments. I wouldn't believe you. And so

2:34 What's like the golden goose for you? So which one is like Like I know in my portfolio, right? I have like I have like a mini version of what you do where we have like four or five companies that we kind of have either bought or own a big stake in. And I could tell you'll be like oh this bus like for us Like the Summer.com business was like my golden goose. Partly'cause I

2:52 got in on a great price, but also The business tripled since we bought it and it's just this business that just spits out cash flow. And it's like The market keeps growing for this. People need this. And so for us, that's been the the golden goose. It just keeps laying a golden egg every single month for us. What's the golden goose in your portfolio?

3:09 Yeah, well, we've been fortunate to actually like we've we've kind of stacked golden geese on one another, is how I would describe it. So uh the very first business I bought is called Media Cross is a military recruitment firm, bought that in in very early two thousand ten. Explain in layman's terms, what does that even mean? Military recruitment firm. What's happening? Yeah. So uh we at the time worked with two branches of the military. Now we work primarily with one. Uh we had two contracts. One was to recruit civilian mariners into a division of the Navy called Military Seal of Command that resupplies the ships that never come into port. So It's about uh fourteen hundred to eighteen hundred civilian mariners a year are recruited into that division, and that's our responsibility. So we do all of the marketing and recruitment efforts to and then the processing to bring them into that branch of the military. Does that mean like you're out you're out on the street with people, or does that mean you're running ads and you own like a Legend website?

4:00 All of that stuff. Yeah. We're we're doing we're doing Legion. We have a whole processing center. We're actually doing qualifications for these people. Um so it's a it's a complete soup to nuts uh operation. Pays you per recruit or how does that work? Yeah, we're on a fixed contract um that that that escalates every year uh based on the staffing and needs of the business. So we it's basically a staffed contract and then we have uh um you know sort of a built in profit margin that's on top of that. What do you get per recruit or per referral for one of these things? Oh gosh, I don't even know'cause we're not we're not based on that, right? So so we we we've done this for the the contract is we've had it as a business for

4:38 Thirty ish years now? Um, it's been forever. Um, and uh I mean, we're so deeply embedded into what they do. We know exactly what it takes. We I mean, we are the outsourced function of that uh a piece of the military. And why why is that business great? Is it because you got this cash flow, but you have this contract, so you have the certainty and defensibility with that. Is that the what's great about that business?

4:59 Yeah, I mean so I like for the most part, we know what our profitability is gonna be in three years from now. Right. And so once you get that business optimized and you get great people in place and the the leader of that business we've had, uh I mean, she's been with the business since the very beginning. So we're 15 years into the relationship. She's doing a great job. And it just it it clicks. So that was a that was I would call the original golden goose that allowed me to uh pay back the SBA. I I've heard you say you accidentally bought your first business. Is that what you meant when you say you accident what does that even mean? How do you accidentally buy a business? Yeah, I I I got a call from a guy and he was like, Hey I wanna introduce you to this guy. He's it's your uh he's in your industry. You know, he said m marketing, marketing,'cause I'd launched a uh uh called an ad agency for all intents and purposes, uh before then.

5:40 And he was like, Hey he's junior industry, you should get to know him and I said, Okay, great. And he's like, Oh, by the way, the guy's uh he he's gotten left at the altar for the second time trying to sell his business recently. And I was like Well, okay, I guess I could take a run at it. I had no idea what I was doing. I was twenty four at the time. Um No idea what I was doing. And um I sat in front of this guy and and

6:00 You know, we talked about it and we negotiated and he said I'd never sell it to you for the price you asked for. And I was like, That's fine, no problem. And I didn't talk to him for seven months. And then seven months later he called me up out of the blue and said, Uh just renewed our largest account. Business is in great shape. I'm exhausted. Uh, I'll give it to you for the price you asked for, but you gotta close all cash sixty days from now. And it was one of those where you kinda like you make the sale on the you know, then you go down the elevator and you say, Oh shit. Uh it was it was like that, right? And I remember getting off the phone and I was like

6:27 Oh crap. Like I I just obligated myself to go buy like buy a business and I have no idea what I'm doing. Did you know anything about digital marketing? Uh yeah, I mean we had we had we did digital marketing work back then. You have a marketing agency, you Stumble into this business. Um, you're like maybe somebody s tells tells you you there's a chance to buy it, you're like, All right, I could try. He says no to the first price. He comes back, you're not even following up. He comes back and says, Hey, still interested. But if you don't have a lot of money, you're twenty four years old. So you go to the SBA and you get an SBA loan for this thing.

6:56 Yep, correct. Yeah. I I I asked my newly married wife to sign a personal guarantee, and she was like, What's that? And I was like, Oh, don't worry about it. No big deal. You're like, good news and bad news. Good news, no prenup. But you do have to sign this other thing. Exactly. What happens if this doesn't go well? I was like, it's probably not gonna be great. Um for somebody who's never done an SBA loan, what can you explain just like You put down X, you get Y, what's how it all works. Yeah, back then, um, so the requirements have changed a little bit. I think it's like five or ten percent you have to put down now. And I think you can actually qualify with seller financing. I'm not an expert anymore on the SBA. I've only done the SBA one time and that was literally fifteen years ago. Back then what I did was I account uh leverage the accounts receivable from the existing business as the down payment. And then got the the rest of the debt through the SBA. And so I mean I put very little cash into the deal. So you put basically zero down.

7:45 I mean it was a it was a lot of m my my money but it was just tied up in other assets. But yes, I mean uh in terms of actual cash that was coming out of my pocket was not a lot. I didn't have a lot of cash. Um and so um yeah, I ended up asking the my buddy at the SBA, who was a he was part of an SBA lender, I said, Hey, do you guys do like expedited SBA loans? And he was like, Not really. Uh we don't do that. And I was like, Well, I need it in sixty days. And he was like, That's really not possible. And I was like, Can we make it possible? Like let's try. How much how much are you talking? That that you had a bar. It was a million bucks.

8:17 Yeah, it was a million dollars. And was this like your C's candy, like Buffett bought C's candy and returned like a billion dollars in free cash flow or more than that to the to the headquarters it over the last whatever fifty or whatever it's been. Yeah, it's it's it's like a twenty Xer. Yeah. So That's amazing.

8:34 So that was the first golden goose and then you said you started stacking geese like a rapper, you know, at the club. So what's the second geese? I hope that becomes a term that we can use stacking. Stacking geese. We we gotta get some shirts made from a merch guy. Uh you know how like Rogan has like Jamie. I kinda have this like fictional studio in the room where I'm like Pull that up. Merch guy, get on that. Yeah, yeah, merch guy. Um yeah, I mean I knew I knew so little back then, I remember uh my lawyer said, Okay, we gotta start due diligence, and I literally typed into Google DO diligence. Like do like I had no idea what it was. Um and I was I was like reading about it as he was talking to me. I was like, Oh yeah, we just asked questions, like how hard can that be? Um so anyway.

9:16 Uh it was quite the adventure. That's amazing. Yeah. Another another anecdote on that deal. was uh a week before closing I said, okay, so I take all of my money

9:27 And I give it to you, you take all the money out of the business, like how do I make payroll? And the guy was like, Well, you obviously got uh a line of credit on the business, right? And I was like No, I didn't I didn't do that. And he was like The business is gonna go under immediately. And I was like, Yeah, that's not good.

9:43 What do we do? And he was like, Well, you gotta figure this out'cause you you're getting ready to close on the business. And I was like Can I get a loan from you? So he actually lent me money to as a line of credit to keep the business operating because I didn't even I didn't even think about it. I didn't think about like, oh, well, he's gonna take all the money and there's not gonna be any cash to operate the business. I was um I was with this guy this weekend and he was like, Hey, should I start my own business? You know, I'm twenty eight. I don't think I have enough experience, though. And I was like

10:09 Yeah, I'm pretty sure like a lack of experience isn't like hasn't stopped a lot of people. Uh you can kinda be like a kind of a dummy and get into it and you'll probably learn in like six months. And you are a good example of that. You don't really need to know much. Huge dummy. And like the Uh lean manufacturing.

10:27 part uh like kind of philosophy. They had this idea of like just in time. You you you do things just in time versus doing everything ahead of time. And so Just in time learning is basically what you did. It's like, oh, when I need to close, then I figure out what due diligence is. Then when I need to take over the business, I learn what w working capital is. And you just you learned each of the core concepts as you needed them, which is actually the real way that people learn rather than I'm gonna learn everything up front. Then I'm then I'm fully prepared to now go do this. And like w in reality, that's not how how life works. Yeah, and sometimes it doesn't work out and I you know, I joke that with force gov private equity for a reason. So

11:01 What else do you own? That's awesome. Yeah, so the next business uh we bought uh was a was a pool business out in Arizona. Um and that was uh just with uh again started accruing cash and um started building that up and and bought that business. And again, that one turned out to be uh a great investment as well. You you say you say that nonchalantly, like, Oh, a pool business, but it's also like, dude, that would be really random. I don't think about pool businesses. Nobody shows me a pool business. So what were you doing? You're talking to brokers. Where does that deal come from? Like for you at that time.

11:29 Yeah. So it was about so let's see, so I had no idea what I was doing. I after I bought the business, the Media Cross in two thousand ten, I was like, Oh, that worked. I should do more of what works and less of what doesn't. At the time, there wasn't a lot of writing on the internet about this. Um, so I mean there was a little bit of uh stuff out of Harvard, a little bit out of Stanford around search funds. But there was very little activity online. And so uh I was like, Well, I just need to ask around like are there other people doing this? I didn't even literally know that there was a thing called private equity. That's how little I knew. I mean, I I started somebody was like, Oh, you did a private equity deal, and I literally Googled private equity and I was like, Turns out there's a whole industry of people that do this. Like why would they not do it like in smaller companies?

12:07 And uh that was my foray into it. And so at that point we said, Okay, well, if we're gonna go find other businesses, I mean, how hard can it be? This one just came to us. There must be just tons of businesses out there just floating around ready to be uh ready to be bought. And so we started reaching out to people and developed deal pipeline and one of the deals that took us so that that pool deal we first saw in two thousand Twelve. I wanna say. Um, and it took us about three years to get the deal done. And um, it was just hanging around the hoop and they actually went with two other buyers before us and

12:38 Ultimately had a good relationship with them and So the time between deal one and deal two was three years. It was uh five years. Sean, isn't it crazy how long things take? Like Brent's like a Brent's a big shot right now. Like, you know, people know you and you like you're talking about hundreds of millions in revenue. But you started this in like

12:57 Sixteen years ago. Like that's a I mean, you it's a huge success and everything, but it like really goes to show you that like You have to grind for or at least be consistent for a decade plus. Oh, absolutely. No, I mean I I I say to people all the time, like if I had been given fift million dollars to invest in like two thousand ten, I like I would have lost all the money. Like it just took so long to build up like to make a bunch of mistakes. Make a bunch of mistakes that were low stakes.

13:21 felt like high stakes at the time that were low stakes, uh in order to be able to to to warrant having more resources. And so Yeah. So at some point somebody did give you fifty dollars. How'd you get somebody to give you fifty million dollars to go buy companies?'Cause I'd like that. Yeah. Uh well, so uh funny story, I met this guy named Patrick on the internet, and uh literally he put out a tweet, Patrick O'Shaughnessy put out a tweet, and this is when he was like an analyst at at his dad's firm and

13:48 You put out a tweet about capital allocation, I responded, I was like, Yeah, I can hop on the phone and talk about capital allocation. I didn't really understand what he was even asking. He was asking about public markets like capital allocators in public markets, but I I didn't know much and so I just reached out and said, Yeah, sure, let's talk. We get on the phone. He's like, so what do you do? And I was like, Oh, I buy these these small businesses. He's like, Well, how much do you pay? And I was like, I don't know, like between three and five times.

14:09 And he was like What? Like, are these businesses going out of business? Like are these are these going under? Are these distressed? And I was like, No, these are healthy businesses. And he's like, I've never heard of this. What is this? And so we talked like two or three more times and then he said Well, can I come visit you in Columbia? And I said, Sure. So he flew to Missouri and we spent a day together, and at the end of it, he said

14:28 Like I want my family to invest in what you're doing. Like I believe in what you're doing. And I said Sorry, like w we don't take outside capital. Like I'm not gonna Do a two in twenty, ten year fun life. Uh looked at that. Uh don't want to do a hold co and value the current assets and uh, you know, get saddled with a bunch of partners that I don't know who they are. Like life's good. Like we're making a bunch of money and compounding and Like everything's fine.

14:49 And um he asked me the question no one else had asked me because we'd flirted with some family offices at that point and and he said, uh Well, what would it take for you to take our capital? And I said Well

15:01 I don't know. And he said, Well won't you figure that out and get back to me and I'll tell you if we can do it or not. And so I whiteboarded out our current structure, which is Like kind of the opposite of traditional private equity. So we take no fees of any kind, no reimbursements of any kind, there's no cash that comes from the portfolio companies. Uh or from the L Ps to the G P outside of we take a percentage of free cash flow above a hurdle as we return cash back. You gotta redo that last twenty seconds. Can you dumb that down a little bit? I I got you, Sam.

15:27 He's the guy working in Cinnabon. That doesn't touch any of the Cinnabons. So he's in an industry where everybody's like They're just getting high on the sugar. And he's like, I'm good. I don't need that. Can we only do cinnamon references or analogies because that was uh much easier than talking about hurdles and sprinting and whatever. Cool, me too. Yeah. Well so okay, so traditional private equity, you you you raise a fund and you get two percentish.

15:57 Uh of the uh of the amount every year. Every year, by the way, you get two percent. So which is actually like getting twenty percent of the total. Correct. Every year for ten years. Which is kind of insane, right? It's insane. I mean Pe people in private equity get paid well'cause it's hard to do and not many people can do it and it's a rare skill set. And uh Yeah, I mean it it it seemed high to me when I first looked at it, but I was like

16:19 Okay. Well that's the market for it, so whatever. Yeah, I said I don't need the fees'cause I'm already paying for the team and the overhead and everything. And so I don't need any of the cash flow from the fees. Just I want to be entrepreneurial. If we make money, like we want to share in that making it together. And so um that's our model. And we don't use debt and we hold it for a very long time. So we have a thirty year initial term on our capital.

16:40 Uh typically a private equity firm will have 10 years. And uh most private equity firms, you know, use a lot of leverage. put a lot of debt on the businesses at closing. We typically use no debt. And uh so we're kind of in some ways the the opposite of traditional private equity. And

16:55 Yeah. So I went back to him and I said, Hey, this is the structure that I think would work that we would take capital and He and Jim, his father said Okay. Wait, so I think I missed it. What what did you do as the carry then? So you said okay, no on the two percent fees, but what what did you do for the profit share? Yeah, so we get uh forty percent of the uh of the free cash flow of businesses a as we return it back to the investors. So you don't you don't have to return all the money up front first. You just start participating from day one with forty percent.

17:22 Correct, correct. But it's only on what we return back. Only on what you return back. Okay, great. And then And you said you use no debt. Correct. Yep, so these are completely unlevered.

17:33 All cash deals using equity from day one. Why don't you use like a little bit of debt? Just a little bit of a little bit of buds. Just a little icing on top of the cinnabon. Exactly. Just as one time. You don't even do seller notes like nothing? Uh we will occasionally do some seller notes, although we found that uh having um the people that you work with be your creditors is not an ideal situation often. Um, so we've really shied away from that as well. Um yeah, no, we typically just close all equity.

18:05 And uh try to keep things just super simple. I mean, we think that that that transitioning small businesses is difficult and it's pretty stressful on everyone. We can always lever him up after you know after we close, although we haven't really done that. And if that's strictly like a lifestyle choice. You're just saying that just helps you sleep better at night. Is it a financial decision or a peace of mind decision? To not use debt.

18:26 I think it's both. Uh what I would argue is that the optionality that we have in doing uh some pretty interesting things with these businesses to grow them. is much better when you don't have debt, when you're not paying all the cash to to a bank. I'll give you an example. So we bought an aerospace business in 2019 called Pac Air. I don't know if you guys know this, but the airspace business never goes down. Um, it always just goes up um in the history of the industry. Never really has a problem.

18:51 And uh I remember when we were closing that deal, one of the advisors to the seller said Are you guys idiots? Like the this business does never go down. Why wouldn't you guys lever this thing up with debt? And we said, Yeah, here's our philosophy and all this stuff. Well It's not like we actually knew what was coming down the pipe, but twenty twenty hits and we were literally the only business out there without debt on it. Like literally.

19:11 And so we were able to take all the cash flow that we were generating, because we were still generating cash flow, even though the business was down a lot. And we were able to go out and basically make ten years of progress in two years. And that business now is seven ish times the size. Uh is when we bought it. And everyone else that that had debt is

19:27 you know, maybe grown a tiny bit out of from 2019, but not much. And so it's really been a transformative experience. And we've had that happen over and over again in these businesses. Like we never know what the future's gonna hold, but we know that there's gonna be options to invest in really interesting things. If the cash flow is all going to the bank, you don't have that option. Right, right. I'm gonna still use a little bit of debt, but that I think that's good. I can't never hurt anybody. We've had a bunch of people come on this podcast and I'm always like wowed by their insights, their personality. I I feel this way about you and and so many people that have come on this podcast where I I walk away being like that guy's the man. Like that person's a master of what they do

20:03 They're kind of a master of the universe. Uh this is great. And it's so easy. And it's a yeah, it's so easy. Uh but uh and forget the easy part for a second. I'm just like wow, that really works and it makes sense what they said. They're they're kick ass. And then if you look at people over like a twenty year period or what you know, like a longer period, ten ten to twenty years.

20:21 There's this base question which is like If you just put money in the S and P you get some rate of return. Right. So like Sam loves to put must the in money into the index and he's like, Cool, I like that because I do no work And I'm gonna get

20:34 Sam, what do you wanna get? Eight, nine percent, something? I would be very happy with eight percent per year. Okay, so eight percent a year. And so to be smart and do a bunch of work, you gotta beat that. And so We've had people come on this podcast that when they talk, they sound absolutely brilliant. And then later you look at their returns and it's like

20:50 Oh they Kinda don't Beat the index, actually. Um, and I don't even think that's really like a knock on them or I don't even view that as like they're not like a charlatan. I just think it's really hard to beat the index, actually. So what do you try to do in terms of like your rate of return?

21:05 And What W what's your score? So if the if the SP is doing nine percent of your compounding, what are you doing out of out of permanent equity? Yeah. Well, so I'm under all kinds of SEC regulations, so I can't actually talk a ton.

21:18 And I would love to talk about uh but I can tell you what's been put in the letters or annual letters that you're gonna do. What are you not allowed to say? Uh I can't say anything that would be future looking, I can't say anything that would be inducing investment, I can't say anything that uh that would be considered marketing because we're like top level registered SEC FENRA, all the stuff. And what if we bleep it out? What if you tell us that we bleep it out so it's not a it's not on air. Just tell me when to stop. Yeah, yeah, yeah. So what I can do is say we target uh the minimum underwriting that we have is we target a minimum of a thirty percent IRR is is minimum we underwrite to. And we've historically been pretty significantly above that. Okay. Um but Um, you know, we we really think about term things in terms of cash, right? So I think it was last year that we talked about uh, you know, our total cash out IRR. is in the low twenties.

22:08 And that's without any marks. That's without anything. So you uh you know you stack marks and the the growing, obviously cash flows on top of that, and the numbers get pretty ridiculous. Marks being uh the valuations. The valuations of the business. Yeah, that's correct. And so I mean if you if you underwrite, I mean if you think about it like kind of the bottom line. If you're buying a business with no debt Right. So take the debt side off of it. You're just buying the business for all cash. And you know, let's say on average we're paying between Five and seven times for a business.

22:33 kind of in that range. And let's say that the business is organically growing Seven, ten percent per year. And we're increasing that to uh sort call it mid teens a year, maybe low twenties. Um, the math gets pretty amazing pretty fast. And that's without using any debt. And so I think that's where it's obvious from the outside looking in. There's gold in the hills, right? If you look at small businesses acquisitions, I mean, this is not a secret anymore. I think when I first started talking about it in

23:00 15, 16, right? I remember going on Patrick's podcast when it was brand new. I remember Patrick being like, Oh, hey, I'm thinking about starting a podcast. I was like, Yeah, sure, I'll help a friend out. Had no idea it was gonna turn into what it is, right? Uh, but I remember going on there and people were like shocked, you know, at like what you could buy these businesses for. And people say, Oh, well, that's not fair, it's an inefficient market. Is it is inefficient, but it's inefficient for different reasons why people think. It's inefficient not because people are getting taken advantage of. It's inefficient because it's absolutely freaking brutally difficult and it's so easy to lose a bunch of money. Like I had a guy reach out last week and say, Hey, I I wanna be honest, I'm looking for a job. My wife and I went all in. He was working at uh a big private equity firm based out of LA as an operators. He and his wife went all in on a business. And it failed. And now they're bankrupt.

23:45 What attributes make you and others like you successful versus this other guy not successful? Yeah, I mean I think the the In the beginning, if if the first deal I've done gone south Um, and there's plenty of opportunities for it to go south. And so I I would say a lot of our success is is attributable to luck in the beginning. And I mean, look, if you listen to any investor, if they tell you that the early stuff they did wasn't lucky, They're lying to you.

24:09 Um, I mean, I remember uh getting a chat chat with uh Buffett about this and I said, Hey, tell me about di uh sandboard maps and Dempster Mill, and he was like, Oh my gosh. Like he's like if either of those investments go wrong There is no Warren Buffett, no one knows about Berkshire Hathaway, none of that stuff happens, right? And they were that close. Like that's how he met when he met Munger, he asked Munger, Hey, do you know anybody who could help help basically turn around Dempster Mill because it's it's flailing. And if that goes under, like my future's done. Wait, can you can you I don't know the story. Can you tell the story in more detail so W Warren Buffett almost failed at the beginning of his career. What what was it? Can you tell the story? Oh yeah. So he had seventy percent of his assets into these two investments. One was called Sanborn Maps and the other was called Dempster Mill.

24:52 Um, and this is early days of the Buffett Partnership. So this is pre Berkshire Hathaway. What do those two companies do? So Sanbour Maps was a was a mapping company. Um they basically had uh at the time the Think about it as intellectual property for for maps. Right. Uh if you needed to go build something or if you needed to navigate something, they had all the the best mapping technology. Um, and so um that that business was a publicly traded business. And uh I think he was a minority shareholder in it, but he was basically the controlling shareholder.

25:22 That one um I think turned around independent of him installing new leadership, but Dempster Mill was a completely different story. He he bought into that, took control of it. Um and it the business was just failing. So dempster mill, I can't remember exactly, I think they were building constructing um mills uh of some sort, uh hence the name Dempster Mill. And um it was basically the biggest headache. And he was staring down the barrel like I did. And I mean I can talk about the early days like we almost failed like five different times. So sorry, so he He had seventy percent of his assets in these two companies, but those were public companies where he's just a passive investor, or he was like owned the majority of those companies where he could make a change in them.

26:00 Yeah, so he I I think that he had he may not have had a controlling stake in in in Sanborn, but I know he had enough shares where he could basically throw his weight around in that way. Um I think Dempster Mill, I think he actually did buy a majority of it and have control of it. And so those companies they're not doing well, and he you said he goes to Munger and asks him something? Yes, we just met this guy, Charlie Munger, uh, who had been back into town in Omaha and he had kinda gotten a a matchmaking by a mutual friend who said, Hey, you guys are the two nerdiest dudes we know. You should know each other. It was like bromance, like love at first sight. Uh they get to know one another. And I think it was actually Charlie who said, Hey, well, like Warren, what's your biggest problem you're facing? And he said, Well I've got these two, you know, problem children, especially Dempster you know Dempster Mill And uh do you know anybody? And uh Munger said, Actually, I do know this guy, his name's Harry Bottle.

26:47 And he's an accountant out here in LA, we should go talk to him. And so They took Harry Bottle of Lunch and pitched him on moving his family to the middle of nowhere. Midwest and uh running Dempster Mill. Harry Bottle uh reluctantly agreed, turns it around, makes Demster Mill a uh a you know a fortunate surprise on the upside.

27:06 And um You know, again, he starts stacking geese. As we talked about. So um at all times. Everyone in the beginning. I mean you look you you don't you don't get to be successful by not taking risks. Like all investing is taking risk. And so the question is just how much risk are you willing to take and when you're younger and you don't have much, I mean The only way to get ahead is by taking more risk. When you are doing all this research, are you an expert in the pool business or are you just an expert in looking at financial statements? Are you an expert in understanding how leadership thinks and how to find winners?

27:40 What are you great at? I think I'm pretty good at seeing the big picture. So taking all those pieces, like I'm not the best financial analyst. Uh the joke is I can barely open up Excel. Like I'm not an Excel guy. I've never had the skill set. I've never learned. I never worked at another uh firm. Like I never took a finance class in my life. So I I don't have a lot of the what I would call like hard skills that you learn as being an associate or an analyst at a firm. Um

28:03 You know, I think that I'm I'm pretty decent at putting the puzzle pieces together and then negotiation. Uh uh you know, I think You know, and going back to Buffett, he talks about I'm a better investor'cause of an operator, I'm a better operator because I'm an investor. Yeah that's true. And I think operating and investing are are two sides of it, but I think there's a third leg that's not uh talked about a lot, which is the deal making side. Um, and I think that deal making side, especially as as you get into more inefficient markets, becomes really the dominant skill set. So understanding how to put the P puzzle pieces together and like in that pool business

28:33 Um, I saw a business that had uh a clear track record of growth. Uh they were in a durable business. I mean, you know, we we kinda joke that You know, to people stop dipping their bodies in water for pleasure will be fine. It's been happening for a couple thousand years. I think it'll keep going. Like we try to have these like very simple theses for everything. And so if you look at somebody already has a dominant market share in a market, they've had it for a long time, the business is growing, the market's growing. Um, you know, w you look at the business model of it and you say, Okay, look, we're an asset light

29:01 business. Um they're not investing in a ton of equipment. It's a very simple business model. It's find customers that want pools, uh, do it better than they could do it themselves and and and and take a rip on that on the upside. Yeah, you start then looking at okay, who is the leadership and how do you structure a deal and how do you make sure everyone's interests are aligned. Um, how do you continue to find talent to build the business? I mean, those are all I I I say this to sound and make it sound simple. It's not simple. It's very difficult. It's just not Complicated. You gave one answer to the question.

29:31 I think the real answer it just was based off of your How you're answering it. You are a uh really good storyteller. You are very persuasive and do you have um You're a g I could just tell you're a good leader because of how you dumb things down to be relatively simple and easy to understand. Right, Sean? I mean just him explaining that, you're like, Oh, okay, that's you're actually You're like.

29:54 You you don't get stuck on the midwit mountain, right? Like the the middle the middle part where it's an over over analysis, over s overthinking, over thesis out. You know, you're like Yeah. Do I think that people are gonna stop dipping their bodies in water for pleasure? Exactly. All right, cool. Uh you know, th that's great. Do I think we're gonna get like

30:13 Do you think tech you know, is AI gonna take us out of the pool business? Nope. Okay, cool. So this is an enduring business. Great, we got that. Seems like this guy's been paying himself a lot of money every single year as the operator. Great. We'll probably be able to do the same. Also seems like this guy doesn't do any marketing. He says that and he doesn't have any ads anywhere. If we did a little bit, probably would help, right? All right, cool. Thesis done. Check, check, check. Right. So like not Um not overcomplicating things.

30:37 Is a skill. Um I would also say like It seems like You have a good amount of Level two luck, which is the action luck. Like you were talking about

30:45 That Patrick O'Shaughnessy example. I thought that was a great luck example,'cause you were like Y you didn't have any investors. You're just doing this with your own money. This guy tweets out, Hey, I'm looking for somebody, whatever, to to talk to me about equities and or capital allocation. So you reach out, right? And you reach out. You don't have some like imposter syndrome or insecurity that prevents you from reaching out. You take some action. And you've probably taken a thousand actions like that, you know, cheap lottery tickets.

31:10 Where the downside is very low. The upside, if you made a valuable connection like you did, was pretty high, actually. So you filled out a thousand of those scratch off tickets. And then he had luck on the other side, which was perception luck, because he's like, Oh, you're buying this company. For four times. Profit. That means like

31:26 If you put in a hundred dollars, you're gonna get twenty five percent yield every year, even without growing the business. And wait, I'm in the stock market buying things at twenty five times earnings. And you're buying them at four? So like something is good, you know, that makes a lot of sense. So he had that third level of luck, which is like you uh you could spot it. You could spot good luck when it shows up at your door. And that's why, you know, that was good on his part. So I think that's

31:48 Impressive to me and a and a good reminder of like You gotta take action to get that action looked. And then when you know something and you spot something Well he did a great job was he flew out to Missouri He got to know you, he pitched you, you said no, and he's like he asked the magic question, What would it take?

32:04 Whereas like, you know, ten other people could have done most of that and not gotten the result that he got. You wanna spend more time talking about why you're successful? Uh let me ask you a different question. So I am I have this goal. I wanna retire my sister. So my sister has worked hard, she's got her own business, blah blah blah. And

32:23 She wants to just have an easier life. So she wants to spend time with her kids. She wants to travel. Like her business is brick and mortar. So she's stuck in the certain location where those businesses are. She can't really take her eye off the ball in that way. Um So I want to buy our business. And I'm like buying businesses sounds great. You buy a business that's already working, it's cash flowing. You hire a CEO or you promote somebody internally in the company to be the CEO. But I know there's obviously a lot of ways that can go wrong.

32:48 And so if you're me and you want to retire my sister, where do you start? Like what what what is your thought process around Buying that first business. that's gonna get you to three hundred to five hundred thousand dollars a year of free cash flow. What what would you Where would you orient somebody who's trying to do that? Yeah, I mean I think it's all about constraints. Um actually I wrote a piece uh called How to Buy Your First Smaller Company, like literally because this is a question I get a lot from people. Um and I can remember I had no idea when I when I first got going. And uh I mean the thing is I I

33:20 Everyone's got different constraints. Where do you want to live? Uh, how much do you want to travel? Uh what do you actually know about? uh what are your what are you good at, right? So somebody with a very different personality type than me should be buying things that are very different than what I bought. Somebody who uh wants to live in LA uh should be buying things that are very different than you know living in Missouri. People who don't want to travel a lot Or who wanna drive to the to the place? Like

33:45 Uh capital constraints. How much cash do you have available to be able to invest? I mean look, like You know, if you have uh you can buy really, really high quality business assets that are smaller for like seven, eight, ten times. So if you want something that's gonna be more hands off, that's an incredibly durable business model. You can get something that's either software or software adjacent. You can get something that has recurring revenue. Like the more you pay up into the value chain, I mean, you're gonna have decreased, I think, total returns. Um, but ultimately like they're easier businesses to run. So like there are like level 10 difficulty businesses. Like I would not recommend buying into your local restaurant.

34:20 Like that would not be something that I would recommend doing, especially if you want to quote unquote have an easier life. Like it depends on if you want the role of a hybrid investor operator, which really is you're going through a short season of investment and then really you what you're doing is you're buying a job. Like that's one very specific type of of way to leverage your time against your money. Um, if you really just want to be in the investor seat.

34:41 it's very difficult to only occupy the investor seat in the in the world of small businesses. It can be done. It's very, very difficult. The first three to five hundred thousand dollars of cash flow coming from small businesses are very likely gonna require a lot of sweat equity in in in exchange for that money. He uh she should go to that blog post. He has a good Q and A. He goes Uh the question is, how hard will I have to work?

35:03 Harder than you've ever worked before. The opportunity in small business uh in the small business market is dressed in overalls. And likes to h and likes hard work. Dude, you're poetic when you're right. I love the way you're writing. I've told you so.

35:19 Yeah. Yeah, yeah, that's great. Uh you have some one liners that are pretty cool. Can we just get you can I read you a one liner that you've said And you just kinda rant on it. So just basically kind of like make your case for this thing, why why you think this is true or why you believe it, why you think people should pay attention to this idea. This is the lightning round, right? As a lightning round, yeah, here we go. All businesses are loosely functioning disasters. Some just happen to make money.

35:42 Yeah. Uh, anybody who's ever operated a business knows this is true. The only people who have issues with this are consultants. So if any time I've said this publicly, the only people who come at me are people who either got lucky the first time or have never done it. And uh Yeah, I mean look, every business I've ever been involved in, it doesn't matter how profitable the business, how big the business, um I've gotten a pretty

36:01 good view into some very large businesses. They're all highly dysfunctional. Why are they dysfunctional? Because they're full of people. People are messy. When you get a bunch of people together, that messiness compounds. Like it is not a complicated concept. Uh and so I just think that people should lower their expectations and and understand what to expect when they get into a business. It's gonna be hard. It's gonna be hard in different ways. Like

36:23 You know, the first time you have to put somebody through rehab, your your guy doesn't show up at the to man the warehouse because if there's been a domestic violence dispute and he's in jail. I mean, literally like these are things that we're having to deal with. Um these are things that everyone's having to deal with. Now they may come in different flavors depending on how professional the business is, but The reality is that these are things that happen. Sean, have you watched The Land Man? I have. It's really good.

36:46 Um It's a for those listening, it's a show with Billy Bur Thornton and it's about like the oil industry. And they there's this great quote. It says Our business is one of constant crisis interrupted by brief periods of intense success. Yeah. How good is this? Yes. Uh yeah, so I have a I have a quote on my wall and it says Success is founded on a constant state of discontent interrupted by brief periods of satisfaction upon the completion of a job particularly well done.

37:14 Um all right, how about this one? The more humility a leader has, the more their business can grow. What's an example? Yeah, so uh look, what is humility? Humility is acknowledging reality for what it is. Um, and if you don't acknowledge reality, you you can't get better.

37:31 And so uh lack of humility is basically a defense mechanism, right? This usually is is one of two forms. It's either self protection or self promotion. And people are usually doing a combination of both when they're in uh some form of pride or arrogance. Uh they're usually terrified, fearful. I mean, I can exp say this from experience. When I get prideful, uh is because I feel like I'm not enough. And I'm not gonna be enough, and I'm worried that I might not have enough. And so Uh, what is humility is is laying that down and saying, Hey, I I wanna see reality for what it is, so I can learn and grow and become better. And that's the only way to do that is to get feedback from the world around you.

38:08 I like that lack of humility, self protection or self promotion, that was strong. Um Charlie Munger says this thing, he says every time you see the word EBITDA, you should substitute it with Bullshit earnings. Do you agree or disagree? Yeah, for sure I agree.

38:21 I mean, i like look, EBADA can be a useful tool in some very limited circumstances. But for the most part It is dressing up something that uh i i is more than than often obfuscating reality. So when you see EBITDA, especially in the small business world, there usually comes a ton of CapEx.

38:39 a lot of reinvestment needs that are on the back end of that. And what you have to really do is you have to figure out, okay, just in a steady state, what is the business actually producing in free cash flow? Like we look at businesses all the time that are making quote unquote making seven, eight, nine million dollars a year. That you ask the owner how much money they've taken out of the business and they're taking out maybe a million bucks a year, maybe two million bucks a year. I got news for you. For the most part, you don't have a business that's quote unquote making seven million dollars a year. You have businesses making one to two million dollars a year. That's the reality. Have you guys Sean, have you ever learned the history of the idea of EBITDA? Do you know that's like a new ish thing?

39:13 No. So basically John Malone, I believe. Is that right, Brad? He invented. Yeah, John Malone invented it. So John Malone His nickname is like the greatest nickname. He's one of the cable cowboys. So John Malone, uh you would know him now as like the guy who owns uh or founded Liberty Media, which owns F one and all this other amazing stuff. But basically he uh He owned a cable company. It was like a small cable company. I think when he took it over, it was like five or ten million in revenue, something like that, like relatively small.

39:39 And he needed to uh get loans because he found that if he could just acquire way more cable companies, cable companies were incrediblistick and it was recurring revenue. I should go out and buy a ton in order to go and get more cable companies, I need to borrow lots of money. And for some reason he came up with this idea that Ebita was an amazing metric con to convince banks to loan him money. And so he coined the term EBITDA because uh for his business he had lots of depreciation, lots of things like this. So he was like, No, no, just give me like the earnings before all of this And I'm gonna convince banks to loan me against that. And that I think it was the eighties, the mid eighties became like the term.

40:17 And I've hated Ebida. I think Ebada's s really stupid. But what I think that like is in kind of insane is that we've all collectively agree that this is like the metric. And I always thought it was like weird But I never had the courage to say like this is stupid and then I would like r read about Buffett and all these guys and I was like You think it's stupid? Dude, I I take the opposite. I'm like, this is genius. I need this. In my personal life. I need this I need the husband version of Ipita. It's like you know, my my behavior before

40:43 You know. If you ignore all those things, I'm great. I'm I'm amazing, actually. Well it's crazy that like you don't pay your personal taxes on EBITD. You pay your personal taxes on a cash flow base or uh uh you know on a cash base. It's just there's so many reasons why this is insane. Uh but and also, you know what's the most insane thing? Adjusted EBITDA. What the hell does that mean? Means wherever he wants to be.

41:08 It's that's insane. You have another one, uh another quote. You said you either operate with high authority, top down, or delegate in authority. Hell is in the middle. Yeah. So this is uh hard earned, uh, because I would say is I think everyone's temptation is to uh be high authority when you think there's something wrong and then low authority when you want to be lazy. And uh that that combination uh just makes a mess of everything. And so there's really two ways to uh be involved with the company.

41:36 You either say, Hey This is uh what we're doing. This is how we're doing it. You need to get in line. I need people to go and execute this vision. Uh or you say, Hey, I want to be supportive and helpful. It needs to be your vision. Um and I'm not gonna intervene even when I think that something's wrong.

41:51 Um, I'm just going to uh go along for the ride and be helpful. Um and very, very, very lightly intervening. And so you just have to choose. And I think there's both can work. I think both come with certain upsides and downsides. Um, but you can't do the middle because if you do in the middle, what you end up doing is you end up saying to the leadership team, Hey, you're responsible, but I'm basically telling you what you have to do. And so it removes all agency from them. And ultimately Everything that goes right is gonna be their fault and everything that goes wrong is gonna be your fault. But to make the lazy the when I when you say the lazy approach, I'm like

42:23 Yeah, that sounds great. Sign me up. Yeah. But That's hard. How do you make that work? Do you have to find uh the right person and what attributes does that person have and

42:34 You know, Buffett and Munger always said that like incentivizing manager was the number one goal of uh of was their number one job. Is that true for you? Yeah, absolutely. 100%. If you're going to uh try to truly be an investor and not an operator in the business, Uh it all comes down to somebody has to do the work and somebody has to exert judgment. And if you're not gonna be the person to do the work and exert judgment, somebody else does and you gotta be interested, you gotta be aligned with that person. And so yeah, when I say the the quote unquote lazy approach, I I mean ultimately this is the only way you scale.

43:04 Right. I mean if you look if you look at again, we keep coming back to Berkshire, it's a good w thing to think about because when people say, Hey, let's talk about how you know Berkshire like buys businesses and leaves them alone. That was not how they operated for a vast majority of the time that they've done it. Like they had to do that eventually. Because they got to such a scale, they literally couldn't intervene anymore. If you go back and look at Buffalo News, like Buffett and Munger were literally living in Buffalo. Dude, they're writing headlines. They're they're writing like have you ever read of that, Sean? They bought a newspaper and they would literally Uh like they they were

43:37 news guys, like they liked the news and they were like here's I want this many ads uh on the page. I think the headline should be like this. Like they they yeah, this did not know this. This is amazing. Yeah, I mean I was just saying it's like it it Buffalo News is a good example of of like basically their their mode of operation until the call it or early eighties, mid eighties, when they got to have so much money they literally couldn't be involved in the stuff that they were doing. was to be highly interventionist. I mean, they would be involved in the smallest of details. They would set the tone. They would help on marketing strategy. They would replace leadership. They I mean they were doing all the stuff that

44:11 I'm doing they would do all the stuff that anybody has to do because when you're small, you can do it. When you've got less capital and more time. You can do stuff like that. And by the way, the returns are higher when you could leverage your time against your money. It's an advantage. Right. It's not a disadvantage, it's an advantage. But eventually you you have a limited amount of time and attention. And as the money and your attention stays the same.

44:34 that ratio gets thrown all off and and you have no choice but to say, okay, I'm gonna spread a much more thinly layered amount of judgment over a much wider thing of uh grouping of things, which means you have to step out of the day to day operations. And then you have to hire people who can exert great judgment. And so Buffalo News. I mean, there's a uh a great quote from Munger saying, Hey, like I'm down to my last like million bucks that I can put into to Buffalo News. Like After that I'm calling uncle like I'm out. Um, I mean it it was th there's been various times in Berkshire's history they've gotten it's gotten very hairy.

45:05 Uh it was not a guaranteed success, and even when they had a lot of success. It it still gets hairy in various points. And I think every business has that, though. That's what should be expected. Like it should be an adventure. There's a great letter um that you can read. It's from it's in nineteen seventy two, and it's the Buffett letter. To the C's candy CEO, if you Google that. uh Buffett letter to Candy CEO and he says and'cause I went into this, I I haven't like studied Buffett in depth the way that you would if you're gonna

45:33 Do private equity. Um And he I I just thought the oh he's this ah shucks. He sits at the table, he drinks his diet coke, he he just allocates the capital and he hires great people and they just do magic. And This letter, I was like, Oh, Buffett had the mind of an operator, right? Because he goes, Dear Chuck

45:50 I was out of Brandy's a couple days ago and have a few strong impressions to pass along. Number one And he basically he starts talking like Details about the stores. People are going to be affected not only by our how our candy tastes, obviously, but what they hear about it from others as well. The retailing environment in which it appears, the class of the store, the packaging, the condition. Like this is like Steve Jobs talking about the Apple store, right? Like a product oriented person.

46:14 Um and he just goes through like step by step kind of like things that he thinks could be improved on um you know in in the store experience. And I thought, wow, this is different than what I had kind of the impression you get when you hear about Buffett just Sitting in his room reading all day. You know making investment decisions off of, you know, financial uh financial sheets.

46:34 This is a great letter. By the way, how awesome is this that this was a Like a typewriter letter. Does that make doesn't doesn't that make it so much more uh substantial? Totally. He licked he licked an envelope for this one. Dude. How many times you licked an envelope?

46:48 I kinda wanna like start sending letters like this. It just makes it feel like more authoritative. Let me ask you something, Brent. I have like I said, we we kind of um My business is a little bit different than yours, which is I create content on the front end, it's the mullet. So I have content on the front end.

47:04 Which is what I love to do, what I'm great at. But C media and content's not a great business model. So my back end is I basically start or buy businesses that I know I can Like turbocharge. And we've done this maybe four, five, six times now.

47:17 And It's going really well, but one thing I've noticed is I if I drew a pie chart. Of what makes It work.

47:24 It's basically like sixty percent of the battle was just the initial market selection. When we picked a project That was like the winds were blowing against us. It didn't matter how much effort we put in or how great the operator was, it was always just an uphill battle. And sometimes we pick these markets that are just like It's a poll market. You're being pulled in. It's just a sweet spot. The people just need this. It's you know, it's shooting fish in a barrel type of thing. That creates a big part of it.

47:50 The second part of it Uh, the next, you know, so I'll say like thirty percent. is the quality of the CEO that we picked. Who's gonna run the business? And when we pick a sort of limited CEO, we get limited success. When we pick an unstoppable CEO, we get like massive success.

48:04 And the last ten percent was just luck. Like the ball bouncing our way on one or two things that could have easily not happened, but that they happened. Or, you know, when the wins that didn't, maybe we missed out on something that we didn't see. I got a question about that second piece, which is Hiring the CEO or or evaluating the CEO, evaluating the operator. I wanna get better at that.

48:24 If you sit down with somebody, you're recruiting an exec, maybe it's a you're You're interviewing somebody who's maybe in the business that's gonna become a CEO, or you're taking somebody external to come run this company. What are you doing? To what are you doing that's like not obvious? to get that assessment. Is there any little tips and tricks, anything that you've picked up that

48:42 That helps you find the right operators. Yeah, well, so actually I think this is a uh probably a pretty underappreciated uh aspect of being involved in small companies is is all about the people, right? And so the better you can be at the people, the better it's gonna be for the business. And you know, we've really deep dived into um I would say All personality testing is wrong.

49:06 Right. Uh it it just depends on uh what you're trying to get out of it. And so we have actually a a a huge battery of personality testing. that we do for people to try to get as close to a three sixty view of who they are. What do you use? Yeah, so we're doing uh a combination of disc uh uh Myers Briggs.

49:25 And uh something called habit story, which kind of it has them see like what are the habits that they've built in their life and how are they kind of supporting who they are with the structure and apparatus around them. And um I personally also uh do a lot of uh study of Enneagram. And so I think actually if personally for me, when I meet somebody, I'm instantly categorizing them as what I think their Enneagram number is, and I'm automatically categorizing them across the four uh main uh Myers Briggs uh Crazy to me. I thought that shit's just horoscopes for for dudes. Like I do you really use this as like a core your core thing? That's amazing. Yeah, well, so all of it tells you something about the person, right? So if you think about so so Enneagram, most people don't understand this. So Enneagram basically tells you who you are at your worst. And um there's there's nine

50:12 uh numbers. And basically everyone falls into a number and then you have what's called wings, which is kind of where do you tip from that number. So for me Um I'm a three and I tip two. So a three is they call the achiever. Uh my biggest insecurities is that I'm not enough and I want people to like me. And so again, if you if anybody's proud of their Enneagram, it means they don't understand Enneagram.

50:35 Like like it's not a good thing, right? This this basically tells you what are your deepest fears and what what is the your areas of greatest weakness. But if you can know that about somebody, you can see them, how is that playing out in their life, right? So like I when I'm in my least healthy, I'm a people pleaser. I say yes to way too much stuff. Um, I don't tell people the truth. Um, it's really unhealthy. It's it's it's highly destructive behavior, right? I'm I'm very focused on hierarchy.

51:00 And and and my guess is that you guys have different enneagrams, right? I will I won't guess your enneagrams, but Can you do it? That's great. Yeah, keep going. Do it. I can't wait. My guess is Shauna, you're a three and my guess is Sam's an eight. Uh but three and what's eight. Uh the three is the achievement. Well so threes and eights uh both achieve, but for very different reasons. So so uh threes achieved because they want people to love them. It's like less about the thing itself. And then eights really want the thing itself. So like as a three, like I don't want money to just like want the want the money. Like I want the money because I want people to love me.

51:35 Uh AIDS really want the money because they want the the security and they want the power that comes with the money. Uh so so I wanna learn the tr I I wanna roll over so that I get pet and my tail can wag. Sam just wants the dog treat. Yep, that's exactly right. What do you think? Yeah, uh well, like he's d he's describing everything in like the most positive way. So like yeah, it sounds great. Uh I'm uh I like that. And then I looked up who other eights were and it's like What's in Churchill, Martin Luther King I'm like, Yeah, okay, cool. Um

52:09 What this is like crazy fascinating. You said like five different things, so can you give us the exact so you said Myers Brig, uh and then you said this uh this other test. What's like the exact stuff that you're using? Yeah, so so I well there's two things. One is when I first meet somebody, I can t I can walk you through what I do. And then I would say is separately from that, in a hiring process, we we use that once we get serious about a candidate, then we put them through a huge battery of testing to make sure we try to understand them. Right. For me personally, when I first meet somebody, it helps me so much to be able to categorize them into what I expect based on just kind of how they're showing up in the world. Uh, in Myers Briggs, right? So y you have you have I and E, so are they introverted or they extroverted? Right. Are they S or they uh in, which is are they are they in the present, are they sensing

52:53 Or are they in the future? Right. Um Uh then are they a thinker or are they a feeler? Right. So they are they primarily excited about ideas or are they primarily excited about uh sort of the the the people themselves, right? Um

53:06 And then the last one is T and P, which is um Um, are they uh it's it's kinda or excuse me, J and P, which is are they uh very focused on rigid schedules and on creating order, or do they like to go and test and try a whole bunch of things, right? And how all these like sort of stack up and combine really gives you a much more holistic view of who somebody is than when you then pair with Enneagram, I think gives you probably those two together, I think. Creates the most the quickest and the most holistic view of who somebody is, where if you can get like a a pretty good idea quickly of who they are.

53:41 Like how I would talk to somebody who's present oriented is very different than how I'd talk to somebody who's future oriented. And oftentimes, You know, we assume the whole world operates like the way we do. Like my wife and I are literally the opposites in every single one of these areas. So You can imagine our marriage, like how she shows up and how I show up is so different. It creates all kinds of miscommunications. We've been married now for 16 years. And it really we went through personality testing together about oh three and a half, four years ago. It was game changing in our marriage.

54:11 It was it it it completely explained a ton of behavior for her and for me. That had been bothering us for a long time. And uh it was just largely how we're wired. So That's how we do it. That's how I think about doing it in the moment that helps me relate to people a lot more. Crazy.

54:27 By the way, Sean, sixteen personalities dot com is like these websites are huge that are doing these tests. Yeah, yeah. Yeah, they're they're really big. I mean, this is an it's an important piece. I would say Five Voices is a really interesting one. They they um so it's just f the let the number five voices.com, I think. Yeah, th those guys uh have created Steve Cochram and Jeremy Kubacek uh are the two uh founders of that business. They've created an overlay for Myers Briggs that simplifies it. Um, I think a lot of their stuff is incredible. Um, and um yeah.

54:58 Uh we we we definitely use a lot of their work as well. And then we finish off with a quick tarot reading just to see how the future's gonna go, and then we're we're all set. This is amazing. This is so good. You you also have one thing I I read that I really loved. You go, uh you have this like asshole test. It's like we we don't nobody wants to work with assholes. How do we sort of filter for that? Nobody's trying to present as an asshole in a job interview. And you said like Uh, you can eat with them, see how they treat the staff.

55:24 You could uh see them interact with their significant other that'll tell you a lot in their home environment. And then you said Uh, the most telling environment is to travel with somebody. It is impossible to fake it when you're at the airport. You're grinding through security and if there's a delay, your tr their true colors will come out. I thought that was great. Yeah. Yeah, it's fun. I mean just wanna give I mean uh honestly the business we're in is predict people's behavior.

55:45 Like that's what we're trying to do. And because if all these businesses are predicated on the people who run them, they're they're all gonna have the risk, the primary risk of all these businesses are gonna be the people. And so what we're trying to do is get to know people. Have you guys ever been out with someone and they've actually been a asshole the weight staff, though? Whenever people say about this this asshole test, I'm like I I've never been around anyone that's like rude.

56:06 Dude, you don't remember the dinner we were at where this happened? Yeah. But that was like one out of a thousand. Yeah, yeah, it's true. The this guy we Sean and I went out with someone and he was like shooing the waiter when he was like it it was wh it was like It was it was I was sh I was ashamed. I left at dinner and be like I felt like uh like I had just like

56:26 participated in like a porno. Like I felt like I was like, I'm so ashamed. Like if people find out about this, like I'm gonna be so embarrassed. That's rough. Wow. Dude, what a fun episode. This is great.

56:39 Oh yeah. I really enjoyed it hanging out with you guys. Brent, thanks for coming on, man. Uh if you haven't, go check out his blog and his annual letters are pretty great. Follow them on Twitter. What's your Twitter handle, Brent, be sure?

56:51 Yes, Brett B. Sure. Yep. All right. Good C dude. Thank you. That's it. That's the pod. I feel like I can rule the world, I know I can be what I want to

57:01 I'm putting my all in it like my day's off On the road less travel never looking back

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