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Brett Randall is the President and CEO of Aliner, a manufacturer of folding campers and travel trailers.
After selling a family business, Brett was brought in to consult on turning around the 30+ year old RV company. Eventually, his experience in manufacturing optimization, market channel development, and growth led to him being recruited to run the company. A few years ago he bought out a majority of the shareholders and is building Aliner into a larger part of the growing RV market. In this episode, Brett and Aaron discuss how he turned around the company, their distribution through select retailers, and how he evolves the product lineup. Brett Randall’s Challenge; Every month, pick one thing to get done. Connect with Brett Randall
If you liked this interview, check out our episode with JD Ewing where we discuss how he transformed one of the largest office furniture businesses, the values he instilled in the culture and his method of financial forecasting.
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Aarthi Ramamurthy has had a long and successful career in technology. She has lead product teams at Microsoft, Facebook, and Netflix. Aarthi has also built two startups, including Lumoid which went through YC Combinator.
In the midst of the pandemic, Aarthi started a show w/ her husband Sriram on the social audio app, Clubhouse. On the show, they’ve interviewed some of the biggest names in business and popular culture including Elon Musk, Calvin Harris, and Mark Zuckerberg. In this episode, Aarthi and Aaron discuss why we should be optimistic about tech, lessons from leading teams, and practical startup advice. Aarthi Ramamurthy’s Challenge; Build something. Separate it from your identity. Connect with Aarthi Ramamurthy
Tony Greer, editor of the Morning Navigator, filters a chaotic global landscape through 30 years of macro trading experience and his own analysis to provide regular insight and risk/reward for each trading day.
Tony Greer’s Challenge; Explore the difference in the fundamentals of oil and tech. Connect with Tony Greer
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Website If you liked this interview, check out our interview with Doomberg where we discuss food shortages, inflation, and why Energy is Life.
Tyler Denk is the cofounder and CEO of Beehiiv, a newsletter platform company that recently raised $2.6 million.
Tyler was the 2nd employee at Morning Brew, where he worked on engineering, product, and growth. He was responsible for building the renowned referral program and bespoke tech ecosystem that facilitated the company to scale to a successful $75m exit in 2020. Now, he and his team are working to develop all the same capabilities and features for anyone to use on the Beehiiv platform. In this conversation, Tyler and Aaron discuss the key capabilities most newsletter platforms are missing, the lessons he’s taken from Morning Brew, and the success of the Milk Road. Tyler Denk’s Challenge; Always leave the house with a few dollar bills to donate to the homeless. Connect with Tyler Denk
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Beehiiv Website Big Desk Energy If you liked this interview, check out our interview with Jon Shanahan where we discuss Shark Tank, men’s cosmetics, and selling in large retailers.
Peter Zeihan is a geopolitical analyst, author, and speaker who makes bold and startlingly accurate projections on the basis of geography, demography, and global politics.
He has authored 5 books about geopolitics; A Crucible of Nations, The Accidental Superpower, The Absent Superpower, Disunited Nations, and his latest, The End of the World Is Just the Beginning: Mapping the Collapse of Globalization. Peter takes a somber, yet realistic, view of what the short to medium term future holds for countries around the globe. Decades of relative piece, secure routes, and economic integration represent an extreme outlier in the course of human history. In this episode, Peter and Aaron discus how demographics and globalization will affect changes, trouble ahead for China, and how leaders can prepare. Peter Zeihan’s Challenge; Donate to the AFYA Foundation. Connect with Peter Zeihan
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Website If you liked this interview, check out our interview with Doomberg where we discuss energy shortages, food shortages, and how to prepare. Underwritten by Piper Creative Piper Creative makes creating podcasts, vlogs, and videos easy. How? Click here and Learn more. We work with Fortune 500s, medium-sized companies, and entrepreneurs. Follow Piper as we grow YouTube Subscribe on iTunes | Stitcher | Overcast | Spotify
Aaron Watson: Peter. Thanks for coming on the show. I'm really excited to be talking with you. So I want to try as quickly as we can to summarize your view. And it is a macro geopolitical view. So there's a lot of pieces to unpack here, but for folks that have not read any of your books before seeing some of your past presentations, I would basically point to, you know, these pillars that you see driving a lot of the macro picture, which is changing demographies in different countries. Control of the seas and safe passage across the oceans changing finance and capital structures as associated with those demographics. And then just the plain old geographical constraints that countries have been facing, you know, through time and Memorial. We've lived through the last couple of decades where there's been a lot of I guess the opposite of volatility and we are entering. Indicated by the cover of your book here appeared where that volatility is going to be skyrocketing. So with that, as a jumping off point, can you give people a little bit more of a picture?
Peter Zeihan: Sure. So everything that I deal with is the two twins of de-globalization and depopulation. So first globalization and how it's ending. The system we have was established by the Americans at the end of world war II. We didn't have a free trade system before that. So if you weren't an empire, you were kind of real, you're typically a colony. With world war II, that system ended and the Americans patrolled the ocean so that anyone could participate in any supply chain and access any market and resource and work with any partner. And for the first time we got true civilian shipping and that has generated the world that we know that's international oil trade that's international manufacturers. That's the European union. That's the rise of China. All of that came from the American policy during the. The whole idea was we will allow this to happen and we will protect you if an exchange you side with this gets the Soviets. Well, cold war ended in 92 and we've been edging ever further away from that system. And in seven straight to presidential elections, the person who didn't like globalization is the one who won that includes Biden. So we are well past the point of no return there. And now we get to see the system break back apart and that'll be messy by any chance. Wow, that was going on. It also changed the way we live and not just because things were getting better and safer, but the technologies of industrialization now could be applied everywhere in the world, including to the former colonies. And so from 1945, until 1992, that was primarily the Western world and their affiliates. But after 1992, expanded to the entirety of the world so the Chinese joined. Mixing went to China even up to the Russians joining in 1995, when you industrialize you also urbanize. And when you urbanize, you have fewer kids and after generations, two and a half generations of that, most of the advanced world, including places in the advanced developing world like Korea and. I've now aged well past the point of no return. And for all of those countries, this, this century may well be their last because they don't have populations of replacement levels anymore. Now it's happening at different speeds in different places. And every country started at a different time and followed their own cultural norms, their own economic development policies. So there's a lot of staggering. But this decade was always the decade when we were going to pass the tipping point, because this is the decade when all the younger countries become the age past the point of reconstitution and all the older countries age into mass retirement. So whether you're looking at it from an American point of view, a globalization point of view or demographic point of view, this was always going to be the last decade. COVID sped it up by two years and the Ukraine war is a hard stop. We're never going back to 2019. Aaron Watson: And another part of that as you've alluded to, is this kind of insuring by the U S of the safety of the seas, or just, you know, you heard the moniker, like the world's policemen and to some degree. That's being pulled back. And you even said that there's almost an incentive for more disorder because the us can gain more from those types of interactions. So where are some of the vectors or the, the, the areas that you look to as the, having the highest potential to inflame into another conflict like Ukraine and Russia, because you predicted that what seven years ago? Peter Zeihan: Remember, we're only in the second month of Ukraine. We're right here. And so to think that this just, just going to end with the Russians and the Ukrainians is a bit naive. Let me just kind of draw a thread here. And this is a possibility, there's any number of ways that this can all go, but we know that we're going to lose four to 5 million barrels of Russian crude within a couple of months. And in that scenario in the short term, it is Europe that suffers 100% of the pain, but the Europeans have something they can do about it. They can tap American crude, which the United States is going to be willing to give them, I think can go to their former colonies in Africa and renegotiate deals so that the crude goes north to them between the United States and Africa, that's enough for almost everything that the Europeans need, but then that crude is not going somewhere else. And the country that is at the very end of the line that absorbs most of the world's crude. The single largest importer is China, but China doesn't have the Naval power to get to say the Persian Gulf in order to convoy ships back. But the Japanese do so. It's very easy for me to see. African economic and political issues triggering a conflict in east Asia, where the Chinese are left out. And then you're going to have some degree of military confrontation. If, if we're lucky, it'll stay constrained. If we're not, it'll get very big in east Asia. And to think that the middle east, with the Americans absent is suddenly going to be a peaceable place with the Saudis and the Iranians already glare at each other across the Gulf, I think is a little naive. So those are like the three big ones, but you can look at almost any country pairing in the Eastern hemisphere and there's a lot of bad water under the bridge. And these hateful pairs are perfectly capable of coming up with our own dust ups in a very short period of time. If there isn't a global policeman. All right. Now, while I applaud the Biden administration for trying to support the Ukrainians, you'll notice that that's not really happening anywhere else, except with. The United States is not interested in the world in the way it used to be. Aaron Watson: And another thing that, you know, as you outline these, and I'm not that as the same student of history, but there are so many historical just Europe itself is its entire history is conflict between all these different countries in different forms. And one of the, the kind of weird phenomenon that reminds me of another book, the fourth turning by William Strauss and Neil, how is this idea of a allowing. Of generational memory. So if we point to the folks that can actually even conceive of what a world in which there was a world war was like, those folks are, are literally in the retirement home, if not already in the ground because of the passage of time. So why this book is valuable, but also. An additional layer to the challenges, navigating a world that is so foreign to that, which we've become accustomed to over the last couple of decades. Peter Zeihan: Absolutely. The Europeans haven't been at peace because of the globalized system for 75 years. And because the peace was imposed from the outside. The country that imposed that piece, the United States smashed the Germans as part of a process. We have taken the center weight out of the European system and replaced it with a degree of placidity and wealth that they could have never generated on the road. Hopeful that the Ukraine war is going to be a new page for the Europeans, where they both acknowledged their history and build something better. And you know, maybe we have seen some things pushing in that direction the last few weeks. But on the other side, the geography hasn't changed at all the conflict with the Russians. Isn't something that's new. It has been part of European warfare politics and security. Going back to the beginning of the concept of. And to think that the Germans can go from a pacifist, socialist background to just flip and double the defense spending and be asked to defend the Poland from the Russians again. And there's not going to be any side effects from that. I really hope it works, but we're going to have a situation here very soon, where all the patterns are going to repeat. There are a couple of pipelines that come to Germany that don't go through Ukraine and don't go through Poland. So we're going to have a situation here very soon, where the Russians are going to tell the Germans, Hey, yeah, we can totally keep your lights on and keep supplying you with energy, but there's going to be a cost. You have to back out of the nature coalition when it comes to all issues, Ukrainian, in which case the natal position would cease to exist because we can't do it without German logistics. So all of these historical fault lines are still there. And I dare say the Russian. More aware of them these days than most of the Europeans. Aaron Watson: So does that mean that the, and maybe this is overly reductive XQ you'll excuse me for thinking that some of our leaders aren't particularly great students of history. It's the, is that what you would look for in terms of the leadership that can navigate these types of scenarios? Understanding actually how these countries played amongst one another in those more historically normal times, unlike what we've experienced the last couple of decades. Peter Zeihan: Historically speaking, we have been decent at that as a rule, the United States until the cold war tended to elect a lot of governors or a lot of people with institutional experience. We've certainly gotten away with that with the last three choices, senators writ large don't know a whole lot about the world and Donald Trump, Donald Trump's, Donald Trump. There may be. May be an exception with Biden simply because he's literally old enough to remember it all. He's one of the handful of people from the bygone era that actually was a functioning adult during the cold war and is still involved in politics. Now we can pick apart his entire team if you want to. I'm not feeling hugely optimistic, but I'm certainly feeling more optimistic than I was for the last four guys. Because Biden got a lot of. For the way we pulled out of Afghanistan. And I can understand that, but we couldn't do what we're doing in Ukraine right now. If we were still in Afghanistan, because we were dependent upon the Russians for logistics to support the troops there. So we actually have a free hand. Now that's something we've not had for a while. We are at the start in the United States, have a fundamentally new strategic picture. I would like to think it is going to be at the head of a renewed nature Alliance. I see things like the Australia, UK deal as potential grounding point for something similar in the Pacific. But you'll notice that none of this is economic, it's all security. So the whole deal that we had during the cold war of a guns and butter deal to get everybody on our side, that's not on the table. Biden's actually more populous than Donald Trump. So we are talking about a fundamental break and the only relationships the United States is likely to have are those where the security interests align. And as we're seeing with the Australians that comes with an economic cost to the petitioner, not to the United States, if you want to be on our side, now you literally have to pay for. Aaron Watson: So in the spirit of both security and this conversation around China, another kind of very influential book is the kill chain by Christian bros, who now is with Andrew. And there's this discussion of this history of how the U S secured the oceans with these big super carrier Naval platforms that were unparalleled in there, you know, scale and power, projection abilities as the way to ensure this world that is in the process of coming apart from your vantage point. You know, I I've seen you make the argument in the past that, you know, these super carriers really defined power projection into all these different geographies. Do you see that also being on the decline as it pertains to relevance in some of these potential security concerns? Peter Zeihan: To a degree. They were definitely the weapon of the cold war and world war II for the United States. And they've been central for American projecting power around the globe. Ever since the 1940s, they are good for projecting power, but they're not particularly good for protecting ceilings. They're to concentrate. And we only have 13 of them. Now, if you want to patrol the ceilings in a more chaotic world, you don't want 12 platforms, half of which are going to be important at any given time. You want hundreds of platforms like destroyers or arsenal ships. We don't have that anymore, or we don't have that yet. Anyway. In a world where everyone in the American Alliance to first the United States on security issues. And so it does not flow to hostile Navy and where your primary foes are Russia and China, and they're functionally landlocked. This works, but when globalization goes away and each country has to start looking out for their own interests economically, and especially in the maritime realm, you will have multiple navies that are competing. And while the United States. By and large still have the most powerful Navy by at least a factor of five moving forward. It's about a factor of 10 right now. We no longer can operate with complete impunity. And in that environment, we cannot protect the ceilings for everyone. We can only protect the ceilings for certain countries that for whatever reason have bought into our program, whatever that happens to be administration by administration, we're not there yet. But we're getting there because in a world where the Russian energy supplies are disrupted or in a world where the Chinese and the Japanese are hurting each other's throats or in a world where Persian Gulf energy supplies break down, we will need regional regional powers. We'll be forced to look after their own interests and they cannot do that without a functional Navy. There's no reasons to expect the United States to enter into a significant war with any of them. But in fact, a lot of them that will be arising are likely to be friendly rather than not. But the days when the United States can just by Fiat dictate a security environment on the waves, those are gone and we're in the transition now to whatever's next. Aaron Watson: Part of this kind of macro picture that I was curious to get your take on is the role of narratives. So in certain ways you've talked about, you know, historical fault lines or literally like the geographic constraints that say you know, Russia or China might face with the, you know, the first island chain kind of boxing China. And as a, as a kind of very hard physical reality we've talked with other investors who will talk about, you know, a meme stock or a narrative. You know, pools, markets, and valuations and all sorts of different directions. To what degree do you put weight on that? When it comes to some of these geopolitics and example of that, that I would give is we had a civil war in Ethiopia and there was no opinion in the U S there was no media headlines owning everyone's attention. And yet that's clearly not the case as it pertains to what's going on with Ukraine, where there's. You know, every headline, every, every, you know, newsletter that I get from the wall street journal is the days update with what's going on there. Well, we see more conflicts where as a us citizen, it's just not even carrying a purview or having, you know, being the thing, so to speak. Peter Zeihan: I think we're going to see more of that rather than less. Well, Ukraine suggests that maybe the United States is to a degree getting interested in the world again, we'll see how long it lasts, but for all the other conflicts that are going on in the world right now, I think they've just completely fallen off the radar. I mean, w when was the last time you heard about Congo or Sudan or Yemen, or even a rock? You know, none of these conflicts have stopped just the Americans have stopped caring. If you want to be involved, if the us government wants America to be involved, there is a case you have to make the case to the American people about why it's worth intervention. After 20 years of the forever wars, that's a hard call. And even with Ukraine, Biden has gone well out of his way to make it very clear that this is not going to be a regular conflict. There are risks. Absolutely anything with the Russians is going to be risky, but we're not talking about forward surging forces to face the Russians down in Eastern Ukraine. And that's not going to be on the agenda at all. So either you are a country that is able to negotiate a side deal with the United States, or you are on your own. And countries are still coming to terms with what that means. The country that by far is looking at the worst position or the Chinese, because the the security situation Ukraine has laid bare their 40 years of their planning as being wrong. And they're losing the ability to talk to the United States in a constructive way due to internal problems and that the Americans are walking away too. And there's no country in the world that is more dependent upon the old system than the Chinese. Aaron Watson: Are there any alliances that will make sense to be formed? You know, you're familiar with NATO? There was the news of it was, I believe was the India. Japan I'll show you us quad agreement. Are there other alliances that we should be paying attention to or should we should expect to come back with a return to his. Peter Zeihan: To start out with it. Anyway, there's only going to be a very few and they're countries that are either cultural cousins or just strategic necessities to keep options open. So Australia is far and away at the top of the list. Japan paid to join under Trump. And if you can cut a deal with both Biden and with Trump, you're good. And the Japanese have figured out how to make that work. Definitely a U S ally moving forward. And of course the United Kingdom, but anything outside of those four, you have to make the case. Now we are seeing the first re-invigoration of NATO in decades. I would argue that Europe is operating on the same page. First time since like the treaty of Westphalia this sort of integration and cooperation in Europe is utterly unprecedented. Let's hope it lasts beyond that. Everything in the Western hemisphere is kind of behind a bit of a court on cemetery. So it's not like a lot of the countries in the Western hemisphere are allies, but the Mexicans are friends and family. And that that works and the Americans have their own reasons for keeping Eastern hemisphere powers out of the Western hemisphere, which will benefit a lot of Western hemisphere powers. But there's nothing that they can bring to the table in terms of security cooperation that will assist that none of them have deployment capability. The closest of course would be Canada. And as we've discovered, less than six weeks into the Ukraine war, they have already shipped everything that they have to the Ukrainian. The cupboard is bare. And so the Canadians are actually in Washington right now, talking to arms manufacturers in the U S about purchases because they don't have any of their own anymore. They all broke down and closed after the cold war. So it's, it's a really short list. Aaron Watson: So in that same vein, and this is another thing once again, completely take for granted as an American. But we basically have the, the world's two greatest modes to our east and our west with the Pacific and the Atlantic ocean, just the capacity to step back and not have to engage with different conflicts. And then having, you know, one, like you said, Mexico and Canada, and that's the entirety of our borders to secure and how different that is from many of the other countries of the world in terms of their own security picture. You have spoken about Mexico and the drug cartels, the drug wars they're potentially representing a risk vector. And I would say similarly for the, for the U S we haven't thought about. About any sort of potential conflict like that on our border. Can you expand a little bit on another thing you kind of see on the horizon there? Peter Zeihan: Sure. So let's start with the border. It's 2000 miles long. It is completely impossible to defend with conventional means. People talk about putting the army down there, but assuming we put our entire military on the border, that's like, One dude, every couple of miles we don't have the capacity to even monitor it much less seal it and all the talk of the war, the Sonora and the Chihuahuan desert are the greatest national barriers in the Western hemisphere. I'd argue they're actually even better than the Andes because the Andes have passes. If you build a road, the entire length of it, you first have to build 50 construction roads to get to the border. And then you have obviated half of the border because you've made it easier for people to cross half the desert. So I would actually argue that the wall is responsible in large part for a lot of the extra legal migration we've seen in the last five years. Once you kind of digest that. You look at the picture a little bit differently because it's much easier to smuggle drugs than it is to smuggle a person. You know, it's, it's a lightweight high value topic. And by putting in roads, we've made it very, very easy for things to be driven all the way up at the U S Metro regions in that environment. You change the culture of Mexico. We used to shoot down planes or capture boats that were bringing in the stuff by water direct to the United States, you know, the Miami vice days and in doing so that forced the cargo to go into Southern Mexico, where it would start winding up through the mountain valleys until it eventually got to the U S. Well, whenever you go up a mountain valley, you get concentrated groups like organized crime groups that grab a piece of it, and then they expand up and down that valley to take more and more and more of it until they clash. That's the drug war in Mexico is the clashing over those transport routes. You fast forward to today. And there are two giant alliances of the drug cartels. One is the Sinaloa. They're kind of like the the version. They think the drug smuggling business as a business, and they have expanded into parallel industries into tourism and agriculture and property. And I don't mean to suggest that these are nice. They're drug runners. They are not my skies, but they see violence as a means to an end, rather than an end in and of itself. Well, because remember all chapel he was the leader Sinaloa. And when we finally got El Chapo faction of Sinhala, what broke away and eventually merged as what we now know as the Heliscope new generation cartel. And they see violence as an end in above itself. They're far more brutal. They're far more likely to go to war with everyone. And that's one of the reasons why Eastern Mexico is such a violent place now is because they've been going head to head with the cartels. They're just wiping them out. And they're challenging Sinaloa as well. Problem moving forward is that wholistic new generation is now challenging the preexisting cartels at every single border crossing. And as soon as they get one. They can start bringing in drugs in mass. So yes, this, this, in my opinion is the greatest security threats that United States faces over the longterm because it's not like we're going to end our relationship with Mexico. It's our largest interrelationship. It's our largest agricultural relationship. It's our largest manufacturing relationship. And if you factor out the illegal migration, it is still the largest migration relationship. So Mexico and the United States for better, for worse are going to be working together from now on. And we have yet to come up with a good strategy to fight this. Aaron Watson: What, so what are the historical parallels there? Because you know, you can, there might be different tools. There might be different technologies for war fighting, but they're still similar. You know, the art of war was written how many thousand years ago the art of a drug war, the art of our cartel war is kind of a different. Peter Zeihan: I would love to be able to give you some signposts of how we could make this better. But as long as Americans like their cocaine, and then as long as they're willing to pay for it, it's going to continue to come. And the drug cartels are going to fight over it. One of the problems we've got now, however, that's made it worse is because the cartels have had so much power for so long. They're laundering their money through other industries. And those other industries have now become profit centers. So it's no longer just about the drugs and that gives them a degree of staying power versus any potential strategy. And if there was an easy solution to this Biden would have fixed it. Trump would have fixed it. Obama would have fixed it w would have fixed it. Bill Clinton would have fixed it and all the way back to the 1960s. This is, this is a reasonable national concern that doesn't have Aaron Watson: an easy answer. I'm going to switch gears here. I know that once again, if your headline reader, China's very scary, they there's you know, the ability for them to surpass us economically and all these other things that you know, people will ring the alarm bells about you are one of the first voices that for me, Shifted my perception of not only the, the kind of structural risks that they entailed but perhaps the likelihood that there wasn't this kind of inevitability of Chinese dominance across the entire globe. I think we're starting to see some of the fissures in the forms of some of the lockdowns and food shortages being experienced in Shanghai and other provinces around China. But can you talk a little bit about these downstream ramifications for both energy and food as it pertains to. Peter Zeihan: Sure. Well, let's start with the baseline. The only reason we're even talking about China as a significant power is because of globalization. It was the end of world war II settlement that removed the Europeans from the capacity of intervening in China. It was the end of world war II and the settlement with the Japanese that prevented the colonization of China. Japan was winning in China right up until the bombs fell on Nagasaki and Hiroshima. And then all of a sudden the Chinese environment changed overnight. All the foreigners left and the Chinese could fight their own internal civil war, which eventually the communist school. And then we got to a point 20 years later where the Soviets and the Chinese fought a near nuclear conflict over border disputes, entered Nixon and Kissinger. And the rest is history because we basically convinced the Chinese to switch sides. They joined the globalized system and in turn for turning their backs on the Soviets. And that is what set up the strategic environment for China's growth ever since. However that is not sustainable without intervention from the United States or globalization in general, the line of islands off the Chinese coast, Japan, Taiwan, Philippines. If there's one thing they all agree on is that they're not China and the Chinese have never been able to project. Beyond that, except during the global order, because the Americans have forced everyone to be on the same side, that's breaking down now. And the Chinese don't have the capacity in any form to project power, much beyond their own coastline. They do have a lot of ships. 90% of them can't sail more than a thousand miles from shore. And that assumes the going at a slow speed to save fuel in a straight line. And no one's shooting at them really Chinese. Barely make it past Taiwan. And China is the most internationalized economy in terms of its resource and its market dependence. So if the global system breaks down, that is the Chinese system implodes. And if China find itself in a real war with anyone, someone, the Japanese, the Taiwanese, the Vietnamese, the Indians, the Americans, someone is going to put a couple of destroyers in the Persian Gulf or in the Indian ocean and cut the energy. Because the United States hasn't been the world's largest energy supporter for some time over a decade. It's China, China imports, 85% of their energy. And 85% of that comes from the Persian Gulf and the Chinese can't reach the Persian Gulf. So any breakdown in the regional or the global order and it's lights out. And never forget that agriculture is an industrialized sector in the Chinese import. Almost all of the inputs for that too. So you're talking about the lights going out, the truck stopping and famine within a Aaron Watson: year. And so how will you try to get legibility into that situation? Because we've seen them expel external journalists, they already make the even reporting of certain internal data, illegal or obfuscated or falsified. So, you know, really we're talking about. Production function here as a researcher, as a, as a person trying to craft strategy from reality. Where do you look for actual signal through Peter Zeihan: the noise? Actually, it's gotten really easy. It used to be a lot more opaque, but ever since she denigrated his own system into culture, personality, they've ceased making functional decisions at the top. A great example is what's going on with the Ukraine war. So there was this belief in China that. The Russians will take Ukraine first kind of prove that the theory that we have, that we can take Taiwan easily. Clearly that's not the case because while. The Russians are clearly not performing to snuff. The Ukrainian army is not a regular army. They're doing great. Don't get me wrong, but the power mismatch, and that is not nearly as big as the power mismatch between China and Taiwan, because the Taiwanese had been preparing for this war now for 70 years. And they have a lot of modern equipment and oh yeah, there's still an island. So scratch one. They know the strategic relationship will not go the way they were. They're terrified of the boycotts and the sanctions, because the idea that shareholders would back away is something that they can't deal with economically. They need those connections in order to employ their own population and the sanctions. No, say what you will about the Russian economy. It's a major exporter of both foodstuffs and energy and the Chinese are major importers of both. So if we put a Russia style sanction on the Chinese system, that's it it's over it collapses in less than a year. And then if you just need one more reason, you know, it's like, I think there's was plenty. Demographics. The one child policy started 40 years ago. They're literally running out of workers and consumers. It's the fastest aging society in human history. And some of the data they been leaking out of the 20, 20 decade census suggests that this is them suggesting that they've actually over counted their population by about a hundred million people. All people who were born since the one child policy. And it's probably the vast majority of them being women. So there is no hope for a demographic reconstitution of this country. We've always known for demographics. It was going to collapse the century because they're aging so fast. There'll be less than half as many people in 2100, as there are now, assuming nothing goes wrong with anything else. And now with this new data from the census, We may have to speed that date up by 50 years. So in my opinion, this decade was always going to be the decade where the Chinese system completely collapsed. We're losing our boogeyman. I think we'll get back. Aaron Watson: I want to just push on that a little bit more. I buy most of the arguments, but just to kind of play devil's advocate here on the fall of demographics, there's the argument of robotics. You won't need as many people from a manufacturing standpoint because we can put robotics in there. You won't need as many drivers because there'll be autonomous vehicles. And then. In, from an energy independent standpoint, they can roll out new Keeler. They can rely on coal and amongst other energy sources and basically replace their need with an electric grid powered by nuclear in order to accomplish that, those are, those are kind of two arguments against two of the points. Peter Zeihan: These are points they're fair points. I mean, you, you changed the rules of the game and I'm going to change my mind. That's just how that works. Nuclear and coal are feasible options for them, for electricity. That is absolutely true. Their nuclear power plants are by far not the most efficient in the world, but they get the job done and they have plenty of soft coal. My concern because of the demographic stance is far more basic, though. If you don't have enough people to consume, you don't have enough to fuel your economics. And so the Chinese have always been dependent far more than most on imports for the raw commodities and then exports for the finished goods. You can't do that without a globalized system. So you're talking about the best case scenario here being a North Korea like environment where the food goes away, but the power station. It could be worse. Chinese history is replete with examples of it being worse, but what you just identified as probably the best case scenario. Aaron Watson: Got it, and then one last part here, and then we can kind of, I want to wrap with just you as the geopolitical strategist, but there's another. Russia has seen this literally, and this word is used too often, but literally unparalleled financial sanctions levied against them. And they had this fortress Russia idea. You've talked about the finance minister there being someone you've really admired for her kind of brilliance to do as much as she possibly can. Central bank chief. I'm sorry. The idea that once. Bullet has been fired, so to speak by the Western world that now China sits in a position where they can say, oh, we now see what's possible. See what's capable. And we can start to make our efforts to prepare for such a scenario because the bullets actually come out of the chamber for the first time. What do you think about that? Well, let's start Peter Zeihan: with currency and then let's go to FDI. So with currency, everyone who, for whatever reason, doesn't care for the United States, saw this as proof in the pudding that they need to shift to a different system. And so everyone started having conversations about what they would shift to the Russians say, well, obviously it should be rubles and the Chinese. No, no, no, it should be you on, but it's not convertible. So you will, you're going to have to fly those to you. A pallet at a time. And we don't want any of them back ever. And the Indians were like, well, Hey, rupees, let's use rupees. And so, you know, it's only been six months and all of those plans have imploded. And the U S dollar role in the global system has gone up even because the Euro now has basically hitched itself to the dollar as a secondary support system, rather than its own independent poll and the same with the Japanese. So, you know, there, there's just, there's no alternative here. There's no other. On the investment side the Chinese have had a reputation for using a lot of capital flight and a lot of export earnings to purchase what they consider to be strategic assets around the world. And that has generated a lot of heartburn in a lot of places while they now know that that's pointless because the Germans who are, let's say not. I should have put this, made some poor strategic decisions over the course of the last 30 years as regards to the Russians. They're already nationalizing Russian assets in Germany, the Germans, the ones who were the passive it's the socialist. So the Chinese are now realizing that everything they bought overseas. Is worthless and they're trying to sell a lot of it. So at least they'll get some cash out of it, but the only $1. Aaron Watson: Got it. Powerful answer. So I want to wrap up here because not only have I seen your assent here for the last couple of years, as someone who can deliver insights and just build a really interesting business, I had understood that. A career like yours was possible. When I was coming out of school, I think that's actually would have become a north star for me of, of sorts. So can you just maybe start off by just giving us a picture of Zion on geopolitics, the business model and what actually just even goes into being a geopolitical strategist or a geopolitical consult. Peter Zeihan: Well step one, I'm a generalist. So I do finance. I do demography. I do manufacturing. I do act, I do a lot of things. My basis are obviously demographics and geography, but that doesn't do anything. If you can't apply it to the people who are in front of you. So we started out doing consulting and eventually turned into public speaking. I have a lot of fun on stage. I usually have a bourbon and a coffee, and it's a good time for everybody. Some of the joy has gone out of it in the last month because you know, we've got to start talking about the war. But if you can't make the information accessible and applicable, I would just be another consultant with. I try to be more than that. And that means I have to learn the world from every client's point of view for each individual presentation or consulting effect. That is alternatively really exciting based on the client, what they care about. It can be a little depressing. I don't always have good news. And so it's in the delivery in many cases so that you don't encourage people to find the nearest balcony to jump off of. Second the books are my way of having a conversation with myself. So to speak, every presentation I give is different. It's tailored for the audience. And since the book is a general audience, it's a combination of education and forecast and making people understand how we got to where we are. And the new book, particularly the end of the world is just the beginning. It does that from an economic point of view, as well as a strategic one. So the first three books that I did are kind of in the rise and fall of nations genre. And this new one is, you know, here's what the world we're going to be living in for the next 30 years is going to look like. Aaron Watson: And it's really good. I am going to strongly, strongly recommend it to people. The, I think the best analogy that I could come up with that I've referenced a couple of books already, but you've all Harare's sapiens was like the book that everyone cited and I was like, oh, this is how the world works. This was bad. I've read both. This is better than that book. Nope. Nope. Not casting any shade against you all, but it should be just as big a hit and, and really edifying on what's actually going on in the present right now and create this really clear picture. How do you construct your team to get you the information that you need? Whether it be, you know, researchers like, like even just. Hey, I want to make sense of X. Are you getting really, you know, granular and that, like, I need to know what the oil production is from this country over the last 30 years, or how are you actually managing information within a company like yours? Peter Zeihan: Well, that that's specifically as something that we get on every country and usually more than 30 years I remember every client's different that you're coming at the world from a different point of view. And we've got to have clients in manufacturing and agriculture and finance and all the rest. So yes, every time we build a picture of how the world works from their point of view, we have to understand all aspects of their operations and then all us. The context in which they operate specifically for the team though, I cheated a little bit. I rated my old employer more than once in order to pick employees that I had been working with for a long time. So some of my staff have been with me for a decade now beyond that we're always training up new folks. So we just hired a new one a few months. Who's taking it to like a fish to water. But I'd say that the single most important thing is I encourage my team to tell me when I'm wrong, because it happens. And if they don't, then I make a fool out of myself in front of a crowd and that's really bad. So you have to put your ego in a safe deposit box a lot of time and not take it personally. Aaron Watson: And I have to imagine it's also having a really good understanding of where. The good data is like actually building up a premise from the first principle. So something, something I learned from you was you talked, it wasn't the Sinhala. What was the other cartels name here? Scott? The whole Lisko like part of the avocado issues that we were facing. My you know, the wife, the wife, squat going up in price was associated with that. Like how do you even like drill down to actually getting that information? You're not. I'm guessing interviewing someone in the Alaska as a rule. Peter Zeihan: No, I have not intervened Europe interviewing international criminals for that specific one years ago, I did a presentation for a group that literally calls themselves the pickle packer. And in the winter, most of the hothouse cucumbers that go into the American pickle industry go from Mexico. Mexico's a mountainous country. So they've got the greenhouses going into stairsteps up the mountains, which means that they actually have the best footprint in Mexico for understanding the cartels. And when the car sells started getting into agriculture, a pickle Packers knew about it. So I checked. All of my clients. And I've been doing this now for 10 years. And I think I added up recently, it's been about 650 clients and they all have their own stories and it all just kind of gets thrown in together. And every once in awhile you find this bizarre connection that you would have never guessed. And that's what. And Aaron Watson: I have to imagine that it's also, you know, the, the standard truism of this knowledge compounding, I, I heard a story once there was a or maybe it's like a fable or something, but it was, you know, the Senator is reading the news and he basically scans through the entire article and he's done with it in 15 seconds. Cause he was really only looking for one factoid relative to the story because he'd been tracking these arcs over decades of his career and the new intern couldn't possibly comprehend how. Pick that up so quickly from just reading an article. And I have to imagine that it's also part of your purview as you've been thinking about this stuff. So intensively for so long that you're really just adding one small, additional fact to a Peter Zeihan: preexisting Corpus. It's all about the context. And when it comes to making people understand what's going on in the world about them, if you can explain it to them in their context, it'll stick with them. And I think that's. That's what we're all about here and so far, so good, Aaron Watson: right on. Well, Peter, this has been fantastic. I really appreciate you sharing your time with us and your insights with us. Before we leave and ask our standard last two questions. Is there anything else outside of telling people to buy the book that you think they need to understand, or just part of the geopolitical picture that they should be keeping themselves attuned to? Peter Zeihan: I just understand that the world that we've been living in for the last 70 years and especially for the last 30, was this just magical confluence of unrelated events, the age structure that was relatively young or relatively balanced and a geopolitical picture that was safer than it had ever been. And both of those are coming to the end. We're entering into a fundamentally new era where countries are going to have to sink or swim more or less on their own. You're in the Western hemisphere. That's going to be a lot easier than the Eastern hemisphere. And if you're in north America, it's going to be easier than south America. So the U S is going to come through this looking pretty good, different, and I don't mean to suggest the road forward is a straight or a non bumpy one. But we'll be fine. If you're looking for more to follow, especially as regards to the crane war, because that's all anyone can talk about these days. The website is www.zihn.com. And if you could sign up for a newsletter right on the front page, the newsletter is free. It will always be. Aaron Watson: Right on. And I would encourage people to obviously check out the new book. The end of the world is just the beginning, but the older books as well, this United nations was one of the not easiest in terms of being simple, but just a page Turner that I flew through. I definitely recommend this United nations folks on we'll link that all in the show notes for this episode. But Peter, before I let you go, I'd like to. To give you the mic one final time to issue an actionable personal challenge to the audience. Peter Zeihan: Sure. We, because the newsletter is free. We're actively soliciting donations for a group called off yet. your foundation. foundation.org. They are providing medical assistance to the refugees of the Ukraine war. So far, we've got about six and a half million Ukrainians of. At their homes and there's another, almost 7 million internally displaced within Ukraine that are probably going to have to evacuate as well within the next couple of months. So anything you can give would be hugely appreciated. And here we are providing all of the royalties from all of the sales of all of the formats of all three of the books, accidental absence, and just United nations to Aphiah for at least until June one. And at that point, we'll see where the war is. Aaron Watson: Beautiful. Well, hopefully there is a quick end to that and a lot of people are able to donate support. Peter, thank you so much for coming on the show. We just went deep with Peter's ion out there as a fantastic day.
Jon Shanahan is the cofounder and Chief Marketing Officer for Stryx, a cosmetics and skincare company focused on serving men.
Jon has helped the company earn over 120 million organic views on TikTok, scale to millions in revenue, and launch in major retailers including Target, Nordstrom, and CVS. Prior to founding the company, Jon built a brand and YouTube channel called The Kavalier focused on men’s fashion where he reviews menswear and helps his viewers look great. In this episode, Jon and Aaron discuss the vision of Stryx, how he’s blended skills to market & sell, and how he pitched on Shark Tank. Jon’s Challenge; Try something new that makes you uncomfortable. Connect with Jon Shanahan
If you liked this interview, check out episode 386 with Jon where we discuss his first breakthrough on tastes, trends and style through his website The Kavalier.
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Watson: Jon Shanahan. Welcome back to Going Deep with Aaron Watson man.
Shanahan: Thanks. Happy to be a repeat guest now. Watson: Yes, the privileged few. We should like publish a list, accompanied with this, of the folks that we wanted to bring back. Um, and sometimes it's like, let's go deeper on the same topic. And in rare instances, it's like a completely distinct new endeavor. Last time we talked about your YouTube channel, The Cavalier. Basically right around that time, you co-founded a new company Stryx. So for the folks that are not familiar, haven't recently seen you on shark tank, let's give them an update on what the company is, what the mission is and what you guys are working on. Shanahan: Sure. So still run The Cavalier. That's kind of like the basis for everything that I do. And that was what allowed me, I think we talked about it at the time, to quit my job and go full-time into content creation. And had I known at the time that this is the path it would take me on, I would not have believed you, but here we are a couple of years later. Uh, so Stryx is the, we're trying to build the first, essentially men's beauty brand. We build skincare and cosmetic products for men. We launched DTC. We went into CBS in 2020 Nordstrom in 2021. And then just in March, we launched nationwide in Target. So we're putting a concealer on the shelves next to razors and deodorant and other skincare essentials. So breaking some barriers and stigmas there. And also we're very active on TikToK, which is entirely your doing, which, I gotta give you all the credit in the world for, one time we had lunch and Aaron said, you know, TikTok’s pretty interesting. It's a very powerful editing platform and distribution platform. This was November of 2019 and I went home and I was like, all right, I'll fuck around with this TikTok thing. And now it is the number one driver of the growth of our company in a massive way. We've had about 120 million organic views since I started. And it's changed everything. So we can dig into any of those points. And, like you mentioned, we were just on shark tank, May 13th which was also a crazy process. So, if we're going deep, you tell me where you want to start. Watson: Yeah. We'll get to shark tank. That's partially bearing the lead so that people listen all the way through. And partially there's a lot of interviews where they're like, what's shark tank like. We don't want to just completely rehash. There's specific things to your store that we're going to make sure we covered. Have you come across Alex Hormozi yet? Shanahan: Yes. Watson: So he has a really, he has a ton of fantastic frameworks, but one that he's said that I've really tried to internalize is people will buy it online course, or there they'll go build a specific skill set, and then it won't immediately translate into success. And they'll be like, that course didn't work when in reality it's like, that was one of the things they were missing maybe, but they're actually missing other things before, you know, everything kind of clicks into place and wow. You know, maybe I get some micro modicum of credit for pointing you in the direction of TikTok first. The reality is, is that the basis for that 120 million organic views, and that is a valid marketing channel, is this amazing venn diagram of you already had video production skills, content creation skills, marketing basics, a track record of speaking to men about their aesthetic, their look. And when that was married to TikTok’s super easy content creation engine and the loads of organic distribution that come with a social network on the rise that creators haven't yet hopped onto you get this really special opportunity that's driven, you know, I'm sure that's part of the entree into all these retailers that you've listed and the direct-to-consumer sales and success in fundraising and all those other things. So, talk a little bit just about that experience of being like, yo, my skillset and the opportunity, the thing right in front of you is so almost like perfectly like the Venn diagram is like almost the two circles are perfectly over top of one another. What's that like, because that is kind of the thing that the folks that haven't yet found it, it's not product market fit and it's almost like career opportunity fit is the way I would say it. Shanahan: Yeah. Yeah. Leave it to you to tie all those things together in a way that I hadn't totally done before. Because I think even when we talked last time, like the reason that I started a YouTube channel is that I took a video production class in high school, and that ended up leading to the YouTube channel. And then at the same time, the other thing that happened with TikToK and YouTube in particular was there was an arms race and there still is for how polished you can make a video. And then that gets you into a deeply technical side of video production that I've never been as much of a fan of. And TikTok is like run and gun, shoot it on the front of your phone, post it as quick as you can. And so that also kind of played in my favor within there. I think on the last one too, let me get a two for here of quoting Steve jobs. “You can't connect the dots looking forward. You can only connect them looking backwards,” where he says, you can't connect the dots, looking forward, only looking backward. And it's very true. Everything that I attempted, tried, failed at, did okay at, it all ended up leading into this thing, but it's also about seasoning opportunities. So when I went home from the lunch that we had, I posted the video. Tt's still up on the TikTok,iIf you scroll back far enough. It takes a while to scroll back now, but it was half done and it had like 300,000 views, the very first thing. And I was like, there's something here. Let me keep figuring it out. And then it wasn't, from there, it was not just like I started posting and we’re like getting a ton of sales and everything, but there's enough of a signal that I was like, okay, I'm getting views, but I haven't really figured it out. I'm enjoying making the content more on this platform than I am on YouTube. And then there was a lot of experimentation. And so, I think our first 10 or 15,000 followers happened really fast. And then it felt, I mean, I could probably find the stat somewhere. It probably took us eight or nine months to go from 20,000 to 50,000 followers. And then again, there was like this plateau each time and it reminded me, when I was a swimmer in high school, I would get faster and I beat my time and that I would just spend like weeks where I couldn't beat it again. And I wasn't at that level again, but it was just like, if you just keep pushing through and you just, you know, there's a mentality to it that you have to have a little bit, and that's what ended up getting us to this point. Because if I had given up the first time we plateaud, wouldn't be here. If I given up the second time I plateaued and even like right now, you know, we were sitting around 175,000 for three or four months and I was just like, I'm just going to keep going. Cause you know, there's definitely still something here to the wider platform, which is interesting too. Watson: What about the message specifically of cosmetics and skincare for men partially that drew you in as an opportunity worth pursuing, but then kind of marry that to how you actually talk about that because it isn't, you know, maybe there's other people like a Gary Vee we've talked about, that kind of see something like that coming, but the vast majority of people, that's still a shift. There's still stigma. There's still ideas that kind of restrain folks from really wrapping their mind around it. Shanahan: I'd say that is one of the things that gives us a leg up on TikTok is the controversial nature of what we're doing. Like I talked to other founders that run apparel brands or they run like other brands that they just don't get the same engagement as we do. Which, for better or worse. I mean the negative comments that we get are, I'm sure you've seen some of them, they're pretty insane. But also, it comes back to a deeply personal thing where it was something that I experienced and I saw that there could be a change. And code, make the change that you want to be is really what ended up pushing me into this, and so from the clothing thing, it was like, I couldn't find YouTube videos that I wanted to watch about the clothing that I wanted to buy. And then with this, it was okay, there literally is not another product out there that can accomplish the same thing that is also making the barrier lower for men, so how do I seize on that opportunity. And I also got extremely lucky that a lot of the legwork and a lot of the design and R&D and everything was done by the Stryx founding team, and then they had kind of targeted me as like a really good person going forward to help spread the message and really communicate it in a way that I think I've done pretty well with. Watson: And the controversy is kind of this wonderful double-edged sword, like you're saying, from an engagement standpoint, but also just from like a psychological standpoint, you have a community, a tribe can only be so coalesced without an enemy. It's like everyone can kind of turn into infighting or not really care, or be that interested, but when there's an enemy at the gate, we rally around one another and kind of all point our spheres in the same direction, for lack of a better metaphor. And so there's the raw engagement of you're getting more comments, cause I'm sure there’s all sorts of ridiculous hate coming on every video that goes up, but it's also the type of thing that the folks that do resonate with it see, and you know, a friend in need is a friend in need. And that's kind of the psychological trigger. Shanahan: Yeah. There's that. And then there's also, again, talking to other founders that want to make more tickets. I also had a thick enough skin from being a YouTuber at that point for four years that I didn't take any of the comments personally, even though you definitely can. It can definitely send you down a spiral. I know right now, what is it like? Uh, the number one career that kids want in middle school right now is to be like a YouTuber. And it's like, you don't really know what's out there until you put yourself out there in a big way. And so part of pushing through a lot of it is understanding where it's coming from, the fact that you can't really take it personally, and then you also find what the right messages within there, that aligns with everything you're trying to do. And so you also have to kind of navigate that. Watson: So, tell folks just like a little bit more company history, the initial idea, there was an initial product, and then you're now up to, I don't even know if it's a dozen or where you guys have landed with the amount of products that you guys are selling. Shanahan: Yeah, we're a little over 12 now, but when the company launched and I was the first YouTube video for it. It was a concealer and a tinted moisturizer, because those were the two products that most guys were most open to using or have used before, but there was not an analogous version on the market for guys. And I remember, what was the diner that we sat in, in the Strip District where I was like, this is a concealer and this is a tinted moisturizer. And you're like, I get it. I get the concealer. Tinted moisturizer? You know, there's a bigger barrier there to understand what it is. The legibility wasn't as high. And so, then as we've continued to go forward, it's always been about blending cosmetics and skincare. And so the additional products that we built were both partially out of what do we see as a gap in the market, but also, what are our customers asking for? So like that my favorite example is the gel cleanser that we have, we developed because guys we're using the concealer, but they either weren't washing their face at night or the cleanser they were using couldn't remove the concealer, so they were getting pigment on their pillow and complaining to us. And so it was like, we created a problem that we had to then solve, but this is like the things you don't really, you know, think about. And then like our eye tool is one of our best sellers. Guys have a lot of issues around their eyes, they want to fix that, daily SPF. And so the more that we can combine those two, and because we always talk about too, there's a lot of companies that do shampoo and soap and cologne. There's a lot of products for guys that are already out there, but nobody's really tackling the makeup stuff and like that's our opportunity to really seiz and not get distracted by other product categories. That would be easier to jump into. Watson: Can you convey to people how big the cosmetics industry is generally. Cause I, that's something that, unless you're like a business nerd, you don't really appreciate how big it is and how profitable it is. Shanahan: Yeah. So the CPG industry is larger than tech, and companies that are being acquired and in that space have the same or higher multiples than tech companies, but it's not as new of a space, I think why it is why it doesn't get the same attention. But if you look at the major conglomerates that own every CPG brand, they're snapping up companies the same way tech companies do. And I remember I had that realization one time when I was still at First Insight. I think it was when muscle milk was acquired by Pepsi, it was one of those type of transactions that was for like $250 million. And I was like, wow. I was like, you can build a food brand and sell it to a major conglomerate. And then, in the beauty industry it's even more active because there are so many new innovations in the beauty space that major companies can't really get right with a level of authenticity. And so they just want to pick up the company that did it correctly and then bring it into the fold. Schmidt's deodorant is a great example. I know you follow those guys on Twitter. So Jamie and Chris, they built Schmitz which was a natural deodorant or Moise, with native sold to P&G. But, yeah. The beauty industry in particular, I want to say is $35 billion. Like it's big and that's all women's. And then in the men's space, men's personal care is somewhere around 5 billion, but men's is the fastest growing sector of CPG overall, which I always attribute to, or riding the wave of like the mad men era, like mad men showed guys that skinny ties and my suits are nice or like get a nice haircut. And then there was a beard era where everybody wanted to get their beard products and like beard grooming became more acceptable. Now we're in the manscaped era. And like, our bet is that the next logical progression of that is like, all right, you've got your beard and you've got your haircut on lock your beard on lock. You're doing your skincare routine, but no matter how much good skincare you do, you're still gonna get a blemish or something and you need that instant fix. And so that's where we try to fit in. Watson: And the other thing that, you know, so full disclosure here, listeners, I've only ever made, my wife and I have only ever made one angel investment and it's into Stryx. And the first basis for that decision was, you know, I don't have the experience to speak to this, but every great angel investor always talks about it starts with who the actual entrepreneur is. And you are just one of the entrepreneurs that is on the short list of like, whatever you're into I'm into, because I just know that you have the kind of discipline, the creativity, the work ethic to create really cool results. But the second thing, in addition to the TikTok thing really working, that's like a distribution channel for marketing that really like, I don't want to reduce the hard work of building this company to something, you know, very simple, but the concept of this product line that you guys are laying out is we already know that cosmetics is enormous. Like we have these enormous CPG companies, but also like, you know, beauty and luxury are like also tied together and, these enormous conglomerates, just, you know, they gobble up the Kardashians or the, or Rhianna's different beauty lines because those things are just cash cows if you have the customers coming in, because of the margin structure. And, the setup of products, maybe lipstick isn't on some sort of short time horizon for the type of cosmetics that men would potentially be using. But the universe of potential products is already legible. The job is basically, find the ones that are most relevant, reformat them to this male audience that you're engaging with, and any sort of risks it's about like product is, I don't want to say completely off the table, but massively reduced relative to other types of startups that might be in a similar stage to you where you are. We're still not sure if we can get this product to work, or there is enough market appetite or what have you. Does that register with you where it's like, hey, we kind of look to this universe of cosmetics products that are already in place for the women's market and just figuring out, kind of plucking the ones that would be best for this audience that we're speaking to. Shanahan: Yeah. Cause the, the biggest thing in the women's space is it's very saturated. I mean, women spend way more on their face than men ever have, and you know, the idea is that they'll get there. But in order to innovate in the women's space is very difficult, because every product is made. In the men's space, it's kind of this green open pasture where the products really just need particular tweaks to make them more for guys, whether it be accounting for guys oilier skin, or the fact that guys don't have a beauty routine.We can't assume that a guy's going to have a beauty blender and a setting powder. Like there's formulation tweaks to that, but we know that there's products guys are already stealing from their wives or girlfriends or their partners, and they want to have a brand that speaks to them and a product that is a little more tailored to them. And so, yes, there's just, there's so much low hanging fruit in this space. It's curious to me why it hasn't been tackled, but then it's like, that's the opportunity for us to build that defining brand in this space. Watson: Do you think part of the why is just in general, how much more everyone sees themselves? Itt used to be just your mirror in the morning and then like, oh, I'm passing by a window. Oh, I don't have mud on my clothes or something. And then now it's, you know, we're on a remote call right now. People are used to looking at zoom, used to seeing themselves in an Instagram story or a FaceTime or what have you. There's just a greater kind of conscientiousness brought to one's appearance. Is that what you see as a primary driver? Shanahan: Yeah. It's more, self-awareness, not just it's zoom call. It's like when you go out to lunch with your friends, it's going to go on Instagram. It's like, everybody's on camera in really nice cameras now. It's not flip phone cameras and low quality stuff. You're seeing yourself a lot more than you ever were, but there's also a better understanding now that you can do things about it. A lot of the comments that we get, they’re like what is a concealer? I had no idea you could even do this. Or it's like, you're telling me I can hide my dark under eye circles? Tell me more about that. There's just a lack of awareness and education for men in this space, that I experienced firsthand, and so that's part of why social has been such a big thing. Like you can just really explain this stuff and then leave it to them. We're not saying you have to use this stuff, but a lot of guys want it. They just don't know what's out there. And the flip side of that is, they've used these products before, because like the one we hear the most common is like, man, I had a black eye once for picture day, and my mom put concealer on. That stuff's amazing! And it's like, yeah, that's the thing a lot of guys have, whether it's, you know, from a partner or something else, and just making that more tailored to guys is really what has opened this up. Watson: Right on. So, we're about to get to shark tank, but first you referenced CVS, Nordstrom, Target… and what was the fourth retailer that you guys are in? Shanahan: We're in a few othersmaller retailers, but I mean, those are the main ones. Watson: The big dogs. So can you talk, so this is really of a different era, but when the whole direct to consumer boom started, and we saw some of these early, Casper, companies like that get funded, there was this initial, oh, this is a completely new paradigm. Everyone's just going to go to your website, order from you, you're going to ship it to them. Never need a storefront, never need any sort of physical presence. And now these days, like you walk in to Target and there's an end cap for all those DTC companies in their respective section of target to, you know, be able to reach more prospective buyers. I can't tell you how many runs I've made to Target in the last couple of months for things that we needed at some point in time. So can you talk specifically about the upstart CPG company playbook for earning a spot or paying for a spot or gaining relevance in some of these big retailers and just what that kind of step-by-step processes from getting in and getting your foot in the door to having the foot traffic and sales to garner greater presence in those retailers. Shanahan: Yeah. So DTC was quickly associated as a new business model versus being what it is, which is a distribution model. But yeah, ou're right. There was a whole era of brands, and I think you could probably find the quotes from like Warby Parker or, you know, name a DTC brand that were like, we will never be in retail. They were like, that's just how it is. And their tune has changed. But, to use DTC as a way to kick things off, the barrier to entry is very low, you can get a Shopify set up really easily, build a brand and then prove the concept. But ultimately, e-commerce penetration is like 30 ish percent, right. Give or take what it is right now. I think it's contracting right now, you know, for macro reasons. So, you can only reach 30% of consumers that are going to buy online. 70% of retail still happens in physical brick and mortar stores. And so that's kind of the thesis for why we went early. The other side of it is specific to our product and our category. We feel that we need to be in those stores on the shelves next to established brands and products to show that guys can use these. There's a stigma -reaking to it, which is why we're in the men's section, not in the beauty section. But to get into retail. I mean, it's very tough. Everybody wants to get into retail. So there's buyers at these companies that all they do is evaluate new products, new brands, and figure out what's in the market. I would say 1% of brands get plucked right from, you know, if they're growing fast enough, a retailer will reach out and be like, hey we love what you're doing. Come on in. Everything else is relationships and sales. And that's part of, when you're talking about connecting the dots, my experience doing business development and sales at First Insight is when entirely informed the way that I sold into retailers and investors, for Stryx. And so with CVS in particular, they looked at Target and said, Target is bringing in cool brands is bringing ina cool consumer, like you know, younger consumers. How do we do that on our side? And so that made it easy for us too, because we were also, I mean, none of this is easy, but our positioning, because you have to also position to the retailer what you're bringing to the table, is you can put another beard oil or another razor on your shelf, but you're not growing the category. We are bringing in, our product is sitting alongside these other products. We have enough customer data. You have these similar products in your store. And so, hey, this is a way to grow the category. You're growing the whole pie. And so you have to figure out what your story is to the retailer, for how you're going to bring that unique value. One of the brands that I've become close with is Quip and what they said their story to Target, is that something like 80% of Quip customers, they're an electric toothbrush, were coming from standard non electric toothbrushes. And so, they were able to go to Target and say, you know, if we capture 30% of the toothbrush buyers that were coming in for a non electric toothbrush, we can convert them. We’re showing we can convert them, and your margins and your sales revenues can be this much higher because these are the customers that are coming in to buy from us online. And they’ve been extremely successful Target from that positioning. So it's really about figuring out what the retailers initiatives are and how you can then supplement and add to that, and bring those in. So part of that is traction on your DTC, on your website, or if you have smaller, especially in food, it's really common to go to smaller local shops, and then you can start to work your way into the whole foods and in the larger stores like that. But ultimately, I keep telling people, it's smiling and dialing. It's finding the right person, the right buyer to take a chance on you, and also not giving up because there's a lot of brands that will apply three, four or five times, and it's just not the right time. And you just gotta keep building and growing and then go back and it will be the right time. Watson: So consistency and effort underpins all, kind of sales attempts. But I really want to just try to rehash some of the things you said, and you can correct me if I'm wrong on any of these points, because I also talk to people where they want to sell, they want to be better salespeople, but, you know, do I have the right talking points? Do I actually know the levers that make things happen? So one of them is, if you can just prove sales in some way, shape or form. Hey, we were in this small boutique retailer and we sold out, or we had really great numbers. Two, we have this thesis for how we drive value to you. We're deeply empathetic to you, the retailer and your goals and our ability to, not, hey, we would love to have our “yada yada” sold there, but it would help you accomplish goal X, Y, or B. And then once you're actually in the door, it's always going to be some form of, a kind of limited run test. Actually following through and saying, hey, this was the thesis we had. This was the result. And that's going to be distinct to each product, really, because sometimes it is about better capitalizing the average toothbrush buyer, and in other cases, it's, hey, you know, no one comes in and buys three different razors, but there will be people who buy a razor and a Stryx concealer. Shanahan: Yes. Yes, exactly. Watson: All of that tied together to make you guys a worthy subject for Shark Tank. Tell us a little bit about the story of how that came together, and then we can talk about the deal that you guys closed. Shanahan: Yeah,what’s crazy is when we started the Shark Tank process, we weren't in Target yet. We actually had, the same week that we had our initial call with Target, we had our initial call with the Shark Tank producers. And so those two things were always kind of running in parallel. And it was crazy that they ended up coming to life so close together. So yeah, we got in touch with the producer. Shark Tank, in the contrary to retailers, Shark Tank does reach out to a lot of companies. I mean their ultimate goal is to fill their pipeline with cool, interesting companies, products and founders, and then get them whittled down to like a really solid lineup. And so I do know of a lot more companies that have been reached out to from Shark Tank, but I also know a lot of companies that just go through the website like us. It's like you apply on the website, you say your cool thing and you just hope you get a call back. And there's a lot of companies that will get that. And then the process is, you know, you go through a real process, you put a reel together and then you get approved and then you do the producer thing, and you start to refine your pitch, and then ultimately you get to film.What's crazy is, something like 20, 25% of filmed pitches still never see the light of day. I know four other companies that filmed this season, that their episode will never see the light of day. And so, there's all these break points where you could not end up, you know, seeing the filming at all or ever seeing your episode. Watson: Tons of companies get it filmed. Never see your stuff on the episode. Shanahan: Yeah. So there's all these break points where you could end up never seeing the light of day. And they're very clear about that too. Basically they say until you are walking through those doors on national television, your episode's not guaranteed to air. Because there's a lot of work. There's like there's tons of paperwork and backend stuff that you have to do to get on there. And so I'm sure there's companies that go to that process and they get frustrated with them that it never ended up airing. Watson: I believe it. So, part of that has to be like, let's make this pitch really entertaining in addition to having great product. It probably helps to either get a really good deal done or be like shut down by everyone in a really fascinating way. So, you know, just give us what your strategy was going into that, how you thought about preparing for something. I've heard, you know, you actually record for an hour plus to get that distilled down into the highlights that they're actually going to show. So what was that like? Shanahan: Yeah. I think the thing to remember is that the goal of the show is to make the sharks look really good and everything else is kind of like serving that purpose and ultimately showing, you know, the products and everything and the entrepreneurs, but the goal of the is to make the sharks look good. And what we are preparing, yeah we filmed for about an hour. The only thing that's scripted is that first 30 or 60 seconds, right? It's the pitch. And then it's a free for all. And luckily, we had raised money in the past, so we've like gone through those meetings, but the difference was Shark Tank is every question that we wanted to answer, we essentially had to answer to the audience first, the sharks second, and then like investors third. So like, when we were thinking about the way we would respond to some of the questions that we typically get, it’s like how do we answer it so that it answers the audience watching, because they're the ones that are ultimately the most important on the show. And then also answers the sharks question. And then the other thing too is you've got five big personalities in the room. They're all trying to make great TV. So they're all trying to talk over each other, interrupt you see, if you're good on your feet. And so you kind of have to like, choose who you're going to answer. And what got edited out, which was a lot of stuff that got edited out of the episode, but we didn't answer the revenue question for like 20 minutes. And Kevin, he was like red in the face. He was like, what is happening here? Which is why, in our episode, Robert goes, I knew it because we kept ignoring Kevin. He was like revenue. And then Damon was like revenue, revenue. And then when we finally answered it, they're all like, oh, okay. That makes sense. And so, just having that in the back of your mind of like, how do you also just make this as entertaining as possible? You have to keep that in mind too, because that's what they want. You know, they want to make great TV. Watson: Once again, it helps to have years and years of content creation experience going into that, but not every company has. Shanahan: Yeah. I joke with people all the time. Like I spend my whole day talking to a camera, so it's like, it's great to do. It's great to do stuff like this and have somebody else to talk to. Watson: Yeah. To bounce off of. So you landed a deal, Robert Herjavec. I literally tried to say his name and I still have like some sort of blockage. What has kind of been the result so far? So, you know, one of those things with company's not getting on the show, they don't get the, accompanying sales bump that tends to come with everyone rushing to the site after watching the show. But also you've got a shark on your balance sheet. You have fresh capital to continue to deploy. What's that look like? Shanahan: Yeah. So they ended up editing out some of the negotiations too, which I thought were entertaining. It's like they encourage that. Um, ultimately Robert has not come through on some of the promises. I don't know how much more to talk about there, but we've grown the company we've stopped burning cash and we landed, target all without additional help. We would love to have him on board because I know there's a lot of benefit to having those, but ultimately, yeah, it just hasn't been one of the factors that has led to the growth, which is reassuring and exciting, but also, maybe we would have gone faster if we had the additional cash and had the additional guidance on there. But I think that's all I can say. Watson: Fair enough. What about just like when the show aired, did you see like a crazy spike in traffic to the website, to the TikTok account? What did that look like? Shanahan: Yeah, what's crazy is we were on a list for Q1 of the fastest growing D to C brands that's tracked by similar web and that ended in March. And so I'm really curious if we'll hit that again. But in, in Q2 because yeah, the traffic to the site was crazy. We 've never been close to that many concurrent sessions, and it’s as soon as we walked out into the tank, right, you just saw the spike because we had our logos on our shirts, people Google it. And the what's also interesting, because I know other founders had been on previous seasons, is because streaming is so prevalent now it isn't just that 8:00 PM on a Friday night thing. It's once it hits Hulu 24 hours later, then Saturday, then Sunday. And like, I'm still getting texts today like, I just got around to watching your episodes where, since the appointment viewing is such a thing now, people are going to pick up on shark tank throughout the week. And so I think, whereas before it used to be really intense on that one, you know, two hour segment, when the episode airs, it's kind of spread out across a few days, which I think is great. And you know, we've definitely seen that continue and we've ultimately just hit like a new daily baseline of revenue post Shark Tank, which I'm hoping doesn't slow down. It's been really good. But at the same time, we also, I had like three different videos do over a million views that same weekend. So it was just like, everything is just, it's just rising. And it's been crazy to try and continue that momentum. And, we hired a head of growth in January and part of the edict with him was like, look, we got, TikTok really cranking here, but we need other stuff to be working because all of our attention is going into this one channel. And we saw that for the first time in March, where we had a viral video in March and we had this really long tail that we never had on our TikToks before. And it's the same thing with Shark Tank where it's like, all right, so. You know, Shark Tank is going to be a huge traffic driver, but how do we then leverage that into, you know, spinning up every other channel? We want to make sure if people are Googling for what they saw, if they're Googling for men's shark tank concealer, got to hit there and then how do we then leverage, you know, the shark tank appearance into, to the more social validation that it's worth. And so that's been the other thing to kind of lean into. Watson: Yeah, one of the other, I mean, it was prudent to have that growth person ready to go. And I'd be curious to learn more about just like how you evaluate for someone like that. But the other thing that just brings to mind where you could see that kind of lift moving into the future. It's almost like the Volkswagen, in fact, where they say like, you, you go buy a Volkswagen and all of a sudden you see all the other Volkswagens that are on the road with you. And to that same effect, if you do have the placement in Target, CVS, Nordstrom, someone who otherwise would walk by and it just, it would, it would be part of that morass of things that cross your visual spectrum, that you never actually consciously recognize, your ability to now jump out to them amongst that morass because of the fact that they listened to you guys pitch for whatever it was eight minutes on shark tank potentially creates a bit more of that lift now into the future, because then someone could watch that and then come back however many weeks later and see it. And that, you know, maybe that translates to sales and maybe that translates to them telling someone about it so on and so forth. Shanahan: Yeah, I think that's one of the biggest lessons is there's been a lot of decision points in the company where we're like, all right, if we do this, we will be here or we will accomplish this. And you want everything to be the silver bullet, right? It's like, we'll get on shark tank and then boom, we're off to the races forever. And it's like, there really aren't, those things don't really exist. Every single thing is a stepping stone. Like even we got into CVS, we're like, you know, we'll go into CVS and then boom, you know, we'll triple a company or whatever, what will happen there. And there was like, no, like we went to CVS, we sold well. And like, you can just continue, but the real work begins there. And it was very much that way with shark tank where it was like, we did all this work to get up to shark tank and get to the air date, but then. They was like, that's when the real work begins and it just becomes another stair-step on this thing and like everything, I think we were just looking for that silver bullet, but it's really just, just continuing to put in the time and the effort, from there. Watson: Yeah. Well, it's the perfect kind of lesson or insight to, uh, wrap up with here. John, anything else you were hoping to share today that I didn't give you a chance to, before we ask the last few question? Shanahan: No. I think I said on the last episode is like, oh, so I listened to these every week. I feel like I might be one of the most avid listeners to the podcast. I think you do great work. And I think your ability to pluck interesting people that I haven't heard, cause I feel like I see a lot of the same people in some of the podcast circuits, but your ability to, to pluck them and then also ask really insightful questions is what keeps me coming back. So a very public kudos to you on continuing. Watson: Very kind of you. Thank you. For folks that want to learn more about Stryx, follow all the things that you guys are doing, what digital coordinates can we provide for people to learn? Shanahan: We are stryx_official everywhere. Yeah, we do the most stuff on TikTok. And then we're trying to get a little bit better about putting stuff on LinkedIn, just because there's some cool stuff happening. And so, yeah, stryx_official pretty much everywhere. Watson: Uh, one of the other things I wanted to ask you about before we go to the challenge here is earlier in the life of Stryx, one of the kind of company values was subtlety, I believe, or maybe that's discreet. And you know, it, that's kind of the premise of, you know, covering up some small blemishes on your face. And so there was this like, weird tension between wanting to tell everyone about what you're doing and also kind of having some discretion about details of the company. Obviously there's one question here earlier where that was was touched upon, but is that still a value have maybe like something that has been shed to some degree? How are you thinking about that in the context of building a brand? Shanahan: Yeah, it probably creates the most discomfort for me because I'm also that way personally. Spending time to put up stuff on LinkedIn and like brag humbly or not so humbly is like very uncomfortable. And so it’s part of the reason that the brand values discrete is because it very much comes from the founders and my co-founder is the same way as well. Like, we've never really announced a fundraising round because that doesn't to us it to drive the company or the mission forward. And so, with all of our products, you know, the discreet nature remains, but there is that kind of tension where you have to be like, you have to announce these things. You have to be very public about it, but also at the same time, like how do we keep our heads down and just continue grinding on those. That's definitely one of the kind of balances that we're always looking for. Watson: Well, we're going to link to all the scripthere in the show notes, you can find in the podcast app or going to be there and.com/podcast for every single episode of the show. But before I let you go, John, I would like to give you the mic one final time to issue a challenge to the audience. Shanahan: I think you had to try something new that makes you uncomfortable. And like in the context of Stryx, it's, you know, guys try and concealer, but you know, if there's something that you've been interested in doing, it's like take that little leap and try it because for me, and that wasTikTok. I mean, there's a lot of things I've done in the past couple of years that have been that way. Um, but you have growth happens in discomfort. And if you're not making an effort to do that more often, I think you'll be surprised at the results. Watson: Yeah, I can tell you that, we just hired, and I mentioned this a couple episodes ago, an ops person, and that was very uncomfortable for me because every previous hire for Piper had been exclusively video editors. And I was like very, discreet in a different sense of the word where it's like, I knew what it took to be a good one. I kind of knew how to evaluate whether or not they were good, but like the ops thing, I was like, I don't really have a clear definition of the things that need done because I'm all over the place administratively. And it's been a wonderfully beneficial challenge so far that definitely pushed me outside my comfort zone, but has already yielded some positive stuff. So I love that challenge. And I think that everyone should take it. Shanahan: Yeah, it could be hiring or it could be, go run a little bit further tomorrow. Just be uncomfortable. Watson: Amen to that. John this has been fantastic. Thanks for coming on the show, man. Shanahan: Of course. And congratulations on the baby. Haven’t said that publicly either. It's great to see you a growing in the dad life. Watson: Thank you. We just went deep with Jon Shanahan. Hope everyone out there has a fantastic day. Hey, thanks for watching to the end of my interview with John. If you found it insightful and want more insights from him specific to building his YouTube channel with over a hundred thousand subscribers, check out our past interview from a couple of years ago, right as he was at the precipice of founding Stryx, we talked about his YouTube channel, The Cavalier.
Jake Thomas is an expert at writing YouTube video titles. He has parlayed his experience writing more than 4,000 titles into his company, Creator Hooks.
Prior to founding Creator Hooks, Jake helped build a channel from 70 to 200k subscribers After leaving to start his firm, he landed clients that include Hubspot cofounder Dharmesh Shah's personal channel and The Infographics Show. In this episode, Jake and Aaron discuss his framework for writing a title, how to create more curiosity, and the power of owning a niche. Jake Thomas’ Challenge; Develop your Model 100. Create a spreadsheet of the hundred channels with a similar style to yours. Connect with Jake Thomas
Adam Haritan is the founder of Learn Your Land, as well as a wild food enthusiast, researcher, and forager. He is launching a new course, Trees in All Seasons.
He learned the value of wild food foraging while studying nutrition at the University of Pittsburgh, where he discovered just how beneficial wild foods could be in optimizing human health. Wild plants, on average, are more nutritious than their cultivated counterparts (i.e. wild blueberries vs. domesticated blueberries, wild lettuce vs. iceberg lettuce). The wild food diet is the diet that we, as Homo sapiens, have been consuming for the majority of our time on this planet, and it is the diet that we are most adapted to consume. Today, very few Americans consume any wild foods, and instead subsist on nutrient-deficient products that scarcely resemble anything real or natural. It’s no wonder that degenerative diseases like cancer, diabetes, and chronic inflammation are so prevalent. We have abandoned our natural diet and are suffering as a result. In this episode, Adam and Aaron discuss trees, his new course, and commitment to quality. Adam Haritan’s Challenge; Find a tree growing close to your home and identify it. Connect with Adam Haritan
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Matt Blocki is the founder and CEO of Equilibrium Wealth Advisors. Matt is also a co-founder of Wealth Advisor Training, which was founded in 2022 to help provide resources to the top wealth advisors around the country. Wealth Advisor Training gives advisors a comprehensive education platform to give better proactive advice and develop systems to scale their business.
Matt regularly speaks in the financial planning industry, including to top firms Thrivent and Mass Mutual. In this interview, Matt and Aaron discuss Matt’s career trajectory, how to attract great clients, and their plans for WealthAdvisorTraining.com. Matt Blocki’s Challenge; Rate all facets of your life and do the requisite work to improve the lowest rated pieces. Connect with Matt Blocki
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WAT Website If you liked this interview, check out our conversation with Brent Johnson where we discuss Dollar Milkshake Theory and his early career at Credit Suisse.
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Piper Creative makes creating podcasts, vlogs, and videos easy. How? Click here and Learn more. We work with Fortune 500s, medium-sized companies, and entrepreneurs. Follow Piper as we grow YouTube Subscribe on iTunes | Stitcher | Overcast | Spotify
Watson: Matt Blocki. Welcome to the podcast, man.
Blocki: Thanks for having me. I’m excited to be here. Watson: So let's kick things off. People, you know, they hear about financial services, but there are so many different manifestations of a business that is in finance. You've started your own firm, “Equilibrium Wealth Advisors”. Talk to everyone just about the services that you provide and the scale that you've accomplished. Blocki: Yeah. Great. So I've been in the industry… I was actually started as an intern at a big, broker dealer insurance company back in 2008, 2009. So, I’ve been in the industry now for almost 14 years, and I found that a lot of the industry is now very commoditized. There are certain products, there's certain investment strategies, but what we've tried to really build out, is having the process behind decision fatigue. So on a daily basis, a lot of clients have to make thousands of decisions from what they dressed or what they wear, what they listen to. And from a financial standpoint, it's very overwhelming with how many options there are out there. When it really boils down to it, clients have maybe 3 or 4 extremely important, non-negotiable, goals that they want to accomplish maybe in the long-term basis, maybe on a short-term basis. So, our firm is really meant to cut out the noise, make the complex simple, and make sure our clients are reaching those goals. We do everything else from wealth management, risk management, giving advice on tax and estate planning. But I would boil it down our biggest value proposition as just really being there when it matters and making sure that we reduce the stress and remove the decision fatigue behind financial decisions. Watson: And it's really interesting that you said that the industry has the likelihood of the potential to be commoditized because I always kind of look at the world in these two different extremes. There are people that play in the exact same space. If you're in the restaurant game, like there's a lot of restaurants it's insanely competitive. And if your restaurant actually stands out, that's a huge deal. In the same case, with a field like wealth advising, or you can be like the only person who's literally like sending rockets into space and landing them back on. Those two extremes, both take exceptional entrepreneurs, but they're playing a somewhat different game in order to accomplish that. So, can you talk a little bit more just about what makes the wealth advising financial advising space commoditized, and when the kind of light bulb went on that you had to push to differentiate yourself really hard? Blocki: Yeah, for sure. So there's many studies that have shown, you know, from a performance perspective, it's nearly impossible to outpace indexes. So then, you know, investors will Google “well, why not just put our money in index funds?” That's a perfect example, and I'm a big advocate of keeping costs low and indexing in most cases. And then, there are so many FinTech companies that have come out such as robo-advisors that can automatically manage and rebalance portfolios and then other softwares from budgeting and cashflow and tax planning that when it really boils down to it, we're still all humans and humans are very emotional creatures, and sometimes very important long-term decisions become emotional ones. So we mirror and use all of those technologies and important philosophies, that are available to the general public, to scale. We're a very unique industry and that, finances, are the number one stress in most people's lives and mostly why marriages end, why people do, or don't, fund their kids' education, or have a legacy that they wish to have for their kids. And having an advisor guide them through those decisions, not just manage a portfolio or fill out a tax return or make a trade for them, but it's, it's putting all of that complexity together in a financial plan. So, I mean, I always use the analogy, “our clients are the CEO of their lives.” They decide what they want to do, how they want to live. We're the CFO, meaning they've delegated as much as possible to us from an implementation standpoint to save their only non-renewable resource, which is their time. But more importantly, it's reporting to the CEO. It's keeping them informed and making sure that the plan gets calibrated as their life changes and making sure they're really not hurting themselves, making any emotional decisions. Watson: And what I've always thought is, if I'm like picturing in my mind and the experience of either using the robo-advisor or just buying your collection of index funds or ETFs on Vanguard yourself, is you're still kind of sitting in one of your rooms of your house probably doing that by yourself. And, like you're saying, as emotional social creatures, there's a degree to which you still kind of, look at the walls like, oh, that was not the wrong call. I hope I didn't, you know, take this thing off the road by making just some sort of easy unforced error, and the peace of mind that comes from just like, okay, this person thinks about it all the time. I think about it one-hundreth of my time, because I'm juggling these other 18 balls in the air. Blocki: For sure. Yeah, I think the biggest mistake that… a lot of our clientele, alright, we're focusing, we'll talk about a new business we’re starting for just increasing financial literacy in general. But a lot of our clientele are affluent, meaning they're, probably already on track. They have the resources to stay on track. So there's an artwork behind financial planning that I don't think a computer can ever replicate. What I mean by that is, you know, just we have many clients that are retired currently, and that are basically have over cumulated assets, I would argue. Getting their perspective, looking back on the last 30 years has been incredible. So, perfect example, just pick two doctors. They've accumulated between 10 to $20 million of net worth, some health concerns on the table. So when we talk about retirement and, they don't want to talk about it, you know, at that at 65 years old, their kids have grown up, they have more time on their hands than ever, their intellectual capacity as literally at an all time high. They love what they do. They love being doctors. They don't need to work. They want to work. So they typically still do as long as their health allows. And so, you know, thinking back on the advice we could've given them last 30 years, I'm just thinking of a couple of clients specifically, they never traveled to where they wanted to. They didn't think they could go out to eat. They didn't think they could, you know, do a fancy vacation. They didn't think they could, you know, fill in a hundred different excuses. So, we see clients, situations become so lopsided, the best savers are the worst spenders. And so having someone help navigate… Those clients can't get those 30 years back, but legitimately, if those clients had $5 million in retirement, they're going to live the same lifestyle than they had at 20 million. But think about how different their thirties, forties, and fifties could have been when their kids were under their roof, when they were young and healthy and could have done some of their bucket list items, had they had that human interaction. And, you know, that reduction of decision fatigue and really that reduction of fear of thinking we have to save everything, coupon everything, and they've just over accumulated wealth. Now they're in a good position. A lot of people are like, well, “boohoo.” You can't get those. You can't get that time back. And that's the crazy thing about life and how finances fit into it is every decision has a result to it. Watson: And it also sounds like for a character like that, even those clients that are in retirement, getting the permission from the extra set of eyes, it's just like, “Hey, you can you can go spend some of this and you're not gonna run out of money at the end of your life,” which can be its own whole set of fears and, you know, feel relatively confident that this is just not, you know, blowing all the work that you did to save. Blocki: There's no question. There's no question. Watson: So, let's talk about, you starting with the large broker dealer, leaving to start your own firm, the challenges associated with that, and the successes that you've had since that occurred, because, you know, just, to make it I believe it's 14 years in the industry makes you an exception to the rule, but to then leave and start your own firm successfully outside the bounds of the broker dealer you started with is this extra layer of exceptionalism inside of a very competitive industry. So can you talk about specifically that decision, the challenges that came along with it, and what the result was? Blocki: Yeah. No, absolutely. So that, the broker dealer was an incredible place to learn, you know, systems and disciplines and be taught a lot about financial planning 101. When it comes down to it, and especially in the financial planning industry, what we found is that the advice that you can provide, and just getting everything possible delegated to you is the biggest thing a client looks for, especially in the type of clientele that we work for. And so, ultimately at a broker dealer there's, for, for big companies to exist, they have certain products they have to sell and, you know, certain metrics they have to hit to, you know, to report to their, whether it's privately or publicly held. And we found at a certain point, we really just wanted to focus on advice and implementation for our clients, and just being able to wear one hat for our clients became the deciding factor in starting our own RIA. And RIA by mere definition just means you're a fiduciary. Everything you do, say, act is in the best interest of the clients. It’s not just at the time of the transaction, but every moment, during the existence of that relationship. Watson: And how does that change the actual business model of your firm going from the old model to the RIA? Like, where are your fees being collected? Where's your revenue coming from when that shift occurrs? Blocki: Yeah, that's a great question. So there's basically, there’s three types of advisors out there right now. There's fee-only, hourly people. There's a hybrid advisors that may maybe collect flat percentages of AUM and also do a commission business from an investment standpoint. And then there's the fee only from an investment standpoint where it's just a wrap fee, just a percentage of investments managed and we operate in that third tier. And the reason behind that, we've made a decision to actually drop our commission licenses when we left our prior broker dealer and started our RIA, we wanted to keep things simple, transparent, and we really wanted to work with a simple, we really wanted to work with a certain kind of clientele where we have all of these services. And one of the biggest reasons we decided to do this and not hourly, is a lot of times with emotion. You know, I only call my attorney when I need my attorney. Cause she's, you know, almost $600 an hour. And there's probably a lot of times I need my attorney where I'm not calling her and trying to make, become an attorney myself, because I want to save that fee. So with, with finances, we don't ever want to think about having that on the table. So we charge a flat percentage. It drops the more you have. And we want to be there when clients need us. So if, if we're in between a regular scheduled quarterly or semi-annual review and a client has a question, you know, we're there. And that, that set up is very intentional and thoughtful based on the clientele that we work with. Watson: And that's also, that's a time with us. In whether you're running an agency like me and Hannah, a wealth services firm, like you, or any sort of service provider. You are partially going to get the clients that you have optimized for with the way that you're structuring your business and those fees. So if you are just trying to be the bargain basement, lowest fee player, you're getting the people that shop around and kick tires and are trying to kind of squeeze as much juice out of every fruit that they come across versus these folks where it's not that they're completely price insensitive, but they're looking for the kind of higher end high touch type of service offering. And they understand that that trade-off of maybe paying a little bit more to you guys on an annualized basis, basically ensures peace of mind, these kind of things that you're positioning the service to be able to do. Blocki: No question. I think all three models have pros and cons to them. I think that the first model, the hourly model, why we steer clear of that is we didn't want to have that attorney feel where we're, you know, and nothing against attorneys, my attorney is worth 10 times, you know, her fee, for sure in just giving good advice and giving good implementation, but, in financial planning world, a lot of times, we've sat with a prospective client. They've gone through an hourly fee engagement. They have this big booklet and say, okay, this is great. There's good advice in here. So tell me what have you done? And they've done nothing. And that just, that personally drives me crazy because the plan is not a plan unless it's implemented. And I'd say the second biggest part of our value proposition is our follow-through and getting stuff done. You can never discount a quarterback that is coordinating your taxes and your attorney and your wills, and actually getting all of these moving pieces across over the finish line, because the type of clientele that we work with, they don't have time to think about this stuff, let alone to do the necessary steps to get it done. And that's how our firm is set up and why we've chosen that model. But not saying the other models don't work. The second model of the commissions, ultimately, there's conflicts of interest in every model. But I think the conflict of interest exist the highest in that number two, where you're partially fee-only, you're partially commission and we tilt the scales towards the ways that gets you way more. Blocki: And the companies that have those models can tilt the scales and adjust things. So, you know, the people selling the products have to hit certain metrics to keep the company's numbers going. Watson: So what's really interesting, and I guess you can tell me if you think about it in the same way, the per hour model for something like wealth advising, it is not a discreet, you know, finite game when talking about wealth management, because there's the accumulation, there's the steps along the way, there is the then into retirement. How do I actually descend from this pile that I’ve built for myself? Whereas, and this isn't the case with all attorneys, it's great to have an attorney with really high context that's been working with you for a super long time and get the kind of compounding knowledge base there, but they could have a discrete task of, okay, I need this contract written, I need this deal completed, in those terms, and, you know, the deals completed, the contract signed, or what have you it. The, you know, the will is written. And it's finite, it's finished. Whereas the service here, it’s really, you know, maybe you deliver that book and every piece of the plan is implemented and now it's ready to roll, but things are gonna change down the line. Unfortunately, you know, people have more children, people get divorced, people have, you know, sales of their business and other events like that. Blocki: Every time I've thought, oh, that client's good. We don't, you know, probably not a reason to be, but we're going to offer that anytime. You know, it's always those meetings where I think everything’s good. But we're always going to meet. We never want to meet to meet, but every person appreciates a check-in, hug and just making sure, you know, a report is made. How's my plan doing? It's always those meetings that have 10 or 20 follow-ups, because so much has changed. I mean, life, life happens so quickly. Watson: Yeah. So can you give people your perspective? I mean, one of my favorite things is, I know that you're an NBA fan too, is when, lone of the stars of the league will shout out some young player. So like it was Kevin Durant, shouted out, Devin Booker as like the next guy, like he's someone to watch. He's got it. Whatever it-factor is. And you know, he was right before a ton of people because he just knows from actually being in the game, what's going on with that space. You are one of the ascendant, high performing wealth advisors in the entire country. I'll do the brag on your behalf here. Can you talk about just giving people, not in a disparaging way, but a picture of the whole spectrum from, you know, the newest people coming up, the challenges that they're facing, the folks in the middle, the folks who have been in the game for a while, what the state of wealth advising kind of looks like from your purview and, you know, maybe not necessarily, “Hey listeners, like what type of wealth advisor you should go with,” but just what the kind of different trade offs are from those different types of businesses that are being run. Blocki: Yeah, for sure. So there's the big broker dealers from the insurance world who have, good business models. And I say business models because they're very profitable for the companies. They have the deep pocket books. They're going to recruit, you know, kids right out of college. Come into our company, you know, you're going to get this entrepreneurship, unlimited opportunity, you're going to run your own business, and in reality they’ve got to call their friends and families and try to solicit business, which is tough. I mean, I had to do that. I would never wish that on anybody, ever. Um, I don't know if I would go back and do it again. I obviously would, but it was tough. So that's where, you know, the majority, if we look at how many advisors are getting recruited in the industry, where it's happening right now and I think the statistic is like 3 or 4% of those. So three or four out of a hundred of those advisors are really, are successful, and make it as a career. Um, the other 96, 97% fail out. And the companies that recruited them, keep the friends and the family as clients and keep those policies or investment accounts on the books forever, and they may become a hundred percent, you know, almost a hundred percent profit. So very good business model, uh, in my opinion, not great for the industry, especially with the personalities of, you know, whatever generation millennials or whatever's under that. I don't keep up with that. But, um, I found that, you know, that kids out of college are very talented. There's obviously, um, most kids coming out of college right now, you know, they want a base salary. They want to have a career trajectory. They want to know, they don't necessarily want to go call their friends and families or go right into sales. Um, so there has been a big movement to the RIA world, um, or for some of the biggest teams have transitioned away from big broker dealers. So to start their own private company, that's directly registered with the SCC. And those companies are presenting opportunities to younger people to be a junior advisor, and then eventually be a lead advisor and to really learn financial planning. Um, so those are really the two, there's the kind of the cutthroat model. You either make it, or you don’t. Or there's the go get mentored by an existing mature advisor, a team, and then be successful that way. Watson: And there's also a generation of advisors that have been in the game for 20 to 30 years. And because of their ability to just kind of, you know, continue to collect those fees are to some degree on autopilot. They're not necessarily growing. They have their folks that they're managing and they're not even necessarily going out and soliciting new business because it's just got its momentum going. Blocki: It's very relationship driven. So I would say there's a lot of advice out there that is sitting on assets, you know, collecting fees, providing some value, but you know, not necessarily as much as someone young and hungry that could do 10 aspects of their financial plan instead of just the investment management. Watson: So another thing that's contributed to your disproportionate success is your ability to do exactly what you said in that second model, bring the young junior advisors on, start to have them service your lineup of clients, provide, you know, high touch where you can't scale yourself infinitely and also level up into a really great job where they get to, uh, provide this type of financial planning. Can you talk about how you've done that? Blocki: Yeah. So, I've done this by trial and error. Um, there's, you know, first we found that everyone in any company that you run, it's important, if everyone's running, rowing in the same direction on one ship, you can't have the mothership and then a side, little paddle boat that maybe that advisers paddling a different direction. And it's, it's a really, they're going to get dragged along, but it's a lot of friction. So if everyone's on the main boat and paddling in the same direction, they just have to make sure that there's alignment. There's shared philosophy, shared values. So there's a huge psychological aspect to guarantee the success. And, um, right now we have three, uh, lead advisors on our team and all three of those have come from the, the arrangement that I've discussed, you know, trying to, uh, to start their own practice on their own. And, in that company’s eyes, we're not that top performers, but in our company's eyes are by far the top performers because they have, uh, extremely passionate about financial planning, about helping people, doing what's in the best interest. Some of them, you know, can close and sell, but that's not what their job is. Their job here is we want the whole firm to be the “Rainmaker” where our service and, uh, the advice we provide and just the process that we provide for our clients, they love that so much, that word of mouth is going to naturally spread for referrals and all of our advisors on our team, we just want them to, you know, hug and service and provide the best possible value to our clients. And just taking on that mentality shift has made this successful versus saying, “Hey, come in as an advisor, go get a hundred clients, and you'll get paid to do that.” No, it's “Hey, you're gonna get paid no matter. Just take care of our people that we have and take care of them in the best way possible. Watson: So retention is a really big metric now with an established business like yours? Blocki: Absolutely. Absolutely. Watson: And that's, you know, part of the reason that kind of insane number that I'll say again, uh, 96 to 97% of folks that start in the industry churn out in some sort of timeline because you have number one, if you're starting, when you're really young, all of your friends and family that you're calling on, some portion of them are literally also young with no assets under management, no capacity to do much financial planning and further you don't have the reputation or, you know, candidly there's people that are put at ease by seeing some person with gray hair, telling them what to do with their money. Just cause like, hey, this person has been around. They've seen a few rodeos, this young person in a suit that barely fits. Like it's probably not necessarily having all the contexts, that one would need to put a great financial plan together. But when they join an established RIA like yours, there is not only the book of clients that’s already there, but the referrability already baked in. You're getting an inbound lead because of the years of quality work that's been done. And that's this wind at your back to actually, you know, continue to grow. Blocki: For sure. And I think it's the responsibility of the owner of the firm and make sure that the values are followed, but just make sure that the incentive is everything's a team win. It doesn't matter if this advisor, this advisor is bringing in, everyone grows as the ship prizes. Um, but I cannot tell you how important that is for any business model, just to making sure that, um, incentives, alignments, values, philosophy have to be aligned. If they're not, and they say they are, eventually it will come out that they're not. Watson: So there's some advisors that are just cruising on assets under management. They're not really pushing the ball hard too much. And there's folks like you that are continue to grow the business, continue to bring on new advisors, continuing to scale. And there's plenty of people that say, hey, that's enough. You're not one of those people. You decided to start another business. So can you talk about the idea there. Blocki: About starting the other business or just the mindset? Watson: This is the, open the door to wealth advisor training. Blocki: Wealth advisor training. Yeah, I think, you know, one of the most important, um, things I've learned is that when trying to go after a goal, if you're so focused on that goal, um, you're going to forget people, you're gonna forget the journey. And when the goal is achieved, um, which I've, I'm a big believer in goals don't get me wrong. You know, write them down, read them every day and every time I've done that, I'd say 99% of the time I've hit my goals. What I found when I become so laser focused on those goals, that, that goal, the celebration of that, you know, maybe you're on a stage, maybe you're giving a talk, it lasts for 10 minutes. And then typically if it's so celebrated, it leads to problems. It leads to attention. Now, suddenly your calendar gets filled up with other people that want your time and your advice, et cetera. So I found that now focusing on the process and the journey is so much more important than the goal. And so, I'm a very competitive person, but if you're just competing for the sake of competing, um, you're gonna end up going down rabbit trails. But if you have a clear purpose for your company, a clear mission, and the competition is a catalyst to help that purpose arrive, then that's a very healthy thing in my opinion, but it's very easy to get those things out of balance. It's very easy for our goals to get your present life out of balance is something I really think about every day. I try to remain present. Um, we'll also go more into trying to enjoy the journey. Also focusing on the future. I think financial planning has paradoxes like that as well. So for those reasons, we have some very big goals for EWA of how to scale and grow and, uh, stay a top firm and reach, you know, the top firm just to make sure that we can provide the best interest and, and scale for our clients. And a lot of advisors have reached out with, you know, how do I do this? Or how do I do that? And so now we're excited to launch a new business called Wealth Advisor Training. And this is going to basically have every, uh, transparent look into what happens behind the scenes of EWA. How do we train our advisors? Um, how do we get new business on the books? How do we retain the business? How do we, you know, team up with older advisors as they retire and get their business retain on our books? Every problem that I've seen in the industry, we want to address through video format and scale and make this available to the public and help other advisors grow their practices and become the best version of themselves for their clients. I found that, you know, we've done a couple exercises of why is what we do important. Then you kind of do why, why, why? And you go seven or eight layers deep. And it ultimately, I believe in financial planning, it's a huge deal. Not just to get a great rate of return or grow someone's balance sheet. But if you're relieving financial stress to a doctor or executive, and that doctor's impacting thousands of patient lives and that person's able to do their job so much better, cause he relieved financial stress, same thing for a business owner, that's incredible value that can get passed on from family to community, uh, and impact so many lives. So we want to take that to scale and help other advisors grow their practice and provide the best possible advice. Watson: And, you know, you referenced it before, finances being the potentially number one stress on marriages as well. And it's very hard. Like you can't necessarily like, put check marks on your book of like marriages saved explicitly, but implicitly by relieving that financial stress for people making it not a problem or a much, much smaller concern to them, you are helping families in the same way. Blocki: Applications are endless. I completely agree. Watson: So Wealth advisor Training. We are partners on that business. Blocki: I couldn't be more excited. Watson: Um, talk specifically about how a team for a new business, like this comes together, given that you've started businesses in the past. So when you're thinking about a founding team, when you're thinking about the component pieces, you know, the simultaneous instinct to, you know, get your share of the business, but also make sure that the right partners are in place. People are properly incentivized. You talk about incentives with, you know, bringing junior advisors onto your wealth management firm. This is a different business, but you're also thinking through these incentives and what type of actions and interactions will be born from that. Blocki: Yeah, for sure. So when starting a new business, the, uh, the partners and the players are absolutely key. I think that the culture that you have, everyone has to be aligned with the, you know, we have always talk about a 10 year vision, three-year vision, one year vision, then back that down to a quarterly rocks and then even a weekly scorecard. So making sure that everyone's on board with first, what's the purpose behind the business? Is everyone aligned? Is everyone motivated, excited about that? With any start up it's it requires, uh, tons of problem-solving obviously I've heard the quote, “Everyone is a problem finder. Very few people are solution oriented.” So picking partners that actually can, uh, solve the problems, not just come up with the problems I would say is the number one, number one factor. Watson: So, what is your, can you talk about how we're rolling it out? How, um, you know, the thought process to getting something like this off the ground? Is it completely built and it's, you know, now they will come. Is it being, you know, assembling the jet as we're falling, assembling the parachute as we're falling out of the plane? Blocki: Yeah, a little bit of both. I think, you know, the most important part, you have to have a really good structure, a really good base. Um, but it's a learning process to figure out what does the customer want and need. Um, and then in this type of business retention is key. So there's, there's no contract. If you're paying a monthly subscription fee, there has to be enough value for the clients to be retained. And getting continuous feedback and calibrating on a daily, weekly basis is going to be key to the success. Watson: As we were putting together the video platform. The thing that was most interesting to me was how many of these just basic financial planning topics, uh, budget, uh, the decision to rent versus own a home. These types of things that, you know, the broker dealer isn't necessarily incentivized to put at the top of the education for that new advisor to get them fully steep and have a financial plan just because of the incentives that are there and candidly the constraints on time. But if someone is, you know, the junior advisor at the RIA, and you're thinking about ramping them up to be, you know, a senior advisor who can fully serve a lineup of clients, the ability to speak to each of those points, and also just kind of mimic the language of someone who has been in it for a while. So you not only have been in for 14 years, how many designations do you have? Like it's just alphabet soup after your name. Blocki: There's continuing education as a board, but three right now. Watson: Yeah. So you've done the work to assemble a real point of view on these different principles of designing your financial life, and it's not that you're saying, this is the only way to think about paying off student loans or the only way to think about something like that, but here's the principles that inform this specific recommendation that we tend to make to clients, why we think about it that way, and here's how we actually say it to them. So that we can go like, into the theory of the philosophy, you know, I'm glad the professors get together and talk about like, what type of cell is involved in this nuanced type of cancer. I just want to know what the treatment is, what the likelihood of success is and what it's actually going to be like to go through that treatment. Blocki: Yeah. Couple of things to piggyback off that Aaron. So I would say, when I went through the training at my prior company, I probably ended up using, let's say between 2 to 5% of what they trained me on. And both very product driven. Um, the other 95% I either had to learn by myself, while, keeping, you know, 60 to 80 appointments a month without having an assistant flying by the seat of my pants and/or attending talks of actual advisors that had been in the business for 10 or 20 years. And those talks and the research, uh, as painful as it was, where the most impactful things, that's where I, you know, 95% of what I said to clients or the advice we got, or just general education got derived from. And there's this old model you're basically handed like a shoe box and you put all your contacts in it and you have to call them every six months and that's product driven. That's if you're selling insurance. Well, that same system exists today, for a financial planner. And the numbers and the ratios are just not the same, if you're just trying to sell a product versus if you're engaging as the quarterback, financial planners have a very intimate relationship with a client. Most likely they're going to refer you to their friends and family if they're doing good. Um, asking for that may ruin the chance for that, but just doing a good job and letting the relationship evolve, good things will come. So part of the reason for establishing this business is there's this old model that hasn't been updated really for 50 years. And then there's the reality now that these insurance agents, tax advice, financial planning, investment managers really have some firms have merged those all into one, but there's really no formula or system behind, you know, how do we get new clients or how do we do this? And it will drive someone crazy if you're a good financial planner, trying to follow these numbers, because you're going to find yourself buried in work and not just never being able to keep up. So, um, that alone is one of the reasons, is just giving people a clear pathway if they want to do financial planning and not just be a product person, what are the systems and habits and what, what are the advice you need to follow? And then a lot of it's the conviction, because I was told. A lot of things that weren't true, but one of the things was, if you don't get referrals, you're going to fail out of the business. I focus on advice and education, and I found that if I got one or two referrals that caught me, that was the same value as you know, Johnny next door adviser who got 200 referrals that were forced out of somebody's cell phone. Watson: That's an important nuance because if folks are not in the industry, they don't really know the subtlety of what you just said there. So I'm just going to re-say that a different way, is, part of the training is, at the end of the meeting at the end of every meeting you ask, who can you introduce me to? Introduce me to three people, four people, five people. And it's this like, let me pull, you know, it's like a, what's the surgery game where you like, pull the like thing out of it. Like you're going in there, like trying to extract. Right? And what you're saying is not only is it different when someone is, just because of the quality of service, deciding to introduce you to their friend, but also we talk about this a lot, Hannah, and I. There's like this asymmetric difference when they have chosen to call you versus you have chosen to them, like it's fundamentally a different type of person or a person in a different frame of mind when you have come to them with the offer, versus they've already opted into at least hearing your spiel, seeing what you do. Trying to learn more about you. It's, it's this window, you’re saying, we have basically a hundred percent inbound leads for Piper, and it just changes everything about what we do operationally. It's the number of meetings to a close it's the way in which someone is onboarded into the service offering, because they've already seen a video that we've made. They've already heard this good thing from their friend who also ran a business and we help them produce Instagram reels at a incredibly, kind of, efficient rate. Blocki: Yeah, couldn't agree more. When you have someone calling you consistently, you're able to make higher decisions. You're able to scale. You're able to make revenue projections versus if it's one person's ability to, to siphon names out of someone's cell phone, and usually the person giving you those names, it's like, okay, I really don't care if these three people get pissed at me cause they're not really my friends. I don't really know them. And that, that ends up happening. So I think there's, there's going to be, and there's continually going to be a huge shift in the, you know, the insurance world transitioning into the profession of, uh, you know, for example, a certified financial planning profession or, you know, where you're really focused on the client's best interest and the advice that needs to happen. So I'm excited to be on the forefront of that and provide a resource for those that need it. Watson: So, I think we can have fun with this as kind of the last point discussion here before I let you go. One of my like core thesis. This is actually like, really central to almost everything Piper does is I think that business is moving in the direction culturally of sports. So I grew up, you probably were the same way, like I'd either before I left for school or got home from school, watched Sports Center. So I could see, you know, the highlights, follow this athlete that athlete. But folks that come up in, you know, into basketball, for example, Jason Tatum, the best player in the Boston Celtics, talks about like studying Kobe and Kobe's footwork and that informing what he does now. And he's, he's polished to a different level because he had YouTube, to like, actually just watch that video over and over and over again. I kind of think of business working in the same way where it's no, it's no shade at the folks that built their businesses in the sixties and the seventies, but it was just a different environment with different competition. There wasn't the internet there wasn't these other things, you know, like you're saying, you're competing with not just other advisors, robo-advisors, Vanguard, all these other things that advisors from that point in time, didn't have to go through. Um, and it's true with marketing firms like ours, it's true with all sorts of businesses. And one of the things that, you know, I would guess a lot of, uh, business folks don't necessarily consider is, am I also watching film outside of the day-to-day work? Am I also doing these extra types of practice to take my game to the next level in order to compete? And what excited me when you brought the idea for Wealth Ddvisor Training to us, was this notion that this is basically, if you were thinking of someone trying to build their wealth advisor business as an athlete, this is their film study. They don't really have film study in this way in an accessible manner. They really can only get reps in the meetings or shadowing someone in some way, shape or form and, you know, any athlete would tell you, if your only practices in the game, you're going to lose to the person who's been on the practice field. And if you've only been on the practice field and in the game, you're going to be at a disadvantage compared to the person that's watched all the film study and actually done those mental reps when they couldn't necessarily get in there in person. And especially if you're struggling to book meetings, you can't necessarily create more meetings out of thin air. You need to have something that's actually creating those. So I think that that's the other thing that for me, was just kind of a light bulb for why this business could be impactful, was there really hasn't been an outlet for film study for someone in financial services like this, and this is gonna allow them to do that. What do you think about that analogy? Blocki: I completely agree that in the video content and how we initially established our professional relationship is, you know, your company does all of the filming for EWA. We do quarterly videos then we do 80 educational videos a year. Um, I didn't know just how impactful that was. I first thought, okay. If a client's asking us more than 10 times, we should do a video so we can scale it. We're still gonna have a personalized conversation, but then at least the client then could rewatch rewatch, rewatch, and not have to remember everything that was said during a meeting. That's been incredibly impactful, but now the social media aspect of that, you know, the average, person's like four to six hours a day on the social media. So just posting those and doing good in the world, that's really helped our business grow. And I don't know exactly how many inbound referrals are cause they saw video or not. I just know that when we left we had a seven figure business, and we doubled that within a year. The only thing we did differently was the video production, so highly recommend any business owner, that thinks, “I don't need video.” Video content is the future. It's going to really help you scale and stay front of mind, because every company right now is fighting for your attention. Your time. And that's one way to do it for free is through social media platforms. It's just creating the video, scaling the business, scaling conversations, and then also, you know, it's really free advertising at the end of the day. Watson: What do you do to keep your game at an A-plus level. Like, if we're using this analogy, practice, being on the field and the game, watching film. What are the things that you're doing? You've had this disproportionate success with your business. You talked about going and finding these mentors. You talked about reading these kind of different books and texts. Are there other things that you're just doing to kind of keep yourself operating at a high level consistently? Blocki: Yeah, I'd say a couple of things is having extremely good mentors and coaches. So, you know, right now I have two coaches. And they keep me accountable to goals, accountable to making sure I'm taking care of myself, et cetera. Having, you know, routines are extremely important. There's a, I think an equilibrium and that's the name of our firm, but there's a paradox of, you need to have space to have creativity and then you also need to have routines for discipline and for success. It's fighting that, you know, if you could get from a 1 to a 10, if you get to a 9 rather quickly, and it's gonna take you 10 times the amount of time to get to 9 to 10, stop at a nine. So figuring out the paradox points of when does disciplines ruin creativity and when does creativity ruin discipline? That’s just an example. So really just thinking through what are my greatest strengths. How can those flip to my worst weaknesses, unless I'm intentional and proactive about those. So that's one of the biggest ways I think of staying on the top of your game is it just being really self-aware, having the right disciplines, giving your space for creativity, reading a book a month. And then it's just who you surround yourself with. Surround yourself with people that talk about big ideas, that don't talk about the people. Watson: All right. And then I'm actually going to add a selfish question to the end. I always say this for the end. So, we just hired a new head of operations. She's finished, I guess this is the start of her fourth week. She's doing a great job. How do I not mess it up? Blocki: That's a great question. You're probably asking the wrong person. But, just continuously asking for feedback and giving feedback. What's obvious to me and a lot of the team members at EWA is sometimes not obvious. I mean, just having a very proactive, I think just having direct conversations, because there's no real downside to that, but there's only upside. Watson:Right. Blocki: There’s never a downside for having a direct conversation, but there's a huge upside to it. And there is a downside if you miss one. Watson: I think I was hesitant, because I was so, we should have done it sooner. We should've done it sooner. I was hesitant because previously, the only folks that we'd ever hired were video editors. And I was like, okay, I know what a good video video editor is. I can kind of like, here's the check box. Here's the check box here. Here's the check box that they're up to a certain threshold. But ops, it was like, basically I'm letting someone into my really crappy system to look at it and be like, whoa, this needs some work. And I don't like, I don't even know how to fix them. Because if I could fix them, I would. They would be better than the way they are now. So it's definitely something where I know that it's me that needs to grow in order for everything to be as good as it can be, but it is daunting. Blocki: And every business owner, I’ve found, myself included takes over-responsibility for everything in the business. Because, you know, we're always thinking about all the time. So, letting that person make mistakes and fail and learn from that will allow them to grow 10 times quicker than micromanaging. Watson: Matt has been, this has been fantastic. I want to make sure that folks can check out all the things that you're up to in the digital world. Maybe see some of the videos that we've made for you guys. What coordinates can we point people towards if they want to learn more? Blocki: ewa-llc.com is the number one. And then we're on all social media platforms as well. LinkedIn. Facebook. I am not personally on Instagram, but the company is. Watson: Right on. Spam your LinkedIn? Blocki: Go ahead Watson: Um, cool. We're going to link all that in the show notes available at goingdeepwithaaron.com/podcast for every episode of the show and in the podcast player, where you’re probably listening to this right now, down in the show notes. But before I let you go, Matt, I'd like to give you the mic one final time to issue an actionable personal challenge to the audience. Blocki: Well, get video created. Hire Piper. Uh, no, that's serious. I would say the second thing is, an exercise I recently went through with one of my coaches is, basically it's called the “wheel of life. So you rank, every section of your life is like a little wedge that creates a wheel. So there's, you know, financial, there's personal relationships, there's a spiritual health, there's business goals, and there's like six or seven of them. So, I went through and I was told, she said, you know, rank everyone one 1-10. Maybe I ranked personal or relationships at an 8, and then you ask yourself, how could I get that, what would it look like to get from an eight to a 10? And then what steps would get me there in the next 12 months? And then looking through my wheel, everything was an eight or above, except there's one or two that were off. And then the visualization was like, okay, imagine you have, one's a six, one’s a five.The rest are eights. That wheel's not going to run smoothly. So just doing it, taking the time to do self-reflection and making sure you're living a balanced life, that's personally helped me calibrate and make better decisions. Maybe get everything to a nine. I'd much rather have everything at nine than two tens and five threes. So just living a balanced life and having self-reflection and self-awareness to go through those exercises every couple of months has been very impactful. Watson: I like that because number one, it forces you to make it actually legible. You could say, I guess something like a five or six, but you actually have to place a number and give it that real considerate thought. And, yeah, I think if you're out of balance you’re going to fall in a bit of trouble. Blocki: No question. Thanks for having me. Watson: Matt, thank you so much for coming on the podcast. We just went deep with Matt Blocki. Hope everyone out there has a fantastic day. Hey, thanks for watching to the end of my interview with Matt. Go check out wealthadvisortraining.com to learn more about that business. And, while you're here on YouTube, check out our past interview with Brent Johnson, where we break down the origins of his Dollar Milkshake Theory. We talk about his background at Credit Suisse in the early days before he found the path he's on now, and we break down the implications of a rising dollar for entrepreneurs everywhere. Check it out.
Mark Nelson is the managing director of the Radiant Energy Fund, which advises governments, nonprofits, and industry about nuclear energy.
Mark works tirelessly to prevent early closures of nuclear plants around the world and has attended the UN climate conference in Glasgow as a delegate from the American Nuclear Society. His efforts span the globe, working to save nuclear plants from Germany to California. Mark holds an MPhil in Nuclear Engineering from Cambridge University and degrees in Mechanical and Aerospace Engineering and Russian Language and Literature from Oklahoma State University. In this episode, Mark and Aaron discuss the differences between France & Germany, the complexity of the US electric grid, and reasons for hope. Mark Nelson’s Challenge; Find out where you get your power from, what nuclear plants are nearby, and communicate to politicians that you don’t want them shut down. Connect with Mark Nelson
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Mark Nelson: Nuclear is a big cone of silence and secrecy. Not because there's embarrassing things to hide, but because of fear of the public, that's
Aaron Watson: a very, a very interesting jumping off point. So, so maybe let's just kind of explore that. Let's, let's try to just paint a picture for people of the state of nuclear, because I would actually say you're talking about a cone of silence. I would say that almost as a starting point it's. The thing that's grabbing the headlines. It's really the extremes. I would say of either, you know, wind and solar being the end, all be all savior or, you know, dirty coal oil prices. Like to me, I see nuclear as being lower in the kind of popular zeitgeist conversations, unless you're really paying attention to the space. So, so what's actually just kind of going on with nuclear. Where is it growing? Where's it being shut down? Where are there, uh, you know, trends that we need to be paying attention? Mark Nelson: Well, Aaron, first of all, thanks for having me on to talk about nuclear energy. Nuclear energy is the strangest most interesting topic in the world, in my opinion, because it way beyond the technical information, it gets to the darkest core about what it means to be a human, what it means to have a society, what it means to think about one's own death or the death of the world, nuclear energy. Is the most powerful force that we have and the public understands this, what the public is trying to figure out for itself is whether it's powerful, more for good or powerful, more for evil. And that's the tension of the heart of nuclear energy. And I think I should mention something, a fundamental fact that almost everything about nuclear energy ends up following on from, and that's this, when you split. One uranium atom nuclear fission is what this is called scientific term. That means you're taking a really big chubby atom and you're splitting it apart. And in splitting it, you release more energy fusion, which I suspect you may have a show on. Eventually is when you take little tiny atoms and you shove them together into one, one slightly larger Adam, that releases energy. And so large atom splitting is what we mean with nuclear efficient. When you split, you break apart one Uranian, atom, you release a lot of energy. How much energy? Well, one of the ways that physicists can talk about energy of a reaction is to use a very, very small unit called an electron volt. It's a unit of energy. So. When you burn one natural gas molecule, when you burn one molecule of methane, C H for one carbon or hydrogen, uh, atoms put together. When you burn that you release 10 electron volts, approximately of energy to get a lot of energy. You burn a lot of those molecules. When you break one uranium, atom, you release about 200 million. So we're talking about 200 million in one reaction. And in the other reaction, 10, these are very far apart. That's what seven, eight orders of magnitude. Apart in that, in that one little fact, which I know is maybe not as useful because it's using strange units and it's, it's a little bit too technical. That is the power of nuclear. Capturing that energy is a whole process like that that's more difficult. And then what you do afterwards, what you do to fuel it. Those are all, um, definitely issues that people bring up. But the central fact is that the amount of energy release with a tiny bit of manipulating matter is immense. Aaron Watson: And that density has a number of implications. Number one, you know, as we're looking at something like the Ukraine, Russia conflict, and the inability to get tankers of petrol out to all of the other markets that are accustomed to, uh, having access to it, needing in some capacity, there's a whole transportation mechanism there that is, uh, cumbersome, you know, specific ships capable of doing that. Targets because they move incredibly slow across the water, um, or, or, uh, you know, pipelines that make that possible. Or in the case of, you know, wind farms or solar farms and enormous amount of real estate that needs to be, uh, dedicated to something like this. A nuclear plant requires its own real estate and there's conflicts, you know, people don't necessarily want to live right next door to that. But when you're actually talking about the, the energy units itself, it is an unparalleled amount of density to be able to. Power homes, power, these things that make society possible. Mark Nelson: Yeah. I mean, let's put it this way. Let's say a hypothetical European country of 10 million people could be almost completely powered in electricity by just a few nuclear reactors. And those nuclear reactors can be fueled with say one cargo jet, uh, or two per year of fuel. Or if you're, if you're sailing it by ship one, barge one, a few trucks. Right. So when people say clear, maybe very energy dense, but we're still getting the uranium from this country or that country. Well, the truth is that if you like, you can stockpile as a national policy for your little country of 10 million people. You can stockpile many years of fuel for all of the electricity in your country in a fairly short period. You just have to spend a little bit and stack them up, but if you won't go bad, you can just store it. And some countries do this. In other words, it's the most independent of the energy. Uh, Aaron Watson: So you referenced Europe and in the case of nuclear energy, we actually have these two countries right next to one, another, a lot of history who are going from my perception in very different trajectories, as it pertains to nuclear, France, and Germany, Germany has been reporting or planning to close different nuclear facilities. Uh, they find themselves now. At, uh, basically under the control of Russian's willingness to release natural gas to them in order to power, a lot of their economy and meanwhile, France, which has had a kind of more consistent commitment to nuclear and the building out of nuclear, uh, finds themselves in a different position. So can you basically use these two countries? Uh, same geography. Relatively similar kind of, uh, economic might population size. I know it's not perfect, but th th it's it's not like we're comparing, you know, the U S to some island out in the Pacific here. Um, can you just kind of use those to, to, to paint two pictures of how different, uh, countries are utilizing nuclear and what that is enabling for them? Mark Nelson: Sure. Okay. So only 20 years ago, Germany got almost a third of its electricity from nuclear. If Germany had kept that nuclear power, we'd be having a very different discussion. Now, there might not even be a Ukraine war right now. France had a nuclear program. Clearly Germany did if they got up to 30% at the year 2000, but what happened in France is that after the oil shock, it had an almost total commitment at the highest levels of French society of government to just a top-down demand. We're going to build nuclear and it's going to be all of our electricity and they went for it and they had very capable managers who made decisions that in hindsight were very correct, but were extremely controversial at the time. Here's one, they gave up the so-called French reactor program and bought licenses to build American reactor. And then they made it French and called it a French name and all sorts of other French things. But, but they fundamentally chose a reactor system that it wasn't, that it was necessarily going to be the best technology ever. It wasn't that the French understood it best. It was just, they knew it worked and they knew people were going to ask for it as an export. And France had this image of itself being a power player in the energy world, even though it has almost no energy resources by modern, uh, point of. Not that many forests to burn some dams in the, in the Alps, but not like an amazing number. And it doesn't have the coal deposits that Germany has. Germany has massive, really filthy, dirty, ugly coal deposits, but they've got them right. So. Uh, there wasn't really a choice in the eye of the French leaders. They wanted France to be France, to be grand. They wanted it to be independent. They wanted it to be powerful. They wanted it to be a shining light to the whole world. And they knew that that meant that they had to go with nuclear energy and they happened to do a really good job. That means that France should be getting about 75 to 80% of its electricity from nuclear. They have severely squandered their nuclear program. They have severely squandered, their nuclear advantage and they're struggling. Fleet barely hit 70% availability. It's it's really terrible. I have to have to tell you the French, the modern French generation. Um, wasted and abused their nuclear fleet and it's doing really poorly, but that still leaves it with about 70% nuclear electricity and that nuclear, electricity didn't change costs just because there was a war in Ukraine and commodity prices went crazy. In fact, France is able to, uh, subsidize their entire nation's electricity bills just by expropriating earnings from the, from their national nuclear. Now that means that money isn't going to build nor nuclear or maintain it. But you know, you don't win them all Aaron. So over in Germany, Anti-nuclear movement was able to take much deeper roots than the same anti-nuclear movement did in France. There are theories about why this happened. You can look at the German national culture or the French national culture can definitely get into trouble making generalizations about Germans versus French people and, and the basis of not proceed national character. Let's just say. France had nuclear weapons. And it meant that at the deepest level, some part of the nation, the state was always going to be dedicated to nuclear technologies in Germany. They did not have nuclear weapons. There's an ongoing debate at the highest levels of German politics about whether Germany should get nuclear weapons, but as it is during the cold war with a split right down the middle and crawling with spies and counter intelligence agents and propaganda of all types and both east and west Germany. Germany did not have nuclear weapons, but had nuclear weapons pointed at it. Germany lost world war II was humbled and disgraced before the world. So Germany could only build back peacefully. What this meant for nuclear energy is that as brilliant as the Germans were at building and managing nuclear plants, it did not take root in the culture and the M the state as deeply as it did. Uh, France. And then when, um, Russian, you know, the Soviet union fell and Russian natural gas money came, Russia was able to purchase key German decision-makers for relatively cheap amounts of money and make sure that any of the anti nuclear tendencies in German politics were acted on to shut off. German nuclear energy and turn on gas pipelines from Russia. I think it was a brilliant move from Russia. A lot of respect from, from there for their ruthlessness and effectiveness and in getting Germany off its own energy supplies and onto Russian energy supplies. The turning point was really when the major pro-nuclear party, the Christian Democrats headed by Angela. The turning point came when she saw how stressful and difficult it was for leaders in Japan after their nuclear meltdown and decided that that was enough of a reason for her to not want to deal with that problem. If there was some disaster in Germany and she decided that. Greatly accelerate the getting out of nuclear energy. And since she's part of that crowd of politicians, who's totally fine. With a hundred percent dependence, if necessary on Russian fuels directly straight from Russia, it was a natural, it was a natural thing. Oh yeah. All that stuff about renewables, this and that. None of the really serious people actually think. Uh, anywhere it's just a, it's just words. The real thing is the energy that's on demand and turns on and powers industries. That's going to be, you know, uranium or, or gas or coal or. Aaron Watson: And to put a really fine point on something that you said, uh, more on the French side is, you know, we've seen explosive amounts of inflation. I was actually literally just looking at something here before the interview started about, uh, inflation in Spain at being at like 46% or something. People that listen to shows like this can sometimes be, uh, to some degree insulated from the harsh realities of the cost of energy. Going up, when we're talking about electricity or heating your home prices going up, there are people who live on the margins, who that means, you know, the, the furnace, it doesn't come. And, and people are really cold in the winter. That means that, uh, you know, the bill for the refrigerator and basic things to keep people going are either taking up the entirety of the budget. And then that has downstream ramifications on the rest of what little is left over or just not being able to access things. Most of the people at the, you know, middle-class and above parts of the developed world completely take for granted. And so when these choices are being made, we can look at it at the abstract, you know, geopolitical contest level. We can look at it at the machinations of this politician, in that politicians policy position, but fundamentally what. I've always. And I've heard that I've listened to a wide range of different energy folks, coal people, oil people, natural gas, people, nuclear people, wind solar people. They really boil down to two things. Are we in some way, shape or form reducing the amount of carbon that is being emitted up into the air. And are we using, or making energy accessible to people who do not have the kind of financial might to weather wild fluctuations in its. Mark Nelson: Yeah, so a lot to unpack there. First, I want to say that, um, Spain was on the fringe path of nuclear. They were building nuclear as rapidly and intensely as France was, but with a lot less centralized approach, different designs, different companies, they were also doing it under a, a dictator of, uh, general Franco. And when he was kicked out, Um, the pushback on nuclear was intense. We've seen this a lot of places where a bunch of dictators fell around the late eighties around the same time as Chernobyl and a bunch of pro-democracy or, um, popular movements, defined nuclear as dictatorship and getting rid of nuclear as public, uh, public. Now that was a really unfortunate, I think a really unfortunate timing because it meant from countries from Spain to Philippines to, uh, you know, Eastern Europe, Bulgaria Czechia Hungary, Poland may have had nuclear by now, for example, without this association of that hated dictators or the hated state with new. And us, the people, the Democrats with votes, with openness and without nuclear, without necessarily saying, you know, what's going to replace nuclear. So in Spain, nuclear became such an intense partisan issues. That is one of the few places where separatists, uh, terrorist groups, as a matter of policy, kidnapped nuclear plant construction directors and execute. Um, and, and, you know, there was a weird overlap with like eco stuff and that kind of terrorism. Um, there was ecoterrorism against nuclear people in nuclear facilities in France, for example. And I'm not trying to say you have to be an eco terrorist to be against nuclear. It was just, it was the times man era, and it just felt right. You know, you could, you could protest Vietnam, protest capitalism, protest, environmental destruction by attacking a nuclear plant and tackling a nuclear program either at the ballot box. Or in the schools or on the construction site. I mean, you could, you could act and feel like you were doing the right thing. It turns out it was the wrong thing, but old ways of thinking die hard in Spain, they have an issue in that they don't produce their own fossil fuels. Yup. So they're not going to get that cheap fossil fuel costs next they've got powerful wins and a lot of. It tricked them into thinking that that made cheap electricity? No, it makes cheap projects like the so on or the wind farm is going to be able to maybe build less equipment for more output, but that doesn't make cheap electricity for consumers. It's like saying if somebody gives you an amazing deal on a truck, because they say that they got an excellent price on the interior, the seat cushions and the steering wheel, like leather and stuff like that. You'd say, oh, well, that's amazing. That should save us some money. How much does the truck costs though? That's the grit, the whole product, the whole system and its cost to build, maintain, and operate is not, it doesn't appear now that that cost goes down just because your wind and solar is cheap. And that's the trap that Spain came into. But Spain had it even worse because the amount that they paid for the solar and wind that they do have was extremely. I don't know whether it's corruption or badly designed programs, but Spain had horrible, horrible pricing on the wind and solar that they did have. And so you roll all of this together, stopping the nuclear, which is the way that Spain gets cheap electric. Um, too much wind and solar that isn't part of this complete breakfast. Isn't a total, the person using the grid. They can't just use wind and solar. They have to use a mix of everything. And that means fossil fuels. If you haven't a nuclear in your building, that intermittent on off seasonal wind and solar, you put all that together and you get an awful wreck in Spain. You mentioned inflation. Where does electricity come back to you and inflation? The answer? Aaron is absolutely everywhere. Can you get inflation without energy costs going up? Sure. That we've seen this sometimes. Can you get energy costs going up without inflation? It appears no. And it appears much more severe because let's say the cost to go on a vacation goes up. You may, you may not be able to go on vacations if the cost to not live in squalor, if the cost to be a member of . Your refrigerator to have lighting whenever you need it in the evenings to, to be able to participate in the national dialogue or national events by watching a TV with, um, you know, that's on during, when the game is on, not just when their electricity is cheap, because the sun's up or something like that. Like those are things that have been a great gift of grid, electricity service, and that service being cheap. That possibly falling apart in countries like Spain. This is a very, it's a very dark tiding for what's coming up in the next 10 years or so, because if, if, think about this, if it took strong right-wing dictatorship governments to build something like nuclear that made cheap electricity, what happens when the elected democracies fall? Because they couldn't keep the electricity cheap. Do we do we get whatever government with whatever social or environmental policies is willing to say, we will do whatever it takes to make cheap energy. We don't care if that's coal and we're going to get rid of any laws that stop us from doing that because the last guys, they broke the grid. If you break the grid, that becomes the single most important thing about the times about your government, about, about life, right? Everything else becomes less important. And I think we're coming to. Of change in Europe, that's having to, uh, decide which direction to go on energy. And they're going to decide it in ways that are going to be surprising or unpleasant for. Other things in society. Aaron Watson: And, and this has ramifications everywhere. Energy is not a cheap or a completely, you know, non consideration outside of maybe like the Persian Gulf locally. They care about the exports of it. But, you know, Saudi Arabia is not gonna worry about powering their own, uh, lifeforce. They have other things to worry about. I guess maybe your face suggests maybe we could debate that to some degree, but, um, you have some interesting. Mark Nelson: Yeah, that's right. And it's that, um, the Gulf states are going towards nuclear as hard and as fast as possible. And we need to understand why, because it's too lazy to say, oh, because of the geopolitical strategy of being a nuclear state, and maybe if they get nuclear reactors, they'll be able to get nuclear defense. I'm not going to say that there's zero interaction between, you know, the ideas of nuclear defense and nuclear energy among the Gulf states. Certainly they must be thinking. Historically, almost every country that has gotten nuclear energy has done it while thinking about considering or acting on getting nuclear defense. However, leaving that aside, the United Arab Emirates took a very risky move in deciding to get a giant nuclear plant. In 2005, they got the idea 2006 and seven. They started setting up the contracts to deliver the. In 2000 8, 9, 10, they'd selected a reactor builder, 2012. They started official construction and Korea built them over the next 8, 9, 10 years for colossal nuclear reactors on the Persian Gulf. Those reactors are turning on now and they are an obvious, extreme success, both in terms of UAE, getting to tell America. Bugger off and that UAE deciding exactly what it will or won't do based on its own needs. Also, it was a success in this way. Cutter thought about getting nuclear failed to do it, and then used Al-Jazeera to attack UAE over its nuclear program. For years now, they're having to turn around. They're going to go ahead and I'm almost certainly work towards a nuclear program. They'll still have to do it effectively. And competently like UAE. Did they want to see success like UAA did, but for example, Saudi Arabia, Saudi Arabia is absolutely going to get a nuclear program and they're going to do it very rapidly and they're going from today and they will move as fast as they can. And they have a model directly next to. And now a whole industry of people that can work with Arabic and to work on nuclear with the, with the cultures and the languages and the, in the Gulf. And Aaron Watson: that's helpful for desalination of water and all sorts of other things that, that are highly energy intensive, but, um, just to bring it back. Yeah. Mark Nelson: Every, every barrel of oil you use or every bit of natural gas you use in Saudi Arabia is oil and gas that you can't sell at much higher prices abroad. Aaron Watson: Right. Um, less existential, more about profits, but that was a good clarification there. So I'm going to take this back to mark your story. I want to clarify for folks, what is radiant energy fund basically? Like, what is your role in all this? Because. Um, you know, in a certain corner of energy, this like folks that don't really want to talk about it, they don't want to, um, candidly like make themselves a target of, uh, you know, the, the media hailstorms and the lobbyists and the other, uh, weapons, uh, of this type of space, so to speak. There is also all sorts of folks who candidly are talking their own book, right? Like that's, that's one of the rules of wall street is, you know, whoever pops up on CNBC, I can, I can't necessarily be sure much, but I can be sure that they're going to talk their own book because that's kind of the nature of having your incentives aligned towards a specific Mark Nelson: endeavors, a specific enterprise. So I have two organizations, radiant energy fund and radiant. Radiant energy fund is not a fund. I'm sorry. I've disappointed. A lot of people who asked if they could be an LP. And I said, I had to say just like environmental defense fund. I mean, they don't really defend the environment that much, in my opinion, but that that's the name of their group. It's like this sort of sixties and seventies, mainstream environmental groups named after, uh, things that sound corporate or very respectable, even if they pursued radical politics, radiant energy fund is an attempt to save nuclear plants all around. You'd be shocked. How, how poor of a business thing that is basically, if you're fighting to save a nuclear plant, it either means that it's being shut down at the pleasure of its owner. In which case you're fighting the owner of a nuclear plant to save a facility that. No, uh, not, not a lot of Gloria fortunate in doing that. I'm afraid Aaron or your fighting a government you're fighting, uh, other NGOs or special interest groups. It's kind of an ugly world. We want to talk to anyone in society around a nuclear plant who wants to save that plant, find ways to work with them. Find, find where they're being effective. Learn from them, help them get with stories about all the other nuclear plants. We fight, fought to save some we've saved some. And it's a, it's an organization dedicated to, um, stopping this world. I described in Spain where we're losing the gift of Darren modernity D at the very moment, we need it most, um, due to, you know, changing climate, changing weather conditions, changing, uh, inequality. If that's an issue that people are blaming for, um, bad conditions for the working poor. So radiant energy. Is my, is what I do with soul in the game, rather than skin in the game. It's what I wake up each morning to fight on. Right? Radiant energy group is an advisory firm, an independent advisory firm and consultancy. And I advise governments, industry and nonprofits on clean energy on electricity, electrification, uh, nuclear wind, solar, fossil fuels. And Aaron Watson: so in. Part of that, that I'd like to dig into a little bit more is the nature of our utilities. So we're, we're used to having these conversations about either to an extreme degree, nationalization. This is a completely, you know, uh, market or industry that is, is managed entirely by the government or these other, uh, you know, industries that tend to more towards something like a free market or free enterprise. And then there's candidly all sorts of, uh, industries that fall somewhere in between. Uh, utilities being one of the, kind of, um, more peculiar ones. So can you talk just a little bit about some of the, either a common myths or, or the, the nature of the market itself that makes it a peculiar and candidly worthy of clarification to the officials who are actually making these policy decisions, because it can be opaque and they're managing 18 other things and need Mark Nelson: someone to help bring some. Yeah, so that you've opened up about five different cans of worms at once. And the worms are already starting to crawl out and fight each other for supremacy. Let me say this. Anybody coming with economic etiology to the subject of electricity will eventually make stupid and potentially dangerous errors. Okay. Electricity is not like anything else. It is a network. It is a system that has. Extremely tight, physical coordination, over thousands of miles, linear distance and, and millions of square miles. Let me give an example. If you plug in an electricity monitoring tool, like a volt meter down in Southern Florida, and you plug one in, in Ottawa, Canada, you will see the same wave form. Okay. There might be tiny, tiny differences in that frequency, but what you're seeing fundamentally is one giant mission. Connecting those two ends over, you know, what, 160, 170, 180 million people on one grid. And there are different authorities that make sure that it's staying in balance in different regions. Um, sometimes you have cascading failures where, you know, a squirrel sneezing in Ohio's leads to. Uh, a thing that happens and it links up to another bad thing and another bad thing and another bad thing and another bad thing. And suddenly tens of millions of people have lost power. The last time, something really giant like that happened on the Eastern grid that I'm. In our example here that was in, uh, I think 2003 and tree branch following in Ohio led to the disconnect of a nuclear plant that led to overwhelming the, uh, the backup power systems across this massive area. And a lot of changes of common. So the reason why I'm just describing some of those physical quirks of the grid is because it's not like other systems and trying to regulate it as if it were a, this type of company, but it's actually the. Eventually fails saying that my free market principles say we ought to do X that we'll fail saying I believe in state power. Therefore the only stopping of getting whatever energy mix that I want is that the state hasn't taken enough power. That's wrong too. So there's a lot of public power people who are obsessed with public power in New York. And didn't even notice when the biggest single chunk of new York's power supply, Indian point nuclear plant got shut down. And then everybody's bills skyrocketing. And if they had gotten their wish and it was all like run by the state, then the state would have gotten the full blame for any way I could go on and on and on almost everybody with a bone to pick who doesn't get electricity is going to fail or cause problems if they're ever in a position of power influence. So very, very broadly what happened was about a hundred years of electricity. Being, uh, invented by private entrepreneurs, little bit ad hoc systems rising up mainly in cities first, starting to grow outwards and connect with each other democratic, uh, new deal politics, forcing electricity companies to connect rural consumers that ending up working way better than economist or the electricity companies ever dreamed, because it turns out that when you electrify a farm, they fight. A hundred different, amazing things to do with electricity. And as you grow the system, it got cheaper per unit of energy for everybody. Then in the sixties and seventies, the anti-nuclear movement combined with the environmental movement. And they said that the grid was bad and wasteful, and that the only way to save the earth was efficiency, whatever that means. And then that anti-nuclear pro efficiency movement got caught up in the electricity deregulation. So electricity and deregulation regulation. What are we talking about? Well, these utilities that were getting bigger and bigger and bigger and starting to link up, it led to a completely different type of governance. Where in exchange for the state, either a state or the country accepting the physical reality that an electricity grid is a physical monopoly. You shouldn't have like three different companies competing to put their own power lines through the air for their own brand of electricity. That doesn't, that's completely preposterous. Everybody has always known it. So in exchange for accepting that this is a monopoly. States then took public regulatory control over the utilities where the voters vote for parties or for elected officials who will choose regulators or voters choose the regulator directly on their ballots, who will be in these public utility commissions to monitor the electricity. Right? So that system came up against the people who were saying, well, if we destroy the utilities and we destroy the grid, then we can get rid of nuclear. So there was a wave of, of brilliant economists who had never even been to power plants in their entire life, much less worked a real job, claiming that they had cool economic theories about how to run the grid, which they didn't understand. Didn't need to understand because they have. The power of economics, right? The science of economics. So the deregulation movement was then kind of sponsored by the anti nuclear guys, um, and the natural gas guys, because if you build all the nuclear plants and all the coal plants that you seem to need, then somebody discovers a bunch of natural gas and they say, Hey guys, we've got cheap, natural gas. You should build it. Natural gas plants to burn it. Well, if you already have the power plants you need. And they're not burning natural gas. How can you justify tearing down a power plant? You already have just to build another plant and then power it off of a commodity like natural gas. That's highly, uh, chaotic and it's pricing. Right? Why would you do that as utility? Well, if you're forced to do it, that's one reason. So public utility commission. Demanding that you do it, but a much better way is if you break the utility and you separate out the power generation from the lines and wires and billing, and then you say we're going to have an open market, anybody who, and comes up with money to build a power plant of any type anywhere, we'll just, you know, they'll pay a fee to connect to the grid and then they can, they can have the right to put their power on whenever they. That system broke the backs of a lot of the utilities, at least so far as making their own electricity goes. The deregulation movement also called the restructuring movement emerged in the late nineties and continues today. That's the push to make it to where utilities have fewer and fewer monopoly functions. Ideally in many people's mind, they should have no functions beyond. I dunno, the most basic or maybe they shouldn't even say so utilities shouldn't exist instead we should have. Variety of companies with a very different levels of cash reserves and credit worthiness compete to build a nuclear plan or go bankrupt or buy other power plants or build gas plants. I mean, really this system was about making the decision-making horizon of electricity so short that only a few technologies could actually ever get built. That would be the wind, the solar and the natural. It turns out that this doesn't actually make cheaper electricity. And then when the natural gas prices go up, it turns out it makes brutally expensive electricity, but it's too late. We're kind of stuck with this system for most of the population in the UK. The areas that got liberalized and their electricity market are that Eastern seaboard, Midwest, um, plain states, Texas, and, uh, California, the states that have resisted this system, which I think your listeners are going to be able to tell. I don't really care for it. Well, those have been the Southern states, um, some of the Midwest and the west much of the west. So those are states where it's still a utility commission. Monitors and regulates the actions of the big, uh, utilities and says, no, we don't like this plan. Come up with a new plan. Utility comes up with a new plan. The regulator says, okay, we'll let you do 70% of that plan. You can bill. Your customers are voters. You can bill your customers and pay for the upgrades you need as you go. So that's the, I think that's an immense amount that we could have. 10 different shows on any number of those sentences that I said, and we wouldn't run out of a material, but broadly speaking electricity is complicated enough that it can be broken and destroyed politically behind the scenes. And nobody will notice until their power bill starts soaring. That's the world we're in today. Also nuclear ends up making very cheap electricity. It makes for a cheap electricity system, but it is expensive to be. Uh, if you cannot spread the construction cost over consumers early, which some people say you shouldn't, shouldn't be allowed to, then you're not probably going to build a nuclear plant and we're going to be stuck on whatever technologies cheap or expensive happened to fit the, the financing that's available. And in that case, in the U S it's mostly gas and wind and solar, which combined to produce extremely expensive electricity when gas prices. Aaron Watson: Powerful mark. I want to be respectful of your time here and aim towards wrapping up. But, uh, basically what you're saying here, we we've heard also from Dr. Rita barren wall, um, in, in, in our last interview about nuclear, which is something that, for me, I've worked really hard to kind of train myself to, to. Um, flip the incentive structure. So I'd rather take the kind of short-term pain for the long-term gain, but it's candidly the hardest thing to sell, particularly as a politician to, um, you know, sell that to constituents when it's like, Hey, I can bring cheap energy. Well, Hey, I can bring more expensive energy in the short term right now. Down the line. It's going to be great. That's, that's always the hardest sale, uh, for someone to make. So I think that's why my ears perk up when I learn more about this space. Um, and before we kind of wrap up with our standard, last questions, I wanted to see if there were, you know, notes of optimism, notes of hope, uh, generally that you think can, um, you know, start to tend to stem this tide as it pertains to creating more affordable energy for folks, but also. Uh, contributing to these goals that a lot of people have have of decarbonizing the economy and, and making Mark Nelson: things a little bit better. Sure. Here's the notes of hope. Young people like nuclear. Once from the moment they hear about it and they continue to like it. Old people are often against nuclear, but can convert almost. No one is converting away from nuclear, almost all of the, the direction on nuclear around the entire world is towards it becoming more popular and more people liking it. Uh, nuclear gives people hope because once it, once it does work, it works extremely well. And for extremely long periods of time, Um, I think some people are a little nervous. Are we leaving a bad legacy with nuclear waste, but then they see anybody who gets to tour a nuclear way facility. We'll never think that again, it's a, it's an example of a, a scary image or a scary phrase, haunting people's minds. That's banished. The second you see a nuclear war, nice facility. You're you're just totally fine. There's a, there's an absolutely gorgeous one in the Netherlands that I am recommending people go seek. They built it for tours. They built a museum and they have a cafe. I mean, it's, it's designed for the public to see their own, uh, highly radioactive nuclear waste. And we get to interact with it in a safe manner that helps them realize that nuclear is a permanent solution, not a temporary solution, it's a permanent solution. So I think the optimism that people can see and, and, and, uh, good science fiction, they can find an outlet for that optimism in nuclear. When they hear things like, oh, nuclear is a problem because it's expensive and we can't build it. Well, they think, well, how about we build it? Well, right. It's like somebody telling you don't be interested in space. Rockets are expensive. So your answer might be, let's make rockets cheap. I'm not giving up space. And in the case of nuclear, we're not giving up living a good life. We're not, we're not saying that because so many of the ways we make energy may be limited by what the fuel narratives cross we should give up. And there's enough fuel towards, until the sun expands and cooks the earth to a crisp there's no fuel for nuclear. So why not think of beautiful things? Why not think of big things you mentioned the land use? Well, once people hear that nuclear takes a tiny, tiny fraction of the space needed for wind and solar for the same amount of energy. I think a light bulb goes off. Wait, what if we released a lot of. Footprint for industrialized, uh, nature. And we just released it and did a little bit of nuclear. And then we did other things to shrink our footprint and then built our cities upwards, or even made the suburbs a little bit, not, not skyscrapers everywhere, but you know, a little thicker. Those are the sorts of dreams that pair perfectly well with nuclear, almost like a miracle technology. And I think that the optimism I can share with your viewers is that a lot more people are discussing. Yeah. Like how 40, 40%, 40%. I think it is of electricity in, uh, Pennsylvania comes from a few old nuclear plants and we're finding that that nuclear plants that are old, they're not old. It turns out they can last probably for a century or even longer. Meaning if you build well today, you've created an environmentally beautiful solution, a socially beautiful solution for the ultra long future. So anyone with a desire to build. For the future can find their heart going towards nuclear and it's it's happening. Right. Aaron Watson: That's a powerful note to wrap up on a mark. I want to make sure that folks can learn more about you learn more about radiant energy, um, and connect in the digital world. What coordinates can we provide for people that want Mark Nelson: to learn more best way to get ahold of me is Twitter. Um, at energy bands, that's energy, B a and T. British joke. Don't worry about that. Anyway, my DMS are always open. Anyone can always reach out to me there. I can also be contacted at mark at radiant energy fund dot. Aaron Watson: Perfect. We're going to link all of that in the show notes for people to, uh, check out, going to be their.com/podcast or in the app, or people probably listening to this is the easiest place to find all the links to connect with mark. Uh, but before we let you go, mark, we end every episode with a personal challenge for the audiences as an opportunity to end on a note of action. And to speak directly to listeners from all sorts of different backgrounds, about something actionable they can do in the next day, week or month, uh, that, you know, it could be connected to nuclear. It could just be connected to, uh, personal professional development in some way, shape or form. So before we let you go, I'd like to give you the mic one final time to issue an actionable challenge to Mark Nelson: the audience. Wherever you are. Look up. Does your state, does your country, does your region have nuclear energy? If so, what? And is it, is it, uh, in danger of closure and if not, why not? And then get involved either by contacting me or just, uh, getting involved on Twitter or looking up any pro-nuclear organizations in your area. A surprisingly small number of people destroyed the prospects for nuclear. Uh, in the last generation, a surprisingly small number of people are going to be able to save nuclear in our time. It's the biggest single thing you can. For climate change while also keeping a future for modern life is to save a nuclear plant near you or to get one belt. And that is happening now Aaron Watson: in terms of the decision makers for this, you've talked a little bit about these utility commissions and I'm sure it's different in so many different ways in different locales, but. To what degree is this? Uh, you know, uh, a state issue, a federal issue, a like down to the, you know, small sub region type of issue in terms of who the decision-makers are, is, are just basically a web of. Mark Nelson: Uh, it depends. So for example, in California, a tiny click of people decided they wanted all the nuclear plants gone and they acted behind the scenes to do it both in legal and illegal fashion. So for example, current governor of California, organized to kill the last nuclear plant in the state because he thought he would need it in 2016 as like a way to get away. Um, and he doesn't really care one way or another about nuclear. He just, the world is a game. The world is a toy people's lives are just a toy for him. So Gavin Newsome organized. Uh, Diablo canyon to shut down in 20 24, 20 25. So a lot of action in California is about exposing that effort, either getting him out of office or putting enough pressure on him, that he decides that it's more advantageous to his presidential ambitions to save Diablo rather than close. It that's a special case because the plant is profitable at the high energy cost environment in California for a nuclear plant like Palisades and Michigan, which is due to close in one month. It's more of an issue that the plant. It's just like probably different words you can use. They just didn't operate. They didn't choose good nuclear plants to buy. They didn't operate them well. And now that the white house wants to say that nuclear plant they're barely interested in working there. Just, um, I mean, they say that if, if somebody comes up with a business offer for that power plant, they'll consider it. But otherwise we're going to lose a collage, like 2 million people's worth of electricity here in, in, uh, A few days in a time where we have a shortage of almost all energy sources, right? So it's completely preposterous. The more public attention on that, the better, the more public exposure and pressure on the plant owner, the better, and the more support for the governor and the white house in saving that nuclear plant right now, the better. And, uh, and of course, if anybody's into buying distressed assets and running them, uh, for a nifty profit over the next couple of decades, that's a great thing to look at. Um, obviously Bitcoin miners need to be all over that sort of thing, right Aaron Watson: on, uh, well, Mike, this has been so educational and I am hopeful that we'll be able to do it again at some point in the future and continue to have our minds expanded. Thank you so much for sharing your time with us. Mark Nelson: Of course, therein, best wishes. We just Aaron Watson: went deep with Mark Nelson, hoping out there has a fantastic. Hey, thanks for watching to the end of my interview with mark. If you enjoyed it, there are two great interviews that you should check out. Also on this channel. The first is with Dr. Rita barren while she formerly served in the department of energy for the U S government focused on nuclear energy. You should also check out our past conversation with doom Berg, who goes a little bit further down the trail of the implications of energy shortages. Spiking energy prices and the stress of that could cause for people around the globe, Mark Nelson: check them out.
Eric Jorgenson is the author of the Almanac of Naval Ravikant, a GP in the seed investment-focused Rolling Fun, and the creator of the course Building a Mountain of Levers.
Eric also has a podcast called Jorgenson’s Soundbox and was part of the founding team of Zaarly, proximity-based, real-time, buyer-powered market platform. Eric has condensed the wisdom of Naval, a prolific entrepreneur and investor, into a concise and poignant book. That book has opened doors for him and represents a clever method of accelerating one’s career. In this conversation, Eric and Aaron discuss Naval’s advice for creating wealth, how to build the skill of being happy, and how to get started creating leverage for yourself. Eric Jorgenson’s Challenge; Find and implement one new automation to create more leverage in your life. Connect with Eric Jorgenson
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Website If you liked this interview, check out episode 46 with Taylor Pearson where we discuss writing the End of Jobs and creating better career opportunities.
Christopher Nguyen is the CEO and cofounder of Aitomatic, where he aims to redefine how companies approach AI in the context of life-critical, industrial applications.
As a multiple-time tech founder, Christopher has played key roles across a wide range of technology startups. He has also operated in large corporations where he has built the first flash memory transistors at Intel and spearheaded the development of Google Apps as its first Engineering Director. Today, he’s become an outspoken proponent of the emerging field of “AI Engineering” and a thought leader in the space of ethical, human-centric AI. In this episode, Christopher and Aaron discuss AI’s shortcomings, the mission of Aitomatic, and how diverse experiences keep life engaging. Christopher Nguyen’s Challenge; Separate the what and the why when problem solving. Connect with Christopher Nguyen
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Aitomatic Website If you liked this interview, check out our interview with Tom Galluzzo where we discuss GPT-3, robotics, and entrepreneurship. 
Brandon Grbach is the CEO and cofounder of Steel City. Steel City is a family-owned boutique offering Pittsburgh-inspired, vintage tees, sweatshirts & accessories.
Grbach started designing t-shirts for his friend’s skate shop, but when the shop shut down, he continued on his own. Now, he and his wife own a thriving business with over 20 employees, a distinct brand, and a habit of growing ~50% every year. In this interview, Brandon and Aaron discuss how he has learned to drive towards simplicity for customers, opening a second location, and how the brand got big in Japan. Sign up for a Weekly Email that will Expand Your Mind. Brandon Grbach’s Challenge; Ask, “what's one decision you're putting off?” Then, stop putting it off Connect with Brandon Grbach
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Website If you liked this interview, check out our interview with TJ Fairchild where we discuss how to scale a coffee shop, designing soulful spaces, and how a philosophy degree prepares you for business. Book Recommendation Raving Fans : Revolutionary Approach to Customer Service by Ken Blanchard
Rob Walling is an investor, writer, podcaster, and serial entrepreneur. His last startup, Drip, was an email marketing software company that was bought by Leadpages for millions in 2016.
He also has been helping bootstrapped startup founders since 2005 and now runs the first startup accelerator for SaaS bootstrappers, TinySeed. Rob also hosts the podcast “Startups for the Rest of Us”, which has over 10 million downloads Rob and Aaron discuss how to level up in entrepreneurship, the personal growth required to take bigger swings, and the balancing act of parenthood & entrepreneurship in this interview. Sign up for a Weekly Email that will Expand Your Mind. Rob Walling’s Challenge; Consume your audiobooks and podcasts at over 1x speed. Add the video speed controller to your browser. Connect with Rob Walling
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Personal Website TinySeed MicroConf If you liked this interview, check out our interview with Andrew Gazdecki about MicroAcquire, building Saas companies, and the fun of business.
Sam Parr founded The Hustle, which he eventually sold to Hubspot for tens of millions of dollars.
The Hustle was born from a conference he started, called Hustle Con, that showcased non-technical startup founders and their strategies for success. The Hustle ended up garnering an audience of millions of subscribers and was able to operate profitably as a new media startup that was not overburdened by outside capital In this interview, Sam and Aaron discuss the early stages of Sam’s career, his tips for selling, and finding meaning after selling your company. Sam Parr’s Challenge; Monday night, make a list of 50 people who you wish you could get in a room with and develop a strategy for reaching out to them consistently. Connect with Sam Parr
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The Hustle If you liked this interview, check out this video we made about the Morning Brew.
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Watson: Hey, what's up, you're going to love this interview with Sam Parr, the founder of the hustle and the host of my first million.
We discuss. The stair-step approach that Sam has taken to selling consecutively larger deals throughout his career. And a little bit about the scatterbrained all over the place, entrepreneurial mind and how to lasso it. So, uh, do you have the easy name to pronounce of like any entrepreneur. Parr: I do. It's good. Sam, Sam Parr. My full name is Samuel. Joseph par, very Catholic, very, uh, Midwestern name. Watson: I really like the only error that one would make is giving you one R instead of two on last name. Right? Parr: It doesn't happen a lot. It doesn't happen a lot, but yeah, I've got, I've got a good, uh, easy. Watson: I feel like that's, um, that's definitely an advantage. It's not like, I've know another Sam par, but it's simple and distinct enough that everyone gets it. Right. That's good. For a branding standpoint, I struggled. There's a country singer by the name of Aaron Watson. Who's like considerably larger than me. So I have to, you know, start figuring out and I can't even wear like a crazy hacks. And I'm just like the Aaron Watson that doesn't wear a cowboy hat. Parr: No, I'm lucky. I don't know. The only say empire. I know of there's a state park in Illinois called Sam Parr state park, but the guy was like alive in the 18 hundreds, so I'm good. Watson: Nice. Um, so we have a concept on the show. We'll call it deal climbing, uh, you know, uh, other folks have, have different names for the same idea, but I feel like it's. Uh, helpful framework, particularly for people that are just ambitious, they're trying to climb. And if they're climbing from doing $10 deals to a hundred dollar deals where they're climbing from doing $10,000 deals to a hundred thousand dollar deals, it's the same stair-step approach that everyone has to go through in some way, shape or form whether or not they're even in a sales position position, which is learning how to not only deliver more value, but get someone to sign on the line that is. At a higher ticket price. Um, you started off selling hot dogs and, uh, to my knowledge, the biggest deal that you recently closed was the selling of your company for tens of millions of dollars. And I don't know if you remember, he actually commented on our video where we like speculated on how much you, you sold the company for when that happened. Um, but. Uh, we were like trying to back into like what the minimum was and you were like, not wrong, but not right. Like you were like, basically like you're, you're in the, Parr: what was the minimum? What number did you say? Watson: Um, I think we had said that it was over $20 million and then like shortly after I saw Tucker max commenting on a Twitter thread that someone had made the same speculation. He was like, that's not quite. Parr: It was for sure. Over $20 million. So that's, I'll say that it was, yeah. And also I own a lot of HubSpot stock and the stock market is really shitty today, but, uh, Yeah. At its peak, it had tripled, uh, from when we are well, uh, maybe 2.5 X from when we'd sold. So, and it, but I did that like within weeks or months of us selling. So the price kind of almost changed rather significantly. Watson: So, um, we're going to get into that cause it's an amazing thing. I'm not particularly technical. I'm not going to write the code that like builds the next software product, but having a substantial stake in a technology company is, uh, uh, a way to. Draft off the trends of technology generally, but let's, let's go back. You were selling hotdogs, you had to figure out how to get someone to, you know, how much were you selling hotdogs for? Parr: So my prices in the, in the afternoon were different than my prices in the evening. Surge price evening prices you double because it's drunk people. So evening prices, eight to $10, $10 for a polo, a quarter pound pole, or a third, a pound pull a sausage with a drink. So 10 bucks, and then in the day half that. And so Watson: you were, uh, you know, after you. Decided to really make the jump and try to start a company you were before getting to the hustle. What were you selling where you're selling yourself as a freelancer? You selling yourself as an employee, Parr: you know, So when I was in college, I started tinkering with the internet and I made like an online store that was making like a thousand dollars a day at one point. But I didn't like do all the things correctly. Uh, like I didn't like, like, I didn't know anything about filing taxes, getting business license and like, things like that. And so I kind of shut it down. The lawyers at my college were like, yeah, you kind of need to start over and get this thing. Right. But like, I was like, well, all right, I feel you, but that's kind of cool. I learned how to. Tens of thousands of dollars selling stuff on the internet. And so, um, I basically left school because I cold emailed this guy who owned a company called air bed and breakfast in San Francisco. And I was like, I think this thing's going to be huge. I'll can I come and join you? And he said, yeah. And I got a job offer at Airbnb, but back then it was like brand new and I get there and I dropped out of school, moved up. And I got the offer taken away because I had gotten in trouble, um, and had been arrested before I used to be, uh, not the most awesome person. And I did some stupid stuff that I regretted and they, I lied about it. I didn't tell them that I'd been arrested. And they were like, dude, you just told us, like we would have, we would've it's okay. But you lied, we can't hire liars. And they're totally right. So I got out there and I had. So I met a guy and we started a company and we sold it. We made, I made like a hundred grand from it, nothing substantial. What were you selling that company? It was a roommate matching, uh, app. It started as I did it in like in person, I would basically host like roommate parties. And so everyone at that party had the same preferences. You know, they were like a single person by themselves in San Francisco, but getting a one bedroom was prohibitively expense. And so they would help people team up in groups of twos, threes, and fours, and get an apartment. And we've made money from that. And Watson: what, like what was being charged for that service? Parr: I don't remember entirely, but in the ballpark of three or $400 per room Watson: to step up from selling hotdogs, what was similar and what was different from those two sales? Parr: Uh, the, uh, $10 and 300. Uh, it's mostly the same, um, in my experience, um, it was mostly the same. The difference though, is the value that what I learned is like, it's about it's about value given. So the value you get from one meal, isn't significant, the value that you get from. Finding a place to live is quite high. So the name of the game is provide as much value as possible. And just still just take like a small take of that and your take will be higher if it's a higher value thing and Watson: theoretically a roommate's going to be impactful for a year. Whereas you're saying the meal's gonna be impactful for an afternoon or anything. Parr: Exactly. Yeah, yeah, yeah. So it was about how much value you can provide and you just take a fraction of that. So the reason the sale was easy. $300. It was like a no-brainer like people and we kind of had an honor system. We just said, find a place. And afterwards, if you find it through us, call me and we'll come pick up money. And it was so simple. But then we, uh, as we made money, we transitioned and we made it an iPhone app. So it was kind of like Tinder, but for roommates, and this was right when Tinder was like, barely. And like, which is stupid. We should've just done Tinder for Tinder. Right. Uh, but we did Tinder for roommates and, uh, yeah, it, it was, it was, it was hard, but okay. Of, uh, it was a good first swing. I Watson: think you sold that company. You made a hundred at that, uh, about a hundred thousand dollars or so you probably, Parr: I basically got like a good job and with bonuses and I saved my money and I was there for one. And that was pretty much it. Watson: So selling that company, that's a substantial jump up from selling something for hundreds of dollars. What was the difference or what was the kind of gap there in terms of selling a Parr: company? Um, I think I was devalued, uh, undervaluing myself. I think, um, I started thinking in terms of hundreds of thousands of dollars. And I, I was like, oh, that's a ton. What I didn't understand until actually like this year is that big companies need people like me, people who move quick and make stuff because big companies struggle with that. And I didn't understand how valuable that was. And so. The biggest thing that I did then was I probably didn't do a good job of like negotiating. Um, I was pretty bad at, I was pretty bad at negotiating and probably still am. So now I have people that do it for me, even if it's just like my wife, she's good at it. But, uh, yeah, I undervalued myself I think for a long time. Watson: And then did you start the hustle shortly Parr: after that? No, I left that place after one year and one day I was 20. Some age between 23 and 25. I think I was 20. I don't remember. Uh, it was in 14, so it was 24. And, um, I was like, I need to find something to do. I don't know what I'm going to do, but I'm going to run this event called hustle con and hustle con was like non-technical entrepreneurs, giving talks and I was. At we're at, at best I'll break. Even at worst, I'm only going to lose $10,000 hosting this event, but hopefully I'll meet someone who I could partner with or something like that. And I hosted this event. I decided to do it. I made the decision to host it on May 1st and I launched it like it became an event on like June 14th, or I forget the exact time, but it was six weeks. So at six weeks from decision to it going live and it made like 60 grand in profits. And it made profit because I created an email list and I would write cool stories about the speakers. And I was like, huh, that's kind of cool. I didn't expect that to happen. So I basically just lived off that 60 K for like eight months and traveled the country on a motorcycle. And then I did it again and I did the same strategy of just creating a newsletter running about the speakers. And this time it made like two to $300,000 in profit. And I was like, all right, cool. I dig this. Um, I'm not going to be a conference person. I don't like running this business. This is hard, but I've been able to get a lot of people to notice my writing let's create a media company because I L I, if you see on my walls back here, I've got. Uh, I'd like three or four of them are media people and I've always liked those guys. I was like, well, fuck, they could do it. I can do it too. So I decided to start a media company and I just researched what the best way to do it was. And I settled on starting with email and that was, um, the email thing went live, uh, uh, basically four 20, 2016. And so Watson: you were selling tickets to those events that you had to also be selling sponsors? I would imagine. Parr: Uh, yes. And years on the newsletter as well. Well, it took like a year to like, get real sponsorship revenue, the way sponsors work. They want to say it, you could pull it off. So I was just living off the ticket revenue to be honest. But, uh, yeah, so like, by the time we had done that, maybe like once we got to like our third event, we were doing three or 400,000, I think in revenue. And it was like half sponsors have. And then we launched the newsletter and we had, we got that newsletter already had like tens of thousands of people just from the conference and we just kind of switched it over. And then through a bunch of blogging, I got us to a hundred K really quick. So basically we went from like zero to a hundred K on the. And we started adding ads. Uh, I I'm going to ballpark the numbers. We started having sponsors in the newsletter, some number between 50,000 and a hundred thousand. I don't remember exactly, but I do remember, uh, I was my goal with staff and all the events that we were hosting. We were spending like $25,000 a month and I was like, I'm going to go out and get sponsors for $30,000 a month. And that $5,000 profit will give us enough profit to hire a sales. And so I did that. It took me about two months and I did that. And then we hired a salesperson and like within two months that went to like a hundred thousand dollars a month, uh, in, in monthly, uh, ads. Watson: So it's great to hire someone who can move the needle like that. But as you were just selling enough to keep the business afloat, what was the same about all these past sales, hotdogs, tickets, uh, roommates, and what had to, what was new that had to be like. Parr: Um, the same as I always kept things real casual. And as you grow and get bigger, you actually, they're not, they're not casual. So we've closed multiple seven figure deals at the hustle. Those are not casual. Those are process driven and those are really hard. But when, when I was, I would sell, like when I first started, I would sell something for my first sponsor was law trades and wealth front, and I charged him a thousand dollars and it was just like, kinda like hood, like. Kind of like, it was kind of like done like a street style deal where I'm just like, dude, just give me a grant. And if it works, you advertise again. If it doesn't, you've only lost it gray and just like, Venmo me. I like, it was like really like not done the right way. And um, maybe they even sent a check. I don't remember, but they like were like, yeah, whatever fine, dude. We'll, we'll give you a shot. And we did that. And then eventually I was like, all right. What's an N they're like, all right, send us an invoice. I'm like, what's an invoice. So I had to Google it and I like got some invoice software and it said, Invoice 0, 0 1. And I was like, oh, screw that put like 0, 0, 3, 5. Uh, like, so it's like, this is our 36 and I don't want them to know this is my first time I've ever sent an invoice and then like, learning, like, alright, great. You ran the ad. We'll pay you in 30 days. I was like, wait, what? You don't pay me right away. That's crazy. Um, so like learning about that was different. Watson: But I, I feel like that's the only way to do it. So I almost have a, I have a very similar story in the first year of my company. Uh, one of the fortune 500 companies here in town reached out to help with, uh, producing their internal corporate comms podcasts. And literally the exact same thing. They're like send us an invoice. And I literally like it's invoice generator.com or.net or something. And it's literally like the exact same thing. It's like this can't be 0, 0, 1. We're going to like put a 1, 2, 3 or something. And they're the Parr: biggest. Yeah, that's what I had to do to look more legit. And then at first, even to get sponsors, I put like Ford in there as a sponsor, even though I've never talked to them in my life, but I was like, man, if they see Ford, so there, they're going to know we're legit. And that's probably illegal actually. But. Yeah. So, Watson: but so maybe not recommending that to someone getting started, but the like pure hustle of like, just get a deal in the door that is legitimate, that is paid for in some way, shape or form, even if it's not super process Parr: driven. And it was not, process-driven Watson: having also conviction that, like, there's something there, like it wasn't like you had a pretend tens of thousands of persons list. You had a Parr: meal list and we were under again under sold hard. So early on, I was like, I don't care. I like. I'm like guys, I even said to him, like, we're going to send your email 50,000 people pay me whatever you want. Pay me two weeks after you could see the clicks. Whatever's fair. Just do it. I don't care. And that's what they did. And it came out to be like, oh, I could charge like 20 to $30 per CPM. So like, after like the first 10 clients, the next one, I was like, all right, it's $25 per CPM. And the results for our past clients are here. You could see them. So that like, it was like really. The the early folks, and this is actually good. If you're an advertiser, you find people like me who are early and you take advantage of them because they're going to take, you know, it's a mutually beneficial relationship. I'm getting someone to trust me, even though, like there's no necessarily a good reason to trust me because I'm a newb and they're going to get a good deal. So it's like a really mutually beneficial relationship. So I was happy that they were willing to do that. And they were happy that I gave, they got under. Advertising. So it worked out really well. We both won. It's kind of Watson: rare that, but that's a really good framing of it is, you know, a venture investor or some just any like a skilled investor in financial markets is looking for those young upstart companies that haven't necessarily been realized or appreciated yet. It's rare that you think of media buyers in that way, but it really does that. It really is kind of what the elite at the JOL Republic Parr: do it. If you're a good media buyer, that's what you do. You find something that has a small following and you buy one year's worth of that. Watson: And then you get it on the backend with all the growth Parr: that they're going to. Exactly. It's, that's one of the best ways to do it. You'll get screaming deals that way. I Watson: think that you would be fantastic if that was like the position that someone just put you in because from listening to my first million, like you put me on to, uh, Huberman and Hormoz easy who are literally like my two favorite, uh, shows that like must listens now. You definitely have, and it probably comes from producing media. Uh, ability to appreciate when someone's kind of got it before the rest Parr: of them are for sure. Yeah, yeah, yeah, yeah. I definitely have that. And a lot of people have that, but when you, when you see something that is like interesting and dynamic, I mean, if you look at the people that we've hired, we've hired a ton of nobodies and they are not. Very much somebody we have about five people that are like big shots now. And when we hired them, they didn't even have a Twitter. So we've done a really good job. I think it's spotting talent. Um, and so, but a good media buyer should be good at that. Watson: So after you started getting advertisers for the hustle, the next things that you sold in my recollection where the trends groups, that was a kind of research paid community. Parr: Um, but that didn't happen. Two years. So like our ad business was doing like, I don't remember exactly 500,000 to a million dollars a month. Um, I hate the ad business. I hade because they limit, they limit what you can say. And I don't mind losing money in order to have free speech. But the problem was is that my coworkers who were selling the ads were quota carrying. And if I said like, you know, F Goldman Sachs, I'm writing, whatever I want. I have no problem hurting Goldman Sachs. I've got no problem hurting myself, but I, it pained me that Katie was now going to lose money. So I was like, Ugh, this I'm in this conundrum. So I really didn't like. And so we decided to launch trends like two or three years into the business, and that was a paid subscription in a paid community. And that took off like that did really well right away. And, uh, I mean, it did kind of well right away. Watson: And what was new about that sale? Cause it's recurring subscriptions, um, which is different than a lot of the other things that you've articulated. Although I guess an advertiser relationship could be similar, but it's, you know, a consumer sale. What, what did you have to learn to be effective there? That wasn't necessarily true. Parr: Past sales. So with selling big ad deals, you know, we would S I started selling a thousand dollar deal. Then my team started selling tens of thousands, hundreds of thousands, and then millions. And the time it takes the bigger, the deal, the longer it. And, uh, that's what I learned. So like, if it's like a $500,000 deal, there's like many meetings, many process, you have to use a lot of jargon, you've got to fill RFPs and you got to fill, you gotta become an official vendor. You got to get approval for this thing. And that thing, and that is hard. Enterprise sales are hard, which is what we were doing with a $300 deal. Um, I learned a lot about pricing. Two major things there. One copywriting, I think is the most important skill. Not only in business, but life, a good copyright. If you are, if you learn copywriting, you'll, it'll help you meet a wife, a husband like copywriting basically means understanding what motivates people and manipulating them to do what you want them to do. So. Um, I want you to, I want, I want, I want to convince people slavery's bad. I'm going to use like what motivates other people. And I'm going to like, make them feel and agree with me that it's bad. I want them to buy this product. Then I'm going to appeal to their emotions and appeal to their logic and get them to buy this, you know, w whatever I want to meet this woman, I want her to like me. I'm going to figure out like, what motivates her. I'm going to try and get her to like me. That's what copywriting basically. So I think everyone should learn it and I am a hardcore copywriter and I use that for trends and so trends. Copywriting all. That's what sold it. And we actually had $50,000 in pre-sales just from like a word document that explained what it was and it killed it. And the second thing that I learned was pricing. So the 2 99, we charged $300. At first. I should've charged either $99 or 2000. 3 99 or 2 99 is no man's land. That's that's bad. You want to charge either cheaper because 2 99 is not an impulse buy, but the person paying 2 99 very likely would probably be willing to spend one to $2,000. And so it was a bad pricing, but we scaled that business nicely, regardless, even though that was a pretty huge mistake. That was almost a, that's almost a game changer mistake. And Watson: when did you realize that? Because I I've looked at trends and it's still. Roughly in that price range. Parr: Yeah. And for two reasons, well, one day when we sold like HubSpot doesn't care about revenue that we make. So frankly, I think we should, I actually am going to talk to them if it doesn't be like you're making $99, just make it cheaper. Um, but yeah, I, if I was, if I owned it, it would be different. Um, Watson: and then. Was there another big sale before selling your company to HubSpot? Or is that the kind of here? Parr: No, we had this thing that we were about to launch called trends guides, and we are charging, uh, I forget the exact price, but it ranged from 10, uh, two to $10,000. And it was a research thing. And so basically companies who wanted to know, so Trent, the hustle tells you about news trends tells you about specific trends and businesses, and then guides was one level up. And that was like, we're going to tell you about very specific niches and, and one very specific business model in that niche. So if you want to, if you're a media company, You pay 10 or 20 grand a year and we're going to break down like how the hustles doing blank. So you, big media company at Warner can just like, know exactly what they're doing and stay on top of it. And then you can meet the other buyers of that. So you can meet like the cool young media companies. You can meet the older media companies, your peers, and we can all talk about the tactics that we're learning. So, um, and it's almost like a gardener. And so we actually, pre-sold a bunch of those. Um, we had, um, probably, I don't remember exactly tens of thousands or a hundred thousand in pre-sales on that. And, uh, that was mostly the same as selling a 2 99 thing, except the only differences is that, uh, the buyer had to get some type of approval. So Watson: I guess, I guess we should. Tell the story of sound to HubSpot. And then I have a question that we'll come back to this trends thing. Cause I think that there's some meat on the bone there, um, selling your company second time, selling a company biggest sale that you've ever done. You're not going to give me the number here, but we can say tens of millions of dollars in a life-changing personal sum of money. What? Yeah, but you know, what, in what ways was the combination of these past sales? I'm sure it was very process-driven like these seven figure advertising sales that you did. What to, what degree did you have to, um, I don't know, utilize those versus learn new skills. Parr: I made one huge mistake early on and I've benchmarked the price. Someone was like, what number are you looking for? And I said, these companies typically sell for two and a half to six times. Obviously, they're going to start at two and a half. And right when I said that, I was like, fuck, fuck, fuck. I can't believe I said that. So that was the big mistake, but I did one thing really well, which is I've been courted a little bit to sell and they emailed me and I was polite, but blunt. And I said, they sent me an email saying, Hey, we want to partner with you. And I'm like, but I, and the title of the person was in corporate development and I'm like, Hey, look, let's just cut to the chase. Are you wanting to buy us? If yes, say yes, if no. You know, great. We can talk about something else, but if yes, um, I'm going to email you a list of all the reasons why you shouldn't buy us. And if any of those are red flags, we can continue talking and they go, yeah, we want to buy you. And I go, great. Here's a document that explains everything. That's bad about us because I know you most likely know what's good about us. I'm going to show everything is bad. And if that's a deal. Nope, no problem. And I sent that to them and they go, no, these are the, none of these are deal breakers. So I was like, boom, got them. And so after that, I was like, they they're going to buy us. The only thing is pricing. And that Watson: also takes their potential negotiating leverage off the table for later when they'd be like, oh, well, we just found out that you guys, you know, don't wear hats when you Parr: write or something. Got it. That's a good one. I showed them. I got like, like I like showed them all the bad stuff right away and nothing was that bad. Um, but I, like, I was like, I don't want to get any, I want to make you say no fast where'd you Watson: get that strategy from? Cause you study all the different entrepreneurs, you read the biographies, where'd you get that? Parr: I made that up because, um, it's kinda like when you're dating in your thirties, like you got friends that date in their thirties, like on the third day, they're saying like, Hey. Do you want to have kids? And do you see me as, as the woman or man that you want to have kids with? And when you have, like, when you, when you got, uh, you know, it's not, you're not 22, you know, you can't just like, kind of. Yeah. Spend six months and like, oh, I hope it works out when you're, you know, like 37 years old and you're trying to meet a mate. It's like the second date. You're like, Hey, so are you looking for marriage? Are you looking for kids? How many kids? Like you get down to business? Cause you both, like, you're both active. And so I was like, I'm going to use that approach. So I'm just going to be like, Hey, cut to the chase. You're trying to buy us. Okay, great. Here's why we suck because you still want us. And I just wanted to, I didn't want to waste time. So. Watson: Going through that arc, this is something literally light bulb only came on as I was talking to you with you. Um, there's all sorts of stories like this through business history, where someone will build a company, they will sell it to a larger company. And then, and I'm not saying that HubSpot is mismanaging the hustle, but they're not focusing on trends as a business. And, you know, Michael Rubin who, uh, you know, as a, as a minority owner in the 76 ERs and started fanatic. Like sold his company and then rebought it back from the company that acquired it or rebought back part of it to run the company. When he, I would, I Parr: would buy back, I would buy back the hustle, the, Watson: the entire hustle or specifically trends, Parr: whatever they would, let me, whatever they'd be willing to sell. Watson: Interesting. Cause I w I have to imagine that. If trends, revenue isn't particularly meaningful for the bottom line and they're selling like CRM ops software. So there isn't a super linear, like cross selling connection between those two communities. I have to imagine that if you could almost like step away from the nuts step away from the newsletter and the podcast, but know that that has this whole infrastructure behind it. And just hone in on the repricing, the copywriting, the thinking through the strategy there, that seems like a. Uh, if I was, you know, placing a bet, I don't know, above 10 to 20% probability for Parr: sandbars future, I wouldn't, I can crush that business and I, I'm still gonna launch that one day, like a research business. I can make that into nine figures in revenue for sure. And our advertising revenue would have been tens of millions of dollars this year as well. Um, I don't regret selling though because given the information that I had at the time and the mindset that I was in at the time and the goals that I had for myself, Is the right move. But yeah, we would have been way bigger now in terms of revenue. Um, and, uh, I could crush trends. I could run that business really well and I'll do it eventually. Uh, Watson: what is a major takeaway from Ted Turner? I know he's one of the media icons that you've got. What's something that you've just internalized from. Parr: Move really fast. I think that like small companies, we really only have two advantages over big companies, which is speed and focus. Um, and he would move really fast. He also, um, what's an outsider, so he was from Georgia, but he, you know, uh, time Warner is, uh, the time Warner center is like in the heart of Manhattan. And so I think people dismiss them because they kind of talked with the Twain and was from the south. And so I was really inspired by how this outsider can just do it. He also just kind of clawed his way up. He started with billboards, he owned a really small billboard. And then he bought a small radio station and then he bought a local TV station. And then after like 25 years, he created CNN and that took like 10 years to work. So it took a long time. So the biggest thing is, um, if you're gonna do something, it's a pretty good competitive advantage to be willing to dedicate 30 or 40 years to it. I've. Watson: So I've done hundreds of podcasts, interviews like this. I've spoken with so many different entrepreneurs, all sorts of different industries. Um, devouring that information probably to a fault, probably to a fault of like taking as many actions that I needed to particularly early in my career. Um, but that's just like the way, I don't know if it's school or the way I was parented or whatever it is, how I've tried to figure out the lay of the lands that I could make good decisions. And I'm not saying that you didn't take action, but you are similar in that you have. Like your whole show is just, Hey, I was like researching this obscure business in order to try to understand how these things work. Do you get bamboozled when you talk to other entrepreneurs who that doesn't even like really cross their mind as part of their process for getting things going? Parr: Not exactly. Because for two reasons, one, I recognize that there's a lot of ways to get it done. And number two, I think a lot of the people who say they don't, they do a lot more than they, they, they, I think in China, I have a whole, my here's, I have a very strong philosophy on that. And so there's a few things going on here. So I researched and read like crazy because a, I want to, I want to not repeat the same mistakes that they, that they made and you could actually find recurring mistakes and was like, all right, boom, don't do that. So I'm like learning a strategy to there's this phrase that you are the average of your five, most friends are your five best friends. I feel like I'm the average of the five people I read and think about. And so that definitely helps me three. If I study how other people do things and the big things that they've done, really innovative things that done's done, it breaks my mental frame. So for example, When Roger Bannister broke the four minute mile, um, people were like, oh man, you did it. And then like within five months, like four other guys did it. And there's a reason why, which is when one person sees what's possible. They have faith and they have hope and they work a little bit harder and it. Makes it the norm, the reason why I lived in San Francisco, I have a bunch of friends that are like huge deals in terms of business. And at this point it's regular to me. And so when I think about what I can achieve, it's no longer can I do that. It's more so just like, do I want that? If I want that, I, I can do that. I can pull that off because it's just normal, you know, it's like, uh, Normalized. And so that's why I research like crazy and learn from other people. Um, and also it just inspires me, which is like a little fluffy, but I get pumped up and I get inspired. It makes me feel good. And Watson: probably speaking to the, I mean, anyone that's stuck around this long into the interview is to some degree shape or form similar in that they're trying to figure out what other people are up to, Parr: but, and you also, it's, it's fun. I find it fun. It's just fun for me. Yeah. But Watson: when. So you said that you think that folks that say they don't do that or don't acknowledge that maybe just don't realize it or don't think about it that way. Can you elaborate on Parr: that? Yeah. So my friend Goggin started this company called Udemy, and now he has this new company called Maven. I heard his, his co-founder Wes. Alicia. Yeah, she's lovely. She's great. And Goggin used to tease me. He's like, dude, you research so much. And I was like, bro, I go. What have you dummies competitor? I forget their name. It's a big course company, but I was like, Hey, what was Teachable's revenue? And, uh, he told me and I go, why did they do so good? And he, I was like, you know, what were they different than you to me? And he told me, and I go, uh, what about, uh, your Udacity? How are they doing? And he, and he knew exactly like how they're doing and what the revenue is. And he goes, he's like, but the reason they're different from us is they're going after this. Well, bro, you're like researching like your competitors, like, you know, like you're, you're on top of it. Like, you know, what's going on. So like we're kind of doing the same thing. And he was like, well, I didn't think of it that way. So I was like, well, it is, it is the exact same way. So like any, a lot of co founders, they'd like, if you're beyond me, like, you know, like what impossible is doing and you know why it's good, why it's bad, why it's different. Why could be great, whatever you're you are on top of it. So one of the time, and so it's the same thing. Watson: So one of the. Timeless lessons that most entrepreneurs have to learn at some point is to focus and to not be trying to like do these 10 different experiments and get all these things. These things done when one thing is working and if you just quadruple down on it, your revenue's going to grow sales, cures, all, all those kinds of things. Inevitably, you had to learn that lesson at some point over the last. Decade as you were building companies, but now, you know, you have the podcast, you have whatever the kind of out is or structures within HubSpot that, that has you sticking around. But how have you tried to manage your focus in a situation where there isn't maybe the same financial impetus to have to get it figured out? And you actually have like the resources and time to go run all these different experiments and explore. Parr: I don't do that many experiments, even. I know a lot of people think it seems, they think it seems that way, but basically when I was running the hustle, we didn't even have a, uh, like a Twitter page for like the first two years we had a meeting every single week, it was called the numbers meeting and it was. Let's talk about our email list grow by 3% this week. If yes. Why? If no, why? It's like all I cared about. That's all I cared about for four years. I was very, very good at focus. I was like, Nope. We're like, uh, her Keller, the guy starts Southwest. He was like, we're going to be the cheapest airline. And someone came to him and goes, Hey, should we offer a salad? And he goes, is that going to help us be a cheaper. And then you'll note, and then he goes the, no, we ain't doing it. Like, it's all about the low cost airline. So I got really good at that saying, and you just say no all the time to be honest. Um, and you just focus on that one thing. And, uh, that worked really well because if you look at it for a lot of people, There's a lot of people now, like Warren buffet or something like that, or whoever, some tycoon who is wealthy and they've got their hands in lots of different stuff. But if you try to, like, if you backtrack and look at how a lot of people made the first amount of wealth that they were able to snowball, I mean, getting that first nut is like a really big deal. That first thing typically it's like an 80 20 thing where it's like, maybe you accumulated a little bit from the third thing, but nine out of 10 times, most, most all of it came from. Um, and so I recognized that and I was like, all right, I just gotta focus on this one thing that will give me enough money where I don't ever have to worry about money again. And after that, then maybe I can like expend time exploring and having fun. And then I'll find the thing I really liked and then go all in and focus. Does anything that's worth doing it's worth overdoing. I think we've got to focus. Um, and you just basically have to say no to everything. And after Watson: you'd accomplish that though. So, so we, uh, interviewed, uh, uh, entrepreneur had a very similar story. He built a robotics company over eight years. And it was day and night. It was everything. It was the focus to the point that he made it. It was like some crazy thing, like six years without losing a single employee because of just the culture that he'd built and the maniacal commitment that he had given to what he was building. And then he sells the company and is a drift, like literally feels lost because in your case, I didn't have the 3% meeting where I know that it's this number that maybe doesn't define whether or not I have a good week. Significantly influences whether or not this was a good week for us. Like, did you experience any part of that? Even though it was like, he, he, I think he sold the company for $275 million or something like that. Like, it's still this loss of partially how your identity was structured, partially. How you Parr: kind of, well, I still do it. So like the first year after it's only been a, it's been a year and a month or something since we sold the first year, I was like, I'm just going to focus on my. And so it was all about, um, like I had body goals, so I did the same thing. I just transferred it to a new, um, I was like, I'm not going to focus on business at all. All I'm going to do is the podcast. And all I'm going to do is. My body fixed my body. And then I started angel investing and then I set goals. I was like, all right, we got to deploy this much capital with an inside. Did the same thing and the same thing. Now I'm in Explorer, exploration mode a little bit where I'm just like following my heart. I'm just doing whatever seems fun. If I like, it's like a dog walking down the street, they like catch a smell. I explore it. So I'm reading a lot. So I'm chilling because I know that. Uh, um, you know, like, have you ever met a veteran? Like, uh, like a soldier? Yeah. It's got some of my family and a lot of times the people that I've hung out with at least they'll say it was really hard. It was scary, but man, I miss it. And that's how I feel where I'm like, um, I was, I was exhausted. I was tired. I needed time off. I needed a break, but real soon, I'm going to get, I'm going to go to war again. Um, just because I need that. I've just liked to fight. It's just fun, you know, so I'm going to do that eventually. And now I'm just plotting, I'm plotting, I'm reading, I'm consuming and I'm just preparing. And, um, so I don't have too much focus now except on that. Watson: And it's also probably to some degree, you know, that you have the operational executional abilities and identifying the, you know, 10 out of 10 opportunity as opposed to the two out of 10 opportunity where there's the leverage to make that happen Parr: as. And I'm still doing little two out of 10 opportunities just to keep my, my skillset skill set sharp. So for example, uh, I launched like a little copywriting course. It's only like $89 and it's killing it. So make it like a grand a day. Uh, and people are like, why are you selling this $89 thing? And I'm like, I gotta stay sharp. You know? So I I'm like doing little things like that. Watson: What did you have to either get reminded of or learn in order to sell that $89? Parr: Uh, I wanted to get back into copywriting. You could find it if you could go to, uh, try, copy that.com. Um, I basically taught myself how to become a copywriter by this, using this learning methodology called copy work, which isn't very popular, but I think it's the best. And so I just teach people that methodology. And by the end of the two weeks, they become much better at writing and, uh, you can see the landing page. It's like just, just texts. And, uh, I wanted to see if I could do that. I was like, let's see if I can get this to be a 4% conversion rate on this landing page. And it is what, and I get so much joy out of that. I get more joy out of that than selling a company for a lot of money. Watson: That's, uh, that's funny that I think that that's a edifying and relatable for a lot of, uh, other folks out there that it's about the journey and the tinkering and the exploration Parr: there. Yeah. I'm like that. Like I wake up in the night just to check the Shopify conversion rate, just to see what it is. Watson: One of the thing that paralyzes people from starting new. Projects is worrying about the tool. So like, I want to start making videos, but like what camera, or I didn't want to start a website, but like what provider? And you've seen the tools that it takes to scale to millions of subscribers, to the hustles newsletter and things like that. Um, so, and you referenced Shopify here, which is a super robust, large platform for selling things online nowadays. How do you think about the tools that you use when you're building something and what are you optimizing for in terms of like, this really matters and like this stuff really just Parr: doesn't move. So I have a disdain towards people who do that. And so like, for example, people who collect domain names, they piss me off people who say like, I can't do this without this domain name. So the copy of that thing that I showed you, I made 20 grand at first. Um, and I didn't tweet it. I just went to Facebook groups and I posted it. People didn't know who I was and it was on a Gumroad page with no custom URL and it made $20,000. Um, and so I do that on purpose because I'm like, I don't need fancy tools. I don't need any of that. It's completely irrelevant. Now if I'm starting a company and I know it's going to be big, and I know that because I have a little bit of experience and things like that, then yeah. Selecting the right tools early on is important, but for the vast majority, and it's even not that important because you can always switch out of it. Most of the times you can switch out of it. But for the vast majority of people, basically everyone listening to this, I would even say that. It doesn't matter what you use. It doesn't matter if you use convert kit MailChimp. It does. It matters not one single bit. It doesn't matter if you record with your iPhone or with this fancy camera that I'm using. It doesn't matter at all. And in nine out of 10 cases, I would say, use your cell phone. Don't even use a camera because my goal is two things. One, I want to reduce friction. So if I can't figure out how to upload video from this fucking camera, which I don't know how to, I'm just never gonna run. I'm like, this is too much. I don't know how to do this. I had to pay a guy to come and set this up. I don't know how any of this works, but what I do know is I know how to use my phone and I know how to say cool shit to a camera, and I've done that. And so like, I'll get views because there's zero friction between me and creating. So I look for zero friction. The second thing is momentum. So I'm like, if I have an idea and I want to do it, I got to pursue it with. And if there's any type of things that get my way about momentum, I ain't doing it. So sometimes when you buy a domain name to get it set up on WordPress, it takes like 20 minutes. Like, no, no, no screw that. I'm just going to use like, you know, generic name dot Squarespace dot. That's just all I'm going to use and it's going to work just fine. So I like, I I'm, I really force myself constantly to reduce friction and to create momentum. And I cannot stand when people use that they need a certain type of technology in order to, um, start. I think that those people are losers and that's a loser attitude and you really need to get out of that attitude. Watson: Amen to that. Um, Sam has been awesome. I want to move towards wrapping up. Uh, before I ask my standard last questions. What were you hoping to share today that I didn't give you a chance? Parr: And you guys can, uh, follow me on Twitter though. Sam Parr. Follow me on Instagram. Thus Sam Parr. I just did that thing. Copy that. So try, copy that.com. Let me know what you think I'm promoting it. Um, Um, oh, oh, duh, listen to my first million. That's my podcast. That's like my biggest thing going right now. Me and my cohost, Sean, we're, we're killing it. We're doing a really good job. Listen to that podcast. Watson: You have said that that was the, one of the hardest things you've ever had to grow. Um, what would you tell Sam of two years ago about growing a podcast that you know now other than hiring Ben? Parr: Yeah, so, um, I don't the reason, like, I don't know why it's. So like if you asked me how to get big, it's like 2 million monthly uniques now, monthly downloads, which, um, I have to think. Top five, most listened to podcasts this podcast. And I don't know what we did. I have no idea why it works. There's a couple of things that did work, but I don't know if they actually moved the needle. I think what would work and we're starting to do now is you buy ads on other people's pockets. And you spend a lot of money and do it with a lot of people. And I think that's a surefire way to grow. The problem is is that if you're not good, you're not going to retain people. The thing about podcasts is it's the hardest thing to bullshit. I can bullshit a DTC company by creating really cute photos and copywriting and getting you to give me your credit card information. You may not buy it again, but I can get you to buy it first. Um, with a tick tock video, I can make a 32nd video. That's pretty good with a video on YouTube. I can make a five minute video. It's pretty good. Three podcasts a week that are each hour long. It can't really hide bad. You know what I mean? So you gotta be on top of your shit and you gotta be really talented and really skilled folding and good. And I think that we are Shawn, my partner is very, very, very talented. And so that's why it's hard to grow because you can't fake it, which you can fake a lot of other things. Watson: Do you think that that's also tied to the copywriting thing where you're being a good copywriter in written form translates into your skills, a podcast or? Parr: Yeah. 100%. That's I, that's why I think it's the best thing people can learn. It's basically what you're doing. All you're trying to learn is how to influence people and we're all trying to influence someone. So yeah, it's really important. Watson: Well, we're going to link all those digital coordinates that you referenced in the show notes for this episode, people can check it out. Uh, but before I let you go, Sam, I'd like to give you the Mike one final time to issue an actionable personal challenge to the audience. Parr: What time of day does this episode air typically? Watson: Uh, Monday mornings. Parr: Great. By Monday night, you have to have this whole thing completely done. If you're listening to. By Tuesday, you got to get it done, completely done by the end of the night, make a list of 50 people, no less than 50 of 50 people who you wish you could get in a room with. Whether you want to learn from you want to do business with you just want to become friends with, do you want a date? It doesn't matter. Make a list of 50 of them and do it in a spreadsheet. And Oncom one put the names column to put the. Column and find their emails and find their Twitter handle. It's really easy. You can use like email Fox, email hunter just do like email finder, plugin, so easy. Find their email. And then in the second, uh, sorry, the third column put messaged and then do that like eight times. And what you're going to do is you're going to cold email, these people and DM, and I'm on Twitter and you're going to put an X if they didn't reply. And then if you did get a reply, you put reply. And then like put notes about what happened and you're gonna do that with 50 people, and you're not going to stop following up with them until they basically tell you to F off or just know. And so if they don't reply until number eight, doesn't matter, keep going, you keep going. And you use that, put those Xs in that mark and you, and you start doing that today and you follow up with them every two days until they tell you to F off. And, uh, that's what, that's, what you should do. It will change your life. Watson: And when you've done that. So as to not waste the opportunity with these people that you really want to get with, like, what's your, I guess it's wildly different. If it's like someone you want a date of birth, somebody want to be in business with, but what's your strategy going in? So that they're just not like this is a, a Parr: weirdo. If I don't have like a determined, um, outcome, like I want this person to give me money. I want inevitably the answer for me in most, or in most cases, the answer. Inevitably in some period in our career, I want to, I want this person to give me money. I want to give them money. Uh, I want to do business with them. I want to learn from them. So most of the time when I do this, I'm just trying to get on someone's radar. And you, if you're a young person below 30, you have a huge amount. Here because people who are successful love and admire young people who are just trying to hustle and get shit done. And so if you're writing an email flattering, an older person who's successful and new, let them know, by the way, this is what I'm working on. Things are going well, you know, I don't even need a reply from you, but I'm going to send you an email every couple of weeks. Just an update on what I'm working on and maybe you'll dig it and just getting a reply, like, yeah. All right. And then I've done that with dozens of people. And by month, six month eight, they go, Hey, I'm going in town. Yeah, I do. And now I'm great friends with a lot of these people and, and, and then it's like, uh, Hey, um, so I did this with the guy who started Gilt business, insider and Mongo DB. And I, I emailed them all the time. I said, Kevin, what's going on, man? I got a, I got a question I need to ask you. Um, or I'll say, Hey, what's your opinion on X, Y, and Z. Now we're friends. And now we're associates. I've done this with the founder of Pandora. I emailed them like 50 times before we replied. Now we go out to dinner with our families. So like, like it works really well. Watson: Right on well, inside baseball, this is the year in which I've been the most systematic about the people that I wanted to talk to on the podcast. You were on that list and we were continuing to knock them off through the remainder of the year. So we'll see that played out for folks that maybe this is their first time listening because of Sam. Uh, you can hit subscribe here as well to check that out. But, uh, I think that's a fantastic challenge. Everyone should act upon Parr: sick. Hopefully. Hopefully it works. Watson: Thanks for coming on the podcast, man. I appreciate. Parr: No problem. I hope it's a whole. We Watson: just went deep with Sam Parr. You're out there has a fantastic day. Hey, thanks for watching to the end of my interview with Sam Parr. If you're interested in an interview with another top digital marketer, check out our recent past interview with Tucker max, all about the concept of Dumor optimism. Tucker was an initial investor in Sam's company, the hustle, and has had his own string of entrepreneurial and writing success. Check it out.
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Watson: Alrighty, Eric, thanks for coming on the podcast, man. I'm excited to be taught.
Satz: Aaron. Thanks for having me, buddy. I, I, I've been looking forward to this. I'm ready. You know, hopefully I'm ready to go Watson: here. Oh, I'm sure you are. I think that the most helpful place to start folks, I want to really, you know, get a precipitous stair climb up into the nuances of what you're doing with Alto, but to start things off if people aren't super into investing, they may have heard of something like a 60, 40. Traditional equity bond portfolio. That's kind of been the tried and true, safe, right down the middle fat pitch of portfolio theory for decades and for a number of reasons that is less appealing to people. So. In the context of that, being a very kind of conventional style of setting some money aside for retirement or whatever your financial goals may be, what is also doing to kind of serve as a different pole, so to speak of, of funds and, and kind of ways to think about your. Satz: Well, if I knew we were going to play softball, I would have brought a bigger bat. I appreciate that opening question. So let me start with what all the does, and, and also it makes it easy for individual investors to access their retirement savings for purposes of investing in alternative assets. Now we define alternative assets as private equity venture capital real estate. Private credit product, securitize artwork, or collectibles like automobiles or watches or babe Ruth baseball cards or Michael Jordan sneakers. And, and crypto as. So so said another way, maybe a little bit going around the barn backwards here is that these are assets that are not publicly traded. They're not registered securities. And for the most part, places like fidelity and Schwab, which is where an individual in the past may have engaged in the. Conventional wisdom of a 60, 40 portfolio, those places aren't going to allow you to invest in these types of assets. And so we serve two functions in this process we serve, but that. The connective tissue and the platform by which you access and transact with other investment platforms or even your own investment opportunities in order to execute these transactions with your retirement accounts. And we serve as the custodian, which is a regulated entity and, and required by the IRS for people who want to invest with their retirement safe. And so I think the thing about 60 40 is that it's old conventional wisdom, and I think it served its purpose, but I think you have to go back to a, to a time a couple of decades ago. When the number of public companies was growing rapidly, where we would end up with almost 9,000 public companies today, we've got less than 4,000 public companies and of the 4,000 that exists today, only 400 matter in terms of returns. So if you combine that dynamic with the explosive growth in the mutual fund industry and the ETF. Right where everyone said, you know what? You can't beat the market. Don't try to pick stocks. You can't be an active investor. You should be passive about this. Just buy mutual funds. Everybody did. Everybody did that in their 401k. Everybody did that in their IRA. Everyone who employs a financial advisor, all the financial advisors. Be passive by this mutual fund because, well, that's really easy for them anyway. So in, in today's world where people have this, you know, portfolio of mutual funds, they actually don't have any portfolio diversification. And that's because every mutual fund or ETF is comprised of some subsegment of the same 400 company. So it's impossible to outperform the market. It's impossible to get any excess returns. And so what we do is we say, you know what? You need portfolio diversification. You can't find it in the public markets. Let us make these other asset classes available to you. We're not telling you what to invest in. We're saying. Take advantage of this single greatest tool at your disposal, which is diversification in order to reduce your portfolio volatility and increase the potential for returns. Right? And so I think in an ideal world, you might have 10% of your assets in 10 different asset categories. I think that's sort of out of reach for most, most people and. And it's out of reach today because of who has that kind of time. So really get to know 10 different ESSA categories. But how about five asset categories? How about putting 20% of your investible assets in, in five different categories? And by the way, we're not anti. We're just saying it shouldn't be 60, 40 public. And so maybe of 20% in equities, maybe a 20% in bonds. I'm, you know, I'm just picking up, but then maybe have 20% in private companies of various stages, 20% in credit product and maybe a 20%. Right. And so what we do is enable that true construction of portfolio diversification. And, and, and that's what we're about. We're not about saying invest in this one thing, and we're certainly not about saying invest all of it in this one thing. Watson: And it's part of the nature of the digital age that people have more access, more option to things across the board, outside of finance media you know, the ability to in a globalized world world buy something that was produced on the other side of the planet and have a travel all the way around to you with a, you know, two day expected delivery or whatever the thing may be. But very specifically. When you think you're talking about diversification and part of the goal of you know, diversifying where your investments are, is trying to get something beyond market returns. If everyone owns an S and P 500 index, then you're going to get exactly what everyone else is getting, but the other, but the other side of it is also a full. Of risk management. And you mentioned crypto, some of the other options are investing in private companies and artwork, but the farmland piece in terms of a potential alternative asset to be in was a really interesting one because I remember listening to an interview with an institutional investor and they were basically explaining, you know, I don't know if it was the Harvard endowment or Yale or whatever, but like, you know, the average person can't go by. Multiple hundred acres of forest lands that will be logged and we'll have a nice return over 25 year period, but there's no real sense of liquidity in the market for hundreds of acres of forest lands. But I, as the head of this endowment, whatever can totally conceivable. That's really the difference here is partially there's a, there's a, a legibility and a Lego blue building block nature to some of these investible assets that just weren't an option in the paper and pencil. You know, when TD Ameritrade was getting built, it was paper and pencil and they were calling stuff in as opposed to being able to digitize everything. Satz: Yeah. So you're referring to the fractionalization of ownership. When I, when I'm feeling particularly. Particularly poetic. I call it the fractionalization of securitization. My mom taught me how to rhyme when I was little kid. So you know, it's, it's this ability, eh, actually let's, let's stick with farmland, right? Like, you know, do you have $500,000 or a million dollars or $5 million to go buy all this farm land? Ignore the due diligence side of that of a first, second he's like, dude, do you have the wampum to do it? Most of us, no, don't right. But farmland as an asset class and certainly as portfolio diversification and something to use to reduce volatility. So I'm not totally dependent upon how my equities do or how my crypto does is a huge asset to have in the portfolio. Specifically, we work with partners like acre trader and farm together who enable you to participate in their in their investment opportunities for, I, you know, probably as low as $2,500. Right. And you get to review the diligence material that professionals have put together. And they can help educate you. You of course need to do the homework and, and everyone should go educate themselves with respect to how they invest in and where they invest. But that they no pun intended. They literally break it down into bite size pieces, you know, so you can invest in farm land, whereas, you know, five years ago that couldn't happen. And you can take that same fractionalization of ownership thesis, and you can apply it across all these asset classes. Right? So in, in venture capital or private equity, it may be with Angeles or Republic, or we fonder in private credit it's, you know, with companies like cadence and real estate someone like diversify. In artwork, it's masterworks it, you know, so the lady in collectibles you'll see at least knock on wood, I'm hoping, you'll see pretty soon getting added to our, to our partner portfolio, rally and Otis. And, and that would be great. Right? So, This ability to build a portfolio and to build diversification within each asset class, no matter how much you have at your disposal, really. Right. And that's, that to me is exciting about where we're headed in this business. It's also exciting with respect to what I think is going to be key. You mentioned liquid. Right. I think, and this is not happening tomorrow. It's a, it's a slightly longer window or a timeframe if you will. But the, the digit the, the digitization of securitization and specifically the blockchain uses that, that are now sort of on the doorstep of our disposal and how that will enable. To trade and get liquid embarrassing is pretty exciting to think about. Watson: So. One of the other kind of big pieces of news and probably reasons that you're excited is that a $40 million series B was just announced for Alto. And another thing that we've covered in many past episodes is the kind of, if you think about different stages, seed series, a series B onwards and upwards. Each of those come with these different actual risks that need to be removed. Yes. You went positive, you know, stratosphere at hockey stick numbers, but in maybe the earliest stages, what you're trying to prove is this technically feasible. Is there any sort of interest in something like this, does the team make any sense? And then a series that you're looking for some form of evidence that, you know, we figured out how to grow this thing. And a lot of those risks risks are there. $40 million round, at least in my mind looks very much like a growth round. It's like, Hey, we have a formula now of getting more types of assets being available on the platform and getting people to use our platform. Can you talk about specific to a series B what risks you had to prove were off the table or, or demonstrate we're likely off the table to your investors and how did you do that? Satz: Yeah. Regardless of what name you give a particular round of financing, you know, you typically start at the beginning of of any company with kind of team risk product market fit, and then execution. Right. And, and I think as you go through the various fundraising stages, you've got to eliminate. Parts of each of those risks. And as you eliminate the sort of big question marks and, and there's not any one thing within team, there's not any one thing within product market fit. And there's certainly not any one thing within execution. You know, each one has variables living underneath. And so. You have to begin to eliminate a bunch of those variables and that, and at the beginning, at the very beginning, I honestly it's about storytelling, right? It's here's how big the market opportunity is. We can attract the people to help build us the company that's going to take advantage of that, that market opportunity. And by the way, here's why people want that solution to this. As you go to to series a, as you're building a series, a your, your, you know, the product is out in the wild. You're no longer selling the story. You're hopefully demonstrating that you have product market fit, that, that people want this thing that you are selling. And, and that kind of gets you to the series. A and we did the series a. For us anyway back in March, April of, well, of last year of, of, of 2020. And the idea was that we could show that with the product market fit that we had demonstrated and with the team we had built up until that point that we could begin to accelerate. And, Watson: Let me pause you real quick. You said last year you said March, April, 2020. Did you mean. Satz: I meant 20, 21. Yes. Okay. Watson: You say, if you raised in the middle of like the world seemingly coming down, that would have been one of the most, like we would stop everything else and just be like, tell me about that story, but 20, 21, got it. Satz: Yeah. 20, 21. But what I will tell you is I raised immediately before the world coming down and, and this is like that. And I'm going to come back to the soreness. Second. I think. I'm older than a lot of entrepreneurs. I think I'm, you know, I'm 52 years old. I, I have seen more cycles than a lot of, you know, on entrepreneurs and sort of at the end of 2019 going, going into 20 You know, I had this uneasy feeling about things. I certainly wasn't predicting a pandemic by the way. You know, my crystal balls first of all is not made a crystal and certainly not clear like that, but so we ended up raising right before right before the pandemic. And as a result, we were able to continue to accelerate growth. Through 2020. Whereas other people were thinking about, okay, who are we going to cut back? How do we spend less all this stuff? Like we, we were doing more, not less. And you know, so a little bit more than a year later in March at 21, when, when we raised the series a we demonstrated that not only have we built something that people wanted. They were paying us for it. Right. And so basically from the year 2021 had 15 X revenue growth, which you could S you could say you're still starting from the, from the law of small numbers. But I don't care. 15 X, 15 X, 15 X is, is a big, it wasn't that small that we were starting with fit, you know, fit 15 X is, it is a big number. And so that was the train that we were on. And that's what led to our series B because, because it was saying, look we feel like we've established ourselves as the leaders in the category. This is what our vision roadmap for the future looks like with more money, we can, you know, not just step on the gas put, but put the pedal to the floor and, and we think we can go another, you know, call it five to seven X from 21 to 22. And that's, that's what we're trying to do now. And that, that's why we raised the $40 million. Watson: And so. So, what I was struggling with going into this interview was understanding the proper categorization. Cause if you've looked at, if you've watched startup deck, like people do their pitches, one of the slides of every single deck is here's like the five competitors and we have this box and like all these different things, like, look our box, we have everything. Check mark. And then all of our competitors are missing at least one check mark in some way, shape or form. And we've referenced, we've referenced, you know, TD Ameritrade, fidelity Schwab, some of these kind of conventions. Enormous platforms, billions and billions and billions and AUM that are helping people to kind of wrap up their equity and bond, investing into these IRA type of rappers. Is that who you point to as the competition for a platform like this, there, you kind of foresee that they eventually have to move in this direction and you have that first mover, nimble start-up type of advantage, or do you conceive of the chess board in a different. I Satz: think, I, I think about it somewhat differently. First of all I think we all owe a lot to fidelity Schwab, TD. E-Trade all those folks. I mean, they, they moved I I'm going to say they, they took the investment landscape and they shifted it. Up into the right, so significantly over the last couple of decades to everyone's benefit. And, and those are, those are incredible combination. I think we're doing something very different from what they do. I, I, I consider them to be. One, one of two things either potential partners because they, they decide that w what we built is a value, and they want to partner with us in order to enable access to their client base, or eventually potential competitive. But I don't think that's happening tomorrow. And if, if you asked me what my goal is with, with Alto, it's to displace fidelity as the leading retirement investment platform. And, and, and if you don't have goals like that now all companies are different, but we're a company that's raising venture capital. We have institutional investors. So, you know, I think it's only appropriate that we have goals to do display Sutton, display someone like fidelity. Th the, the other thing that I want to point out, and I think this is a somewhat relevant an important comparison. Actually it has to do with Charles Schwab the man, not the business, but the business followed, which is if you roll back a few decades, The brokerage industry commercials were dominated by F Hutton. And, and you may not even be old enough to it, to, I've seen an EF Hutton commercial. Yeah. Right. So it was sheriffs and Lehman Hutton. Is what bef I mean, there's so many mix ups in the, in the brokerage industry and investment banking industry, but the F Hutton commercial, when something like when, when, if Hutton talks people listen, and, and there was this commercial where EFA. To the extent he was a guy would start speaking and everybody else around would sorta turn and cut their ear and, and try to listen to this stage, you know, investment advice. But really the, the scene in which this took place was a country club or a yacht club or a golf course, or pick some setting where you had, you know, You know, wealthy white guys. Right. And, and it was like this commercial was really only speaking to that demographic and, and a broker wasn't going to talk to you unless you had a certain amount of money. And I think one of the, the, the Justin incredibly genuine and brilliant things that Charles Schwab did was to say, you know, what. We're not giving the average investor, the average American enough credit here. Everybody can and should do this. And by the way, the discount brokerage that Schwab introduce, like in the early seventies, it was like 49 99 a trade. Can you imagine? For Robin hood zero Schwab 49 99. Like that was, that was discount brokerage trading. But what they did was they said, Hey, we're going to put a store on every corner of Maine. We're going to invite people in, we're going to help them. We're going to educate, we're going to tell them why they need to do this. And he was just way ahead of his time there, I think. And it was just absolutely brilliant. And so to, to, to a certain degree, what I like to think that we're doing. Is what Charles Schwab did without the, you know, stores on the corner of main and main, which is like, you know what? Everyone deserves the ability to, to potentially achieve some outsized returns. It's not without risk, but we want to help you understand those risks. We want to help you do your homework. We help you diligence opportunities. And then of course we want to make it so that you can execute an affordable way. So just trying to follow that model, hopefully we'll have a quarter of the success he did. Watson: Yeah. I mean, that would still be an absolutely epic company because it, those companies are, if you're in finance, you have an appreciation for the scale and the, the, the amount of just kind of market moving impact that they have. But if you're not there. You know, I don't wanna say hidden in the background cause they're probably every other, like a NFL Sunday running some sort of commercial in some way, shape or form, but it's easy to miss the, the scale there. So I'm going to talk really quickly about just another important nuance, not speaking over people's heads because there's there's finance people. They're gonna be just nodding along and then there's gonna be folks that might miss the nuance here is because that these are IRAs. There are potentially tax advantage. Statuses associated with making these investments so that it's already possible to, you know, because of reg CF and some of these crowdfunding platforms that you referenced masterworks, you can go direct to all of these platforms and do that type of investing. I just got an email the other day that was like solicited via angel list to be a part of the seed round of a startups round of fundraising. The important element here that takes. Doing it through also to another level is the potentially tax advantage status that comes with being in the IRA rapper. So I thought maybe you could use the story that got all sorts of people in a tizzy about Peter teal and his investment in Facebook. As an advantage as an example of that, or if you wanna use a different one. I totally understand. Satz: No. So I wouldn't do, I want to build on what you just said first then that, and then I'll talk about Peter too. So you know what, whether it's in your fidelity IRA or in your auto IRA you don't pay taxes on capital gains. You're you only. So, you know, to extent you have gains, you get to re-invest them without pay, without paying taxes and you get the benefit of compounding returns. And I'm probably gonna butcher this, but I think on sign referred to compounding at the time it was compounding interest. So I'll call it compounding returns is like the eighth wonder of the world. And you can do some quick math or pull out a Google sheet or Excel or your spreadsheet. And, and you could just see how much bigger your returns are over a lifetime of investing. Call it 20 or 30 years, depending on how old you are. If you're not paying those, you know, let's just call it a 20% tax rate every time you get returns. But instead you get to reinvest that 20% each time that before you know it, that's a big number. The the, the second piece, which is the Peter Tio question, the issue actually didn't live with his investment in Facebook. I don't think anyone in any way questions, the validity. His having invested in, by the way, what's important here is that he invested out of his Roth IRA. So he did an alternative IRA investment, like an also IRA investment out of his Roth IRA. And you know, for those who don't know, when you invest, when you put money in a Roth, you pay the taxes upfront and then all your returns, including when you take your distributions out at retirement are all texts. And so he made he famously made a $500,000 I think it was a $500,000 investment in a very early Facebook. Which turned out to be worth a billion dollars. And well, we call that a good investment. So and, and the thing about also that, that I like to point out is that you don't have to have $500,000 to do what Peter to. You can have $500 or 5,000 or 50,000, you can still achieve the same return through our Roth account. Right. You know, the absolute dollars may be slightly different. But the IRR is the same. The, the piece that I'm not saying is that when you invest out of an IRA, there are certain, although highly limited restrictions. Which has to do with what is called a prohibited transaction. And so for all the entrepreneurs out there, as well as the CEOs who are on boards of companies, you cannot use your own IRA to invest in your own company. And. So all the, all the hubbub around what teal did actually goes back to his investment in PayPal and whether or not that was inappropriate investment. Now, I don't know the details around it, but I suspect whether it, whether it was legal or not knowing in the IRS notice, you know, until some point beyond the statute of limitations is what I suspect. So, yeah. Watson: It makes sense. I just think that you know, the, the very easy thing for all the platforms to sell you on. And, and it's very understandable is pay less in fees, pay less in fees. Everyone has to pay less in fees, but it's really important to also recognize that, you know, if your, your fee is being reduced from say 1% to 0.1% or 0.1% to 0.05%, that versus. Avoiding a 15%, you know, tax or whatever the, the effective capital gains tax would be on that trade. You're talking about completely different levels of you know, potential savings when you use that vehicle. So I just, I think it's important to recognize that because someone's gonna say, well, I've already bought a piece of art on masterworks. I've already bought my, you know, swanky set of shoes or whatever on rally. And I, I, I don't necessarily need this. It's like, that's partially what you're trying to also help people do Satz: know that that's right. The savings are of a far different scale. I think it's also important to note that you can't use your IRA to buy from yourself and assets that you already own. Just, just so people. So, so people don't take you know, I don't want some to have the takeaway like, oh, you know, I bought something on rally. I want to now sell it to my IRA. That's one of those prohibited transactions. Watson: Right. So Eric, this has been fantastic. I, I hit most of the questions that I had today. But before I kind of aim towards wrapping up with the final, last two, was there anything else you were hoping to share about business building, building about Alto in general, that I didn't give you a chance to Satz: look at it it's every, every overnight success is like some long time in the making, right. It, you know I was interviewed about the series B round LA last week. And unfortunately it didn't make it into the article, but for those who, who are listening at, at home, what didn't make it into the article. As I said, you know, all these articles get written about the founders and the CEOs And what while founders and CEOs certainly deserve some level of credit. It is my strong belief that it really has to do with the team you surround yourself with as well as catching catching, a couple of breaks, getting lucky here and there. Oh, what I like to say about luck is that it's where hard work opportunity and awareness intersect. It's like that ability to recognize that something is about to go your way and to, and to take advantage of it. But look, we, we, I raised the first money for Alto in 2016, right. It's 2022. You, you really gotta want to do whatever it is. That thing is that that you're doing is not always up until the right. Watson: Yeah. Take your lumps along the way. It's a par for the course. So Eric has been fantastic. I'm really excited. Like I, one of my favorite things when I do these interviews is when I come across something that I know that I will inevitably. Refer or, you know, advise a friend to check out in the future and unambiguously this falls into that category. Cause I got a lot of friends that, you know, try to try to do angel investing or probably need a more tax advantaged way to Yolo their crypto investments or whatever the thing may be. So for folks that want to learn more about auto checkout, all the things you guys are doing, what digital coordinates can we provide for people? Yeah. So Satz: also ira.com is. The easiest, a L T O ira.com. Right. That's, that's pretty straightforward. We're on Twitter, I think also under auto IRA. Maybe there's a underscore in there somewhere. We're on LinkedIn. I'm on Twitter. I'm on LinkedIn. I go by real names. So I'm just Eric's I know it's boring, but I'm just Eric sets of both. So you know, you can pay attention there. Or you can just look up my sweatshirt if you're watching this on video, my hoodie right on. Watson: I feel like your, your name is right on that barometer where it's distinct enough. Like I've never heard of like another Eric SATs before, but it's simple enough that like, someone's not going to struggle to spell it or look it up. Most likely maybe you've had different experiences, but I feel like you kind of are right in that Goldilocks zone. Yeah. Satz: It's funny. It's funny you say that. So, you know, most people, I think that a fault for most people with Eric is a city. And, and that's what I am, so that works to my advantage. So you'd be, you'd be surprised when I say SATs, like sentence, some of the, you know, w when I'm on the phone with an operator, I'm like S as in Sam, a as in apple, T as in Tom, Z as in zebra, and they're like, oh, sets. I'm like, yeah, that's what I said, but. Sasha runs with cats, but I don't know if I get all, I get all kinds of stuff. It's crazy. Ask my kids. Watson: Yeah, I'm right on the other end where there's a, a famous country singer. Who's also named Aaron Watson. Who's like Matt order of magnitude more famous than I am. So I'm, I'm dealing with that, like, like Joe Smith. I can't even imagine what his world must be like, but anyways we're going to link all those links in the show notes. To this episode, you can find it in the podcast app. You're probably listening to this or@goingdeepwithaaron.com slash podcast for every single episode of the show. But before I let you go, Eric, I would like to give you the mic one final time to issue an actionable personal challenge to the audience. Satz: It's a great question. So it's probably not going to be the, the answer most people might be thinking. I give it, I mean, crypto is so top of mind right now and we have a crypto IRA product. Coinbase is our partner. And I highly recommend that if people are going to make long-term investments in crypto, that they use an Alto crypto IRA to do it. But that's my, that's not my, my one thing, because I think people are kind of already looking to try to figure out how to do that instead of. What I would challenge you to do is to open your standard also IRA account move some money from wherever you have it, whether it's fidelity, Schwab, wherever to, oh, over to Alto and, and do some homework and diligence on your, on your first alternative asset, like non crypto alternative asset. Whether it, whether it's a. A startup company on Republic we fonder or AngelList, or buying an interest in a piece of art on masterworks, or we've got 70 plus different investment platform partners that you can begin to to diligence. My, my challenge to everyone out there is make your first alternative asset investment and See what that's like, see how that feels challenge yourself, get out of your comfort zone. Watson: And I think that one of the other important elements of taking an approach that isn't just throw it in the index and forget it is also, it requires you to do more thinking, like, you're not saying go for it. You're saying diligence, it find it. And that's a very different than. Literally set it and forget it. Which, you know, we probably spent another hour on like the philosophy of actually approaching your life that way, which we don't necessarily have the time to, but I am, I am in agreement with you on that front. Well, Satz: excellent. And so let's see if we can get some people to do that for themselves for the first time. Watson: Amen. Eric has been awesome. Thank you so much for coming on the show. Aaron. Satz: Thanks for having me, buddy. Watson: We just went deep with Eric SATs. Who've run out there has a fantastic day. Hey, thanks for watching to the end of my conversation with Eric. If you enjoyed it, I would encourage you to check out our past conversation with Mike Green. He is a high level investment manager. We talk about Bitcoin. We talk about index funds and all sorts of other risks that investors of all shapes and sizes need to consider. Satz: Check it out.
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Dr. Rita Baranwal served as the Assistant Secretary for the Office of Nuclear Energy in the U.S. Department of Energy (DOE).
Dr. Baranwal led the office’s efforts to promote research and development on existing and advanced nuclear technologies that sustain the existing U.S. fleet of nuclear reactors, enable the deployment of advanced nuclear energy systems, and enhance the U.S.A.'s global commercial nuclear energy competitiveness. Dr. Baranwal previously directed the Gateway for Accelerated Innovation in Nuclear (GAIN) initiative at Idaho National Laboratory and served as Chief Nuclear Officer at ESRI. She is currently the CTO at Westinghouse. In this episode, Aaron and Rita discuss how a nuclear reactor works, how nuclear energy is part of an energy solution, and why she dedicated her life to this technology. Sign up for a Weekly Email that will Expand Your Mind. Connect with Rita Baranwal
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Watson: We need to start at the really kind of ground floor level and work our way up so we can get into some interesting conversations here but the starting point is the basics of how a nuclear power plant works. I think that, you know, people turn their lights on, and it's often not necessarily powered by nuclear energy, but they take for granted whether it's coal or natural gas or solar or renewables or whatever. The thing may be powering that if a nuclear power plant is behind that what's going on. What's happening. Baranwal: Okay. So the way a nuclear power plant works in a nutshell is you have uranium fuel that fissions and creates heat. That heat is used to create steam. So the way a nuclear power plant works is in a nutshell, you have uranium fuel and it creates a fission reaction. And that vision reaction creates heat. That heat in turn is used to heat up water. That water is heated to steam and that steam in turn turns, turbine blades, and that turbine blade activity then is converted to electricity. So really nuclear power is a heat source. That's used to create steam. That's used to create electricity Watson: And in general power across the board is that idea that we need to heat something up so that a turbine can be turned. And that's where the power is generated the differences. Where is that heat coming from and what are the costs that we pay for that heat? So very conventionally you know, you're consuming media in some way, shape or form you think about burning coal. You think about some of these other ways we do it. There's this carbon that's emitted into the atmosphere and we've all sorts of expectations about the potential ramifications of that. No carbon basically whatsoever when nuclear is being burned. Baranwal: Exactly. Nuclear energy has always been a clean energy source. It has not been a carbon emitting source and really it's very important as states in the us and countries around the world. Move forward to. Achieving their decarbonisation targets and their clean energy targets to include nuclear energy as one of those facets in that portfolio, because it's always been a clean energy source Watson: And the basic, you know, the other side, the risk factor that people perceive it. And there's one of the elements is people, you know, from an environmentalist standpoint, they see something like Chernobyl and they say, wow, there's like a whole part of the environment that's somewhat unlivable or has like lasting damage to it. There seems to be this gap between we don't want to emit carbon in the environment. So therefore solar, so therefore wind and nuclear sometimes doesn't necessarily get allocated into that same realm. Is it really attributable to its kind of history being used as a weapon that, that causes that? Or what's your perception as someone who's been in the field of nuclear for such a long time? Baranwal: I think that that perception is changing. So, so that's a good thing, but I think some of the perhaps preconceived notions are based on what folks are familiar with. So I'm really appreciative to have this chance to chat with you and talk about what the benefits are. And we can go into more detail on what those are, but. Since those accidents. Let's talk about Chernobyl. Let's talk about Fukushima and three mile island. Yep. Many, many lessons have been learned. Technology has been substantially improved and regulations have been strengthened and tightened. So. In today's technology, today's commercial operating power plants. Some of those accidents could never even occur. So while yes, those, those accidents were tragic. Some were due to technology. Others were due to human error and. Those lessons have been learned internalized and technology has been, Watson: Can you give some examples of that? Cause one of the things is I was doing my research was the concept of a nuclear reactor being walkaway safe, which means everyone walks off the job tomorrow. headed down this dangerous route of catastrophe, but basically for lack of a better analogy in my mind, it's like a very small campfire on the ground with a few embers and more likely than not. It's just going to kind of fizzle out because there's no ready fuel to kind of continue to perpetuate Baranwal: So technology that is walk away safe is designed with passive safety features in mind. In the very unlikely event that something like that happens, you, you can walk away. And some of these designs are, for example, they have a 72 hour window where within 72 hours, everything will be shut down. In PR per the design, right? No human interaction, no human intervention and intervention is needed. No operator intervention is needed. And so those are some of the lessons that have been applied. The technology advances that have been applied to existing power plants and new reactor designs. Watson: Got it. Can you just talk about where the current state of things is like, like w you know, in the us or internationally, wherever your kind of purview is.You talked about it being something here in Western Pennsylvania, where people getting it, where people know where close to getting it. And what are the trajectories in terms of more reactors are coming online versus summer being shut down and taken offline. Baranwal: Ok, let's talk about the U S in the United States, nuclear power is responsible for 55% of this country is clean energy. But it's only responsible for generating 20% of its electricity. So you're getting a lot of clean energy bang for the buck, right? We are holding steady in the U S at about 20% of our electricity coming from nuclear. We have two new plants that are being constructed, almost ready to come online. Those are Vogel 3 and 4 in the state of Georgia. Around the world, the construction of new power plants, it has experienced such an uptick that the US frankly is probably falling behind with respect to construction of new power. The interest from countries around the world in a constructing new nuclear is that they do appreciate that it's a clean energy source that they do need to decarbonize their electricity portfolio.And many of them are looking to the other benefits that can be offered from nuclear power plants, such as generating clean hydrogen, such as desalinating water, such as providing high that. To the transportation sector to help decarbonize that very, very currently pretty carbon, carbon heavy industry that should also be department. Watson: And in terms of the business model of a nuclear plant, my understanding is that it's very expensive to build relative to other power plants of other kind of energy types, but on the back end, the long tail of a nuclear power facility. It doesn't need to have the same types of costs because of just a different input ratio. So can you kind of talk through that, maybe contextualize that versus other types of plants? Baranwal: Sure. So let's kind of frame it as we're talking about larger 1000 megawatt size plants, right? That's that's generally the average size of an existing power plant these days. They are expensive to build, but they last, some are licensed for 40 years, but they can easily get there license extended for 20 years and an additional 20 years. So in the United States, there are some plants that are going for a second license extension to allow their plants to safely operate for 80 total years. That's a pretty good investment when you, when you look at what needs to be put in upfront, and then you have this, this power generation source for, for 80 years. So there's that piece of it. The cheapest way to decarbonize any society is to keep existing power plants online. Those are already sunk costs. They're already generating clean electricity, clean energy, and. W we'll probably get to it, but you will see some plants around the world. And even in the U S shutting down in the U S the Mo most of the recent shutdowns have been for economic and political reasons, not technological reasons. Watson: So there are some of those political reasons that maybe this is like a, just very cynical, jaded take, if I'm in say oil and gas or I'm in some of the other renewables, I would love to have more of the grid be my energy source that I'm economically tired. Versus another, is it, is it that reductive or are there other factors at play when it comes to the political headwinds against nuclear? Baranwal: There’s a little bit of that just as you described. And then, there's this also push from certain pockets of constituencies, right? They want more renewables and, and our decision-makers will certainly listen to their constituents. And so that's why it is important for us to have these types of conversations to say nuclear doesn't have to, it's not, I'm not saying it has to be a hundred percent of the solution, but it needs to be. A sliver of that solution. And the reason is that there have been studies after studies that have shown, even if we were to take fossil off the table, which I don't think is realistic in the short term. Or you have carbon capture, for example, let's leave all of that on the table. You set up. The rest of that with as much renewables as you can, there's still about a 20% slice that's left. That needs to be fulfilled, that can be filled with nuclear and it should be Watson: And even in that world of ex exclusive renewables, you need a lot of batteries in order. Happened just to store it through, you know, with sunlight, sunlight's only up for a portion of the day. Wind is intermittent. And if you're going to be able to continue to power things and you batteries, which are not exactly the most carbon neutral. Baranwal: Commodity out there, they're definitely not carbon neutral. They're definitely not inexpensive. And we can. A bit more about you know, what it takes to develop those batteries, how expensive it is. The mining operations that go into the critical minerals that are going to be needed to fabricate those, those said batteries, but let's also talk about the footprint, right? The physical. Print that is needed for a nuclear power plant is much smaller than that. That's required for a wind farm or for solar. So for example, wind farm requires 360 times the landmass, the land area, sorry, the land area to produce the same amount of electricity as a nuclear power plant and solar photo take plants require 75 times more space. Land is at a premium in most parts of the world. So that also needs to be considered while, while. The hearts and minds of folks might be, yes, we want to push renewables. You also have to consider the value of the real estate that's going to be needed in the impact of the communities around, around the solar farms and wind farms, et cetera. Gotcha. Watson: So we've talked a little bit about these kind of like big almost like regional powering type of plants, but another thing that. 99% over my head, but I've heard the buzzword for it. These mini nuclear reactors, can you talk about the differences, like what, what that entails and then what that could potentially unlock that other forms of energy generation wouldn't necessarily be able to do? Baranwal: Sure. So let me categorize it first. So we've got the micro reactors, which are generally speaking about 20 megawatts or something. Okay, then you have small modular reactors, which are 300 megawatts or smaller. And then we have the traditional larger 1000 megawatts or so sized reactors. So the micro reactors are the smallest of the ones that we're talking about right now. The niche markets that these smaller reactors, the micro reactors can serve, include portability. So then you start to think about, oh, well, can the military use them in terms of helping support operating basis? Watson: And they have with nuclear submarines for decades too, right? Baranwal: Absolutely. So I started my career at Bettis atomic power laboratory here in Pittsburgh and nuclear power has been used in our U S Navy's aircraft carriers and submarines for decades Watson: Without like any sort of major knock on wood here, but like any sort of major issue in any Baranwal: way, shape or form, correct. Safely powering tens of thousands of miles of. US Navy activity. Watson: Got it. But there's other forms of transportation. So what are just some of the implications of, okay. You know, we could think of large ships medium sized ships, cruise ships, I guess, in different forms. What are some of the other applications of something like that for Micro? Baranwal: So for micro reactors the, the, some of the. More near-term applications include helping power island and communities or remote communities. So in the U S let's think about Alaska. Diesel is very expensive to truck in and out, right? If you have a micro reactor, that's powering the community costs costs for for the fuel that's needed for electricity generation goes down. Let's talk about Puerto Rico, where you you want a reliable energy source that can withstand. Climate events and nuclear can do that. Nuclear power is resilient. It's reliable. It's always on, it can be tapered back. If you want to supplement you know, your portfolio with solar with wind, with hydro. It plays well with others as a kind of reductive framework Watson:. So once again, I'm like coming at it from this kind of very newbie mind, but I think a lot about allocations of a portfolio in a, in a finance context. So, you know, you want some bonds, you want some equities I'd argue on some crypto. You want some real estate, you want some other entities in there. And to me, the notion of we've got this one specific play that like you said, has. Hi, upfront cost, very low long-term costs and very basically no kind of carbon release seems like an absolute no-brainer in the context of a larger portfolio, but that's a very kind of reductive view. You have literally dedicated your life to this technology. And just like in past conversations, when I, when I meet someone who's in those shoes, I'm really curious about the origin stories of that one. When did the light bulb come on? When, when did you decide, man, this is really something that you know, years and years of work would be worthy of setting a goal for. Baranwal: Okay. So it starts back when I was looking for my first job out of graduate school. All of my degrees are in material science and engineering. I am not a nuclear engineer by degree. But my first. Opportunity was at Bedus Tomich power laboratory. And what really enamored me was the high-tech laboratory equipment that I would be able to use if I went to work there. So it was really the innovation aspect of the field. And once I was there really got to work on exciting work and develop new technology for the U S Navy's aircraft carriers and submarines. But what sort of was my aha moment, if you will, was when I got to take a van full of summer interns down to Newport news shipyard to watch ships being built, aircraft carriers, being built, separate submarines, being built. And that year we had the opportunity to stand inside the Ronald Reagan aircraft carrier, as it was being constructed. And I stood inside where the nuclear reactor was going to go. So the reactor compartment area, and I looked up several floors and I realized that thing that I'm working on back in this little lab in Pittsburgh, the little thing that I'm working on, the fuel powers, this behemoth of to help defend our country. Yeah. So the energy density of uranium that is leveraged to create nuclear power was, was turning point. number one for me, Watson: Can you, could just contextualize that real quick, just like, you know, I don't know if it's cubic feed or how you would quantify that versus say like the tank of a, you know, an oil rig or something like that. Baranwal: Oh my goodness. Fuel in commercial reactors is the size of a like a pencil eraser on a pencil, right? So it stacked up into, into rods. And then those rods are put into an assembly and you have several assemblies, a few hundred assemblies in a nuclear power plant. So every about 18, one-third of the fuel assemblies are removed re repositioned to optimize the heat output and eventually taken out and considered as, as useful. And we can go down that road in a moment. So, so turning point number one was, was when I visited the, the shipyard. What has kept me in this field is the fact that nuclear power is a clean energy source. I'm a mother of two teenagers, and I sincerely want them to inherit a world that is cleaner than what we have today. And I know that my work and my career in the nuclear industry will help them inherit a world that is cleaner than it is. Watson: And so contextualize that from a global view, we talked about the U S here a bit are there specific, you know, countries, geographies that do nuclear relatively well, because like you said, we could fix this all. I know that there's these international kind of climate agreements, but we could fix this all say in one country, but then if on the other side of the country of the globe, they're just spouting out coal that's. Not even canceled itself out, that's still going to be a huge problem. So, so what does that look like? Like an international field. Baranwal: Yeah. Internationally, there are countries that have existing nuclear that are continuing to build out and increase their nuclear portfolio. Unfortunately we also have countries like Germany that have. Decided that they, they want no nuclear in their portfolio and they're shutting down plants. So at the end of last month new Germany shut down three of their nuclear power plants. Watson: Prematurely, is that all political from your constituency is saying that that's not something that we're interested Baranwal: In Germany I believe it was. Wow. Yeah. Yeah. So Watson: I know. So, so unfortunately one of the other things that's in the news is that kind of a political unrest in Kazakhstan, and that is a major location for uranium mining. Is there a kind of a connection there where, you know, I would imagine not that the Kazaks have a particularly out-sized role in terms of effecting international kind of energy policies, but I have to. In areas where uranium would be mined, there would be a kind of connection to optimism or kind of the proliferation of nuclear power as a specific source. Is there, is that, is that seeing the board correctly or not so much? Baranwal: It's there, there's definitely a uranium source, so well done on doing your homework. And there is some tension right now in terms of what's going on there and what's going to happen with the uranium market, but the beauty of nuclear power in terms of the commercial aspects of it is that you can store your fuel. And you can have that supply at the ready. And so we are not at the whims of the immediate turn of tides of, of politics or, you know, unrest in countries. So that's one aspect of it. The other, is that just because you have a. Country in this case, that is a critical, crucial source in the nuclear supply chain does not necessarily mean that they are also a user of said critic critical or crucial resource. Russia and China are both. Big players in the nuclear power plant arena. They are the two countries that are developing and constructing new plants as well. Certainly leaving the U S in their, in their dust. India is another player. There are many countries around the world that are, like I said, continuing to expand their nuclear portfolio. But to me what's really, really exciting is the countries that are now exploring, deploying new nuclear. They're new to nuclear. They've never had it, but they realize the benefits of it. And they want to have nuclear power as part of their electricity portfolio. And then you've you expand to. Yeah, desalinating water. And possibly even de-carbonizing the transportation sector to helping those areas as well. Watson: So one of the other points there is if you build up a nuclear power industry and you're able to provide not just cleaner power to the grid, but potentially more at an effective cost, what we're really talking about is more energy per person being able to be used. And that's kind of an underrated part of the just macro. Energy store, I'm sorry. The macro economic story of emerging from poverty, it takes power to cook your food. It takes power to heat your home. It takes power for all these things that, you know, when people in a developed world probably take for granted. But that's really part of the appeal, as you're saying in, in these places that are maybe new to nuclear, but even just the proliferation of like you're saying remote areas, whether that be in a desert or some of these other areas that would struggle to have. A consistent connection to the grid in some way, shape or form. Baranwal: Right. You may not have the ability to even extend the power out to a remote area or to develop a robust grid in a certain area. So what you're touching on is a little bit of what energy justice starts to talk about and address it. It is very, very, I think, important to our industry to make sure that we consider elevating communities to a quality of life that we all deserved. And you're right. That us in a developed country can very much take that for granted. And we will bemoan if our lights went out for even 30 minutes, right. There are. Communities and, and parts of countries that go four days without power on a regular basis. And so nuclear power is just one reliable source that could be deployed. And especially if we went back to that micro reactor conversation or an SMR where you can start to positively impact a community that may not have that access to reliable 24 7 Watson: So an example like this interview, I would say is like me doing a very, very, very small part to contribute to that type of move and in a general way, but getting back to you and your kind of career arc and the commitment to this technology. One of the expressions of that was working as the assistant secretary in the office of nuclear energy at the U S department of energy. That is a mouthful. I did practice that before the interview. But from, from sitting at. Position in particular, so that in one seat, you're the engineer actually, you know, constructing and iterating upon the design for its implementation. And then I have to imagine something there it's much more playing political games, understanding, you know, regulatory policy, making decisions that enable this to be unlocked. What did you learn from sitting in that position about what the. Roadblocks are to this being implemented more widely. Baranwal: There is a lot of policy decision-making that goes on. I would say limited voices in the room. So it is really important to make our voices heard. So not only as a policy maker, but more importantly, I would say, as a constituent the squeaky wheel really does get the grease. And so if there is a group of folks that go and talk to their Congressman or Congresswoman wanting X, Y, or Z, Sometimes that's what it takes for a change to come to fruition. And really, what was most surprising to me was oftentimes when a nuclear energy decision was being made, I was the only. Voice in the room with that technical depth to contribute to that conversation. So being present, being represented is really, really important. And so, you know, my challenge to the audience would be make your voices known, make your opinions known now more than ever today, more than ever. It is so easy to do so you don't have to go and walk into a staffer's office on Capitol hill. You can tweet it. You, you can text it whatever way you would like, but interacting with those folks with your representatives really, really does make a difference. In my role, I was able to, to interact with representatives and Senate and senators that were on the decision-making committee. And tell them what our priorities were for my office, for the office of nuclear energy. But then there, I also had to help represent all of the, for example, the technology developers in the United States or the commercial entities in the United States that work in the nuclear industry. And we, we did achieve a lot of really good things during my time there. Watson: What are some of the ones you're most? Baranwal: So the one I'll focus on one, the one that I'm most excited about is the launching of what's called the advanced reactor development program. It's a very large funding program where in we, we challenged developers to apply for funding, using a concept that they could deploy in five to seven years, a new reactor concept that they could deploy in five to seven years. And. So pleasantly surprising to me was we had numerous applications from numerous different technology sizes. We talked about the different sizes, but also technology classes. So we have, I talked about how the fission reaction heats water. Steam to generate the turbine. There are other technologies where the fission reaction actually heats liquid sodium liquid led it can heat molten salt, or can heat a gas. So there's different technologies. Each of them has their own benefit. Some of them, for example, are that you don't have a pressurized system, like you might in, in many of today's existing technologies. So it makes it even safer than today's technologies. And today's technology is today's technology is very safe. So to be able to launch that advanced reactor development program. To challenge our community, our nuclear industry community, to act with a sense of urgency, to be able to deploy new nuclear in variety of sizes for RD of technology classes, to help suit a community, a state, a country's needs is, is one of my most exciting achievements, five to seven years. Watson: Just to contextualize that versus what was because like you're saying that like, man, that's really fast, but for many outsiders, they don't necessarily know. It was in terms of shortening the window for these types of approvals and implementations. Baranwal: Right. It's it can be decades long. Yeah. So we are really challenging, not only the developers, but arm-in-arm were, we are also asking the regulatory authority. So in this case, in the U S it's the nuclear regulatory commission, we're also putting the challenge out to them saying you will be. Accepting you'll or you'll be seeing new designs that are going to be at requesting you and RC to review and hopefully approve these designs in a much shorter timeframe because their deployment plan is also much shorter. Now I want to be clear the NRCS first and foremost mission is to ensure the safety of the public. So they will never. Accelerate anything just for the sake of accelerating. Watson: It’s an inherently conservative organization, because it's all about risk mitigation, risk management, just any organization, whether you're an insurance company or a regulatory body, when you're about risk reduction, you're always gonna have. Move in that type of way, right? |