Based Camp - Practical Guide to Getting Rich

00:00:00.000 Yeah, I'm thinking more about like, you know, bridge loans or whatever, like loans for growth.

00:00:04.660 These people don't have access to that, Simone. 0.67

00:00:06.540 Yeah, yeah, yeah, I get that.

00:00:07.740 Advice to normal people.

00:00:10.040 Okay?

00:00:10.680 Anyway, yes, SBN loans are great and they do provide a lot of opportunity.

00:00:15.260 However, let's go into what I would suggest is the number one way that I would look at creating a company

00:00:21.820 if I was an average middling to above middling intelligence person living in the US, right?

00:00:29.000 Would you like to know more?

00:00:30.460 So Malcolm, there's a person in our family who would really, really love, loves money

00:00:36.640 and definitely encourages us to make money.

00:00:39.000 And whenever she's been unhappy with how much money we're making, her advice is always just tell them to pay you more, which I love.

00:00:48.500 This is my mom who's not with us anymore, but she would always do this.

00:00:51.740 Just be like, I'd be like, oh, I'm making this much.

00:00:53.980 And she goes, that's not enough for you.

00:00:55.160 You just need to tell them to pay you more.

00:00:56.760 And I was like, I'll get fired if I do that.

00:00:59.720 You know that, right?

00:01:01.020 And she goes, you just need to be firm.

00:01:03.080 And I think so many older generations are this way.

00:01:05.380 This isn't like, just go and bang on doors and offices until you get hired.

00:01:10.020 But one of the things, you know, if you look at online influencers and stuff like that, sort of the place they always end up, whether you're talking about Girl Defined or Andrew Tate or even Trump is trying to teach people how to make money.

00:01:23.580 And they'll create these little universities for making them because it's true.

00:01:26.400 You know, if you're building your own little community, you know, one of the things that's easiest to promise them is financial independence and wealth.

00:01:33.440 So you promise them that, you get them to waste money on that.

00:01:36.160 And it ends up, you know, some, I think some of it is pretty good.

00:01:39.680 So you look at like Hustle University and stuff like that, like what Andrew Tate is doing and some of the other ones.

00:01:44.080 It's reasonable. 1.00

00:01:45.220 He has to figure out how to tell idiots. 1.00

00:01:49.560 Like, because, and I'm not saying that he disproportionately attracts idiots. 1.00

00:01:53.640 It's, I'm saying if your reach is wide enough, no matter who you are, a huge chunk of that is going, the majority of that is going to be idiots. 1.00

00:02:03.200 Yeah. 1.00

00:02:03.360 As the statement goes, you know how dumb the average person is? 1.00

00:02:05.720 Well, half of them are dumber than that. 1.00

00:02:07.260 Exactly. 1.00

00:02:07.580 You've got to be selling them all sorts of stuff like drop shipping and stuff like that.

00:02:12.320 Like ideas that anyone can focus on.

00:02:14.100 The great thing about what he's doing that I really respect is most people who I see online who are selling these kinds of programs, they're like sort of pyramid schemes and they're based around coaching.

00:02:23.640 Like I'm a coach, you be a coach, you make money like me, blah, blah, blah.

00:02:27.660 And it doesn't really work.

00:02:28.280 That's what the girl defines kind of was.

00:02:29.260 Continue.

00:02:30.020 Well, yeah.

00:02:30.920 I mean, she's one of like a million.

00:02:32.640 What I like about what Andrew Tate is doing is he's giving people very concrete, very practical, often like very unromantic.

00:02:39.520 You know, they're not sexy.

00:02:40.660 They're not about becoming a famous, beautiful coach that everyone wants to follow.

00:02:44.160 You know, it's about copywriting.

00:02:45.540 It's about drop shipping.

00:02:46.360 Like you said, it's about opening an online shop.

00:02:48.100 It's about very like straightforward stuff that most people could do.

00:02:52.320 And for which, with the exception of copywriting, there is demand.

00:02:56.100 And, you know, I don't think AI was ballooning when he first started this copywriting course.

00:03:01.460 So I do admire what Andrew Tate is doing with that.

00:03:05.880 But you're absolutely right.

00:03:06.760 That is what you typically see when some influencer tries to start teaching their audience to make money.

00:03:12.620 I mean, I want to start by being clear that I actually think that he is probably the most honest in terms of what he's promising people of all of the people I have seen do this.

00:03:22.180 Yeah.

00:03:22.460 So good on him.

00:03:23.440 But we're going to do something a little different because, you know, I have my MBA from Stanford, right?

00:03:27.700 Like I am, in terms of making money, probably one of the most educated types of people there are.

00:03:34.720 You know, Simone got her degree from Cambridge in technology policy.

00:03:38.320 And we have done something that gave us a huge insight that normal people don't have, which is called a search fund.

00:03:44.500 So not only did we learn how to raise money from investors, like we've done venture capital.

00:03:47.560 Both of us have worked in venture capital.

00:03:48.600 So we know that whole industry.

00:03:49.860 But we went out there and we had to find a company to buy.

00:03:53.600 So we were emailing, you know, thousands of companies, CEOs, every week, interviewing.

00:03:59.680 I think you got an average of 80 interviews a week, finding out how, and you did this for about two years, finding out how just hundreds, if not thousands of companies worked inside and out.

00:04:10.200 How they were built, everything like that, which gave you, and these are normal companies.

00:04:15.280 These are not like VC companies.

00:04:16.560 So the first thing I would say to people interested is if you are uniquely intellectually gifted, so I'm going to like break this into categories.

00:04:25.140 And if you're okay with high risk, high reward opportunities, go to Silicon Valley, go live in a hacker house, meet the VCs, start, you know, get working on startups, go that route.

00:04:36.320 You can even go the VC route.

00:04:38.040 You just have to be very ambitious, very hardworking, and know that you are very intelligent.

00:04:44.200 And I mean, actually, you have to be well-networked to get the deal flow.

00:04:47.580 You need to actually find.

00:04:48.820 No, you don't need to be well-networked.

00:04:50.080 You become well-networked.

00:04:51.120 You have to be able to become well-networked.

00:04:52.180 Oh, sure.

00:04:52.660 Yeah, you have to have the potential for sure.

00:04:54.120 Yeah, you don't have to start out that way.

00:04:55.260 But like the network you go into Silicon Valley with is pretty irrelevant.

00:04:58.480 Yeah, that's totally true.

00:04:59.440 As long as you're able to build it.

00:05:01.560 Yeah. 0.88

00:05:01.840 I mean, unfortunately, you have to live in Silicon Valley, which is a shithole right now.

00:05:05.140 And there's a few other places you can do this out of.

00:05:07.900 You can do this out of Singapore.

00:05:09.160 You can do this out of London, maybe.

00:05:12.060 But that's really it.

00:05:14.160 Maybe there's some other places.

00:05:16.020 No, I've looked at the ecosystems for doing VC in other countries.

00:05:19.660 And it's just really bad.

00:05:20.920 They almost never end up with economic successes.

00:05:23.720 We can go deep into why this is.

00:05:25.700 Actually, you are better off at having a big success in a country that is smaller than a country with a medium-sized economy.

00:05:31.440 So like if you're in Korea or Japan or Germany, you are much less likely to have a huge economic success starting like a startup-style company than you would in a country like Norway or Finland or Sweden or Estonia.

00:05:45.000 So keep that in mind or Singapore for that matter.

00:05:48.140 And the reason why, just to give a little bit of color there per Malcolm's hypothesis, is that nations that are so small basically have to start out being global,

00:05:55.780 which basically means that you'll discover if you can have global range and global market potential very quickly.

00:06:02.380 Whereas when you're in a medium market where you could sell a lot domestically, like Germany, like South Korea,

00:06:08.540 you could basically get stuck in the trap of selling and specializing for your local market, which ultimately has a very limited ceiling.

00:06:16.420 And so people kind of get stuck in that.

00:06:18.660 Yeah.

00:06:18.760 And then, you know, companies that do well, like Kakao and South Korea, they begin to grow inwards on themselves with stuff like, you know, Kakao Uber, basically.

00:06:27.640 Kakao Talk, you know, Kakao App Store.

00:06:30.120 Okay.

00:06:30.300 So anyway, I'm going to take a quick moment here to describe the different types of capital,

00:06:36.300 because this is important to know about if you're thinking about starting a company.

00:06:39.080 So we just talked about one core category, which is if you just have enormous faith in yourself and you're young and you have educated yourself to some extent.

00:06:47.160 And I mean, you need to be like actually highly educated.

00:06:49.560 I have talked to our fan base.

00:06:50.960 I know a lot of them are of this smart category, but the people in this ecosystem will ferret you out very quickly if you aren't highly educated.

00:06:59.220 And I don't mean in a university context.

00:07:00.780 I just mean that you've taught yourself.

00:07:01.880 And hopefully when we build our school system and we release it like Q1 this next year or Q2 this next year, it would get you there if you completed it.

00:07:09.580 But anyway.

00:07:10.300 Well, and I do really want to emphasize that, like, especially in Silicon Valley, thank goodness, this is not one of those worlds where you really do need credentials.

00:07:17.260 And many VCs really, really just care about merit. 0.98

00:07:20.340 So this is one of those few places where educated actually means what Malcolm is saying, like literally knowing your shit, not having a piece of paper. 0.98

00:07:27.380 That doesn't matter. 0.99

00:07:28.440 Yeah.

00:07:28.600 And having social competence.

00:07:30.580 We've seen a few people pitch to VCs and they, like, lack basic social competence and they come off as crazy.

00:07:36.360 No, don't come off as crazy to VCs.

00:07:38.520 That will not help you.

00:07:40.380 If you have a problem with coming off as crazy to people, this is not the route for you.

00:07:43.800 We will go over routes that could work for you.

00:07:45.980 This is not one of them. 0.93

00:07:46.960 Coming off as crazy to people means that you are low, like emotional IQ.

00:07:50.060 You just can't read people very well and that's going to cause problems. 0.83

00:07:52.920 If you're autistic, and that's why you're – that's totally different. 0.98

00:07:55.520 VCs will love that.

00:07:56.420 Yeah.

00:07:57.000 But if you are on the schizoid side, which –

00:08:00.200 Yeah.

00:08:01.360 Yeah, which, you know, is weird because, I mean, like a little bit on the schizoid side and you're really good at modeling people.

00:08:06.260 But we know a lot of people who are both extremely smart but too far.

00:08:09.440 Yeah, they don't know boundaries.

00:08:10.420 You pass some kind of weird threshold where suddenly you stop being able to model people well.

00:08:15.380 Great.

00:08:15.580 Okay.

00:08:15.820 So, yes.

00:08:16.580 So, with venture capital, on average, even if you're looking at the best firms, they make their money on one of every 13 deals, which means that they cannot invest in companies that will do middlingly well.

00:08:28.320 Okay?

00:08:28.720 Even if it's going to be like a $500 million company, that is still a failure in many VC eyes, right?

00:08:35.040 So, if you're coming to VCs, you would never come to VCs as like a chain of companies that do like laundry, right?

00:08:42.180 That own physical locations, for example.

00:08:44.900 Because a lot of the investment there is going to be in real estate and stuff like that.

00:08:49.180 And the margins just are never going to be that insanely thick.

00:08:52.220 Right.

00:08:52.620 And it requires a lot of, you know, what is called CapEx, you know, ownership of property.

00:08:57.580 So, you would never, with VCs, do a construction company.

00:09:00.320 You would never, with VCs, do a real estate company.

00:09:02.780 Basically, they need to invest in something that is very low CapEx, which basically only software is, and a few other like weird business models where like the CapEx is owned by like a different model.

00:09:13.340 Yeah.

00:09:13.540 And before, you know, our commenters were like, oh, but WeWork, I mean, look at how that's played out for them.

00:09:17.540 So.

00:09:17.920 Yeah.

00:09:19.100 So, that was a huge mistake because they ignored the core way to do VC.

00:09:22.620 Right.

00:09:23.020 All right.

00:09:23.560 So, next.

00:09:26.460 The next source of capital is going to be the source of capital that I would recommend for most people who want to start something with a high probability of working, a high probability of providing them independence, and lower costs to get into.

00:09:41.540 Which is what I would call search fundy type companies, right?

00:09:45.160 And these are companies that you can get into with debt.

00:09:47.700 So, debt can be bank debt, right?

00:09:50.260 Which is actually pretty cheap for an individual to obtain.

00:09:53.340 And by that, what I mean.

00:09:53.740 Well, especially if you get it through.

00:09:55.500 So, first, a little bit of color.

00:09:57.540 Search funds, also known as entrepreneurship through acquisition, involves acquiring an existing company that is already performing well, typically from someone who's looking to retire and sell that company.

00:10:06.220 Because they, you know, don't have a son or daughter to pass it on to for whatever reason.

00:10:10.640 So, these are often companies that are really small mom and pop businesses, very practical.

00:10:16.160 This is where you are going to see dry cleaning businesses and dental offices and mosquito remediation companies and all things like that.

00:10:22.140 And why the debt can be uniquely low is because this is not just bank loans that you're getting.

00:10:27.420 You could be getting SBA loans.

00:10:29.080 Let's talk about an SBA loan.

00:10:30.760 Yes, a small business association in the United States.

00:10:33.020 So, this doesn't necessarily apply to every nation.

00:10:35.060 Other nations may have similar loan programs to this.

00:10:38.260 Are available to small business owners to do all sorts of things.

00:10:42.360 But indeed, to also sort of put leverage on businesses that they acquire.

00:10:45.940 So, what many individual searchers do to become entrepreneurs through acquisition by acquiring one of these small businesses is they use some of their money to acquire the business in the form of equity.

00:10:56.360 And then they get out an SBA loan to cover the rest of the acquisition cost.

00:11:00.020 And they may do some what's called seller financing with the person basically saying, okay, well, I will pay you this much up front with a combination of my money and debt.

00:11:07.760 But then I will also pay you this other amount from the profit that I get from the business after I acquire it.

00:11:13.460 So, let's talk about the two ways that you can go about doing this, right?

00:11:16.460 Because you're talking about one way what I actually probably wouldn't recommend to most people because it's a little bit more sophisticated to acquire an existing company.

00:11:24.100 But if you want to, you know, and you're coming in with some, you know, maybe some money you inherited or something.

00:11:29.520 Let's say you've inherited like $200K or $250K.

00:11:32.520 And then on top of that, you're putting that down.

00:11:34.740 You can talk to a bank, you know, if you don't have a criminal history or something.

00:11:37.660 Get some debt.

00:11:38.820 And that can get you into a company for like $500K, right?

00:11:41.720 If you buy a company at around that range, this can be a company that is earning, let's say, you know, when you're buying these really small companies, you can buy them at like 1X EBITDA or like 2X EBITDA or like 1.5X.

00:11:55.020 EBITDA does roughly the profit of the business.

00:11:57.640 Basically, it means that if you own this company, you would be bringing in about $250K a year yourself because other people don't want companies that small.

00:12:05.080 Like private equity funds don't want them.

00:12:06.380 So, they sell for really low multiples.

00:12:08.660 And then you can do something called a roll-up.

00:12:09.900 You know, you take that money, you set it aside for a couple years, and you buy other companies in the same space.

00:12:14.840 And banks are going to be even more trusting of you then because they're like, oh, you've run a company like this before.

00:12:19.460 But let's talk about why SBA loans are so useful if you do not come from an economically advantaged position.

00:12:26.720 Defaulting on a bank loan, a lot of people are like, oh, this is terrible.

00:12:29.480 Like, what if I buy a company and it fails, right?

00:12:31.800 If you get an SBA loan and you buy a company and it fails, then you go into bankruptcy.

00:12:36.820 That will hurt your ability to get credit for about like five or six years, but it eventually clears out of your record.

00:12:43.100 Especially if it wasn't your fault and then you can do it again, basically.

00:12:46.620 Not necessarily with an SBA loan, with another type of loan or something like that.

00:12:49.360 But as long as it wasn't criminal or anything like that, and what this means is that if you don't have a lot of money to you, you have access to a way to get money.

00:12:58.040 Or if you're willing to put down all of the money you have on a deal and then you can take an SBA loan on top of that.

00:13:02.360 To get capital that's actually not available to people who have assets they have to worry about.

00:13:07.320 I would warn people that SBA loans are personally guaranteed.

00:13:11.500 Yes.

00:13:11.720 So, one thing that we would say about this form of entrepreneurship.

00:13:15.380 Explain what a personal guarantee is.

00:13:17.180 A personal guarantee means that you are on the line when it comes to like basically collateral.

00:13:23.320 Like, you know, you can use your house.

00:13:24.860 So, your company can't go bankrupt.

00:13:26.080 You personally have to go bankrupt.

00:13:27.180 You personally.

00:13:27.880 Right, right, right.

00:13:28.260 This is on you.

00:13:29.880 It's not on like the company.

00:13:31.160 Now, with normal like bank debt, like our travel business that we acquired through the entrepreneurship, through acquisition model has debt.

00:13:40.040 But we are not on the hook.

00:13:41.200 Basically, like if somehow our company could no longer pay this debt, then maybe our company would go bankrupt.

00:13:47.300 To get that, you basically need an MBA from Stanford or Harvard.

00:13:50.220 Like, it's very hard.

00:13:52.080 Or you need to have basically a long history of audited financials for your company that sort of show that it has, you know, or you need to have a company that has like a lot of real estate assets.

00:14:02.120 So, basically, if a business.

00:14:03.860 No, Simone, really, it is very hard to get that.

00:14:07.440 I think it is unrealistic in what you're telling people.

00:14:09.500 And it's not a path I would go down.

00:14:12.140 No, if you own real estate that a bank feels sufficiently confident would cover their loan.

00:14:17.760 Your real estate.

00:14:18.840 Not their real estate.

00:14:19.840 They could sell their real estate separately.

00:14:21.680 So, that's not going to help you in the transaction.

00:14:25.140 All I'm saying is when we applied for debt, Malcolm, as a company.

00:14:27.760 No, that is true.

00:14:28.780 But think logically about what you're saying, okay?

00:14:31.120 If I'm acquiring, for example, let's say a company that does like salting roads or something like that.

00:14:35.940 And they have a bunch of real estate.

00:14:38.240 Included in the price of the company is going to be all the real estate.

00:14:42.240 So, I can take out debt, you know, against that asset, the real estate that's included with the company, but that debt won't exceed the real estate that's included with the company and will be less than it.

00:14:54.040 It'll be like 80% of it.

00:14:55.600 So, then where am I getting the rest of the money to buy that company?

00:14:58.340 I either need to be independently wealthy or I would need to get a personally backed loan on top of the loan that is covered by the real estate the company already has.

00:15:07.780 Point of clarification here, this isn't obvious to listeners, but a company's value is going to be its real estate and hard assets value plus the value of a multiple on its EBITDA, i.e. how much cash it's pulling in every year.

00:15:23.100 So, the value of the company is always going to be higher than the value of the real estate.

00:15:27.800 I mean, unless you're in some weird situation, it's just worth noting in terms of how you value companies.

00:15:33.600 If this video does well, we could go into this stuff in a lot more detail, like how to value companies and where to find companies to buy, et cetera.

00:15:42.220 Yeah, yeah.

00:15:42.880 I'm thinking more about like, you know, bridge loans or whatever, like loans for growth once you do acquire the company.

00:15:47.920 These people don't have access to that, Simone. 0.67

00:15:49.060 Yeah, yeah, yeah, I get that.

00:15:50.300 Advice to normal people.

00:15:52.540 Okay?

00:15:53.180 Anyway, yes, SBN loans are great and they do provide a lot of opportunity.

00:15:57.520 However, let's go into what I would suggest is the number one way that I would look at creating a company if I was an average middling to above middling intelligence person living in the U.S., right?

00:16:11.540 Or really anywhere is I would first look at search fundy type companies.

00:16:15.820 So, look at sites like DealStream and stuff like that.

00:16:17.920 See the type of companies that are selling.

00:16:19.900 Talk with people who run these small companies.

00:16:22.320 Understand how they work.

00:16:24.140 Get a feel of the landscape that's out there right now.

00:16:27.160 Then start a company that is like one of these companies that you have some understanding of.

00:16:34.200 So, this could be like road salt.

00:16:36.100 It could be maybe you have a dental degree yourself and you start your own dental practice.

00:16:41.380 It could be-

00:16:41.780 Vending machines or dental offices.

00:16:43.180 You could do-

00:16:43.440 Packaging some like light production.

00:16:45.540 All sorts of weird things.

00:16:47.320 Or like all sorts of-

00:16:48.200 Vending machines I would not suggest.

00:16:49.780 Vending machines are almost an MLM.

00:16:51.160 Oh, sorry.

00:16:53.160 I should also mention don't do an MLM. 0.99

00:16:55.140 It's stupid. 0.99

00:16:55.860 Yeah, please don't. 1.00

00:16:56.660 You will lose.

00:16:59.000 Any company-

00:17:00.200 I'll word this differently.

00:17:02.000 Any company where somebody is getting a financial kickback for getting you involved with the company,

00:17:07.020 don't do that company.

00:17:08.120 That's a bad idea.

00:17:09.700 Okay.

00:17:10.200 Here, I would make one thing.

00:17:11.660 Direct sales companies are okay if you are below average intelligence.

00:17:15.140 It is probably the best earning potential you're going to have.

00:17:17.440 If you are high aggression, high sociability, below average intelligence, or average to

00:17:22.520 slightly above average intelligence, direct selling is a great opportunity for you.

00:17:26.620 And you really shouldn't be undersold.

00:17:28.140 But direct selling is not MLMs.

00:17:30.380 Okay.

00:17:30.560 That is very different.

00:17:31.840 Okay.

00:17:32.380 In direct selling, the person who recruits you is not getting a portion of your profits.

00:17:36.640 Okay.

00:17:37.320 I guess that's the key thing to look for is there some kind of like upstream pyramid going on.

00:17:45.160 So what I'm saying is the number one way that I would suggest making money is go out there,

00:17:48.800 understand the type of companies that are like these boring, simplistic companies.

00:17:52.540 You really probably want to focus on one that's very low CapEx.

00:17:55.740 That means, you know, like you wouldn't want to get into construction because that requires a lot

00:17:58.840 of construction equipment.

00:18:01.260 What we're actually experimenting with right now is landscaping.

00:18:04.380 We're helping a friend of ours get into the industry.

00:18:06.780 It's a low CapEx industry.

00:18:08.080 And we're, you know, giving them the money up front to do that.

00:18:10.020 And with these sorts of industries, you might be surprised the type of people who will invest

00:18:15.180 in you to do this because it can be a very easy investment for fairly low amounts of money.

00:18:21.380 You know, if you're looking for, let's say, under 30K for something like this, and you're

00:18:25.060 going to your friends like, okay, I need a certain type of truck.

00:18:27.500 I need a snowplow.

00:18:28.360 I need an et cetera.

00:18:29.220 One, you can give them ownership of those assets.

00:18:32.560 And two, just say, okay, I'll pay you like 10% for the rest of this business's life cycle.

00:18:38.200 And if they know that you're a hard worker, who's like not flaky and has some experience

00:18:41.640 in the industry, it's actually a fairly easy financial investment for them.

00:18:45.540 So this is even if you can't get like an SBA loan because you have a criminal history

00:18:48.840 or something, as long as you have people who believe in you often within your cultural

00:18:52.280 group, you know, this is a strategy you can use.

00:18:54.640 And if you're like, I have nobody who believes in me, then like, maybe you should think about

00:18:57.500 like why that is.

00:18:58.500 Because before you do anything like this, right, any of these ideas that we're talking

00:19:03.600 about, you do need to work the grind.

00:19:05.180 You do need to go to an office or work for a landscaping company or work for a something

00:19:09.020 like that to begin to understand how the world actually works and build up enough cash

00:19:14.060 deposits so that you can try for the type of things that will make you a lot of money.

00:19:18.300 But I would focus on things that the environment around you actually needs.

00:19:24.720 Now, a final thing, if you're going to talk about hard mode, but they can make a lot

00:19:27.920 of money is look at local RFPs.

00:19:31.440 These are requests for proposal.

00:19:33.440 These are basically most local governments, at least in the United States, are obligated

00:19:37.600 to go through a formal procurement process whereby they publicly post an advertisement

00:19:42.780 essentially for a service or products that they need.

00:19:45.440 This could be anything from lead remediation, education for a certain neighborhood, to landscaping

00:19:49.620 services, to computer supplies for a school.

00:19:51.700 Yeah.

00:19:53.080 And so you can see that, understand, and work your way towards these positions.

00:19:58.120 So if you're starting one of these companies, you know, if it can be a wounded veteran owned

00:20:01.440 or a disadvantaged minority woman owned, you know, you can get advantages. 1.00

00:20:06.120 So here are places to go if you have us in our society that can get you these sort of unfair

00:20:11.920 economic advantages.

00:20:14.140 I don't want to say unfair.

00:20:15.540 I mean, obviously, whatever.

00:20:17.140 However you want to see it.

00:20:18.260 Special treatment.

00:20:19.540 Special treatment.

00:20:20.920 Yeah.

00:20:21.800 That can be a strategy to go down, but it's significantly more like advanced.

00:20:25.900 I might even do like a, like look into specifically how you do this and how you get to that stage

00:20:31.400 with one of these companies, because you're going to want to be able to get customers outside

00:20:34.940 of the RFPs before you get the RFPs, which can take a while to win.

00:20:38.720 Yeah.

00:20:38.900 So the secret to winning RFPs is before they ever even get posted, you are speaking with

00:20:43.660 that government office, with that university, with that, whatever it may be.

00:20:46.880 No, this is what people say.

00:20:48.100 I think that's a lie.

00:20:50.480 If you're starting, right?

00:20:51.840 Our business just won an RFP.

00:20:53.560 You know why?

00:20:54.180 Because we basically made sure that we were going to win it ahead of time.

00:20:57.960 I'm not kidding you.

00:20:58.780 So like during the final bidding process, it came back to us and they're like, all you

00:21:01.260 have to do is lower your price to this and you're going to win it.

00:21:03.100 And then we did.

00:21:03.680 And we just won it.

00:21:04.780 So sorry.

00:21:05.900 Are you allowed to say that?

00:21:08.140 Do I need to cut part of this?

00:21:09.760 I think it's okay.

00:21:10.560 I'm not naming the client.

00:21:11.760 Like, sorry.

00:21:12.320 I'm not naming the client.

00:21:13.980 And here's what I would say next, because this is actually a final thing that's important

00:21:17.640 to note, is a lot of people will be like, well, I have this skill, right?

00:21:20.500 What I'm going to do is I'm going to start a business around this skill.

00:21:23.700 Like I'm good at consulting in this area or I'm going to, oh my God, like don't do something

00:21:27.500 like making jewelry or fashion.

00:21:29.140 Like that will, I'm making jewelry now.

00:21:31.500 Unless you have like 5 million followers, in which case totally start your tequila brand,

00:21:55.420 start your jewelry.

00:21:56.040 In which case you're just milking followers.

00:21:57.820 But let's, let's, sorry, I gotta, I gotta be clear here.

00:22:00.060 The reason not to do this is because then your business isn't sellable.

00:22:03.180 And it's something to keep in mind is that your, is your business sellable.

00:22:06.340 So if your business is like non-differentiated, like if you have a landscaping company and

00:22:09.780 you have a bunch of people working for you, you can sell that, right?

00:22:12.740 Like, and you can sell that after only like building it out for like three years and then

00:22:15.920 have like $10 million to your name or something, right?

00:22:18.360 Pretty easily.

00:22:19.500 But you know, if you've grown it to any extent, and we can talk about how to do that, but

00:22:23.420 if you're doing something where you are the key player, right?

00:22:28.320 It's never going to be sellable.

00:22:30.000 Like if I'm doing a consulting business or a, a, a law business where I am the key player,

00:22:34.400 well, no one's going to want to buy you.

00:22:36.000 Or that, but like a consulting business over some area that I have some specialty, I'm never

00:22:40.880 going to be able to sell that because I am the key person in that business.

00:22:44.640 Yeah.

00:22:44.820 It is referred to as key man risk.

00:22:46.240 And like, sometimes even like, even if you have just really important salespeople, it

00:22:50.760 will scare, it will scare people who are looking to buy.

00:22:53.320 Cause they're like, man, so much of this business depends on this one person.

00:22:56.280 That's a little bit too risky.

00:22:57.420 Can I close with just returning to your mother's statement of just ask for more money?

00:23:02.120 Hold on.

00:23:02.320 Before we close, there's one more thing I need to say about key man risk.

00:23:04.660 If you are going into one of these businesses, like if you have some skillset and you're like,

00:23:07.740 I think I could do this on my own, what you're really going to need to learn is how to do

00:23:12.360 math cold outreach.

00:23:13.880 And that is for a separate video or for something to you explore on your own.

00:23:18.420 But if you're like, I have the skillset and I don't understand how my company gets all

00:23:21.480 these clients, can you learn how to build a sales pipeline?

00:23:24.920 That could be another video for us and how to do math cold outreach, but they're going

00:23:28.140 to have to be a part of it.

00:23:29.120 Well, just like with finding a partner, right?

00:23:31.120 You're not going to just, you know, approach your wife.

00:23:34.860 So as I was saying, we've been advised to just ask for more money.

00:23:39.400 Now an employee can do this 100%.

00:23:41.460 And also like key employees can do this and pretty consistently get higher wages.

00:23:46.020 There's a risk to this that I think a lot of people don't consider.

00:23:48.740 And so I just want to end with this one warning in terms of the just ask for more.

00:23:52.760 If someone does end up paying you more, if your boss pays you more, the more salary you

00:23:56.820 end up making, the more it means that you're going to be the first person on the chopping

00:23:59.740 block when, you know, your business goes through some kind of hard point because they're

00:24:03.860 going to look at, okay, who right now is costing me the very most?

00:24:07.720 What is the most expensive thing I can cut?

00:24:10.640 And so if you are not making, that is like literally provably bringing in more money than

00:24:16.460 you are costing, the more money that you demand, the more you put yourself at risk for being

00:24:21.680 fired.

00:24:22.260 So I just wanted to end with that because it's something that was hard.

00:24:24.880 And that is so true.

00:24:25.700 And it's so something that people don't understand.

00:24:27.540 You can get that raise in the short term, but you are now on the list to be fired.

00:24:32.660 Yeah.

00:24:33.340 Yeah.

00:24:33.520 And a lot of employees, they don't realize when they're asking us, they've come to us

00:24:36.280 and I think they walk away feeling great because they got the raise and they don't understand

00:24:39.820 that now they're on the fired list.

00:24:41.340 Well, and the most important thing too is, you know, people, when they ask for raises,

00:24:45.860 it's often like, oh, you know, my family, this, or I just had the surgery that, or, you

00:24:50.960 know, whatever, like, oh, it's just been really hard for me or rent's really high.

00:24:54.640 The business does not care about your personal life.

00:24:57.640 The business cares about how essential you are for the business making money.

00:25:01.640 So you really, when you want to ask for a raise, you need to basically show, demonstrate

00:25:05.440 that you are making more money than you're asking for.

00:25:08.160 And that if they want to keep getting that money from you, that they need to pay you more,

00:25:12.680 but that they're going to make more money from you being there than from you not being

00:25:16.760 there.

00:25:17.160 And none of this is CEO cruelty or anything like that.

00:25:19.460 Your value to the business is literally what you cost the business less than what you make

00:25:25.520 the business.

00:25:26.140 The higher that cushion is, the more job security you have.

00:25:29.840 The more you lessen that, the more you are milking for the company, but the less job

00:25:33.420 security you have, because you are literally worse, less to the company.

00:25:38.260 Yep.

00:25:39.140 So just something to consider because it really astounds us as CEOs, like how little people

00:25:44.020 get that.

00:25:44.800 Like, we're just like, you know, I love you and I love your family and I love whatever.

00:25:50.540 We never ask our board for raises.

00:25:52.600 We are, we are so underpaid at this point that I think we're basically unfireable because

00:25:57.180 we could never be replaced, which is what we wanted.

00:26:00.100 We wanted job security more than wealth.

00:26:02.860 Yeah.

00:26:03.300 Yeah.

00:26:03.840 All right.

00:26:04.420 Love you, Simone.

00:26:05.160 Love you too, Malcolm.

00:26:05.900 Love you.

00:26:06.780 Love you, Denise, well.

00:26:11.840 Love you, Tim.

00:26:14.360 Love you, Tim.

00:26:15.560 Make that clear.

00:26:16.520 We have Barlow.

00:26:18.160 Love you, Tim.

00:26:18.840 Love you, Tim.

00:26:19.680 All right.

00:26:20.180 Love you, Tim.

00:26:22.460 Now let us.

00:26:22.800 Love you, Tim.

00:26:23.480 Love you, Tim.

00:26:23.780 Love you, Tim.

00:26:24.660 You're welcome.

00:26:25.100 Love you, Tim.

00:26:25.760 Love you, Tim.

00:26:27.240 Love you, Tim.

00:26:27.840 Love you, Tim.

00:26:29.800 Love you.

00:26:30.940 Love you, Tim.

00:26:31.320 Love you, Tim.

00:26:32.700 Love you, Tim.

00:26:33.740 Love you, Tim.

Based Camp - November 07, 2023

Practical Guide to Getting Rich

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