Yosef Martin - Founder of BoxyCharm | From Zero to $500m Dollar Exit

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Today, my guest is Joseph Martin. He is the founder of BoxyCharm, an online subscription beauty service that was launched in 2013. And with his unique vision as CEO, BoxyCharm quickly became a major disruptor in the online subscription beauty box industry as the first brand to deliver full-size products to members. The company ships millions of boxes monthly. Joseph had an incredible exit selling BoxyCharm to his competitor Ipsy for $520 million. BoxyCharm is not the only success that Joseph has had. He's had previous successful businesses and exits. So, he's been in multiple industries, multiple categories. So, we spoke about all things entrepreneurship. So, finding product market fit, how to market yourself, how to make your product go viral, how to figure out supply chain logistics, all some of the horror stories that he had to deal with. We spoke about him working with some of the largest influencers in the world. He worked with the Kardashians. We spoke about why most marketers and marketing sucks and how to do better. And then we also spoke about his exit and how he sold his company for $520 million. So, you know, one day at the time, that's my story is I'm an entrepreneur and that's my second business. The history for me was that I started around 2004. I launched a company called Merchandise Liquidators. Merchandise with a Z. Z. It's because I had a typo. And I noticed that later, but I'm like, F, fuck it. You know, let's just go it up. And I was trying to pay my out of state to issue and study and flow it down. And anyway, I learned search engine optimization early on. And then I learned how to run a business. And it was a liquidation company. It was a business to business. I had to sell truck roads of excess inventory and customer returns from department stores. But that was a foundation for me. And I can entrepreneur how to create something out of nothing. Really, I had a couple hundred bucks to start the business. Into it, around 2012, I heard about the monthly beauty subscription box concept. And I figured there is a gap in the market. I started getting requests from subscription boxes. It's not a makeup company. Subscription boxes were basically a concept where a subscriber pays $20 or $10, already depends on what they're giving them a month. And you get five items either a sample size or a full size items that sells in Sephora, all tasks, makeup, skincare products and so on. And usually, the way it goes is that the brand gives their products to the subscription box. So around 2012, we get some requests from subscription boxes for products. Imagine I'm a liquidator. I sell products for pennies on a dollar, all the leftover junk from stores. So when they came over, I heard about the concept and I said, why are they buying from us? And they said, well, sometimes brands don't give them free shit. So they come to us and they got to pay pennies on the dollar. So in my mind, I figured it's not a sustainable concept to grow the business if eventually someone is going to come and find the economics to pay the brands. So I decided to launch my own subscription and we called it boxy charm. And it took off. I mean, we had a bunch of iterations to what I thought is going to work. And it's the exact first, a lot in the beginning, but eventually the company was grossing close to 500 million in sale or seven years into it. And yeah, but you don't just like, that's a lot of iterations to gross 500 million dollars in sales, consistent iterations. Because no one else has done this exactly to what I do. There was another company that was grossing some more numbers a little bit. First, we're much bigger than us, but they're doing sample size. And I had to figure out the whole business. I didn't know anything about the beauty industry per se. And I was from high alia. I mean, our warehouse was in high alia. And we had to learn how as we go, but the constant was surprise the people with amazing products. Figure out always chase the perfect product every month and keep surprising them. And the second one is make sure your marketing is fucking amazing. Make sure that people like your Instagram and you want to come in, not because you're selling them nothing. It's because they like your fucking Instagram. Make sure that the product is going to be so good that you're going to go and refer your friends. As long as you're profitable, don't worry about how profitable you are. Think about growing and making sure that the product is amazing. Because that was the constant that we had, it was easier for us to grow. And the iterations were more on what is trending right now. How can I get my hands on it? How can I get those big brands to want to work with me and explain to them my concept and so on. But eventually once we, a couple of years into it, you know, we became really popular and brands understood social media. And they got requests from the social media team to big makeup brands. Okay, we get both with boxy charm. And once you had the first one and the second one that was big reputable makeup brands, all the other ones felt like they have to do the same and they start coming following through. And that's how your company keeps going. And behind all that, you get great people next to you, making sure that they help you sustain the growth of the business. When you started off, you didn't have any experience in beauty. And I want you to just comment on what a lot of people think is, find a way to monetize your passion or find a way to monetize the things that you know best. And even when you're talking before, when you work in an industry or a vertical for so long, it's really easy to start a business in that industry because you know it so well. You came in with nothing. So when you're launching something and you're creating like the category was somewhat defined but not really and you're creating a new product and a new category, how do you make how do you know that you're moving in the right direction? Is it because it's not something you're not intrinsically motivated because of a passion for makeup and beauty. So you have to have external motivators and validators at the business moving in the right direction or you would give up for sure you'd give up because you'd be like, I don't get this. It's not working and you probably have a lot of self doubt too because you're like, I'm probably not getting it because I don't know beauty and I'm missing the mark on something. You launch it. How did you how did you keep it moving? You know, I think there is a plus and minus in both right. The fact that I didn't understand the beauty industry, I see it more of a bigger plus than a minus because if if I was a consumer, I would have been in another box. There were many boxes. I mean 2014 was the year of the boxes and most of our competitors, at least their boxes were curated by women. And I had to be the one pushing it almost all the way to the end. Eventually I found the right people to take over but it was tough. The part where it's easy to understand that an outsider is going to be the trailblazer. I was the outsider and I just did not think like the consumer that apply makeup, I thought as a person that want to understand what the consumer wants and you find out that the consumer have different opinions and different days. And technically when I would do it, I would just do focus groups and I would have my team there at first we had nothing but women working for me. And I would just have them all asking what do you think about this, what do you think about that, what do you think? And you'll figure it out fairly quickly what works, what doesn't work. But one thing I did understand is that looking at the item right now, you understand very quickly what's trending. Okay, so you can say okay, this category is trending, anything it's can just say holographic highlighter in 2017, that's the thing or 2016, that's the thing, everybody wanted that, right? Get it as soon as you can, it's a it's a fact, it's going to go away. But now don't buy it tomorrow because you can get stuck with this. So you understand the fact you've seen already enough and you know what's trending, right? But you also understand that it's only a particular consumer that's going to want to use it. But what you don't understand at first is that there is a difference between receiving the product and there's a difference between viewing the product on Instagram before people receive the product. And if you're a person who uses that, you would probably think mostly about I like it and I don't like it. That is the end part of the logistic process. They receive that and now they're going to give their opinion. You need to get them excited when they see the image on social media. That part is completely different than trying it. So at first I was asking the team to try the product and tell me what they think. And the results were not always great because they would love the product. But when you put it on social media, the product was too small and people didn't apply received value when they saw something small on social media when they received it. The comments were positive, but by then you already get rushed for selling them small items. So then you said, okay, and that's just one example for many things. Like, okay, we need to go and just have them look at the item and say, what would you think if you see this on social media? Okay, now get to try it. You have to break it down into two parts. And it was all trial and error based on, I mean, it was because of blood that was shed over mistakes that we made. We would buy an item that was very, very small but very expensive because there was pearls from Europe to people and people hated that. But when they got it, they liked it, but it was too late. It gets me, so we had to learn through those mistakes and that was the thing. If you keep chasing the kind of improving and exciting the consumer, with a better product, then you're going to win. And Elmi understands something. So for the business model, when you're shipping out these boxes is the opportunity for the consumer because they are rather, is the excitement for the consumer because they see it on social and they like getting something new and it's like exciting. Or is there actually like a dollar value? So is there a margin that you're taking advantage of when you put it in the box? Let me break it down a bit more about the concept, right? And how do you get more, more than a million members by the time we exit, paying members? The reason you grow so much is one, it's a discovery concept. There are two types of subscriptions, physical subscriptions. One is replenishment, the other one is discovery. So replenishment is, I don't know, your vitamin supplements, you need it. My company. So that's something that you know you're going to get and you're getting it and that's it. You're not going to take a screenshot. Look, I just got my razors. Again, you're not going to do it, right? You have to really create awareness by yourself every time. Discovery is actually different because people don't know what to receive. And if they're happy, they're going to take a picture and they're going to go on post-its and they're going to bring awareness for you for free. That happens in my case. That was a discovery. What we did was we went on the full size and we made sure that the price ratio was about four, four and a half to five times, sometimes six times. So you pay $25, but the retail value is about $150. So now there is the price, there is the surprise element, and there is the matching with your personalization that works every time. And those are the reasons. It was a couple of reasons why they get excited. It's kind of like a surprise every month for themselves. Awesome deal that they got. Now, two reasons for them to brag and bring more subscribers and build your awareness. It's kind of like the rich get richer. You have 10,000 subscribers, less pictures on Instagram. You have a million get more. And that was the reason we were able to scale consistently because we focused on the fact that they needed to get excited when they opened the box. And you architected it. You architected a little bit of that FOMO. So because you found bigger products that were Instagram-able, and I also love we're going to talk about your influencer marketing strategy and your growth strategy, but you architected a little bit of that FOMO. So that when people saw it on Instagram, then they're like, now I want to see what's coming and what's new, and then you architected a little bit of virality, and I know that you were doing lives at some point. But you were hyper focused on influencer marketing on social. Did you run, I can't remember if you ran paid as well. Did you run a lot of paid? At the end, before we sold, we started. I think we... Not for the most, not for a lot of money. Most of those years, no. Only at the end, when we went through a process about to sell the business, it was time to start learning how to do performance paid marketing on Facebook, we got to almost 100 million plus in sales, close to 200, without really putting any money in marketing. That's insane. I mean, we did money marketing, but influencers not paid. And it was working because, again, your biggest piece of marketing is your product. And if you can create millions of views, many millions of views through influencers and through your members, that's all it takes. If you didn't sell your product, it's because your product didn't sell itself. Then you get a work on everything else. So while we put, when we put the product, so our growth was as far as more like 20 million year, 50 million year, 100 million, 100 plus, 200 plus, 400 plus. That's how we... And then that's when we exit the company. And it was consistently growing because it was laser focused on the fact that we want to make sure that the experience is going to be great. And the product would sell itself. And a set of influencer marketing that today everybody knows and do, what we... What we actually were able to build was a tight community, but not a community in the terms of just saying, oh, we have a community. No, no, no, no, no, no. What does it really mean, a community? Well, a community is a group of people with the same interest in the same space activating together. When you take that and you said, okay, what is my space? Where is my space? We found that there... You can have your space, say, on your IG page or your Facebook page. But we found a much better space. We found a space that's actually their space that they gathered together, already just to talk about us. That was on Facebook groups. And they created it. They created it at themselves. Now, when I found out in 2017 that our Facebook groups, it's just something on Facebook. At the time they call it forms. It was nice because I just wanted to hear the sentiment. So I joined them. And they said, look, it's only women are allowed. And at that time, nobody knew who I was. I was private on my accounts. And they told them, I'm the founder of BoxyCharm. I just want to hear the sentiment. They were really excited that I joined. And then they said, oh, listen, the owner of BoxyCharm came. And they were posting this and everyone wanted to hear me. So then I said, this is my super charmers. Those are the most advocated consumers. They call each other charmers on the forms. They said, we need another moderator. We need another two charmers to be moderators. I mean, I was saying, this is it. I didn't even know that happens. This is kind of like a backroom door to group of passionate people. A lot of people you have. Most passionate people. And then it hit me and said, the community is not about the size of your community. It's about the passion of your community. How can I amplify the passion? And then I'm going to amplify their numbers. So I said, here is my space. So I said, look, I see, know what? I'm going to let you know before anybody else what's going to be next month in the box. It's going to be a sneak peek. We usually used to do on our platforms, sneak peek on the first of the months. I'm going to give you two weeks before that. Everyone wanted to join those groups. And I announced it on our pages on Instagram. You saw three forms turning to nearly 60 or 80 forms. Any so many other makeup forms and groups asking me to join them just to let them know what's there. No problem. Because there are many charmers over there. And then I ended up having at the end submitting information to about 100 forms every month. The largest boxy charm form at that time, I noticed was more than 90,000 people in one form. And my goal was to gather them all together. All those passionate members. And make sure that they're going to be discussing together. That is their activation. That's how you activate them together. And I would say, well, check my Instagram. I would have them all move to my Instagram page. Everything outside of the boxy charm page. Make sure that it's going to be kind of like the the underground parts, not the regular channels. So they'll feel they're special. Coming to my Instagram page, I'll show you something no one's going to see it. It's going to be behind my back. That's going to be a sneak video. Go in and check it out. Now they connected on Instagram. So now those two friends that we're talking on Facebook, now they get to see each other's Instagram page. Now they're friends because of boxy charm. Because there's 12 of how that was creating kind of like a very tight community of people that became so close to each other over boxy charm. That was the common denominator. And they were so passionate that you get to a point that the community was so solid that when I needed to launch a new product, it was a quarterly box, a subscription box. I announced it twice. One time on boxy charm Instagram page and one time on the forums. I told them in a month and a half there's going to be a new box. It's going to be quarterly coming. Decide crashed. I expected about 40,000 buyers and I thought I'm going to sell 20,000 boxes. I wanted to sell out quick. We had about 200,000 people clicking the checkout page on the second we opened it up. We told them 9 a.m. September first, 200,000 people. Take my money. We added 30 million dollars just like that into a revenue stream in a second from two posts. Because there was an infrastructure, there was a community. Everyone spoke about that. And it was really important for me the momentum because we had a competitor coming at the same time with their innovation. I wanted to make sure that I'm going to take the entire conversation away from them. And I had to go and make sure that it's going to be on that date. So our development team couldn't really complete the site testing to make sure the site crashed. But it's okay. Mission accomplished. All of them subscribed for the following box because we didn't have enough boxes for them. And no one heard about the other companies new innovation. We just took away the discussion in the space. Okay. So I want to talk about the viability that you created. And some of the things that also come from the viability. Because I think that that will help a lot of the other things you're trying to accomplish. If it's paid or if it's trending on Twitter or whatever it is. But you saw those groups of 90,000 people. That's you took advantage of that. And that makes sense. But how looking back, how would you reverse engineer somebody to try and do that and build that group purposefully? That's what I that's what I think the magic is. So you almost you had this like cult like following. But how do you get that cult like following. So that I don't I don't want as a company. I don't want to be forced to create my own community. I want my product to be so cult like. And I want people to be so passionate about my product that they create their own communities. I think you said it's first to start with your product. No one's going to get excited over what they see everywhere else. They have to get excited over your then you kind of like it's a recipe. It's not one ingredient. But it's like you it was like you were actually selling you were selling other people's products. Yeah, like so it's like it like the product was actually but it's a combination of understanding what was what resonated. Yeah, that was the product. Yeah, so exactly. I mean I was the chief product officer until I had Christie that was working for us and she was taking over and she was amazing. But it took me years to find that. And then I was the marketing guy behind this. But look when you build a community I guess a lot of a lot of the elements is that when you trend right when you trend you get to be seen everywhere right. And how do you trend yourself using the community as a utility? The alvenized community. You're talking exactly you're going and so the way I was doing every month there was a spike when people received their boxes on the I want to say around the state of 15th of the month people get the box and there was a spike. And I needed to kind of like and my problem was that if you look at the chart it was unlike the beginning of the month a little spike when I would give them a sneak peak then it would go down after two three days and the discussion around boxy charm because they saw the sneak peak if they came to our to our platforms and then eventually they start receiving the box it does an ad or hype spike blah blah blah blah. It goes down towards the end of the month all the way to the next month. And I needed to lift it in those two in those two days. I needed to kind of be the market market market maker yeah I want to be the market maker. So I said you know what let's do it this way. I'm going to go and introduce to a small group of people but very very loud what's going to be next month in the box during the dips. And I can go and do it just those those two times. I'll take the two strongest items that will be next month marks and on the first dip and on the second dip that's what I'm going to show that. And I'm going to do it in different ways. But my point was I would go in the forms and then say is there any interest in the sneak peak. I would always use the same phrase is there any interest. Eventually I just said is there any interest and that said they would already know what I mean. And all of them would say yes and you would see hundreds of comments yes of course why are you asking this one and and then oh well it's just being funny always that's that just telling me as we can show it to us and it was just really really fun and then I would go and say well go tomorrow tomorrow at 3 p.m. Eastern time you're going to find somewhere I'm going to post something about the sneak peak. Where do you have you have a couple hundred thousand members at the same time searching boxy charm. What what happened with 300,000 people are searching at that time don't don't if you if you were to spread it across 30 days there would be no it wouldn't trigger the object for it wouldn't trend but if it's it's over an hour a couple everyone everyone's trend at the same time now you would go and google trend and you would see in google trend a spike ball boxy charm whenever there's a spike in the trend anyone that mentioned anything about boxy charm is going is getting tons of views anyone that mentioned their box anyone that mentioned what anything so what happened is they said that they trend when you do mention boxy charm down they want to mention us more now they just created more virality concept for free you just offer funnel again everybody here's boxy boxy boxy boxy boxy but you just manipulated the algorithm you just use your community to come in at the same precise time and you do it two three times a month and you keep the discussion going you get you get the discussion going and that's how you chase the cool factor just in the cool factor make everybody wants to like you emotionally they look at you differently emotionally i would say that also having a non faceless company does does the trick right but put yourself out there yeah you put yourself out there right but being a face for the company coming all the way from the founder makes a big deal the fact that you don't take things too seriously you're being funny and you have those consistent words that you keep all the time creates lingual around the community is there any interest and do it fittingly used the same words it was it was ingenious it's very easy nothing is a rocket science technically it's just it's just easy you know what all you're doing is just paying attention yes which is like it sounds it sounds like so basic but i mean how many companies don't pay attention like how many people don't look at the feedback from their product and their users and they're just like no that's what it is i'm gonna keep putting it out there i'm gonna figure out and optimize performance marketing and i'm gonna find a way to like convert people and that have never heard the product before and they're not focused on people that are their biggest fans and their biggest evangelist and how do you serve them it's just like find new customers bring them in this is a big issue with like SaaS companies too you always focus on bringing new customers and you don't focus on churn you have churn you have churn in subscription boxes as well you don't focus on churn you have like a leaky like a whatever like that the leaky yeah like i'm trying to think of that analogy someone told me really good analogy it's like if you take the plug out of a bathtub and you let the water run it's always gonna it's gonna drain but try and fill but imagine like if you like plug that hole and you put water and it's gonna overflow with money and customers all that so you have to focus on the churn yet focus on the customers that have already purchased your product as opposed to just always bringing that new and and how do you focus on them we just listen to the feedback from the people that have already purchased good and bad that's all you that's what you're doing yeah well when you when you make decisions when you run a business you have a decision to make are gonna spend your day you can spend your day reading cohort data and and put yourself in endless meetings that you have credit for yourself to follow up and reporting and ask everyone to go and think for you and and create strategies for you or you can decide to still be the the technician in a way you're gonna say well i'm not letting that piece go until i find someone that does it like me or better and then i can always over seal what they're doing but at least i know that it's in good hands and this way in a for us there was one come one meeting a week all our vps and above just to follow up we we have to collect a stand-up meeting we have to talk only about what's absolutely important urgent that's it nothing else not everyone needs to hear everything about everything so when you have enough time on your hand you can be plugged into the consumers uh discussion you understand what they're thinking about your product you can maneuver you you're in touch with influencers they become your friends they'll tell you hey listen you should go and jump on on this feature right now you're gonna blow up don't at that time it was every in every new features can give you my views okay so guess what boxy charm would be the first to start using say uh it's an IGTV at the time when you would get all the views to IGTV because it was a supply and demand issue right they wanted to make sure that the adoption is going to be there so you did and it's also so though also so you're with any if you go in a month and a half sooner than your competition you get a month and a half free time this is but by the time your competition came in he came into a traffic gym you already created a gap then after that you're going to reels and so on or other features and reels now so you you're you're plugged into the trend and you have enough time in a day to look at those those little things that can make you getting another little unfair advantage because you have the time to actually do it instead of bearing yourself with meetings and in many cases that's what people know they just look at the business as a process process oriented business and all they have to do is step aside and let the people work make it smaller meetings less meetings I think the big mistake that people are doing is big meetings you see when you have a large meeting with 100 people but you have so many things to discuss 14 15 topics to discuss it's it's from you'll find those meetings where most people don't even participate and they're from different departments and not everyone from every department needs to hear everything about every department they need to work and they need to know only what they need to know at the time when it you know if they want to ask questions come in we'll we'll tell you but but you do not need to contribute so to so much data for them for no reason because one year out the other it's not going to stay or or adversely if they do latch on a certain piece of data though contacts it can provide incorrect information or they could get stressed about things or what exactly I just want to take a second and make the sponsor of today's episode HubSpot now pies taking candy from babies both things that are theoretically easy but anyone who's made a pie from scratch or attempted to pry a lollipop from a screaming toddler knows these things are in fact very difficult but you know what is easy integrating automating and scaling your business with HubSpot now the HubSpot CRM platform seamlessly transfers customer data into usable insights like what's the average time it takes us to respond to a customer service request or how can we get better at it the HubSpot service hub brings all your data and support channels in one place so your team can spend less time hunting for information and more time the lighting customers plus seamless connectivity with marketing and sales hubs means every person on your team has a crystal clear picture of your customer easy as HubSpot learn how HubSpot can make it easier for your business to grow at HubSpot.com look it's like my my my analogy was biblical analogy the when when when Moses came with the 10 commandments to the Hebrews only 10 he didn't go with the whole Bible decks of explanations over the Bible because it's useless you have a lot of people give them a little bit of information only what's important you have smaller group of people now you can go a little bit more specific it can retain more depends on the group so you start if you have a big meeting kind of like a town hall meeting everybody's there two three things everybody needs to hear don't overkill it you can have your 10 commandments this is your 10 commandments don't go and discuss everything about everyone to everyone it doesn't it's it's waste of resources in the companies you can find large companies being deployed poorly and then they're going to go and and and and lose for a smaller more nimble competitor that just focus on what's important and urgent all the time and then they they have enough time to always be tuned to the trend you find that like the way you led your company it makes a lot of sense you feel like founders make a lot of probably like you feel like founders fumble on this part a lot and they maybe try and uh maybe they try and step away from the from the operations too quick and then they hire someone then they micromanage that person it happens in many companies happens many companies were they when they start everything is good because you have a small group of people and they're much more efficient I think that the rule and I'm I'm I'm spitting someone else's words uh is and I like that I like the analogy that they gave it's uh the scope of your employees will do 50% of your work so if you have four people at first you're the more at the optimal stage where two people will do 50% of the work so everyone's efficient everyone knows the direction everybody understands where they're heading and they're all now you have 100 people 10 people will do 50% of your work if you have a thousand it's 33 people will do 50% the organization will be less and less efficient right they actually said that once you get to a point globally right you have the whole world right seven billion people but 50 thousand people will do half of everyone else's work where you can see the gap why you have that always there's that 1.1% that are receiving everything because there are more effective and they're doing everything more efficient so when you grow your business we'll be becoming our own enemies because if you forget where you come from and you said well do I really need to step out of everything can a company have the founders still looking at the images before they go sometimes on on Instagram or look over is it really that bad and I think that that you can absolutely find a way to scale a business my look I wasn't a multi billion dollar business but I was half of a half a billion dollar business and half a billion half a billion in revenue half a billion should be like the valuation out its peak would be unicorn well yeah I mean I mean by most multiples like to be honest you would yeah well you know what I was in an industry that you don't have too many buyers it was a new industry so we sell we sold you know at the Covid time but I was happy to imagine if you were in SaaS doing 500 million forget it I mean look if I was doing spark if I was sparking the company at that time it was but but I don't want to I don't want to talk about this why are you bringing it up it's thank you very much but I would have stayed there now and then I'm done I'm out yeah you don't want to be a CEO everyone I've spoken to who's ever been in and or around CEO of publicly traded company says you don't want to be a CEO of publicly traded company yeah I mean like there's some like I think there's some like mental health aspects that are more important than money if you if you have to focus about your quarterly running every every day then you no longer focus about the company the way you're doing it in the private sector yeah and that's that's the biggest deal I mean if I had to focus on that I would have been the death of the business it would just be very very hard for for our particular business it's it's different but I mean look I think the the right that you take is is the real value the the transformation you have within yourself no one teaches you how to build a 500 million dollar business you have to transform to be the business you are well yeah I mean I needed I needed that evolution to be able to go from here to here Joe 2014 is not Joe 2020 or 2021 you probably dealt with a lot of shit every day yeah I mean every day but at first you think every time oh houses and fire and then eventually it was like I've seen this before what were your biggest fuck ups over like the worst well we had a few fuck ups I mean I mean and if you didn't fuck up you didn't try right this it's all about that we had I mean we pushed everything to the limit you have to understand I prioritized momentum over perfection in my execution because look at look at today you're going to find very creative marketers coming in with with on social media and they're getting sets compared to what people have done with zero creativity into 2014 it was just a better momentum so I always understood that momentum I mean to to a to a perfect to up to a particular level right I mean don't completely fuck it up in in there no no but you're not gonna yeah but I mean like if you execute in a month versus if you take a six months or a year to execute something that's exactly exactly so then we we would write things on a piece of napkin we would never use a PowerPoint presentation just tell me over the phone what you what your ideas and then we would go and execute right but because of that we we had a lot of in our mind we thought we failed and also when I was into the weeds of so many things so I felt it I mean I had people going on social media telling me what happened where is my boxer I was really tuned into it maybe another company is the I wasn't pushing myself away from this so you know that it's kind of like if a four if a three falls in a forest does it matter for them maybe they haven't seen it I would see all those trees falling in a forest and I was concerned so my forest eventually stayed very very clean because I was big what did that happen let's understand some others don't because they're far away from that but I felt I will give you one example that was stressful wasn't really our main fuck up but there was some some event that happened to us where we had we were trying to match a skin tone to members and we had a person that we hired that he was the data science guy PhD and all that smart he would do the cube in seconds how do you call that Rubik's cube in seconds oh the guy is a genius I tell you right so then I don't look it's very simple we have all the data for the members who based on their skin tone this is more important than anything else so that when you when you use a location who gets what you know it's what shade you said you like on your quiz and everything as I said forget all that it's all about the skin tone you said okay ship some boxes and how you start getting complaints I got the light instead of the dark I got the dark instead of the light I got the I gonna ask him what did he do he said oh yeah well the other considerations I had to take an account I had to change it wouldn't mean what other consideration well you know some people said they like mascara versus something else I get oh wait so what did I ask you I said before anything else make sure you allocate the skin tone forget everything else if someone doesn't like too much a mascara but the skin tone is there give it to them anyway he actually did everything opposite and people who were supposed to get one shade get the other shade so we had to stop all the shipments because don't too many shipments that went through but we had to stop everything we had to reallocate the production something that we thought will take us two days but reality took us about two and a half three weeks you have to understand when you're getting your box every month from the 12 and suddenly you're not getting it until the 31st at first it's all good when it's a little bit delayed but then it was nightmare people told me go back to your country this is horrible and I mean every we're all stressed right you're all stressed over that because of one arrow that oh well I thought the color of the lipstick is more important and I was like no it's it cannot be more important we just give them for the first time skin tone shade so and that was that was early 2019 we're actually supposed to go we're supposed to be sold sooner but because of that it delayed the entire cell of the business in in about two couple months maybe two or three months and that effect us big because the reason I see it as the biggest event for the business it's because if we were to sell the company two months we sold the business at the end of 2020 we were supposed to sell the business at the end of March 2020 okay you heard about the virus so you're about nine months late and so what happened when we were supposed to get the final beads after doing all the due diligence from all the buyers it was supposed to be March 25 2020 March 15 March 16 the whole world fall apart so we get all those buyers tell tell the story tell the story of selling it to get started so we were going through a process I mean in that particular case if we were just few months sooner we would have sold it same 2019 and all that would have been over but we ended up coming into that place so the whole process had to be shut down because 10 days before the final beads the world had to shut itself down and I said no it's not fucking real this is not happening this is not happening this is a matrix movie over here it took the wrong period but eventually we are we're required by IBC and they said now we're going to still buy you and we're going to you know the and then eventually we ended up selling for 20% more I think within the previous bidder because of that it was coming it turned out to be for the best but imagine you do everything you can do you trying to rush it no problems boom one higher one one higher one higher and to be honest with you there was a discussion why it should we let him go give him another chance you know he needs to get more explanation a jar rules da da da and I said no it's unlike that it's a specific knowledge that none of us has its data science and if you cannot understand kind of like protocol that we give him and he doesn't follow that and they said no he needs to and need to write him up did you tell him this did you write him up like this did you we had to follow all this procedures and then eventually that's what happens so then I went through with because one hired everything that got stalled but can complain because it turned out to be not bad at all actually but that was everything I mean you know when when I sold boxy charm I knew that I needed to control the growth into 2020 because 2019 we had we doubled yourself in growth but we needed to increase the profitability because it was more than maybe the market driven so so by the way like predictable revenue doesn't count for valuation in subscription boxes like it doesn't SaaS it does but um if to understand it all also come down to how many buyers you have and what exits you had in a space right when when YouTube sold for 500 million years ago people thought Google is crazy imagine today yeah so you build it up we're the first real exit in the subscription box well the first one if if you look at the beauty industry companies that were grossing I think there's a company that just exit for 600 million and their gross revenue was 80 million revenue the gross revenue okay yeah and this is this is one company I'd imagine if coming into us right growing and it's much more predictable than other I mean the regular stuff right but it's not a beauty brand it's really not it's a subscription but what subscribe it's not a SaaS how many buyers you have one no one ever bought it okay so then that's what you have and that's okay you know what you you're proud of being what what you did I mean my mom still accept me in her house and she said you're fine and uh you know no one is mocking me in the table with my family and my cousins are still nice to me so it's all good um but eventually it does get your head like I could have been a little bit I mean but again I can go on and on I could have bought Bitcoin back then and I didn't so no it's just funny I guess before before we chat it I had no idea because when you think of subscription I think subscription SaaS oh my god how would an investor not want that how would an investor not want something investors were the only one that came to us actually it was it was the strategic that didn't come to us have strategic stuff come to us meaning the big brands if the support of the world and all those understood what they can do with that it's much more than than a regular SaaS yeah you have you have you have uh you have so much to do with what what we're doing over there but they're gonna try and build it out themselves well they had already they failed it's a four-hour box and they shut it down may she said the box they shut it down they all failed why it's not an easy business there's a reason why there are only two big companies in that space in the beauty subscription box you're asking Ipsi the gap between Ipsi boxy versus everyone else was because it takes something special to understand that business this is not a regular business look on one on one aspect your a makeup brand on another one you're a marketing brand for the brands and then on the other aspect you're a logistic brand you know how hard it is to ship a million boxes compose all those boxes and they never you can never own manufacturing you can never own manufacturing ever it's impossible you don't do that so you have you have to deal with all the products coming from all of the world to make it one time for that particular thing because that variation has to go to that second that's your logistic company that has to have data science behind this you have to have technology then you have a technology company behind this to manage all this as a founder you have to understand a little bit of everything and then when you have a million plus members the customer service team has to have different procedures than anyone else because if you are delayed let's just say a week two weeks the amount of input they're going to have you're going to fall apart so you have to have a by far better automation you have to connect with the member before they know that there's going to be a problem because if you have 200 300 customer service representatives that's not enough when you have a million people not getting their bucks and time what do you do one time we had a hurricane so we had a hurricane and we have to get out of town now thankfully a year before that I decided that if there's going to be a we used to compose all of build all our boxes in Florida we used to do it ourselves because at first we did our boxes ourselves so we're doing the logistic doing the technology doing everything ourselves right all the hats you can just pair of pliers making making it work and we did amazing by the way but I figure you know I can do great but if there's a hurricane I'm not shipping anything for a couple days people are going to hate me let's get out of Florida at least the fulfillment part so we got out of Florida and we had a hurricane and I said thank god we got out of here imagine okay so guess what there was a blizzard on the place where the hurricane was no hurricane Florida but we sent it to the north east blizzard shut down everything for a couple days again they were twashing as where is my back shut it down there was a blizzard I mean it can control the weather but it's also they're not wrong so then okay we have to go to a place that has no blizzard have no natural disasters what are you going to do so it's it's a stressful business and when you get executives to sit down on an office that managing bunch of stuff and that's just one more thing they're gonna they're gonna lose yeah you get to be all in when you do it you have to understand how to respond to the consumer there's no protocol for the companies how to respond so many and you have to understand customer service you got all the elements yeah no idea that it was gonna be like this going in no idea I had no idea what I'm getting myself into the biggest challenge is where the first biggest challenge is when you get to say 20,000 members because you learn that at first you buy the products you go to brands you have it on the shelf so you can do it for next month but all of a sudden when you have 10, 20,000 times is that how you start you just go into stores no no not stores you go to brands connect them explain the concept and so you go to small brands at first because they're receptive to say hello to you and the animals who are you get out here but then they go and they they have like 50000 units on the shelf but when you get to 10, 20,000 you have to start asking them to produce it for you you have to upfront it for still money because no one gives you to do it they would go in and production is eight months so now you have to build your boxes eight months in advance that means you have to do you have to anticipate how many you're gonna need every month which you're never gonna be right too many not to end not enough all that so you build that business this way and then you said damn this is this is hard because eventually you run every month without having any extra money on balance sheet but you're making money but it's all in products for the next few months and you hope for no problems and then some problems didn't make some products in make it on time because there is a strike at ALA port so there's a lot of moving parts that you have to manage and it's a stressful business I'm just thinking about this is what business is all about if I know what I just think about like let's think about like when my CTO has to onboard more customers and he spins up another AWS server that's it's a little less stressful it's a look I had my my wife telling me just go back to liquidation why are you doing this to yourself when we have what one stressful day and I told her this is way better let me let me continue this one if anything give me more motivation because I told myself good it's a stressful business I want to see Sephora and Macy's coming into that space I said that before they got in I said if they come into that space they'll fail they'll never be able to sustain that pressure that I do that's how I knew it's better for me I knew that there's gonna be one or two winners at the other side so okay so one thing you brought up but I thought was interesting is that you had a ton of ton of problems finding the right help so you didn't hire people too much later that you felt like you could like not the not like the general people running the business but like the people that could see your vision and actually execute so you've mentioned the before a couple maybe mishires I don't know if you want to go into those up to you but the people that that you did find how did you find the good people and how did you how did you stay away from people that maybe missed the mark so well a couple things first I hired a lot of young people from Miami and to someone else's words a friend of mine that used to work with us he said you turn them into ninjas they're first of all they're great they're open-minded they want to learn they're excited and you can see their transformation the the thing is they were not molded into anything already by someone else so they sit with you and they see that a lot like even you go into the industry you you always you always mention that your advantage is that you knew nothing about the industry you use it as an advantage yeah right you can look at this as a downfall but it can also be an advantage but in in in terms of hiring we eventually we needed to hire experienced people because there's only eventually you have to partially people that have done things you haven't done and we we had some great hires that obviously overcompensate for the bad hires I think every business comes to a point like that that the scaling of the business where you have to tear your organization from flat into tear then you have to put layers there's two components to it that that everyone has to understand one is when you tear the organization and people are not as efficient as the world when they're already in a room it's because they no longer understand what are really doing in this business and how where are we heading and how are we going to get there so I had to create the I had to create the four pillars and the goal for the business so no matter how many tears you're going to have everyone's going to understand it had to be coherent like the 10 commandments we had we had our four pillars and it was clear precise everyone knew how to do it and it really carries us all the way through the exit so that's one thing so the all know where they're going so you have a goal oriented business and I can literally give a semester about that but the second part is hiring the right people to your point hiring the right people listen you're going to make mistakes you're going to hire the wrong people the question is not just and it's important not just how to find the right people it's between you and your competitors who's going to retain the wrong people longer those are the losers interesting perspective you need to be faster in letting the wrong people go I was yet to be okay I want to say this well okay I was never sorry about someone let go the only regrets I had was not letting them go soon enough that's that's my regret if you and then some of them were catastrophic some of them were just okay some of them were but just okay is not what you're looking for you're not looking for just okay you I rather have a smaller team with with ninjas versus another guy that's you know no it needs to be for the business if you want to be a unicorn you want a person that's going to feed what you're looking for and it's okay to go and and be precise what you're looking for how do you find that that's the question well so you said there was one person I can't remember her name the the woman who took over as I don't want I don't want to mention the one that succeeded yeah yeah the one that was Christie yeah so how did you find her so listen some they come to you eventually right that's first nobody wants to come to you because nobody knows your company so you have to make do with what you have and you have to train your own people you have to figure out things that you don't know because you can't find the people who know they don't want to come to you you work in a crappy place not first with a small nobody you want to work with you have to learn it yourself figure it out then you don't just go and expect someone to figure it out for you if they don't have never done this and you want and it eventually was actually the best thing that happened because if I had to learn so much eventually I knew who's the right person and who's not look if I'm a mechanic a car mechanic and I want to hire you to my mechanic shop I'll know if you're good or not because I'm a mechanic but if I'm not a technician I'm not the mechanic how the hell am I going to know you have no idea yeah you have no idea so you want to run a body shop or mechanic garage gotta learn the job first then you're going to find better people because he'll know who's good and who's not right same here we have me my team we have to learn everything and by the time we hired people we're able to filter better than the other ones because we knew what we need we knew who's good and who's not we understood so and it took us a while right we needed to we needed to crack that shell ourselves wasn't easy but after you get uncomfortable you're fine but and again that kept me thinking outside of the box that was created by the beauty industry and when you bring in people and in order to be honest with you like I tried first to bring in people from the beauty industry and I was rejected as as follow what is your mission statement what do you need to change in the world give me in seven words why does the world need your company what's your DNA I don't have all those questions I just need you to help me get mega brands into my box can you do that no before we do it we need to go and look at the look and feel of your website and there is no soul there is no listen I don't need you to be my creative director I just need better products that's gonna sell my box no but your website and let's look let's just not do it thank you I know what I was I knew exactly what's important for my business I can compromise on the look and feel of my website I can compromise on the messaging for my employees and who am I because no one's gonna care I'm too small I just want the right products there was nothing else more important and when you go to an industry that all they care about is that okay good all my competition let them focus on all it's not important dig for let them dig for for for copper so I can find a gold I just need a gold I don't need you to give me copper and eventually you you see the results and eventually you find that all the time that was spent is to absolutely what's important and urgent nothing else and when you do that you learn you you can screen those people better you understand how they think how they work and you ask them questions like I had when I was trying to hire a CMO I had three questions because I was a marketing person and I came from experience in that case and I did not want it a person that's gonna be just a general manager that's that got a job somewhere as a CMO and and doesn't really know the marketing I'm a marketer that started everything from the ground I've been scaled everything up and I wanted to know do you really know marketing so I told them well here's here's how you interview a CMO you're running a jewelry company sir man I'm giving you $5,000 a month budget to go and promote your business you get me profitable you don't operate under that $5,000 you get to make money with this shoot what do you do tell me after they tell you what they do with a $5,000 okay now your company scaled a little bit now your budget is a hundred dollars what's the best answer that you've heard well the thing is if you are if you are going well the second one is now I'm giving a hundred thousand what do you do now I'm giving you a million what do you do because if you if you're giving the right answer for the $5,000 that means you have grind in the beginning from the get go you understand all the elements on the ground how to do it then if you know that $100,000 that means you scaled a little bit you might get stuck on a million that means you never really manage a large budget and and I needed you to understand all that because at the end we could have spent easily a million dollar or more a month so it was it was that now I think the critical part where everyone felt everyone was the first one they didn't know to do it 5,000 you have a jewelry company well I would hire an agency okay bye get the fuck out of my company I do now want to hear you I did not hire you to hire someone else I can do it myself thank you very much the door is there like I said horrible horrible then you'll find if they knew marketing if I go and I tell you build your own thing do your own thing can you do it can you go in right now build it here's a website here's a couple products to sell put it on a website show me how you sell them if you can't do it why would you think that you can go and work for my business and no one was able to actually answer right and I remember my partners which they are amazing and I think a big piece of YM today was thanks to them for me Joe you need to find the CMO we got we got to sell a business that has a CMO but before you go into the story I need to know so the right answer the right answer my answer to that would be like content marketing like like content marketing well I mean I mean my thing is organic first but I mean I'm so about my view because if you had your experience as a marketer for your business you can tell me something I didn't know about but I've always done organic social for everything to start it off one so you've done what I've done okay and you could have done something else yeah that that'd be just fine I'm not looking for my answer I'm looking for your answer or affiliates are free anything right you can say well I found that but hiring agency is not yeah if you tell me hiring an agency or so and if you if you tell me I am going to go and do paid okay you can do paid with a 5,000 maybe you know paid so well tell me your tactics specifically how you can do the paid well if you told me well we're going to go and sell female jewelry and if I'm going to go and take a bracelet and I'm going to try to appeal to the female consumer so I need to go and so I said that my demographic is woman from that age to that age I'm going to pay four dollars a click however if I go and I basically put for general audience for whoever I'm going to pay five cents a click but while I'll do is I'll put a pink background the algorithm automatically will associate the pink background with female and now I can hit only female consumer but in self paying four dollars and paying you know what again I know what he's doing maybe he doesn't know internet marketing but maybe I can use that maybe maybe he doesn't know how to work with influencers but yeah perhaps we can still work with that okay so I needed to hear something like let's get rid of that you've done this I want to know that you actually made money and he doesn't have to be the way I would have made the money so and otherwise I don't need you I don't need another McKinsey guy that came down not to say nothing it's McKinsey but just just a generalist you need zero to one any people that operate from zero to one with no budget think about it like bootstrapped yes you have no money at all yeah so anyway the CMO that you said your friend your partners needed a CMO they told me Joel I basically said no no no no no and they said we need a CMO we need to find any like someone good and and then the thing was and I don't want to go too deep into it because there is more to the story but but they were not wrong we needed a CMO to sell to other companies because they didn't want to say Joe is the business it's only Joe no one's going to go and let you cash out on so much they'll need you they'll tie your up so they they were absolutely right but it all them every time they would come in with someone like fucking idiot or she's a and I'm like that I'm more I'm rough around there just you nobody has to like me all the time but I was telling the truth they're not the right people and I can't find them and they said are you sure said I am a hundred percent sure why do you think we're making it like it's because I'm the one doing the marketing if they're not as good as me or more I don't want them I can keep doing it myself my day is clear I had all the time in the world I was doing product and and marketing and I had enough time and I wasn't sitting all day on marketing every time when there was a meeting I was it was a very tactical meeting oh let's let's look at our Instagram feed let's see whoa I know why we how did we what do you think we got bad bad engagement on this post and we have the team talking about it's just just empowering the people and working together that was the thing I was doing but I would do it once a week I have enough time so I said I don't need I don't need so much help in that regard but ultimately there is there is something to tell about how to hire people but I think the 60% of that is to fire the wrong people to let them go for and I will say I was guilty of keeping some people longer because you know what you eventually get attached and you give another oh you know what you have kids and they relocated let's try more and let's do it's it's it's hard but the better ones the better companies would be the one that just let you go sooner if you're not the right person for the job you think that you think that one of the the one skills that a CEO a CEO should have is to be a sales or marketer first and to understand sales and marketing you think that's one of the most useful skills a CEO can have I can't tell you it's for everybody but for me it was absolutely that's one of the first things that I'm scared of when it doesn't matter if it's a consumer product or an enterprise product the CEO can't sell it or can't market it then that's a that's a big red flag like I see like look at the Elon Musk versus Ford who's the CEO for Ford again I don't remember exactly right 100 year old company or so right Elon Musk shows up all of a sudden how much value do you think comes from from him creating putting his face out there how much worth if he loses if imagine if Elon Musk is losing his Twitter account what's gonna happen to the stock it's gonna it's gonna crash it's gonna I mean CEO CEO you can absolutely I mean it's a sell job by itself right yeah people want to wait for him for that now obviously he created a phenomenal product right but still he sells he sells right if he goes right now and say hey we're gonna go and put another round for space X if you want to be a partner we do another round if anybody wants would you put your money into it just because it's him 100% that's what okay so question before I would talk about Elon a second is there any other you want to go into more boxy charm stuff let's let's get out of the boxy because I'm sure that the guy's already left the room and it's only chicks we need to bring the guy's talking to you because I just want to take a second and thank the sponsor of today's episode Manscaped now Manscaped is the leader in below the bell grooming and because you're listening today success story you're gonna get 20% off plus free shipping with the code 20 success at Manscaped.com but let me 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performance package you're going to go to Manscaped.com use the code 20 success remember that is 20% off plus free shipping the performance package all the stuff I just mentioned go to Manscaped.com and use the code 20 success okay so you want to say there's two rabbit holes we can go down I think the twitter one is interesting we can also go down youtube too those are two very relevant so with twitter um any opinions on on what he's doing with buying twitter and trying to buy twitter and the bid and the fact that it's so there's a all now it's just like arguments left right in center right because it's a public trade company people are saying oh like how can he have the audacity to just think he can buy it then my argument has always been like well if it's public technically it's always for sale I think Jack Dorsey is the one who said that as well like so do you think that it's a good thing or a bad thing that Elon is trying to buy I'm a big believer in free speech and I think Elon Musk does things not because he wants to make money up until now I mean he wanted to change things right at least after PayPal at least yeah he you know after PayPal he didn't expect to actually make it in Tesla or SpaceX but he thought it was important enough and I think you've seen the you've seen the negative side of kind of like a control media control and I think he's doing it for for that reason I guess I guess a big example of that is to say well he's he's not taking himself too seriously when he goes to Vladimir Putin himself fight if if I win you leave Ukraine and he's just not taking himself too seriously I never takes himself seriously exactly why I think people like him doesn't really he's chill he's laid back it's you I think I think the biggest thing is when we look at and I'm not gonna go all the way over here but look at Netflix right now Netflix crashed I think anyone that doesn't also Netflix crashed three months ago after the quarterly earning that he did good actually they they lost because of one thing that their CFO said we don't know why we didn't grow as fast as we can that that basically crushed the whole market but I thought they were down 200,000 subscribers now oh you're talking you know three months ago they just didn't increase as much as they said they're gonna increase then their projection was to increase this time 2.5 million and now they actually went down to 100,000 which is not a lot but the biggest part was they hit the ceiling they hit the ceiling for member base and when you invest in a company that at that time they you you think they hit the ceiling I don't think that's why they went down well I mean listen they hit the ceiling for them to say that the space is three times bigger is foolish it's not true the space is not three times that's it they have 150 or so million members are there paying for the streaming service they have stiff competition coming from really strong competitors you have Apple doing in the streaming service they have hulu they have Amazon they have Disney Amazon right and what happened is at that time there is no one else and they did a fantastic job I think they changed TV as we see it today why they created their own TV shows exclusive to create stickiness for their platform but now everyone else is doing that and I don't think it's about their price that they're increasing the people complain I think the biggest mistake that they did was eventually will come the time that you gonna stop growing in member base and when that time comes people are no longer going to look at your PE price per earning as as a fast growing company anymore now it's going to have to drop to about one it's 10 12 PE the PE ratio you believe do you believe that the average person that's investing in Netflix understands a tam of streaming I don't think they believe that that there's a big percentage because look at the fact that you have and we don't know what is the percentage of institutional money going behind this and they you bet they know it they know it yeah for sure and then you still have at least 50% of the other people I don't know the percentage of all the other ones that understand that but then look there is the herd the herd mentality they all come the all come back but the thing is if you understand doing doing a simple method okay they are no longer growing why is the the PE so high why can I just put it on a more stable company that doesn't go anywhere more like a PNG there's there the slow growth like anybody else like PNG like J&J like like closer to blue chip exactly they go out and that's it like you you moved from that category now where is going to be the PE ratio it's based on the market goes up and down right now but because that happened it create a lot of panic and there is that momentum with that over correction the thing is looking at all this and I think this is where the discussion is lacking right now on social media what is the mistake that Netflix have made and I can tell you in my mind it comes from the CEO where the CEO should have anticipated that and he needed to go and diversify to another time tall addressable market that's easier for him to get into because right now all they make all the revenue is just from streaming when you look at Amazon when you look at when you look at this new when you look at all their minus hole I think all of them are making multiple revenues from different streaming from different services this is just one more time for them he did then needed to go into the same music streaming was the first one they should have gone into five bucks a month extra get music as well how are you going to say now to that build up the algorithm so I can hear it better than my music and Spotify take a piece of that market now it does it's going to create more stickiness and it's not defined only by the time for streaming service only there is another market for you that you can grow second one and I think that is the biggest opportunity that they have missed and that's lack of creativity compared with YouTube why YouTube very easy imagine if they go and they create their own social media platform YouTube style where you can go and start reviewing the you go you put your own reviews on the movies and guess what when you go on Netflix just next to the trailer I can start seeing the top reviews by people imagine everyone is going to jump into that I don't want to break it all down but it is easier for them easier for them than anybody else they could have done this early enough build their own celebrities just like tiktok build the only the milieu and all that Amazon's doing and Amazon has influencers now too bam I had no idea about that they do this is what they should have done they do like they they Amazon I don't know they're doing it for the movies no for for streaming so live streaming shopping so now they have Amazon so they're doing live streaming shopping because they're going after what Facebook is doing yeah I think they should have done this for videos where you can create your own videos about anything but it can start as reviewing videos you can go and cut and paste do your own trailers you can do your own whatever it is and then you can see the stuff going to do it it would have been easy and people would want to do it and then eventually I mean how do you drive people into it fairly easy if you're one of the top ones you can go to the premiere next time you can be invited you can meet someone I want to do it they could have had so they can enter the social media market it gives you power it gives you a lot more influence and more revenue now you're not long you don't tie this is your safety net when you hit you by the time you're going to reach your peak you already have had a revenue streams that are coming in building himself up and that is again an infrastructure for something else in the future and that is the mistake they made they were more than two hundred billion dollar market cap they crushed it and they had the cash they had the opportunity and you need to do it when you don't need to do it that's that's the that's the the golden piece of advice you have to do it before you need to do it you know there's other things that could have done too you didn't even touch on the thing that they're actually trying to do so they're going to introduce they're thinking about introducing ad tears so this is doing the same thing right this is for me this is kind of like you haven't stepped out of your own town they're still they're still stuck in the same time so same time more revenue than a different I don't even know if it's going to create more revenue they just wanted to go and go back for the churn look if you're in like your own time eventually you're going to start eating eating from your own pan and it's going to just get harder you're going to rethink everything you're doing and everything else you need it to get out you could also do what about you what about the thing that like prime does hulu does where you can rent like like first releases you can pay for them ahead of everyone else you can also do that absolutely that's slightly different him it's definitely a different time that they should have done but but overall it's the same time in that industry but modification but all overall what I'm trying to say is that while you're losing your creativity and it seems like that's one of the things they've lost when you go and you said well I'm going to make sure I'm going to find if you're using your password and then you know oh it's paying me a little bit less but I'm going to show you commercial I think that's when you can see a finance driven mentality and not creative driven mentality running the business it's a it's a more of a financier banker running this business instead of instead of a product person that want to create excitement every time I'm a firm believer that finance people should never run businesses every business that I've ever seen a finance person run and not a salesperson a marketer or a product or a creative person I always find that they screw the business up well I I don't disagree but what I will say is look Jeff Bezos came from from finance world and the thing is he was able to step out of that mindset and he was able to be the financier when he needed to but he understood that perhaps that this is not what it's all about is not finance finance you can find this is this is commodity you can find financiers everywhere great better than anybody all right but you just need to be that person to find opportunity and he was not a financier when he was doing this he was really looking at the experience for the members he was all about the consumer that's going to chip it faster it was it was nothing like a financier so some people can get the finance experience or they can get access to opportunities through the finance position that they sit in he was in I know a lot of people that have been put in the CEO roles because they've been in like they're like accountants at one point and they they move their way up and then but they're usually horrible he's a unicorn yeah mostly mostly when I see PE people coming in their their job is to be operation they want to run a business and you know it's okay in some cases but but it's it's like they go many many of them go back to their comfort zone which is let me look at the cohort data let me go and cut the meat and and fire people they're just not looking at everything the right way from the fat from the fat yeah that's the meat that I said that the meat down so my English yeah that's good it's good thing in English yeah I was like cut the meat that's new I'm it yeah that's not good um no okay so what do you think uh do you think oh yeah so it was like 300 million that they invested or something like that and they had 10,000 subscribers oh my god that's a ceiling yeah it's yeah it's definitely a tough competition to go into it first Amazon didn't do it all great in the beginning the series that they came up with a movie they came up with all the flying movie now I love everything they have everything people for at first being in Netflix was a big deal now Netflix is not the only player in town and now people can have options so they open it up for competition listen I think that the Netflix has the opportunity to go and do it but I think it's a bit late for them to go and manage manage everything else right they did declare what you're gonna do and coming into earning after earning after earning they can get beat I can't see them dying they're still big last time I checked or 97 billion dollar market cap but I think it's going to affect a lot of their quality of their movies though the other mistakes they made and I think people give it to more they dramatize it more than what it is I think they went political and they went extreme left and the mask was actually tweeting about this who mask Elon Musk was tweeting about it so right before the shares right before the earnings report and the shares dropped like 30 points he actually tweeted like Netflix screwed themselves by going to woke and it was like the it was like 24 hours before yeah I mean like I don't get it why why would a public company in which anyone of us can buy shares in both sides of the spectrum go go go go political any side because you have an obligation for your shareholders to make sure that you're not going to create any reasons for people to dislike you being disliked by a group of people it's just not a favorable position now I get it if if you have a plan behind this like you know what I'm gonna grow the business I'm gonna go to a very dedicated consumer and this is gonna be my strategy but when you're really there in the middle of things and you have such a big company and your problem is agnostic nobody nobody looks at Netflix as a political company now they do now they do and and people are not now I don't think though that that was really what what hurts them because I don't think people say you know what screw them let me cancel no they still wanted to see their shows they still wanted to see all that and I think that a long way to go I think they can still recover look there's the day two companies which I believe they're during day two company it's a slow syncing chip what do you mean what is they do I don't even know that term it's not me again it's Bessos he was explaining day one and day two they won it's your first day on the company if you every day wake up like it's the first day that you launch a company those are the companies that thrives the company the day two mentality is the company that's that they had your hey days now they're in the second day and the excitement is not there it's a slow it's kind of a company that that doesn't observe that that don't want to go and accept the trend they swim against the trend because the trend has changed since what what back then used to work now they're finding they're assuming against the current basically instead of swimming with the current observing the accepting the the change and so on so those are but it can be a slow slow death it can be over years you can see companies that take some years now I'm not telling you they can't get out of it but they need either a mineshift that the general is going to have and usually it's not a general on top it needs to be the whole sea level underneath them because you hire like-minded people that pretty much have that idea sometimes you have to have a routine change to make make an impact in the business in the right way and then it goes through some tough times sometimes because the first change you know you're not going to see the results right away but it's kind of like a necessary level where I'm tbodic you're going to feel weak a little bit but eventually it's going to kill the the disease what are you so I'm just it's interesting because now like I know you're hyper focused on like you're hyper focused on investing and you're looking at different companies and I'm actually curious as to what you think about different different companies that you're interested in different trends like just outside of youtube but just to like to bring it back like you're like recently fresh off the exit of your company too what is it like when you've worked so hard towards something and then you sell it and then you have cash in the bank and like explain what your day-to-day is like and what it feels like to decompress after that so you know the day when the wire came in the disappointment is that you don't feel anything you expect because you primarily you can't accept in your head and and all that and you work through the due diligent part is like six to eight months and you're very happy you're very excited and all that you keep it secret it's only a small circle of people that knows about it and sitting down well excited it's my partner is myself just talking about that then that my mom didn't even about that really of course not even when we exit I never really told her anything so come the day and get the cash and remember my banker said okay I sit in the account I'm like I don't see it I'm refreshing it's like refreshing again no let me log out let me log in yeah no there's like oh it's here and they said okay wow and rock yeah it's here and it's like what do you feel now what were you don't I don't know nothing maybe it's because I already pre-meditated this too many times in my head and but I will say that comes a time I think it took me about a year until I actually processed that it took me a minute to process that and you start processing that were that first you get some concern when you get the cash it gives you a little anxiety because you're not used to hold something like this and then then goes away and then eventually comes the point where you start thinking okay I want to make sure that I'm going to be doing right the right move but you really don't have to wake up and manage so many people you don't have the stress it's a different level and I didn't have this for 18 years I had the first company into the second company we know stop 18 years just building something out of nothing and suddenly I know it's it's fine you can just sit down and you really don't have to worry about that every day and I remember that one day I sat down and I felt like it's hitting me can just sit down and joy and I didn't enjoy vacations for 18 years I couldn't enjoy I was able to go to McDonald's I was there for eight days and I was free I felt free for the first time because when you run a company I was not a guy that could be touched I was a hundred percent in I was forced my wife was like hey listen we gotta go and every time I would go with her anywhere I felt like I'm suffering because my mind was in there and I had to be on the phone the whole time and you just cannot mentally disconnect and it's going on for 18 years I don't know if there is a toll for that but for the first time I don't have I think there probably is there probably is a toll I mean like I'm sure like if you didn't do that for 18 years like you'd be I don't know maybe a few less right here I'm sure it's that stuff for your body too like your heart like you're like I'm sure there's like I'm 72 years old right now and you can see the how I age now I'm just kidding so I had I had that moment when I told myself I really am free now and it took me more than a year to process that at least for me it was like that but you know going I remember driving Miko Noose and just not worried about anything needing to check my phone all the time I can just drive and there's no Armageddon situation that can happen in the business any given times it says it was it was amazing to go and feel that but I needed a moment I needed a moment and I still I I'm not gonna like you I am still not 100% there I don't know how to really take a break I don't know how to do it yet I feel like I need to do something that adrenaline is is very addicting I need that adrenaline and look my friends have been going to so many occasions all these times I can't come by I can't I want to do other stuff I want to figure out some things let's go and check this manufacturer let's go and look at my mind keeps running and I go to sleep at night I keep thinking about it and I don't know how to shut it off yet but that one week that gave me that moment where I didn't have to think about it I'm just thinking about how we're gonna go party after and let's jump into the pool and it was sun it was beautiful weather it was great I didn't have that for 18 years and I enjoyed this unlike all the other times where I headed at and I was just looking at trying to come up with excuses to go back and kill the vacation in the middle I was horrible I was horrible I couldn't I mean to someone else that didn't have to experience boxy chump but while I was in boxy chump that was the biggest vacation I can look at this as I was I was on a vacation for 18 years instead of once a while I enjoyed every minute I had a purpose I wake up I before I went to sleep I couldn't I couldn't wait for the morning to wake up for 18 years I remember that one of our employees her name is Zari and she was very observant to she she was employee number seven for boxy chump all the way to the end and she told me one day Mondays you need to see Joe Joey something else Mondays he comes so excited okay guys we're starting on okay you don't think about this until someone else is more aware of and they tell you that and I started thinking about it's like Monday I could just couldn't wait to be that would be the earliest orders was exciting so yeah it's a process it's a mental process you programmed in a certain way after it is you feel like your life actually materially changes after no I don't I don't think so I mean no look so I separated my wife and I have two best friends but the thing is I saw both of the place that perhaps I couldn't afford before but that's it like I don't really care for cars I don't care for shoes sunglasses watches I don't I don't like boats I like my feet in the ground I do care for experiences so I like going to puppy stake I like going to Komodo I have I have friends that people like you sitting down talking I like to be intrigued intellectually and for that you don't need money for that you really don't need money you need you need to just have the friends around you need to be in a right place and I'm think I think I'm very fortunate to be in Florida it's a it's a right place to be and you don't really have to make anything difficult just go right here the endless beautiful places to go out Mars and and see some more equality of life is through the roof years to the roof and and we went through Renaissance people like you coming down to Florida yeah you guys have transformed Florida prior to you guys coming down here when I say you guys I'm talking COVID COVID refugees that came down to to to Florida so many friends that came down here before that many many times I had to travel somewhere to find the right intellect to talk to them I had my CTO my previous CTO is actually an all-time friend he used to used to have a dating company before in the past and he was living in Toronto and every time he would come down here we would always talk about SEO and we would go and like let's go to South Beach I said okay we would sit down in his room and we started talking to chatting every time about the SEO and we would find ourselves not wanting to go to the club because I don't need that noise I need to hear you what you're saying bouncing at this I didn't have any of this in Florida now through clubhouse I was really into clubhouse during the COVID time so many of my friends on clubhouse that I made you said that they're moving to Florida and so many other people their friends and now you have a network of beautifully smart people coming down here you're not gonna get bored yeah and yeah so this is this is basically my my time I'm a simple guy but but that's that's the thing I this is my my best leisure time what's okay so what's your what's your passion now because I do know because I see you on I see you on Instagram the story of of you going on like live and like talking about like different socks and like getting in out of the market and like everybody who follows you doesn't care about that yeah most of my charmers were most of the followers are or ex charmers or charmers score in charmers and they're like yeah you're not telling me what's next month in the box why is he talking about money now you can do whatever you want right I'm telling you to do your own thing to build your own thing we're gonna probably do a podcast I don't know but you can now do like what your passions are and you can you can sort of focus so you talk a lot about like stocks and like so what what businesses interests you what what's exciting for you that you focus on so you know I gotta say this okay I want to call myself newbie until I die on this one because I'm so newbie till you die new yeah because I'm 40 some years old getting into the stock market um but but the the idea is that it's funny I could have put all the money on the stock market like I did at the time and then I pulled out and I started coming back in or I could have had the money going into a real estate investment trust and made a lot more money because anything that I did put over there was giving me already more than 50% 50% more than 50% in a real estate trust yes I have to talk after yeah yeah and it's it's a time I should have put more but I mean how would I have known right I'm not even blaming myself for not buying Shiba Uno or buying a Bitcoin or something like that early enough right say trust I don't ever like I look at real estate there's obviously huge investment opportunity but I don't look at trust is the opportunity in real estate if you don't want to manage a headache if you don't want to yeah the headache and you get a little bit less and you basically put the money out the reason I like the real estate the current real estate investment trusts the new ones that are coming out is the the previous ones were okay we're gonna buy multiple buildings whatever it is here's the money you put it in and then every quarter grand card on does yes I don't I'm not specializing in grand card on stress I'm going to bigger one more like a black and black stone or or there's not one name his hair is or something the reason I went over there it's because it's a liquid trust meaning you can pull your money I think you have a year lock up and then you can pull it every month when you want to because there's a pool of cash ready for anyone that wants to pull out and there's always buyers and sellers coming in the idea is that it's almost it's pretty much as liquid as putting the money in the bank almost but the returns actually put it more like a monthly CD right that you get nothing for it well now you get a little bit more because of interest rate up but I didn't want to take it out could you not just loan against that trust perhaps you can but but I mean right now I mean you I think you can actually you can 50 percent but if you if you're looking at previous rates maybe it's better right just look think about it what do you do with the trust why am I getting a trust you have two components for the trust one is the stock that sits in the trust and then you have the dividend so those particular trust I think every month they distribute dividend from the rent and then so let's just say that's going to give you about 4% a year right something like that sometimes three point something sometimes four point something depends sometimes use that cash to buy more or something more properties or something like that and then you have depreciation so the the money that you get every month is not going to get to reach but at least if you put a dollar into it you get say four cents back every year and you can leave off of that or you can use it for regular expenses but it's completely deductible because it's real estate the other part is actually you're going to expose yourself to capital gain if you sell out but it's there just like you sell any other building it's there at least so it's comfortable it's just a phone call and you get your money in and that's it and year later you know you can take it out and you can do it also on many other options now the risk is obviously that the market can turn but I mean do you want to tell me that it's it's as risky or more risky than the stock market no it's not so it's a safe investment and I mean I'll be happy with 12% a year I think this year was a crazy year for real estate that's why we went out so much yeah but even if you give me 12% that's serious it's not bad what the hell 12% without doing nothing you know what you yeah so that's the the thing is that you're not doing anything for that 12% because if you do go into real estate and you you sell a building if you don't have to pay capital gains on that if you reinvest it in more real estate of course so of course but but the thing is to you I mean I'm not saying I'm not getting into real estate as well this is you put some into everything right put some so what's your what's your what's your mix like what's your portfolio mix I don't want to break it down too much I mean I have a little bit in private companies and I have been you private companies you really we don't need percentage the product on these real estate I'm a traditional stock yeah do you do crypto a little bit yeah a little bit okay not like a significant amount though okay um what are the companies that you that you actually look at I mentioned one called Zim ZIM the reason I I'm gonna bring it up and I'm not telling you buy anything with that with the stack just something for you to look at the the PE ratio is below two percent below two so it's um it's rare so when I start to say that doesn't make sense and then they distribute crazy dividends now it's all about the stack price it's actually really down right now I'm negative on my stack but I actually got this long longer term for the next two years because it's it's a cargo ship companies it's in Israel it's been there since I remember it's way before was born not going anywhere they're just new in a stack market and supply chain right now I mean they're the ones are making all the money the ships right and you can really build ships that quickly to offset that how many years it takes to build a boat enough right so yeah so you get two good years right and um I'm buying it it's a small company it's only eight billion dollar market cup and um I think right now they're lowest in the last six months but the point for me was they're distributing high dividend crazy yeah it's crazy high so we put a dollar you get every year I think fifteen sixteen dollar back and they do it every quarter but then I think next that's significant very yeah it's very high so I was that saying it like like you're you're you're a business leader like you you build businesses so do you go and you look at the strategy and actually distribute they have distributed more dividend um I think March they gave um seventeen dollar for each one that holds a share and that's a quarter that was the problem of their stock price so they're what they're propping up the stock price by incentive the stock price blocked right after that because people people who sold the stock right before are still eligible for the dividend so they said okay I'm gonna sell the stock because it's high I'm gonna get out and then and the stock dropped it was 85 and now it's 55 or something like that and I I got it a little bit higher than what it is now but the point for me was it's a it's a dividend play for the next 24 months I don't care about the movements in the last 30 40 days I care more about the next two years I know that supply chain is not gonna be resolved in the next two years especially now China lockdown the people against it's it's not a bad thing look being in that space where we had to pay four thousand dollars to ship a container from China to California for grand now it's sixteen grand or so that right so they're they're turning some it's like a casino they're making money like casino so that's why I believe there would be a smart move to put it out there and then not to worry about the fluctuation like I said it's a small company yeah so expect that to be much more volatile but ultimately they're too profitable not to put some some money in yeah I've always thought that like when I like go on forums and stuff like that and like like I look at the people that are like you know that make like millions of dollars in investment and I'm just like a minor investor like like insignificant but I always look at like opportunities that are outside like North America so I also think that's really interesting that you wanted to Israel like I've looked into Asia companies like APAC companies as well it's actually in America because it's straighted over here I was not even on a foreign socket change no it's here nice deck yeah or nice deck or I don't know I don't know well by eights it's a it's here but you know the talking about Latin America the question when people ask me about launching a business over here and you ask yourself what do you do in America everything is saturated everything you want to do any consumer good product probably the rock already lunch a company for that or Rogan Paul and you have to compete with giants right everything is tougher what do you do and I get out of that fun get out of America do the same thing but do it in Colombia do it in Mexico do it in China do it elsewhere where you don't have those monsters to compete with there's a family if you ever heard of this family that they took Pinterest and they launched it in Germany three brothers oh yes yes yes and you're interested you're talking about I'm gonna find their name are you talking about rocket rocket the one that launched Glassy Box I'm gonna find I can't remember the two brothers they they also sold something similar to not Pinterest you're talking about the two brothers two brothers they get two brothers that know that I thought it was three the the same were brothers yeah German brothers all of a mark in Alexander did they launch Glassy Box I'm looking at what they launched what did they launch they the okay what what brothers are facing disapproval people were not happy with them they launch clones and clones yeah that's what they do Germany China Russia Brazil but I don't know what they launched clones that maybe it was Glassy Box site yeah they launched clones because they saw birch box and they said oh it's the same Glassy Box they went to like 20 different countries um but they're billionaires now yeah yeah yeah so you do it outside you you do something you see the proof of concepts in America and you modify to the local markets outside of the US that's a smart it's a smart business play too it's very simple it's just again we're in a box right when the United States box get the hell out of your box right it's competitive over here it's like you have multiple lanes you can drive on the 95 yeah there's one that's all jammed and the other ones are free just get on the free what would you what would you start what would you start if you're gonna start another company and I asked that knowing full well that at some point in your life you're gonna do something else yeah so I mean I'm banned for a few years to touch anything beauty nor I care to go into the beauty I need I need to modify myself I can't tell you specifically what I'm gonna get into but all monthly the the category that I want to go into I would like to see a product in which I can go and make a change meaning there's a modification for the current product and make sure that the product is going to be a little bit better perhaps can be a service it's not it's going to be better enough to go and get people excited and talk about that do you like blue ocean blue ocean like category creation like yeah well obviously that that was my analogy with with lanes right yeah jammed and absolutely I think if you can get that look you can warm up your brand outside of the US and then bring it over right you can come in when you already have the company outside that it's funny when you see companies launching in US then going international they struggle companies that go into national coming to the US they don't have to always struggle actually do well because the it's just something that I keep seeing again and again and again if if I had to crack the code and I had to pick a country I would go to China right away huge market and they are as advanced when it comes down to social media and shipments infrastructure delivery very very easy to control that a lot of America a bit challenging in certain countries some are easier than other but if you go to Mexico Mexico has some issue in terms of adoption to pay online you go to Brazil hard cash can get the money out you can get products and that wasn't produced over there the I said the labor laws over there are horrible it's it's worse than in France you hire someone you can never fire them it's it's very hard so you don't get that in Asia you go to one country you go to say the Philippine boom 100 million people no problem everyone uses the internet because brick and mortar isn't scarce over there so I saw it on I mean people used to get boxy chum over there somehow these two ship it from from the US all the way to the Philippines because they couldn't really get makeup unless it's online and that's 100 million people and most people don't even go there because the fans 7100 islands over there go figure what to do it's just hard and so they have the infrastructure Malaysia it's a 100 million here 100 million days let's go and now for me to understand how okay Tagalog I'll take some courses I'll speak Tagalog tomorrow if I have to and then let me go in and adapt to that consumer see how they think let me it's enough people to go and pay attention to it's not a small market and it's open you can do whatever you want so look at the right markets and then go from there that's um it's not it's not it's not uh it's not that hard selling online is really not that hard you can go in through Singapore start dispatching products to Thailand to the Philippines to multiple countries through a warehouse hub over there I mean the only thing that that I think like stops entrepreneurs is that the whole like all of that sounds great but when you're starting something for the first time it's like the thought of even doing it successfully in the US for an American entrepreneur but that's when you're doing for if you do something first time do a five million dollar business oh easy that's what I mean if you would billion dollar business you you want to have different advantages when you come in you want to don't it so it depends at what stage you are right if you what I wanted to do um so I want to I want to we'll do other shows but I want to like finish this one off because we're hitting almost like we're going to hit the two hour mark soon so what I want to do is I want to like just draw some insight out of you for entrepreneur like starting off like early stage entrepreneurs and like teachable moments and we've gone through a lot but I want to like summarize and like and like end the show with that I think that'll be very useful too so a lot of the people candidly a lot of people listen to the show or not at the level that you're at so a lot of people that are not trying to figure out how to build a billion dollar business trying to figure out how to build a five or ten million dollar business that's really the goal I don't think they want to just build themselves a job and make a million dollars a year they want to build something that you know ten million good yeah congratulations so if you were if you were mentoring a first time entrepreneur what would be the things that you want to you want to drill into their head the most important things oh man it's kind of hard to see there's a billion different potential opportunities but somebody comes to you I mean I like to talk about marketing first they it's very hard to find good marketers to work for you near impossible because the good ones don't work for you so you have to be the marketer you have to learn marketing because good online marketing is like back in the day location location location if if I go and I get the right location to open a store it doesn't really matter if it's clothing store if it's I know selling empanadas I'm in the right location I'm gonna I'll be okay so learn how to market yourself then from there then make make it's easier to go and start with that because that's a skill set I can go and tell you that anyone can make the right decisions when they're the right leaders or the organizations the the whole mindset of how to make the right decisions it's probably hard to teach harder to teach it may it comes down a lot to the way you're wired but assuming you have that in you if you also get the skill set of marketing now you're you have an advantage and I think it's also going to give you a lot more motivation to start a business a lot more motivation because knowing how here it is I'm giving you a store over here in a busiest street go figure what to sell over there it's gonna work you have a busy street same thing learn how to blow yourself up you just need the traffic you can zigzag after what product change the product figure out what the product is so that would be also a motivation level for the for the memory that's that was something that helped me so I figured if you understand the marketing you already have a big piece of that