The Simple Newsletter Making $20M+ A Year With 1 Employee
Farm Kid to $20M Newsletter Guru - July 1, 2024 (9 months ago) • 01:02:15
Transcript:
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Sam Parr | Kevin, the interesting thing about you is that you've got this massive newsletter business. It's all about farming and agriculture. | |
Kevin Van Trump | Yeah, we're probably in the **$30,000 to $40,000** range on paid subscribers. Wait...
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Sam Parr | Did you save like 30,000 subscribers at $600 a year? You gotta tell me everything!
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Shaan Puri | What about the other techs? I've seen people do these, like Fitbit for cows.
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Kevin Van Trump | Yeah, we think that that's going to be prevalent throughout. We think you're going to "blockchain the farm," is what we're calling it in our world. | |
Shaan Puri | What are the things you're excited about now? Where do you think the opportunity lies?
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Sam Parr | Have... have gotta do a quick story on how we met. So, about four years ago, I think we were in Scottsdale, Arizona, at the Design Pickle conference. I had just finished doing this talk about how *The Hustle* was doing pretty good. We were at a million subscribers, whatever.
At the end of the talk, I just walked backstage or walked to the back of the crowd. You're wearing a Ramones t-shirt and shorts, and you walked up to me and said, "Hey, nice little talk you did there." I was like, "Oh, thank you."
You've got this confidence about you, and you're like, "So, how many subscribers do you have?" I said, "I think a million or something like that." You replied, "Well, you know, that's pretty nice. I got a little newsletter myself. We are doing okay; we got about 30,000 subscribers." I was like, "Oh, that's a good start."
Then you asked, "Well, how much do you charge people to read *The Hustle*?" I said, "It's free. I make money via advertising." You were like, "Oh, you don't charge?" I replied, "And you do?" You said, "Yeah, we charge about $600."
I was doing the math and thought, "Wait, did you say 30,000 subscribers at $600 a year?" You said, "Yeah, what do you expect?" It turns out you've got this massive newsletter business. I asked, "What's the newsletter about?" You said, "Oh, we talk to farmers. It's all about farming and agriculture."
I was like, "Wait, hold on, Van. You've gotta tell me everything here!" That's when my mind was blown, and I thought, "We gotta get you on." It took about four years, but finally, we made it happen.
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Kevin Van Trump | I appreciate it.
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Sam Parr | Sean, what did you think when you met the Van Trumps and got around his people?
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Shaan Puri | Man, I would just call it a series of amazement and confusion. I showed up, and first of all, it's called FarmCon, so I thought the conference was going to be a bunch of farmers. By the way, in my life, I don't think I'd ever met a farmer. I had grown up overseas; I lived on the coast, and I had never really met a farmer.
So, I thought it was going to be about farming and whatnot. Instead, it's actually about investing. That was the first part where I was amazed and confused. I walk in, and there's a talk going on about options trading and corn futures. It was so far over my head, and I was like, "Wow, wait, these guys are actually talking about crazy Wall Street stuff. What's going on here?"
Over time, I met a bunch of people. The conference was amazing, and they were like, "Well, what are you doing here?" I was like, "I don't know. I don't farm, and I don't trade commodities, so I'm not really sure. But I'm here to talk. I have a talk scheduled tomorrow, and I'm here to just be out of my comfort zone, be out of my bubble."
Because I had only been going to tech conferences. When I was doing my research for this pod, I learned that you actually kind of did a similar thing, which was that there was a...
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Shaan Puri | Of your life where you wanted to shake things up and you.
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Kevin Van Trump | Started just going to different conferences or trade shows that were totally unrelated to...
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Shaan Puri | What you were doing at conferences or trade shows that were totally unrelated to what you were familiar with, you kind of intentionally put yourself in that situation to shake up your worldview. Is that right? Can you talk a little bit about that?
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Kevin Van Trump | Yeah, for sure. That's what I meant, Sam. I mean, we were at this... I don't even know what the hell it was. My son had called and said, "Let's just make it where we make ourselves go to different things, make ourselves uncomfortable, get out of our comfort zone."
He called me and said, "Hey, there's this conference in Phoenix. Mom wanted to go to Phoenix and out there." I said, "What is it?" He said, "Design Pickle." I said, "What the hell are we doing?"
They had people speaking out... We're doing like hair, you know? They're at a hair drying business, so they had all kinds of crazy stuff. I said, "Okay, I'll go."
Next thing I find myself walking around the courtyard of this place, holding another guy's hand. Like, you know, stuff I never do here in the Midwest, right?
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Shaan Puri | What's the wind going on, you know?
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Kevin Van Trump | They had us doing some weird stuff, and yeah, that's where I'm at, Sam.
Each year, we try to go to different things to get different perspectives and views. You know, we just believe in trading and investing; it's all about perspective. You can get blindsided a million different ways.
I like to be around younger people to help broaden my perspective because, you know, we always say in our business, "It's the old bear and the young bull." As we get older, we tend to get more bearish just because we don't understand as much as we did when we were younger.
When we were younger, we were aggressive and we knew the latest and greatest things. Now that we get older, most of my older hedge fund friends and traders are more cynical and bearish, just by nature, it seems like, because we just don't understand a lot of the newer stuff.
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Shaan Puri | Well, I'll give you two things that came out of it.
Number one, after PharmCon, Ben and I were in the lobby of the hotel while one of the talks was going on. There was another Korn Futures talk that was going over my head. I said, "Hey, let's just hang out in the lobby real quick. I just gotta... gotta... gotta... gotta understand what the hell these guys are talking about."
Anyways, we went to the lobby and we talked about your newsletter business. We thought, "You know what? We should create a newsletter business around what we're interested in." At the time, we were very interested in crypto. We had been kicking around this idea, but we hadn't really had the momentum or the energy to just create it from scratch, to birth that baby.
So, only in the lobby of the hotel were we like, "Let's do this!" We named it Milk Road, which was kind of like a farm-y sort of name. Anyway, it all came together in the lobby, and then a year later, we sold that business for $1,000,000.
I gotta credit you in a way because we had a conversation with you the night before. You told us, "Hey guys, I gotta go back to my room. I gotta write the newsletter." We were like, "You still write the newsletter? Surely you've hired a team of people!" And you were like, "No, I write the newsletter myself." I think you had written it for some absurd number, like 18 straight years or 20 straight years. You hadn't missed it, and it was you writing it every single day. Is that right?
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Kevin Van Trump | I have a girl who works for the KSA Board of Trades, Stacy Craig. She's out in LA and helps me with a lot of content. I write about corn, beans, and wheat. I write the top comments, and she helps with those. Then, I write the stories down below. So, it's her and I usually tag team the whole thing. To give her credit, she's been awesome. | |
Sam Parr | Let's explain a little bit. Your main thing is the Van Trump Report, which can be found at vantrumpreport.com. It's a daily newsletter that is a great read. I actually have read it for a while.
It talks about... I call it for farmers, but it's way beyond that. It's agricultural-based information for farmers, but also for people who are trading commodities. You have said that politicians read it to understand a little bit about what's going on in that world.
You've told me—I don't remember exactly what you said—that it was doing something like 30,000 people paying something like $600 a year. It's basically just you writing it. If you did that math, that's true; that's like $18,000,000 a year in revenue from a newsletter. Is that right?
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Kevin Van Trump | Yeah, it's just myself. There are about four of us on our staff here. A friend of mine, who used to be a golf pro, is a buddy that I went to school with. His name is Stacy, and he’s out in California. My son, Jordan, is on this side of the fence. My wife does bookkeeping with our accounting team, but that's really it.
Like you said, I did the newsletter and just wanted to write about what I was interested in and everything that kind of interests me. So, you know, that's really what we do and what we put out.
Yeah, we've got several congressmen, senators, and a lot of big trading groups, hedge fund people. We have about 35. We're probably in the 30,000 to 40,000 range on paid subscribers.
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Shaan Puri | It's also got like five pages of memes in it, which I love. I was reading it, and the first part was cool. It's commentary on where you think the market's headed, and it's written the way you talk. It's very informal; it's a straight shooter type of vibe, which makes it fun to read even if it's not your style.
Then, it's got a bunch of memes, which made me laugh. I was like, "This is hilarious that you chose to do that." Was the product we see today basically how you started it? Is that what it was at the beginning? How did you get it off the ground? What was the initial momentum with that?
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Kevin Van Trump | Yeah, pretty much. So, my Mary, my high school sweetheart, and I were both from a small rural town here in Missouri. I went to work for a group that was contracted with the NFL to do camps, combines, and clinics. I was traveling all around the country, got a really cool job, but making no money.
My wife kind of landed her dream job in Chicago. You know, we didn't come from any money; neither one of our parents had any money, really, so to speak, when we were younger. My wife got this job where she was going to run the Eddie Bauer store on Michigan Avenue. It was going to be their premier store, and we thought, "Man, this is going to be great."
So, we went up there, and I didn't know anything. Some of my friends in the NFL said, "You gotta get into the trading business." I didn't know anything about trading. I was just a small rural town farm kid who played a lot of sports all my life. They said, "Well, we'll give you this interview."
I went to get an interview with this guy, and he just kind of looked at me and said, "Damn, you're a big tall guy." I was probably about 6'4" and 350 pounds at the time. Then he asked, "You like to fight?" I thought, "What the hell kind of interview question is that?" I said, "Yeah, sure. I go out every weekend and get into a rumble or two at the bars."
They said, "Yeah, you're great. You're hired." I asked, "Well, what am I doing? I don't even know what the hell I'm doing." They replied, "Oh, everybody will see you on the floor. It'll give us a little edge and advantage."
So, I started at the very bottom. They wanted me to be a phone clerk, and then I moved up to getting orders off. I met a few people, and they started me off trading Swiss francs, Deutsche Marks, and foreign currencies over the Merc. Then I flipped back over to the board and started trading treasuries. | |
Shaan Puri | So wait, Kevin, this was back when you used to have to kind of push and shove your way with the papers to get your trade-off. Your size was actually an asset.
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Kevin Van Trump | Yeah, big, big time. You know, they'd hire basketball guys, ex-football guys. There'd be fights breaking out on the floor.
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Sam Parr | Alright guys, really quick. Back when I was running The Hustle, we had this premium newsletter called **Trends**. The way it worked was we hired a ton of analysts and created a sort of playbook for researching different companies, ideas, and emerging trends to help you make money and build businesses.
Well, HubSpot did something kind of cool. They took this playbook that we developed and gave to our analysts, and they turned it into an actionable guide and a resource that anyone can download. It breaks down all the different methods we use for spotting upcoming trends and identifying different companies that are going to explode and grow really quickly.
So, if you want to stay ahead of the game and find cool business ideas or different niches that most people have no idea exist, this is the ultimate guide. If you want to check it out, you can see the link down below in the description.
Now, back to the show.
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Kevin Van Trump | Then we got off to the floor where we were Arben Minis. Arben Minis first came out, and we were Arben Minis against bigger S&Ps.
Really, my strong suit became more apparent as people got interested in grains, particularly corn, because they started using corn as ethanol and things like that. A lot of our big energy traders and friends didn’t know anything about the Midwest, you know? It was all just a foreign language to them. They would keep asking me questions.
Then I would go back home to my small rural town where the farmers were playing dominoes in the morning, getting breakfast or coffee. They’d be like, “Hey, city slicker! Tell us what’s happening here in the corn, bean, or wheat market, or the cattle market.”
I would, like you said, Shanna, just double it down to my back home speaking, in more of a blue-collar way, and just tell them, “Hey, here’s what they’re really meaning or saying.”
In 2007, it was a little before that when the government came out with the RFS (Renewable Fuel Standard). That’s where they turned corn into ethanol. I started writing a newsletter, kind of just for myself, a journal. I said, “Hey, I’m going to be a better trader, a better investor. I’ve listened to a lot of people, and I’ve been broke twice on a couple of deals. Let’s do it the right way.”
So, I started journaling and said, “Hey, I’m going to send my notes out to friends.” Then it started circulating back to me. It was coming from guys at Goldman and different trading firms. It was circling back to me, and I told my wife, “I said, ‘Shit, we were investing in trying to do some storage units at the time.’”
So, I thought, “Oh, I’ll send it out for $40 a month. It’ll be like a storage unit deal. Let’s just see if people buy or pay.” And it just kind of took off and went nuts from there. We’ve never advertised, and we’re about in 45 countries now.
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Shaan Puri | All the growth was organic then.
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Kevin Van Trump | Oh, but yeah, I would never advertise one time.
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Shaan Puri | I love it! Then you have the conference, the thing that I went to. I think it was originally called the Van Trump Conference, but you renamed it to PharmCon.
For those of you who don't know, you are like a god at this thing. It was really inspiring to see because you weren't trying to be the front and center of it, but you could just tell you had so much respect from the community. People really appreciated this gathering because they were getting a lot of value out of it.
You ran it like a family affair, and you got your son there with his swag business. So, how did the PharmCon thing come about? Is that like a big part of the business? Why do you do it?
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Kevin Van Trump | Yeah, you know, it started off with just myself and probably 30 or 40 friends—traders and investors. We'd get together once a year, drink some beers, and tell each other about our favorite trades or investments.
They loved coming to Kansas City because it was kind of an anomaly. You know, we're used to being on the coasts of New York or California, so they'd come here and it would be kind of fun. They started to invite their friends, and we all had investments in land—bigger land investments and different things.
Next thing you know, we had a lot of hunting and fishing guys coming, just people who owned big farms. They were flying their private planes in. So, yeah, then we just kind of blew up. They started telling more and more of their friends, and, hell, like I said, we started selling out most everywhere we had it. You know, it's a really cool, fun time.
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Sam Parr |
Can we talk a little bit about your empire and what it is now? So you've got:
1. The publishing business
2. The newsletter
3. This thing called **AG Swag**, which is a merch company, is that right?
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Kevin Van Trump | Yeah, let me back up to be clear. Some of the people were grandfathered in. We started charging $40 a month or $400 a year. Then, about 8 years ago, we went to $660. We have some people that white label the report and send it to their businesses and their staff, and things like that. So that's all in the mix.
But yeah, I had a friend, Dave Krumholz. He recently passed away. He was the CEO of Payless Cashways. Dave came back here to Kansas City and started a business consulting company. Then he got hired at a place called American Identity. I said, "Dave, what the hell are you doing at a company with American Identity? Don't they just sell hats and tchotchke stuff?"
He said, "Yeah, a private equity company bought them, and they're gonna dress it up. They want to have a big executive team, so they're bringing me in as CEO. I think we'll have a good exit."
Well, about 3 or 4 years later, they sold to Staples. I believe it was undisclosed, but I think it was close to $8 billion. I said, "Holy shit! What did you guys do over there at American Identity?" He said, "You know, we made hats and shirts."
I asked, "Well, who the hell were your biggest clients?" He replied, "John Deere, ADM, Cargill." I was like, "Oh shit! I know all those people. I know all the farming community and ag people."
He said, "Well, I tell you, if you ever get to where you guys are gonna start something, launch something just under the radar, non-intrusive business, this would be a great way to get something rolling."
So, I told my son Jordan, when he was about to graduate college, "Hey, if you ever want to try something on your own, I got an idea. I've come up with a name: Ag Swag. We could probably spin this off, take care of a lot of our clients, provide a lot better service, and be a lot more fun and friendly. We could give people some great fresh ideas."
So, we launched Ag Swag. It's just a swag company that provides hats and things of that nature to people, really specifically in the ag world. We do other things, but that's really Jordan's forte, and he's running that.
He's hired an art team; he's got about 4 or 5 artists. My daughter came back to help him. He's got a team of logistics people, and I think they're gonna do somewhere between $25 million and $30 million this year. So, they're growing like crazy. If we want to pull up on Slack, I can walk you guys through a little bit of the business. Well, I learned that.
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Sam Parr | Yes, let's do it.
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Kevin Van Trump | You know, this is just a simple example. You draw your scale of uniqueness on the left and your scale of total value on the right.
So, if you go to your far right, you have high value and low uniqueness. You're asking, "What the hell would that be?" That's like a tire business. I always use this example: people have to have tires, so it's not unique, but there's high value because everyone needs them. Nobody wants to kill their family, and they need good tires on their car.
If you see your business in that aspect, you're in a low gross business model. This means you're going to have to be a low-cost provider, and you're going to have to do volume. That's going to be your play.
Now, if you get up into the upper right quadrant, this keeps me out of a lot of bad business deals. Here, you have low value but high uniqueness. You start to ask yourself, "What is that?" Remember when Snap or Google came out with the glasses? Those glasses were spectacular back in my day, like a LaserDisc.
You know, it's going to cost a lot of money to educate the masses. It's going to cost a lot to get it to market, and there might not be any longevity in it. So, you have to be careful. Not a lot of value but high uniqueness—that's a tough spot to play in.
Now, you get over to where Apple likes to play, or some of the others. You go high value, high uniqueness. That's something like an iPod—10,000 songs in your pocket. That was their main stick. That's where you can create high gross, high margin, and make a lot of great things happen.
Obviously, in the lower left corner, you're an idiot if you're somewhere in...
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Shaan Puri | It has no value, no uniqueness.
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Kevin Van Trump | No, bad idea. You know, I always say, "People buy value, not price." This was a hard concept for a lot of people to understand.
For example, if I went into Walmart and put a whole bin of LaserDiscs for sale at 5 cents, nobody would buy them just because there's no value to them. Now, maybe there is a little value now because people are looking to sell some of those types of items, but I'm just saying you have to be aware: people buy value, not price.
You can set the price as low as you want, but it’s just not good. I see people get trapped in that a lot in real estate and other areas. This is where we try to categorize the business deals when they come down the pipeline, assessing where they are and how they are going to play out.
It's never the soldiers I send in at first; it's never the first money we send in on the deal. It's about how many more soldiers are going to get called into duty and maybe never come back home to my bank account or come back missing limbs and arms. So, you have to be careful in that aspect.
My wife is always saying, "My gosh, we’ll write more capital call checks." But we kind of know that if we can categorize it this way, we know what we’re getting into.
With Ag Swag, what's critically important, we believe, is knowing your funnel. Your light users—obviously, you're going to be able to get more market share from your light users as you move down the customer continuum to your heavy users.
As Sean pointed out, that would be John Deere or Cargill. What you have to understand in all businesses is that you're always going to be pulled to the right. You're always going to be pulled to the high user and low gross. They’re going to try to get you over there. If people like what you have and what you're doing, they're going to pull you more to the right and try to beat you up on your price and gross because they say they're a heavy user.
That's why it's really imperative for most people: you don’t want to get an order from a low-value customer. You don’t want to go that way because it's next to impossible to get your business back to the left. To the left is where you're going to see a lot more profitability and higher gross.
So, we try to position Ag Swag in the middle, away from the John Deeres and ADMs. We've had calls from them wanting us to store all of their merchandise for the year. We ship it out, and it becomes a logistics business. The growth shrinks up to nothing, and we’re running a real people business there where we've got a lot of... | |
Sam Parr | Hands and a lot. | |
Kevin Van Trump |
Of touches. So we've tried to stay out of that space as much as possible early on, so we can create and build more smaller accounts, smaller business owners, and people like that where there's more fragmentation for us.
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Shaan Puri | You have these other slides that I really like. So, you have this poker versus chess one that I loved. Can you talk about this one?
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Kevin Van Trump | Yeah, you know, I just think... they talk a lot about life being like chess. A lot of times, you'll hear people talk about those things. You know, I say life is more like poker than chess just because the cards are face down and a lot of luck is involved.
A lot of times, you can be the greatest, have the greatest skill in the world. I've met some of the most brilliant people, but if they don't catch any breaks, if they don't catch any luck, it becomes tough.
So, I think you have to remind yourself... and that's what we were kind of talking about earlier. If you think you're a genius and you're just smarter than everyone else, I think you run into a ton of problems and a ton of roadblocks.
That's where I think you have to look at it more like poker. You know, you can catch a lucky break every now and then, get on a run, and get on a little heater. Sometimes, you know, that's when you really have to push and go all in.
It's when your luck's going your way. When you feel like some of the little things aren't going your way, you've got to pull way back. You know, that's not when you double and triple down. That's when you kind of hunker down and let the storm clouds pass, and hopefully, your luck will shift and turn around a little bit.
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Shaan Puri | Well, it seems like there are three parts to the poker thing, right?
First, the cards are face down, so there are a lot of unknowns, unlike chess.
Then you're talking about luck and variance; that's the second part.
The third part is that you said amateur players just play too many hands. A pro only plays about 15 to 20% of their hands, but an amateur is playing half the hands.
So the trick is actually to pass on the average opportunity to save room for the huge opportunity. That's the other one.
I think Warren Buffett calls this "waiting for the fat pitch." He's like, "There are no called strikes." You can let 50 opportunities go by and just pass on them. Even if there were some good ones in there, it's okay as long as when you do swing, you swing at the right ones.
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Kevin Van Trump |
100% agree. I mean, you know, we use that analogy... we use the Ted Williams saying all the time. There's Ted Williams' batting chart, and Ted Williams was one of the first persons to go and document all of this. Where he would hit balls, or where he could... you know, what his percentage was if it was high and outside, low and inside. He figured out where his sweet spot was.
And Williams would just sit and wait for his pitch, and when he got it, he'd knock the shit out of it. So it's similar to where you're selling.
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Sam Parr |
You talk about luck, and you say "passing on the average opportunity to save room for the huge opportunity." With your trading, what have been opportunities that you've thought were huge that you pounced on? As well as maybe some that you didn't because you thought they were average?
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Kevin Van Trump | Yeah, tons. I could go through those like crazy. And you know, I agree with that. We've talked about this—myself and a lot of my trading friends.
As we've gotten older, we've learned that we can look back through all of our documents and everything. I mean, the more trades we made, the worse the year seemed to be. The fewer trades we made, by far, the better the year.
Now, we're trading even less and less. I know some of our readers probably get scared of this; they want the action and everything. But you know, it's like wrestling. A great high school or college wrestler is super patient. They wait for the market, in this case, to make a mistake—like getting out of alignment, being over-leveraged, or over-tilted. Then you come in and try to make a play.
Most of your money is made by sitting and waiting. The greatest traders will say that all your money is made while sitting. It's incredibly hard to do. The decision to do nothing is a decision, and in our world, a lot of times, it can be the best decision you could possibly make.
As far as what Sam said, we were early with BigQuery and early with Tesla. I was trading when Amazon first came out, and we had 30,000 shares of Amazon right out of the gate. I went negative on it. I'll never forget the story. My wife and I, we didn't have enough money to pay attention at the time.
I had this position, and it wouldn't get me. I said, "Man, if this thing just gets back to even..." Amazon traded at like $3 or $4. It got back to even, and I blew out. It would have been like the craziest trade of all time if I had stuck with it. But I wouldn't have stuck with it, probably.
You know, I'm a trader, so you can't beat yourself up saying, "Man, if I would have just stayed in that." I think a lot of people do that to themselves. It's a psychological game, and you just sort of try not to beat yourself up and not get down on yourself. Because then it gets hard to fail and recover.
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Shaan Puri | What's the case for being a trader versus an investor? Because if you read about all the investing greats, they all kind of poo-poo traders a little bit. They're like, "Oh, you don't want to be a trader. You want to be, you know, a buy-and-hold guy. You want to buy, find a great asset, and then sit on it for a long time."
Am I just only reading the advice from the investors, and that's why? Or is there something to what they're saying?
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Kevin Van Trump | No, you're absolutely right. I mean, there are plenty of trades I've been in that I've become an investor because they went against me. We just kept holding and holding and holding, right? It was meant to be a short-term trade but turned into a long-term, you know, just ass-kicking.
So, it's like, no, I agree. My job, though, I was a trader. I was on the floor, at the exchange, at the Kansas City Board of Trade, you know? My whole job revolved around trading and fairly quick movements in the market. I did own a day trading firm at one time, and you should have seen the success rate of people day trading. It was just a miserable business.
So, we don't day trade, so to speak. We'll be more swing trading; we'll be multi-days in a trade. You know, the commodity markets are a little different. For every buyer, there's a loser, and they're a little different than stocks. There are expirations on the contracts, so we're more short-term oriented, but we're also longer-term investors.
Like you would say, Sean, I do think I advise my kids exactly what you're saying. You know, unless you're going to be full-time and you really want the belly aches, I wouldn't advise trading or trying to time market movements. Like I said, I'm more with Buffett. I think everybody's trying to beat the indexes. I mean, everybody's trying to beat the S&P and the NASDAQ. Year in and year out, that stuff is tough to do.
So, I think, as a passive investor, a long-term hold is probably a good play for the majority of people, and that's the way to build wealth. | |
Sam Parr | How many years have you beaten the index? How long have you been doing this? 20 or 30 years? Do you think that you've beaten the index?
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Kevin Van Trump |
You know, I mean, the years that we beat it would be by a mile because we get lucky in some certain position or some certain stock. In the year like this year, I'm trailing. I have a decent amount put over into... you know, we're still in a lot of CDs at 5.25% or 5%. And you know, a lot of our wealth building has come from real estate.
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Shaan Puri | That's just buying land, farmland, or what are you buying?
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Kevin Van Trump |
Buying real estate... We have everything from commercial properties to single-family homes that we've turned into various Airbnbs. Land - farmland, regular land - those have been our biggest winners.
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Sam Parr | Has the majority of your net worth come from the income that the newsletter has produced, or has it been from trading?
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Kevin Van Trump | So, I think there are two ways you can approach your business. You know, when you're making money, you can either take the money and reinvest it back into your business, which we didn't do. That was kind of my play. I'm like, "I'm not going to do that. I'm going to take my money and then I'm going to put it out and see if I can invest in other people's businesses."
We've partnered with a private equity firm called I Select. So, we're early investors in ag tech startups and some biotech. We've had a ton of losers, but they've all led to meeting new people and learning new things. That, in turn, comes to something else we did.
So, you know, we try to grow our revenue and then take that revenue and invest it in various other vehicles and sources. | |
Shaan Puri |
What's the sentiment like amongst the people that are reading the newsletter or would come to the conference? You know, are people bullish right now? Are they optimistic? Are there big headwinds or tailwinds? What's going on in the food producer world?
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Kevin Van Trump | Yeah, you know, it's pretty dark right now over in our world, so to speak. The big jump in rates was obviously kind of a real pinch for a lot of our ag tech startups and a lot of people just in agriculture in general.
So, you've had a big jump in rates, and then we also have, you know, a little bit of a glitch right now. We have a pretty burdensome supply of coal. We're over 2 billion bushels in supply of coal. You know, we had about 500 million bushels of beans coming down the pipe.
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Sam Parr | And wait, sorry, that means that last season overproduced.
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Kevin Van Trump | Yeah, you know, we had a good year last year. South America is coming off a pretty good year. For example, Argentine production doubled from what they had. They had a big drought last year and some production problems.
Brazil's down a little bit, but China... so China right now hasn't been a buyer of U.S. new crop beans. They haven't booked any cargoes, which is unusual. So we're worried. We have this election coming up, and anything can happen. We're not sure how China is going to play it with Trump coming back into the mix. Are we going to have a bigger hit on tariffs?
When Trump was in office, we saw bean prices break pretty considerably because we got into a pissing match with China. You know, they're the number one buyer of beans in the world. So we're kind of trying to weigh this out and see how things are going to shake out.
But we do have some new things on the front. We have sustainable aviation fuel. Soybeans are going to be used to make sustainable aviation fuel, which is going to be a big one. We're trying to push to get corn production to also be used for sustainable aviation fuel. There are a few pipeline issues that need to be addressed and some things like that, but we're moving toward more food for fuel, which is becoming a little more prevalent.
We're seeing more countries move to that for cleaner energy sources. We're seeing more utilities and more usage for traditional crops. We're also seeing more utility and more usage for land. We're just seeing a ton more buyers and bidders come in for land, with people wanting to put in solar fields to create energy and wind fields.
There's just a lot more utilities being used now for data centers. We're seeing a big push through the Midwest with companies wanting to build these massive data centers, really through the glut of the Midwest. We think it's kind of like Cushing, Oklahoma, where we store our oil. Now we think data is going to be kind of the new oil, and so we're going to try and store our data here in the U.S., centrally in the Midwest.
So we're seeing a big push in some farm ground being gobbled up for big data centers.
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Sam Parr | My father is a produce broker. He owns a small brokerage where, let's say, over the course of 20 years, he's sold $100,000,000 worth of onions. The margin is about 5%, so he'll make $5,000,000 over those 20 years. It's a huge quantity, but in that space, he's a small dog—really tiny.
I remember during 2008, I was only 17 or 18. I was watching the news and I asked my dad, "Why do you seem like you're making more money now than before when everyone else seems to be going broke?" He replied, "Well, look at the corner of our kitchen. There are onions and potatoes there. People are still going to buy this stuff no matter what. When the economy is going well, you're going to go out to eat, and I'll crush it then too. So, I'm in a good business."
As I got older, I kind of forgot about farming and food and agriculture. I didn't really think about it. But what I've learned over the years is that America is really good at two or three things. One of them is culture; we export culture amazingly well. Hollywood is like our biggest export, or culture in general.
The second thing we do really well is growing corn. America is so good at growing corn, and I forget how important agriculture is to our way of life in America.
So, when you're talking about some of these things—what China is doing, what Brazil is doing—if China is buying stuff from us, how big is this entire industry? I mean, what percentage of the GDP or economic value is it creating in America compared to other things?
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Kevin Van Trump | Oh, massive! I mean, it's one of the... and we're seeing more and more of the wealthy get into agriculture. That's why I'm saying it's a really hot area.
You're seeing, you know, the Gates Foundation, Buffett's group... well, Warren's son, Howard, he used to be a big farmer and he had just recently gotten out. He's still on the ground, but they're having some other people farm and do some things like that.
But yeah, we're seeing a big, big push and more and more people being interested in agriculture and interested in food and where it's coming from.
We're seeing... Sean, what we're also seeing is more people going direct to the farmers. Just recently, in the last few weeks, we've seen more ranches come online, kind of form a little coalition. There's a group of about 7 or 8 good ranches down in Texas that are now selling direct to the public. You know, they were getting minimal for their beef, and now that they're selling direct, they're really doing well. People like buying direct, and so...
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Shaan Puri | Did you just buy off their website, or is there some startup that's doing this?
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Kevin Van Trump | Yeah, they have an auction. I think it's called "Bid for Beef."
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Shaan Puri | That was a dating site.
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Kevin Van Trump | Yeah, you know, so they... I, yeah. | |
Sam Parr | Well, it could be whatever you're into.
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Kevin Van Trump | Yeah, yeah, but you know, they're starting to make more traction. We're seeing that across the board with other plays. | |
Shaan Puri | What's going on with farms that kids don't want to take over? What does the succession plan look like? And is somebody solving that problem?
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Kevin Van Trump | That's a huge issue, and it's being discussed heavily in the agricultural world. You have this big succession rollover; I think I don't know the exact number off the top of my head, but it's around 80% of the farms are owned by people over 60. It's a really aging demographic.
A lot of the kids have other jobs or went off to great colleges and schools, and they don't necessarily want to come back. So yes, there is a big issue. Many people in the farming world keep their cards really close to their chest. They don't talk a lot openly with their kids, and they don't have a lot of great succession planning in place.
We're seeing that a lot. I think we've tried to be super open with our kids, discussing everything and showing them everything. We say, "Hey, here's where everything's at. Here's what you need to know. Here's where you need to be." Hopefully, we tell our other friends it's a similar type of thing.
So yes, succession planning is very important, and I think it's something that we all have to address as we own businesses.
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Shaan Puri | So, what do you think is going to happen? If 80% of these farms are owned by people over 60 and a lot of the kids are going, is this just going to mean that private equity owns all the farms? What happens here?
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Kevin Van Trump | We are going to see a lot of rollover and a lot of turnover.
In the farming space, or when you're buying acreage, there are two bidders that are going to come against you. The person whose farm butts up against you is going to be willing to pay a big premium because the land may only come available once in their lifetime. They will be bidding heavily.
Whoever is in close proximity, as you know, driving the combines is hard. It makes a lot of sense to get a continuing piece of ground.
Now, you're also having California teachers' pension funds bidding against you. You have other high-profile fund people bidding against you. So yes.
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Shaan Puri | Who runs it? They just pay somebody to go live on the farm and then run it.
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Sam Parr | Sean, have you ever been on a farm?
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Shaan Puri | No, so I don't even know where I would go to find a farm. Where do you go? Is there a map somewhere?
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Sam Parr | My aunts, uncles, and cousins are farmers in Oklahoma. They have about 2,000 to 3,000 acres, and I guess they're ranchers. They own around 1,500 cattle, and a bunch of their cattle are—Sean, you probably never heard this term—bucking bulls. Have you heard of what a bucking bull is?
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Shaan Puri | I do not.
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Sam Parr | So, what they do is the PBR, which is the Professional Bull Riders Association. If you get a good bull, a good bull can be worth, I don't know, Kevin, what? Like $50 all the way up to $1,000,000.
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Kevin Van Trump | And, oh, slip... yeah, more than that.
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Sam Parr |
Some of these good bulls... you make money in two ways:
1. You make money because at the rodeo, the rider gets paid. If you stay on a bull for a certain amount of time, you win and you get paid.
2. The bull that bucks the hardest also gets paid. That's like a rating system.
So there are famous bulls that are known as really hard bucking bulls.
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Shaan Puri | Who's the Michael Jordan of the Bulls? It's Bushwacker. I'm leaning towards Bushwacker. | |
Sam Parr | Bushwacker... Bushwacker has been the best for a long time. No, Bushwacker is a famous bull. The guy who dominated Bushwacker, what's his name? Jr. or something? He just retired, I believe. Right? What was that guy saying?
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Kevin Van Trump | My son played football with a couple of kids that were PBR bull riders. | |
Sam Parr | He does.
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Kevin Van Trump | A lot. | |
Sam Parr | Of stuff there. | |
Kevin Van Trump | Oh, not. | |
Sam Parr | Yeah, my cousin and the family, this is what they do. So, I went and stayed with them every once in a while. We get up at like 8, and starting at like 10, we go to the feed store and buy a huge amount of feed.
We bring the feed back, call the bulls, and scatter it throughout the area. They come up and eat it. Then, on the weekends, they drive these bulls from Oklahoma to Texas, which is like a 12-hour drive.
You would think that a bull you birthed and raised would be calm, but once the bull hits puberty, or it has... well, you know, "balls," it wants to kill you. It doesn't matter if you raised or birthed this bull; it wants to murder you every chance it gets.
So, just to get the bull onto the truck is like a life or death situation every time.
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Kevin Van Trump | A while. | |
Sam Parr | Like this, it's a 1,500-pound thing that you gotta get into this truck. They would drive these bulls all around the country, and they get paid, I think, $4 just as an appearance fee or something like that to show up on the TVR.
Then the other cows, the females, they make their money by raising the cows that they sell for beef. The bulls, they either sell them to get bred or they make money directly from the rodeo. It's like a huge cash business.
So my cousins, aunts, and uncles will always have a wad of cash because they'll go to the auction. It's just like a really heavy cash business. They get, let's say, $10 for selling 10 cows. They take that $10 and spend 8 of it like that day on more cow feed.
So it's a really heavy... I'm probably getting some numbers wrong, but it's a really heavy cash business, and it's hard. My cousin Sam would drive around, and he'd be drinking like Natural Light while he's driving his truck, checking on all the cows. Dude, it's a hard living, and it's really fun.
I've spent time there; it's fun for me as a visitor, but it is a hard job. You are working and walking constantly. | |
Kevin Van Trump |
Yeah, you're right. I lost a good chunk of my... not a big chunk, but I did what you said. Some buddies of mine said, "Hey, let's start raising these bulls to be PBR bulls." You know, rodeo bulls.
Shit, I don't think I ever cashed one check. It was a lot of fun, a lot of... like you said, a lot of drinking that he liked, and driving around in the pickup checking on them, you know?
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Sam Parr | Yeah, like, it's fun, but it is *really* hard. It's a very capital-intensive business. | |
Kevin Van Trump | Hey, I'll give you one that was a big miss. A guy came to me, and this was probably 20 years ago when the internet was just getting going. He said, "Man, I got this great idea."
The guy came in all suited up, and I said, "Well, he's an English major and all that." He says, "What I'm gonna do is I'm gonna build these websites, and I'm gonna hire a couple of other English majors. We're gonna write really eloquent descriptions of these cattle and these bulls and their stems." The stem that they call the sperm, you know?
And he's like, "Then I'm gonna sell this sperm all over in Japan, all over the world." I said, "Dude, you're nuts. This shit ain't gonna work." You know, this was early on. He blew it up. He blew it up.
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Sam Parr | How do you eloquently describe the sperm of a bull?
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Shaan Puri | What's his website?
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Kevin Van Trump | You know the background, the lineage... I don't know, I have not followed him for a number of years. But I remember he came back through and some people were like, "Man, this guy just..."
Hey, I'll tell you one thing. We were at the Louisville Farm Show. They had me come down there to speak. It's the world's largest indoor fire rate show. So I go down there to be the keynote speaker, and there's this little booth set up next to this. They got all these Polaroids on this little 10 by 10 booth.
Ted, I gotta tell you guys, "So what the hell is this thing?" He's like, "It's called FarmersOnly.com." And you guys have seen all of the ads. Man, I'm not shitting you, Sean. We're all making fun of him.
Then the next year, he comes and he has like a 20 by 20 booth. And then the next year he's there, and shit, his booth is damn near as big as John Deere! I mean, his booth is massive. And we're like, "What the hell?" Then he's got Super Bowl ads, and it's just... FarmersOnly.com. If you're looking to marry a farmer, that thing just blew up. He turned that into a great deal.
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Shaan Puri | So, let's say I wanted to become a gentleman farmer and I wanted to buy a farm. Walk me through that.
First, where would I find a farm? Is this sold on Zillow, or is it brokers only? How do people find farms to buy?
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Kevin Van Trump |
You know, some people are now investing fractally through... I'm invested in their company, **AcreTrader** (acretrader.com). So we buy farms. We even have farms out in your neck of the woods, Sean. Out in... we have nut farms out in California. We have regular other row crop production farms through Bakersfield in that area. Through there, you know, and all over the United States, you have various farms that grow very similar products over there.
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Shaan Puri | A farmer is selling a fraction of their farm.
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Kevin Van Trump | What happens at AcreTrader? We go in and actually buy the entire farm from a family that is wanting out or dealing with succession planning, and they won't leave. So, we'll buy the entire farm.
Most of the time, we'll have a farmer in that area who has called us about the farm and said, "Hey, we don't have the money, but if you guys would want to put up the money, we'd be happy to farm it for you and do revenue sharing, crop sharing, or some type of split into the revenue."
We're looking to just hold the ground for appreciation over a 10 to 12-year period. You have good years, and you have some really good years. However, some years, you're going to have some losing years. But over the course of time—10, 15, 20 years—your appreciation on the land is really going to carry you forward.
That's what a lot of hedge funds are looking for; a lot of the funds are looking for that longer-term appreciation.
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Shaan Puri | Well, what do these trade for? Like, if I go buy a farm, what is the multiple you typically pay on a farm?
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Sam Parr | Or would it be just price per acre?
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Kevin Van Trump | Price per acre has gone nuts lately. I mean, my buddy just sold a chunk of ground that his mom left him, which they had in the family. He said, "Hey, what do you think?" I said, "I don't know, man. It's a great time." This was about 7 or 8 months ago. I mentioned that farmers are flushed with some cash, maybe it was about a year ago. He ended up getting $20,000 an acre down here outside of Missouri.
Now, that's pretty rare. Off the books, acreage around here typically goes for about $5,000 to $12,000 to $15,000. But if someone needs the ground or wants the ground, and it's a continuing piece of track to their farm, you can see guys getting into bidding wars.
You can go out anywhere and look up farm grounds. There are a lot of things you want to look for. For example, in Kansas, you can't drill any new wells. In Kansas and Nebraska, there's a lot going on with the underground aquifer, and there are a lot of problems with water use.
We believe, though, that we like C and B grade ground. We prefer ground that's maybe in a floodplain or ground that's water deficient because we believe that all the technology and the money from the Gates Foundation or Buffett, they're really putting their money into new technology that'll help grow crops in third-world countries that have really poor soil.
You know, Iowa has the best soil. Iowa and Illinois will argue with each other about who has the richest soil. They have great soil and great farms that you really don't have to do a lot to. But when you get to some of these peripheral areas, though, you're going to...
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Shaan Puri | Be like these guys. You get a biker jacket, but you have no bike. That's more of my land.
So, I just need to know. I'm asking questions just so I have the lingo in case I ever get pressed. That way, I can sound like I know what I'm talking about without actually knowing anything.
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Sam Parr | A lot of times, you have to get some land to match that Carhartt coat that you want to get.
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Shaan Puri |
I get that. Well, what about the other tech? So, like I've seen people do these... like Fitbit for cows. Where they're like, you know, a cow's a valuable asset and you don't know if it's sick. You keep driving around, keep checking on it. What if you could know before it's too late? What tech is working?
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Kevin Van Trump | Yeah, we... it is. We invested in a few companies to do that, and they'll tag the cattle. You know, because there is a push to have less antibiotics, less shots, and things into our food supply.
So, if you're able to identify when they have a fever earlier, you could get them segregated from the herd, get them away from the herd, and give them the medicine that they need in a more timely fashion.
So yeah, all those are great. You know, Zoetis is a publicly traded company. They're a leader, really, probably in the animal health space. If you're looking for something a longer-term play, we're invested in Zoetis.
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Sam Parr | I have a business, Sean, that my friend's working on that might interest you too, Kevin. So basically, he's putting... he's put... RFT... RFD... RFD.
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Kevin Van Trump | r f | |
Sam Parr | I'm sorry, it seems there was an error in my response. Here is the cleaned transcription:
Sorry, tags on chickens and cows. You know how like a chicken will... when you buy eggs, it says "free range," and you just kind of trust it? You're like, "I guess that means a chicken was just out walking around," which is better for me because it's somehow healthier.
And, oh, it's also like if you care about animals, you're like, "Alright, at least I know it had a better life," and whatever. But "free range," I think that's a technical term actually, where it has to have a certain amount of space. But I don't think that it's necessarily always followed.
So what he did was he put these tags on the cows and chickens. You know, the beef that you bought has a tag number, and you could actually go and see how much it walked around and where it went.
Which sounds a little morbid and weird, but it's actually supposed to be reassuring. It's like, "Look, my farm is now accountable. You can know that this meat was actually raised in the way that I promised it would be."
That's an interesting idea because I think, Sean, you said this... I think you said it in like some... | |
Sam Parr | Of time, 20, 50, or 60 years, we're going to look back at the way that we treated cows and we're going to think, "That was pretty unfortunate." It shouldn't have been done that way, where an animal is just born in a pen and never leaves, and then we eat them.
I actually agree with that sentiment. I agree with the idea that while I'm okay with eating certain animals, it's better for them to have a certain quality of life. So, this idea is kind of interesting to me.
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Kevin Van Trump | Yeah, we think that that's going to be prevalent throughout. We think you're going to **blockchain the farm**, which is what we're calling it in our world. You know, **blockchain the farm** means that the fertilizer companies and the input companies are going to have to report all that information. You're going to know what was put on whatever it is you're eating.
The reason they want to **blockchain** it is just like when Chipotle was having those issues several years back. They want to be able to go right to the field, right to the spot, and know exactly what happened, what was put on, what time it was, and where it was at.
So, yeah, I agree with you, Sam. I think that's definitely where the world is headed. I think we're seeing farmers make that transition more and more. They're a lot more tech-savvy than people give them credit for. As a matter of fact, nobody treats their animals poorly.
In my opinion, I have never been on a farm in my entire life where I saw any abuse to animals. Nobody treats their animals better because it's generally the way they make their living, the way they make their money. They teach their kids to take care of them. You know, they love them and show them at 4-H and go all around.
It's sad that they get such a bad rap in the media when I've personally never come across it. | |
Shaan Puri |
What's your take on the alternative meat movement? In Silicon Valley, there's a bunch of startups that are trying to grow beef from cells. The idea is that you won't have to farm the animal or harm the animal to be able to have the same genetic meat. It should be virtually identical, genetically identical. What's your take on that movement? Is that where you think things are going?
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Kevin Van Trump | I think there will be a segment of the space that continues to grow, and I think you're going to see it continue to gain market share.
As the population shifts and moves out, you know, as the baby boomers continue to age and move on, we get more people. I think you're going to see alternative types of protein being developed. As they get more money in the labs, they're getting better at reducing costs and creating better flavors.
I think as those two things continue to move forward, just like with Tesla and Elon Musk, you know, it's only a matter of time. Everything happens gradually, then all at once.
You know, it's like the electric vehicle. I think you have a lot fewer moving parts; it's a lot better than the combustion engine. I think you're going to see things gradually gain more and more market share.
Well, have farmers taken to... like, I always read the comments on Texas message boards and...
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Sam Parr | It seems like it's 50/50 if the rural community thinks that electric vehicles are worth it.
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Kevin Van Trump | Yeah, right now, at the time, no. Because just the distance traveled, you know, a lot of folks have traveled massive distances out in rural America. So it doesn't make a lot of sense to them at the moment.
I think eventually, yes. I think they'll see it have better torque, you know, better low-end get up and go out of the hole. I think you'll see a lot more transition.
Like anything, no, nobody wants to, I guess, let go of their heritage and their roots. And, you know, same with the fake meat. A lot of farmers just bash it and want to go nuts about it.
I think there's definitely going to be a place for it, and I think it's going to be able to gain and grow some market share. You know, probably as they get costs lower and lower. I think it'll be, you know, a way that we see things happen.
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Shaan Puri |
If you were 24 years old again and you had the entrepreneurial energy to go do something, what would you be? What would you advise that 24-year-old to go do in this space? Where do you think the opportunity is?
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Kevin Van Trump |
I think there's going to be a big push with air quality. You know, just the quality of air from this whole virus... Just the testing for the viruses, and we're seeing a lot more testing take place in general over the entire space.
So I think there's going to be a big push in things to do with air and creating good air quality. We're seeing a lot more kids that have asthma or asthma-related problems, and I think not just here in the United States, but I'm talking globally.
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Sam Parr | Some of that... What's an example solution of that from an agricultural perspective?
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Kevin Van Trump | Well, so look, you know, we're big right now into the carbon market. We're trying to reduce carbon footprints, and no one really reduces it much more than the giant cornfield plants and things of that nature.
So, yeah, I think there's a big play and a big push into carbon reduction. Like I said, we're trying to reduce the footprint. Anything that'll help save energy, improve our water usage, and enhance water purity is important.
I think anything to do with natural resources is just going to become more heavily relied upon if we transition all this to electric. I mean, the rare earth materials are going to be hard to come by. There are going to be a lot of developments in what we see on that whole side and front.
So, I think, you know, anything to do with natural resources, air, and water is crucial.
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Sam Parr | Like I... | |
Kevin Van Trump | Said food quality, you know, we really love the blue-collar space. I mean, I think we love, you know, like what Cody Sanchez has going on or some of the other things. We like the thought of buying blue-collar businesses, rolling them up, and you know, kind of packaging them up and selling them.
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Sam Parr | Why do you like that? Because they're retiring.
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Kevin Van Trump | I think they're retiring. I think we didn't see nearly as many kids going into the trades as we had in the past. You know, my dad, my wife's dad—I mean, everybody was in a trade back then. That was everyone's goal: to go to college.
So, you know, we just had a big lull or a big, I guess, short supply of good skilled people. Now, we think you can go into that space. We've tried it a couple of times, you know, where we can build out some things.
I think if you provide people with good quality service and an onboarding process, you can cut your customer retention rate down to a feasible level. I think there's just the sky's the limit on growth, you know what I mean? Do you?
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Sam Parr | Do you use TikTok, Kevin?
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Kevin Van Trump | I'm on it. Yeah, I see it.
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Sam Parr | Have you guys seen the popularity among young people in the trades? They glamorize it in a cool way, and I think an accurate way, which is like, "I'm making $120,000 or $150,000. I just went to trade school for two years."
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Shaan Puri |
It goes so well on TikTok because it's like a novelty. It's like going to the zoo. It's like, "Wow, you made that! You know how to do things with your hands!" And that's what a carrot looks like when it comes out like that. That's incredible. Swipe. Alright, onto the next one then. That was easy.
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Sam Parr | But I actually think that some of these young people are being influenced by this. They're like, "Shit, I graduated with $150,000 or $200,000 in debt, and I don't make anything remotely like that amount of money."
I'm sitting on my computer all day, and this might be a little bit more intriguing. I don't have any data, but it does seem like young people are more open-minded to the trades than at least Sean and I's graduating classes.
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Kevin Van Trump |
Yeah, I'm seeing that as well. I'm wondering about some of the younger kids that are opting not to go to college. They're going into trades instead, like:
- Joining the pipefitters union
- Entering the plumbing union
- Joining the electrical union
So yeah, we're definitely seeing this trend.
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Sam Parr |
Because AI isn't going to replace plumbers, electricians, or HVAC people anytime soon. It may happen one day, but not in the near future. I think that stuff's getting more popular, and I think that's really cool and fascinating. There's also like ripped, buff dudes, so there's always women commenting. Have you seen that guy Sean who just cuts wood?
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Shaan Puri | Yeah, the lumberjack guy... he's incredible.
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Kevin Van Trump | I love that guy.
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Shaan Puri | Just chicks. I’ll sit there and watch that video twice. It's just an incredible video.
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Sam Parr | It's this guy that uses an axe. He's sometimes shirtless, sometimes not, and he's just, you know, obviously a 10 out of 10. He's just chopping wood, and like everyone's like, "I need this in my life. It's therapeutic."
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Shaan Puri | Have you been a part of any roll-ups? I always find roll-ups to be a really interesting business strategy. It seems like there's...
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Kevin Van Trump | A lot of money.
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Shaan Puri | To be made in a successful roll-up, I'm curious if you've been a part of anything.
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Kevin Van Trump | I have not personally, no. I usually either exit ahead of time or, you know, get a little nervous over it and it flames out.
But I have a couple of friends that, yeah, that's their whole way. They've created all their wealth.
You got one of the Joe Lumps speaking of right now. He's doing it with cranes. He's buying small crane companies that have 2 or 3 cranes, and he's putting them all together. You know, he's going to sell that.
He's done it with several other things, whether it's restaurants or different things in the past. So, yeah, I thought it was interesting on the crane play. You know, he came to me about an investment and we just didn't do it, but I'm sure he'll hit a huge home run with it.
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Sam Parr | Dude, Sean, I think the stuff that Kevin's doing is way more exciting than the stuff that our friends are doing.
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Shaan Puri | You're going to quit and go do it.
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Sam Parr | No, I don't know about that. It sounds like a lot of work.
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Shaan Puri | Sounds like a lot of words then, if you're not going to go do it.
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Sam Parr | No, what it means is I like hanging out with these types of people sometimes. That's what it means.
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Kevin Van Trump |
Yeah, and it gives you guys... I think it gives both of us... I like hanging out with your group of people because I think it gives me a different perspective and I learn different things that you guys have going on that I can make applicable to my world as well. So, you know, there's a good synergy there between all of us.
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Shaan Puri |
And how do you do that practically? Because I think you do a good job of getting yourself into positions... like we talked about going to random conferences that are totally outside your industry that you didn't need to go to, but you wanted to go to shift your lens a little bit. Or hanging out with younger people who may be demographically just doing different things, culturally doing different things than the guy who "made it" and is at a country club now might be disconnected from whatever the culture shifts are.
How do you tactically go about doing that? How do you put yourself in those positions? What questions do you ask?
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Kevin Van Trump | Honestly, I just made myself. I always yelled at the kids when we were growing up. I played sports at a high level and had several friends who won the World Series and Super Bowls. We always talked about how you can get a bad coach. Everybody gets a bad coach or things like that.
It's like, "Look man, you gotta be able to steal something from the guy." The guy was a great player. You gotta go in there with an open mind and be able to take away some things that they've done well and positively. Then, use those and put those arrows in your quiver.
So, I always have the kids looking for new, crazy, weird conferences or things to go to. From there, I'd make myself go. The last couple of years, I didn't want to go, but each time I went, I took away several little gold nuggets that we implemented into our business models. We've made big returns on each one of them.
You know, I didn't think I'd get anything out of going to the conference. I was just like, "This is gonna be a waste." But I just sucked it up and did it. It's like going to work out or having to run or something. It's like, "Yeah, I guess I just gotta go do it."
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Shaan Puri | Yeah, we had a friend when we were going to PharmCon who was supposed to come with us. It was me, Ben, and our buddy.
The morning of, we were like, "Hey, we'll meet you in the lobby. You know your flight was... you landed like an hour ago, right?"
He basically woke up, looked at the flight time, and he said, "Kansas City." Then he was like, "You know what?" and he just bailed. I was like, "Man..." But of course, I felt that. Everybody feels that in the moment. Like, "God, do I really want to go do this thing that I don't have to do, that is unknown?"
It's back to your thing about, "Are you willing to sprint for an unknown distance?" We didn't know what value we would get out of it. That was the hard part; that was the challenge. Doing it when we didn't know what would come out of it was really, really valuable.
It's ironic because that same friend gave me a great analogy one time. We were talking about a younger friend. This guy was the youngest VC in Silicon Valley, so 19 or 20 years old. He was investing, I don't know, $10 million into things. He got written up as the youngest VC in Silicon Valley.
So we were meeting with this guy, but now five years had gone by, and it was like you hadn't seen him really progressing at that same rate that you would expect from somebody who definitely had that sort of phenom type of upbringing, where it seemed like he had all the potential in the world.
I was like, "Man, what do you think he's doing wrong? What would you do differently?" He goes, "Oh, it's like windows and doors. He's only willing to do something if it's a window. If he can immediately see through and see what's on the other side of it, then he'll do it. But anytime there's a door and it's opaque, and you don't know what's on the other side of it, he's not willing to knock on a door and open it up to see what might be inside.
He's only looking at doors and windows. He's never willing to go through a door. Once he starts going through doors, this guy's career is gonna take off."
I remember hearing that and really taking that to heart because I thought that was very, very wise. | |
Kevin Van Trump | That's a great analogy. Yeah, I've never heard that before. I've heard a lot, but that's a great one for sure.
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Sam Parr | Sean, the reason why you like a lot of these folks in the Midwest and some folks in the South is because you love phrases. You love phrases like "windows and doors." You love cool sayings, and you know what? I love them too. That's why I'm happy I'm friends with both of you guys.
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Shaan Puri | I love them at a dinner. So, at PharmCon, you invited us to a private dinner at the end. It was about 10 people.
This guy stands up and delivers two of the coldest lines I've ever heard. He stands up while we're doing our intros. I stand up and give some super vanilla intro: "Hi, I'm Sean. I live in San Francisco, and I'm a tech founder and an investor." Alright, I sit down—forgettable.
Then this guy stands up. He's got a big presence, and he says, "I forgot—I don't remember what his name was exactly—but he goes, 'You know, I don't know a lot of things. I don't know the score of the game right now. There's a big game going on. I don't know the score of the game right now. I don't know anything about this.' He goes, 'Hell, I don't know where the remote is in my house half the time, but I know deals, and I've made a lot of deals. I'm a private equity guy.'"
He starts talking about his deal-making, and I was like, "Wow." Then he says, "I've been around for a long time. You cut me open, you can see a lot of rings in the middle."
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Kevin Van Trump | I was like, "Wow."
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Shaan Puri |
That's one way of saying it. He's just on fire. He goes:
> "Somebody asked me, 'What if they don't go for it on this deal? Sounds like you really need them to say yes. What if they say no? What if you get rejected?'"
He goes, "I'm not afraid of rejection." And he's a big, big old dude, and he goes, "I've stood in front of women in my life naked before."
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Kevin Van Trump | I've heard... no, no, no, no, no.
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Shaan Puri | I'm okay with it. I was like, "Wow, this guy is like half comedian, half businessman," and I loved it. But it was just another day at the office for him. For me, coming from our world, that charisma level and the gift of the gab was so incredible to see. I loved it.
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Kevin Van Trump | Yeah, it's definitely wild times.
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Sam Parr |
Yeah, and you got that too a little bit. I like just hearing what you have to say, Kevin. And for the people listening, maybe we'll get you some new subscribers. It's **thevantrump.com**.
I like how you always do something cool where you'll just have a selfie with you and your wife, and you're like, "Today we're on vacation, here's what we're doing." And you'll say something kind of funny and cute. I love it.
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Shaan Puri | But we should just get like a group of 20 of our listeners—a select small group—to go to FarmCon. We'll all go together as a field trip next time you guys do it.
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Sam Parr | When is it?
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Kevin Van Trump | The first week in January, January 8th and 9th, this year coming up.
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Sam Parr | How much is the ticket?
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Kevin Van Trump | I think this year we're like **$1,200** or something.
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Sam Parr | And you sell a lot of them too, right?
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Kevin Van Trump | Yeah, we'll sell out whatever they give us. You know, high capacity. We sell at the hotel every year.
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Sam Parr | We appreciate you doing this. You're the man! Thank you, and thank you for years of being a cool dude. You've always been a great guy to me, so thank you!
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Kevin Van Trump | I appreciate it. Good luck to both of you and your families.
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Sam Parr | That's the pod. Thank you very much.
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