Behind The Scenes of Selling My Company For Millions | Suli Ali (#410)

Shaan Puri

Every time I've had a company sale, like when we sold Bebo to Twitch or when we just sold to Milk Road, you have been our what we call the "deal doula." You help us go through that labor process and come out the other side with, you know, the happy ending, I guess. Sully, welcome to *My First Million*. You're subbing in for Sam Parr today, and like every substitute teacher, it's always the best when they're there. We're going to do a bunch of things. We're going to talk about some of the companies you've started, the companies you've invested in, and some ideas you have. You were the first ever episode of the podcast. If people want to hear your life story, that's the place to go—episode number 1. We've come a long way from there. Did you think this is what would happen?

Suleman Ali

I always knew the podcast was going to be big. From the very beginning, you were like, "Let's do Barstool except for business," and that's what it's become. It's huge! I actually think it's going to be way bigger in a year than it is today—like three times the size a year from now compared to today.

Shaan Puri

Yeah, I hope so. That's the goal. We did the kind of Barstool thing, except without hiring anybody. It was like, "Okay, we will just be the jackasses and then let it go from there." Alright, so you sent me this document, which is great because there are a bunch of topics on here that I kind of want to jump into. I guess we should set the groundwork here. So, I'll give you a very short life story so people understand who you are. You worked at a job for a couple of years. You took the traditional path, working at Microsoft. Then you quit and decided to start your own company. This was right when the Facebook app platform came out. You started building silly Facebook apps that went viral. Think of things like superlatives, which was like, "Which of your friends is most likely to do X?" It would invite those friends to do it too, and it grew like crazy. But it was just a silly Facebook app, so you didn't know what to do with it. In the end, you ended up selling it. So that was your kind of "my first million" moment. You sold it when you were how old? Like 24, 25, or maybe 26?

Suleman Ali

yeah 26

Shaan Puri

<FormattedTranscription> Take that and you go on the next big wave, which is mobile apps. They're going to be a thing. You are creating games, I think maybe first on Facebook and then on the iPhone. When the iPhone App Store comes out, you're like, "Oh, this is going to be big." You create a company called Tiny or TinyCo and somehow you raise money from Andreessen Horowitz. You're living the dream. Then things go south as the economics of that business change. You go all in on this Hail Mary strategy, which again, is the whole story from episode 1. You go all in on this Hail Mary strategy of getting the rights to *Family Guy*. Somehow, as a startup that nobody's ever heard of, you get the rights to the license to make the *Family Guy* mobile game. You did it for *Harry Potter* and a couple of other big IPs. You sell that company, and then I met you after that. I met you kind of when you were selling that thing. We met at a dinner that Sam was throwing because you were speaking at House Look On. Immediately, we hit it off. We made some big plans. You were talking about Tony Robbins, and I was like, "Oh, I'm a Tony Robbins guy." You were like, "Really? I don't even know about Tony Robbins. Tell me." I started gushing about my experience there or whatever. I was like, "Yeah, we should do that here in San Francisco. Let's do it tomorrow morning. Let's have our own power session with people like us who are just, you know, electric." </FormattedTranscription>

Suleman Ali

We were like, "Tony Robbins is amazing! Nobody is doing this in this kind of modern way." Let's put up some Facebook ads today, and then tomorrow, let's have 50 people in here and try our hand at being Tony Robbins for a day.

Shaan Puri

We did the thing where you spend 20 minutes saying, "This is great! This is a great idea! This is a no-brainer!" We kept talking about how much it's a no-brainer, how much it's a slam dunk. We're going to do it! We used all these terms, but we never did it. Ten years later, we still never did it, but we became good friends along the way.

Suleman Ali

still think it's a great idea yeah and it would be the most fun weekend ever

Shaan Puri

Yeah, I think we should still do it. But then we kind of got... I guess from there, you did a couple of things. Your brother started Native Deodorant, and you kind of helped him with that. You started another company, which we don't really talk too much about. Then I was starting my e-commerce brand, and you have helped me out a lot with that. You are kind of a shareholder in that business. Every time I've had a company sale, like when we sold Bebo to Twitch or when we just sold The Milk Road, you have been our "deal doula." You help us go through that labor process and come out the other side with, you know, the happy ending, I guess. So that's kind of how our interactions have been on the business side, and then we've become great friends since then. So that's my intro. Did I miss anything?

Suleman Ali

I love being the deal doula, by the way. When we sold TinyCo, we had this banker named Dick Fillipini. He was our banker and ran the transaction for us. I told him that I loved what he did so much that I just wanted to work for him for free for six months after this, so I could see all of the deals that he was doing. He did not accept my offer and said, "No, you can't do this."

Shaan Puri

Dick is great. He helped us for free because the Bebo deal was going to be too small. He does bigger deals, like $100,000,000+ type deals. It was too small, but he got on the phone with me several times throughout the process. He talked me off a ledge multiple times when I was like, "I'm just going to say this." He was like, "No, you should probably just wait and see what they say." His advice was basically just like, "Don't f*** this up, you know, son." And he was totally right. He helped me a ton. Actually, I still feel the guilt that I didn't send him a gift afterwards. I texted you like a year later, asking, "What's Dick's address?" I didn't send him a gift. I can't believe I didn't. And here I am, still four years later, having not sent that gift. Dick, I'm so sorry. You were so helpful.

Suleman Ali

And I will send you this gift. The deal, another deal I thought was super interesting, was that he sold Applovin to a Chinese company for **$1,000,000,000**. However, the Trump administration or the FTC blocked the deal. Instead of it being a **$1,000,000,000** sale, the Chinese company invested **$100,000,000** into Applovin. Then, a couple of years later, Applovin went public. Everyone thought the founders would be devastated, as they were expecting to become rich overnight from the **$1,000,000,000** transaction that didn't happen. I assumed the founders were sad and upset. But then, a couple of years later, the company went public and at some point, it was worth **$30,000,000,000** as a publicly traded company. So, it was such an amazing transaction to not have closed.

Shaan Puri

Well, they got the best of both worlds because whatever the company was putting out, I think the original purchase price was $1.4 million and $1.6 million. They were going to put in a few hundred million dollars to own 70 or 80% of it. Then, instead, it was like a year went by and nothing happened. With that anxiety came this big payoff because the business grew like crazy during that time. So they said, "Hey, okay, same deal, but now you own like 20 or 30%." They got the money; they got liquid on that, but they only had to give up a tiny fraction. Then they sold it, and later they went public for way more. So that turned out, you know, pretty much as good as it could go, right?

Suleman Ali

like yeah it's a tough scenario

Shaan Puri

Just had to wait a year. Speaking of acquisitions, I have a Milk Road-related question for you first. You saw both the acquisitions that I did from start to finish. I shared it with you, you know, it's like in high school when it's like, "The boy texted me this, should I reply? Should I say this?" And you would say, "No, no, no, that looks too needy. Say that instead. Change the 'to' to an 'a,' and then just cut that last line." It's that level of help that you were providing me. I've given my debrief of the acquisition, and I'm just curious, what was your takeaway? What are some nuggets that you would share from watching that go down?

Suleman Ali

I love the deal structure that milk road ended up with which was a bunch of cash upfront and then a bunch of equity in the new company where those 2 guys are wanting to grind it out for years and build a giant business and those guys in my head you know some percentage of the work that they do is just creating value for you and ben and that's awesome so I love that deal structure the in my head kinda having been through this a couple times I feel like a lot of the you know text the nuance of words that you care about when you're trying to sell your business the buyer doesn't care about that much and it's more of a emotional thing than a practical thing where practically the buyer is like I wanna buy this business because of the strategic reason and the revenue and the profit and a lot of the things that you can be squeamish about or uncomfortable to say or not sure how to say things I think a lot of that stuff doesn't matter one of the things that I learned actually when I was trying to sell tinyco was we ran a sales process where I was trying to sell the business and we talked to a bunch of acquirers and we got pretty far along with 1 and then the deal didn't happen and then a year later we went and sold the company successfully and the there's a bunch of stuff that I was trying to keep close to the chest and I was like oh people aren't gonna wanna hear this people aren't gonna wanna hear that and what was great about a banker and some somebody like dick was he was like no actually this isn't a big deal just tell these guys this and they're not gonna care about that so it took this kind of uncom discomfort I had around like things I thought were secrets that I needed to take to the grave with me and he just made me comfortable telling them about them

Shaan Puri

Sam did something for me in this process. As we were selling the milk, I was like, "Yo, any kind of tips or advice you've had when you sold to HubSpot?" He goes, "Oh, on that same note, just tell them upfront all the **shitty** things about your business that might scare them away. Because guess what? They're gonna find those anyways when it comes to due diligence. You're just gonna be, you know, four weeks in or six weeks in, emotionally invested, and it's gonna get ugly later. They're gonna feel like they just found some big wart on the deal at that time." He goes, "Just tell them all the skeletons in your closet now and be like, 'Here are all the reasons you shouldn't buy this company. If these bother you, you now know them, and you can decide for yourself if that's a deal breaker for you.'" This was not the very first thing, but shortly after, we went to a dinner. Everybody was interested; we hadn't even fully negotiated the deal. But I just said, "Are there any questions you guys have or any concerns?" I said, "Well, I wanna make sure you fully understand this business. I've been through this a couple of times, and I know it's better to just be fully transparent." So I said, "Yo, here's all... I made a list of the reasons why you shouldn't buy this. Here are all the skeletons in our closet, and you can look at these today. You can decide if this is too concerning for you. Let's talk through these now." And we did it. Later, after the deal was closed, we did a debrief. They basically said, "This is how you know they're smart. They asked, 'What could we have done better in the acquisition process?'"

Shaan Puri

Of view and we we asked the same

Suleman Ali

it was amazing they asked that

Shaan Puri

It's like, how was that for you? Was that good for you? It was good for me. We told them our feedback, and they said, "You know, you said something at this dinner where you were just like, 'Here's all the ugly parts of our business, and let me just tell you about them.' We could talk through them." They said that built so much trust because we didn't know you very well. Immediately, we were like, "Oh, okay." We felt at ease and felt like we could trust you guys going forward. So that turned out to be a big win. That's the exact opposite of what I think the entrepreneur's instinct is: to hide that. You know, as far as putting it behind your back. If they ask for it, you show them, but don't scare them away. In fact, what you want to do is find out as quickly as possible if there's a real match here or not and use that as a tool to build trust versus to build distrust by not disclosing it up front.

Suleman Ali

The other thing I've seen entrepreneurs do that I think is also kind of the wrong common sense out there is when you ask an entrepreneur if they want to sell their business. Entrepreneurs are told to say, "No, I do not want to sell my business." They expect that the buyer is going to come over the top and say, "Even if you don't want to sell your business, we're super interested in buying it. We'll do anything it takes; please come talk to us." In practice, that's not at all how it works. Oftentimes, a buyer is looking at a bunch of different businesses to buy at that time. They’ll reach out or talk to 10 different businesses. Five of them will say, "No, we're not for sale," and they'll say, "Okay, great. We're knocking these 5 off. We're going to focus on the 5 that have said, 'Yeah, we are for sale.'"

Shaan Puri

Right, and so what's the way to say "yes" without seeming desperate or too eager to sell? Because you don't want to do that either.

Suleman Ali

I think the way I've done it before is: 1. When I was ready to sell a business, I would find somebody that I knew was interested but wouldn't have a good offer. I would get them to make an offer and then say, "Cool, go!" This enables you to reach out to other people and say, "Hey, we have an offer to sell the business and we're thinking about whether or not to do that. You are somebody that we think there's a great strategic fit with, so we thought to talk to you before we did something else." Yeah, yeah, so that's kind of one way to do it.

Shaan Puri

If they come inbound, it's sort of like, you know, we have had interest, and nothing felt right. We really like our business, but we respect you guys. If that's something you want, we would obviously be open to listening. We owe ourselves that right. So, you kind of just say, "We like our business. We had interest, but nothing went too far because we weren't very keen on it." However, we really like you, and if you want to talk, we're open to talking. There's nothing wrong with that; it's fine.

Suleman Ali

Yeah, I think that's a good setup. I believe buyers who are experienced can kind of read between the lines pretty quickly. What you just said is like, "I'm wide open. Somebody please ask me out for..."

Shaan Puri

a date

Suleman Ali

I'll I'm ready you know and I'll be a cheap date

Shaan Puri

Sign me up, exactly. But like, it's the signal. It's the signal that I've been listed without begging you. But it's like, to be clear, I'm interested.

Suleman Ali

Yeah, it's perfect. It's like looking at somebody across the bar, catching their eyes for one second, then smiling and looking away.

Shaan Puri

There was another meeting. We won't talk about it or name any names, but you were a part of a few of the meetings as we talked to different people from Milk Road. It was the first meeting with one of the buyers, and you immediately called me afterward. You were like, "Wow!" Then you mentioned this phrase: "A fool and his money are easily parted." You immediately sniffed out that this person was sort of an idiot and would be... and sure enough, they made the by far the largest offer. It turned out they were not exactly who we thought they were. We didn't go with them because of that. Of the three or four people that we talked to, this was one of them. You sniffed that out immediately. What tipped that off for you? And what can you say without getting us in too much trouble?

Suleman Ali

You know, there's a lot of people who are charlatans nowadays. They often lead with a lot of flattery and not substance. It's very easy for me to tell when somebody is being honest. For example, when someone says, "Hey, this is who I am. I've done X, Y. I started this company, I sold it. I started this company, it didn't work out." They're just honest about their resume. There isn't tremendous amounts of puffery that, with a couple of Google searches, you can find out is actually not true.

Shaan Puri

right

Suleman Ali

unless I'm happy with that guy

Shaan Puri

You've said a lot of words, but you haven't said anything yet. Okay? That is, you know, either I'm not understanding what you're trying to say, or you have nothing to say, basically.

Suleman Ali

Yeah, that's right. They don't lead with numbers and information; they lead with flowery language that doesn't go anywhere.

Shaan Puri

So, I'm curious. What are some business ideas that you think somebody could start that would be successful? It could be at a smaller scale. I think this can be, you know, like a clear business that'll make a few million dollars. If somebody out there is looking for a way to achieve financial freedom, there is a way to do it. Here's a big idea: somebody who is willing to grind it out should go do this.

Suleman Ali

The big idea that I like the most right now is **Robinhood for real estate**. You know, Robinhood makes it easy to invest in the stock market. The way I thought about this is that I've got a ton of friends who are in their twenties, working at Facebook or Google. They make a ton of money, but what they do with it is just stick it in their bank account, a savings account, or a CD. Sometimes they'll invest in the stock market. I think it's so hard to invest in real estate. If there were a turnkey way through a mobile app to invest in real estate, I think that would be huge. It's really different. You did this investment, and I followed you in a company called **Jar** in India. They make it super easy to invest in gold in India. You can invest with a dollar, $50, or $5,000 and just buy gold with one click.

Shaan Puri

It's just, if you believe that gold is a good thing to invest in, we'll make it easy for you to do that thing that you already think is a good idea.

Suleman Ali

Exactly. So, it's a one-click thing of like, "How much money do I want to invest today?" The best way to do it is to kind of set up a subscription where every month you're like, "Cool, I'm buying $200 of gold every month." And 10 years from now, it's going to be worth $1,000,000. I think the same should happen with real estate. There are a bunch of companies that are like Cadra, Fundrise, or CrowdStreet.

Shaan Puri

yeah whatever those are like it's but you have to look at the individual deals

Suleman Ali

You have to... they're targeted towards people like me who like investing in real estate and who are sophisticated about it. They want to know what the cap rate is, the location, the year of construction, and all this stuff. I think there should be a one-click way to buy equity in rental properties that generate income. It should be marketed to people in their twenties, through Facebook. It should be set up so that you basically log in and say, "Cool, you want to invest in real estate. How much do you want to invest every month?" "$200? Great! $200 is now happening in real estate." You're now investing $200 in real estate every month, and boom! It does an ACH from your account every month on the customer side and invests in that real estate. The income that gets generated goes back and reinvests in more real estate, and that's it. It shows, "This is how much you've invested so far, and here's how much it's worth." Boom!

Shaan Puri

okay love it give me more what else you got

Suleman Ali

what else do you got

Shaan Puri

hey hey hey woah woah woah what's going on here this is you you're the you're the guest of honor here I got I'm doping ideas every week here I'll give you one that like I think is I'll give you one that I get asked a lot which is not actually what's a big idea but what's the easiest way to get to like $1,000,000 and I always think that like the easiest way to get to a $1,000,000 if I'm if I need to get to a $1,000,000 right now here's here's what I would do I would I would create an agency that's gonna target a really specific part of a business that makes money already and just figure out how to make more of it so for example email marketing for ecommerce brands or con conversion rate optimization cro for for companies so you basically say hey visitors come to your site we can help you convert more of that traffic into sales and I think there's such a easy play where you basically just create content so you create content that basically just says like here's the before and here's the after look I changed these three things because I call this my you know my hot cold hot method and we boost the revenue by 32% by the way if you want somebody to boost your revenue by 32% work with me and I think that this is like a such a bootstrappable easy way to get to a 100 k a month in revenue right like you get 10 clients paying you 10 k a month it is not hard to get 10 customers to pay you 10 k a month when it's a part of their business that's already gonna produce like already producing 100 of 1,000 or if not 1,000,000 of dollars of revenue and you're gonna provide you know the turnkey service so you take it off you take the headache off their plate but you do it better than they're doing it because you're you get seen as a thought leader by putting out like 10 of these case studies and this happens all the time with ad agencies email agencies conversion rate optimization agencies but you can do this with anything you could do this with site speed you could do this with like any number of things so I would just go and you could start with z start at 0 and become a quote unquote thought leader expert just by publishing like very simple before and after like kinda case studies and you start by not even having a client you say hey if I was this brand here's what I would do look when they do this it sucks you know they this is a dead end for them or you know they should steal this good idea from this other company and so you could put together case studies without even having clients and so to me this is like the easiest like if you are willing to work hard and you feel stuck at a job that maybe pays you a 100 k a year and you're looking how do I go from a 100 k to 900 k how do I go from a 100 k to to you know 750 k a year this is the like all all it takes is hustle approach to to that side of the type of business and then those businesses can be sold so like your job you can't be you you can't sell your job right like if I write a book I might write that that might be the title you can't sell your job just like my my one line case for why you should start a business instead of have a job and if you get a business like this to 900 k and you know 60% profit you could sell that agency or that consulting business for maybe 2 or 3 times you know ebitda and so you could sell that you could make 600 to 800 k a year and then sell it for 2 or 3,000,000 you know after a couple years and so that's a very easy pathway to financial freedom easy meaning it's simple not not that it's no effort but easy that like anybody can do it and it doesn't take being the genius with the one idea who beats all the competitors in the space

Suleman Ali

Yeah, I totally agree with that. I think there are a bunch of other examples in my head, like just setting up a Facebook pixel and doing it in a way that's actually optimized and perfect, following all the Facebook guidelines. I think that's super hard, and I think there should be some guy who's like, "I'm the expert at this."

Shaan Puri

right

Suleman Ali

and I take care of that for you

Shaan Puri

And I gave a brand of e-commerce, but you can also do this for just about every legal practice or dentist. You need websites? I make websites for dentists, right? So it doesn't even need to be like you're the best at doing growth for D2C brands. It could be like, "Hey, in Minneapolis, Minnesota, I make the best websites for restaurants or legal practices." And just through cold email, or you know, some combination of cold email, LinkedIn, and referrals, you can get 10 customers to pay $10,000 a month.

Suleman Ali

Yeah, I think you could pick any of these big sectors of the economy: accounting, law, medicine, dental.

Shaan Puri

be anything senior living be like whatever yeah

Suleman Ali

Yeah, and I'm just going to go and build an online thing that makes their life easier through marketing. I'm making it easy to create a website. It's insane how many of those old-world businesses still don't have a good website or don't do any Google Ads. So, I think there's a huge opportunity there.

Shaan Puri

Our friend Nick Huber does this thing where he basically has a playbook to make a self-storage unit run better. His approach is that he'll buy it at some multiple, but he knows he can run it 30% or 40% more efficiently. So, he's getting value. He knows that within nine months, he has a turnkey process to make this thing generate 30% to 40% more EBITDA. He does that by buying the properties, but you could also take that playbook and say, "Hey, self-storage owner, I will do this for you. I'll do it risk-free. You pay me nothing unless I deliver this outcome." If I increase your revenue by 30% or your net profit by 30%, that would be great, right? Here's my playbook: I do these three things. You would agree that you're not doing those three things today very well, right? Okay, fantastic. How about I deliver those to you risk-free? When I do, I get to keep half the value for the first year, and then it drops down to 10% after that. You could do this for senior living, you could do this for self-storage, you could do this for any business out there. Once you find a good best practice, this is what Alex Hormozi did with his gym launch thing. He was like, "Hey, gym owner, you want more customers?" He used to own his own gym, developed best practices, and then realized the value was not in his gym being run with best practices, but in taking the best practices and selling them to all gym owners. That's what he did, and I think you could do that with pretty much any niche business.

Suleman Ali

What do you think about niche content creators and trying to build the same thing by creating content in a specific niche? Like, you know, eco-friendly sustainable products, that kind of thing.

Shaan Puri

so what would somebody do there so I'm a I'm a content creator what am I doing there in the in this example

Suleman Ali

Making YouTube videos, Instagram videos, Instagram reels, and TikToks about that content.

Shaan Puri

the business to marketing to business owners as like hey business owner here's what you should do or to no

Suleman Ali

Not to business owners, but to consumers. Just being like, "This is how I live a sustainable lifestyle." Kind of pick anything that you're passionate about and make a bunch of YouTube videos or content about it. I think that can be a big business. Like, you know Doug DeMuro with cars, right?

Shaan Puri

see I I don't like those as much because I a I think it's a good thing to do because good things come of it I don't think they're very reliable at creating successful businesses most content creators don't make successful businesses right so if you just look empirically at the numbers you're just like okay of the 2,000,000,000 twitch streamers and of the 10,000,000 youtubers like who's making over 10 k a year and the number is like astronomically small and so you know the problem with those is that everybody wants to do that and there's not a clear way to like get the value out it is good to do because you will learn you'll become good at content you'll meet cool people it'll lead you to the thing most likely but it's not usually directly the thing when it's consumer facing if it's business facing I think it's pretty easy then to say oh yeah I market to the owners of self storage units I create the best content for them you know you could go that that's what nick sharma did right nick sharma is like hey I'm gonna write the best newsletter for a ecommerce store owner and I'm just gonna put together awesome information case studies deals whatever for them and like that's not for the consumer it's for the business owner and he created you know what what should be like a 5 to $10,000,000 a year business when it's fully mature doing just that and I think you could do that for basically the owner of any business construction businesses you know whatever any you know doctors lawyers whoever any any type of business if you if you focus on that you you get good at doing that so I think that one I like I don't like the consumer facing one as much because I think the numbers would show that they don't make very much money the way that they currently do them and like you know I I have this problem too where it's like what's the most competitive thing is like being like a content creator you know what what are most people doing from like you know even like a 12 year old can do it and I have this problem myself where I'm like oh I wanna create a bunch of youtube content and then I'm like man this you know I'm competing with every 15 year old in america and they're better and faster and have more time and have nothing to lose and are willing to do way crazier stuff like wow that this might be the wrong game to compete in and I you know I'm still trying to square that for myself like is this the right game or the wrong game to even compete in I could have said that about podcasts in general too right so like you know some of the best things I've done have been like in that category and it worked out just fine but it does feel a little strange it's like against my own business advice to like don't compete in the thing that everybody is trying to do because most likely you know you're just playing game the game on hard mode yeah

Suleman Ali

The way I've seen it done well is like there's this guy who's a realtor in LA. You know, a small-time realtor. He started making these YouTube videos that were walking through mansions.

Shaan Puri

you know like yeah he's great

Suleman Ali

Yeah, so he just made 10 of them and was like, "This is fun." Then he got access to more and more places and just made really high-end video walkthroughs of LA mansions. His job was already to be a realtor, so he was doing this as a way to get new clients in LA. As he did it more and more, it became a business of its own. He stopped being a realtor and now flies around the world because people will say, "I'm trying to sell this house, make a video of it." He'll go make a video, and a million people will watch it in 3 days because he has so many YouTube subscribers. I think where you're combining it with a profession that you already have, it probably is a good fit. There's some guy who's an SMB acquisition attorney on Twitter, and it's just a great way for him to get...

Shaan Puri

lead gen

Suleman Ali

yeah new customers

Shaan Puri

Well, I also think, like, I don't know if it's a good thing or a bad thing, but it's that thirties age thing. It's like I used to think about a business and only look up, like, "Wow, the skyscrapers are huge in this field. I too am going to build a skyscraper." Now I'm like, "Cool, before I do that, let me just go quickly look at the graveyard of people who have tried to do this." When I was in my twenties, there was no graveyard. I didn't think about the graveyard. I'm like, "Music startup? Love it! Everybody loves music, right? What could go wrong?" Yeah, and then when you're in your thirties, you're like, "Don't touch me."

Suleman Ali

social networks start up let's see

Shaan Puri

Yeah, I did social networks for like seven years, or six years, of my twenties because the skyscraper was so attractive. There is some beauty in just doing it. They're not even paying attention to the graveyard. I think the people who win will just do that, and it'll work. Their success formula was like, "Yeah, I didn't worry about the graveyard. Why would I do that?" But as I got older, I was like, "Man, you know what's more fun than trying to build a social network? Winning is really fun." So, let me just make sure that whatever I'm doing, the odds are not like a 99.9% chance of failure. If I'm going to do it, okay, I'll go in eyes wide open. I'm going to look at the graveyard and say, "I'm still going to do this." That's kind of what happened with the podcast. I thought, "You know what? I'm still going to do this even though I know that most podcasts nobody ever listens to." Whereas before, I did not even pay attention to that. I don't know if that's a net positive; it might be a net negative, actually, in terms of the strength of that kind of ignorance.

Suleman Ali

Yeah, there's this guy, Bobby Kotick, who's the CEO of Activision. He said, "I can be CEO of anything. I could be CEO of a toilet company or CEO of Campbell Soup." The thing that matters to him is success and momentum. You know, there are so many people who are like, "You're the CEO of a games company." That would make my entire life if I could just be that. But he's just like, "Success is what matters more than anything else." I'm kind of closer to that as I've gotten older, where I'm like, success is the thing that brings me joy more than the specific category or product that I work on. The thing that I think you've done really well, Sean, is you've seen friends who have a successful business, and you're like, "Let me just clone this business in a different category." You know, you did that with Sam and the hustle with Milk Road, and then you saw an e-commerce business with Ramon and the way that he was doing it. You're like, "I could do this too." So I think that's a really good way to do it. That's kind of underrated, and most people don't do it. They see this person as successful and think, "I'm just going to do the exact same playbook but in a different product category or different sector."

Shaan Puri

Yeah, I call it having a blueprint. If I don't see that there is a blueprint of success in a category and that it is replicable, like, okay, I can look at how the guy started Snapchat, but that doesn't seem very replicable. However, when I saw e-commerce or the newsletter business, I thought, "Okay, not saying this is easy, but I understand this. This is simple enough for my dumb brain to get how a business like this works." What are the costs? Where does the revenue come from? Where does the growth come from? Got it. Did they have some unfair advantage? Did they start at the right time, and now is it not the right time? I try to just figure that out. So now, with new things, I just look for that. First, I'm going to go searching for a blueprint. I'm going to talk to people until I find a blueprint. Like, "Okay, I want to buy companies. Cool, Andrew Wilkinson is a good blueprint. What does he do? How does it work?" Then I ask myself, "Do I believe that I could replicate that in my own way, in my own sector, my own style?" If I don't see a blueprint, I don't really get that excited about it.

Shaan Puri

Because I'm like, why would I do it without a blueprint when I can do it with one? Personally, I'm like that. Or the same thing: if I'm going to do it without a blueprint, alright, that's cool, but I'm going to make the announcement. "Hey, I'm choosing to do this without the blueprint." I have to go in with my eyes wide open on that. So, like, all of my rules, I break all the time. But I say them and I do them because I'm cool with violating this rule. I'm just not going to do it self-consciously. I'm not going to do it blindly. I'm going to do it knowingly, and I'm going to make that trade, you know, knowing exactly what I'm trading off by making this decision versus how I used to do it, where I didn't really understand what I was looking for. Now, I want to finish with some rapid-fire questions. Can I do some quick ones? I just want you to say your reaction to this. Okay, so I'm going to say this: the first category is things you've told me that I thought were funny. I want you to just react or elaborate. Sort of like, explain this tweet: "I don't know what the hell mental models are. I used to think I was dumb for not knowing what mental models are. Now I think everybody else is dumb for thinking about mental models." Some version of that.

Suleman Ali

Yeah, that's right. In Silicon Valley, it's so en vogue to be like, "Oh, I'm applying this cognitive bias theorem to this situation." Everyone in Silicon Valley that's smart talks like that. I was just like, why do I, when I see something, not see it in that same way? I just thought I was an idiot. I always solve a problem from scratch, like *tabula rasa*, as if it's the first time I've seen it. I just like that way of doing it, so I gave up trying to find mental models.

Shaan Puri

Alright, another one. You started your first two businesses on what I'll call "waves." So, like the Facebook app platform, I think it launched the same day you quit your job. You were like, "What can I do next? Let me just do this." You saw the announcement and thought, "I'll just do that. I have nothing to lose." The same thing happened with the mobile app store launch. I think you were one of the first big iPhone games. What are the waves today? What would 22-year-olds be doing now?

Suleman Ali

Probably something in genetics or AI. Yeah, probably one of those two things. I think they're the biggest sectors.

Shaan Puri

Okay, what? Seven years ago, we were at dinner and I asked you a question. I was like, "Why haven't you built a big company, a $1,000,000,000 company?" I was like, "Why haven't you done that already? You're so smart, you're so great. Why? What's gone wrong?" You said to me, "I don't think I understood what a $1,000,000,000 company was before." What did that mean?

Suleman Ali

I think you need to have a certain moat, and there are a bunch of things you need to get right to build a $1,000,000,000 company. You need to have a big market, a clear way of getting customers that makes economic sense, and a product that's really good. So, even today, I feel like I've got a very clear path to be able to build, you know, $100,000,000 to $200,000,000 businesses. But I haven't quite figured out how to build a $1,000,000,000 business outside of taking 5 or 10 $100,000,000 to $200,000,000 businesses. I think there's a different code to build a $1,000,000,000 business than a $100,000,000 one.

Shaan Puri

excellent what would you do if you were mister beast

Suleman Ali

I would start a Y Combinator for creators and maximize the... basically find the next Kim Kardashian, the next MrBeast, and support them. Own a piece of them and be a kingmaker where I'm making other kings.

Shaan Puri

You did a lot of startup investing. I think you've pulled back some from startup investing. Give me the bullet-point version of your take on startup investing.

Suleman Ali

I think startup investing I think competing for deals sucks I hate trying I find it very demeaning trying to convince somebody to let me invest $50,000 in their round friend of mine was raising money and got a term sheet from andreessen horowitz and bill gurley at benchmark and went with the andreessen horowitz term sheet and bill gurley was so mad that he called the founder up and like yelled at them for 2 hours and sent them 15 angry emails and bill gurley is one of the most successful people in the industry and the fact that he still has to do that made me be like this is an industry with no moat I don't wanna like have to go kind of beg or try to twist people's arms to let me invest in their start up the other thing that's happened is trying to turn $50,000 investments into $2,000,000 over a 10 year. Doesn't really do anything for me anymore so my first startup investment ever was a 100 k investment a company called chartboost in 2011 or 2012 and then the company sold in 2021 and I made $2,000,000 so that was a 10 year time span so I I think having to wait 10 years to get cash out is really annoying and makes me like it a lot less I think the valuations have also gone really crazy and companies are so much more competitive like there's a company called divi home that raised at a $1,000,000,000 valuation and there's 4 other divvy homes out there that are competitors to it so the combination of high valuations and increased competition makes it really hard to make any money as an investor and I've evolved from being interested in kind of making these 50 k checks into trying to buy a majority interest or a 30 40% interest in businesses that have revenue and profit or a path to profit I think that's a better way to invest for me because I'll see money back and be able to take that money and reinvest it in other new businesses

Shaan Puri

what's the biggest investment miss you've had and biggest hit you've had

Suleman Ali

The biggest miss was Coinbase. At TinyCo, we had this guy who worked for me named Adam Merber. He was roommates with Fred, the Coinbase co-founder. So, Brian Armstrong and Fred were fundraising for their Series A. They got a term sheet from Andreessen Horowitz, Benchmark, and a bunch of other firms. They called me and said, "Hey, should we go with Benchmark or should we go with Andreessen Horowitz?" You know, we at TinyCo raised money from Andreessen Horowitz. Mark Andreessen was on the board, and I was like, "Go with Andreessen Horowitz. Here's what's awesome about them." On that call, I was like, "Hey, by the way, can I put in $25,000 into this round?" I feel like they would have said yes. That $25,000 at their IPO was worth $200,000,000. I think it's probably...

Shaan Puri

did you not ask because you didn't believe or you didn't ask because you didn't think about it

Suleman Ali

I didn't ask because I didn't believe actually

Shaan Puri

I I that's a honest answer

Suleman Ali

Yeah, crypto. Bitcoin. These guys are building PayPal for crypto and Bitcoin. That's silly; that's just PayPal.

Shaan Puri

what about biggest hit

Suleman Ali

biggest hit

Shaan Puri

Well, let me ask you. You wrote something on here. You said you could've invested in Facebook stock. I thought I read something that you had bought, after you sold your company, that was on the Facebook app platform. You had bought Facebook secondary shares. Did you do that, or am I missing that?

Suleman Ali

I did this really stupid thing that I'm still embarrassed about to this day. I signed a contract to buy some Facebook stock—like $150,000 worth. The stock price, you know, it was private, but in the private market, the price went down by 50%. I called my father and was like, "Oh, you know, this happened to me." He was like, "Don't worry about it. Just buy it and you'll be fine; it'll go back up." Instead, I didn't buy it. They sued me, I think. They said, "Hey, you signed a contract to buy this." I said, "Okay, fine, I did," and I paid them $75,000 to not buy it.

Shaan Puri

versus a 150 k to buy it

Suleman Ali

Yeah, it was $150,000 to buy it. So, I paid them and said it was okay to not buy it. I was going to go buy some from somebody else who was selling it, but they backed out. So, I didn't end up buying it. Then, while I was buying it from the other guy, somebody else came to me and was like, "Hey, I've got Facebook stock to sell too." I hooked up a friend of mine with that Facebook stock, and he bought $50,000 worth of stock. That $50,000 ended up being worth like $8,000,000 for him, which is kind of amazing. I was actually raising a fund to be like, "We're just going to buy Facebook stock."

Shaan Puri

Because that's what I read. After we had first met, I was like, "Who is this guy?" I Googled you and saw an article where you had sold your Facebook app. It was like, "What are you going to do now?" and you said, "Actually, I think Facebook is a good investment, not like my app. I'm going to just buy like $1,000,000 of Facebook stock if I can." I was like, "Wow, this guy is super aggressive and interesting." In hindsight, this was many years later, and I thought, "Wow, that must have turned out amazing." I never asked you about it; I never knew the full story.

Suleman Ali

Yeah, this was in 2008 during the Great Financial Crisis. Everyone was running away from everything, and Facebook was valued at $2,000,000,000 in the private market at the time. It hadn't IPO'd, and it was unclear when it would. It was probably at around 100 or 200,000,000 MAUs, something along those lines. I actually met this guy in New York City who was like, "Hey, I'm trying to buy this stock." He said, "That's a brilliant idea." I was like, "Yeah, I'm trying to get the best price possible." He replied, "You idiot! Don't worry about what price you're getting. Just buy it from everyone who's selling it. Go buy it because this price is so cheap that it doesn't matter. Don't worry about whether it's $2,000,000,000 or $3,000,000,000 or $4,000,000,000. Just go buy it all." And I just kind of messed it up.

Shaan Puri

Yeah, easier said than done for sure. When those moments happen, it's happening right now in crypto. I know so many people that were like, "I missed it! I wish I got in," blah blah blah, as it was going up. Then it crashes back down to, you know, Ethereum at $1,000. Bitcoin was at $16,000, you know, like a month ago. And it's like, "Hey, you know, if you did want to buy, now would be a pretty good time to buy probably." And they're like, "Oh, I mean, this thing is... who knows now?" And they're the same people that three years from now are going to be like, "I wish I had bought again." They're just never going to buy. They're just going to constantly sit on the side and wish that they were buying, and never buy at the times they should, and always wish they could buy at the times they shouldn't.

Suleman Ali

That's me right now because I've got like **$40,000,000** or **$50,000,000** in U.S. T-bills that mature every 30 days. I'm keeping them in short-term T-bills because I'm like, "I'm going to find some other investment," whether that's the S&P 500 or something else. There will be other investments, and now is the time to go buy them. A couple of months ago, the S&P 500 was at like **36,100**, and that was my trigger to go buy it.

Shaan Puri

and I

Suleman Ali

It was like, "It's gonna go to 35,100. I'm gonna wait till 35,100." It never hit 35,100. I am still sitting on those T-bills and did not buy the S&P 500.

Shaan Puri

Yeah, it's very, very hard to do this sort of thing. But maybe this is where the mental model works—the cognitive bias or whatever bias this is. I got it. You know, there's someone out there who knows all these biases, and they're right: I have all of them.

Suleman Ali

Actually, my father is really good at this. You know, I sold my first startup and made $1,000,000 in 2008. He lived in Florida and said, "All the real estate prices here are at 25¢ on the dollar. I'm gonna go buy it." So, he bought a house. I sent him that $1,000,000, and he went and bought a house for $150,000. Two weeks later, that same house was selling for $75,000. If it were me, I would have freaked out and said, "Fuck, I don't know what I'm doing. I'm gonna stop. This is not working." Instead, he bought another house for $75,000 and just kept buying houses for the next two years. As the stock market and real estate prices bottomed out, he kept going down and then, even on the way back up as they were increasing, he would just keep buying them. As a result, he owns—or we as a family now own—something like 100 single-family rentals in Florida.

Shaan Puri

And what's the line there between a degenerate gambler? Because I've done that too when I'm losing money and playing poker or blackjack or whatever. What's the line between a degenerate gambler and a genius? Maybe there is no line. Maybe it's how the result turns out.

Suleman Ali

Yeah, I think it's a result, but also it's the psychology going in. You're like, "I know this is gonna go down. I don't care because I know I can wait 5 years or 10 years, and this will go back up." Right? And he was like, "This is below replacement cost." So if you were to build a new home right next door that was the same home, it would cost...

Shaan Puri

you more it would

Suleman Ali

cost you 4 times as much as I'm paying for it right now so

Hubspot

Yeah, amazing! Our software is the worst. Have you heard of HubSpot? See, most CRMs are a cobbled together mess, but HubSpot is easy to adopt and actually looks gorgeous. I think I love our new CRM. Our software is the best! HubSpot: grow better. You have a very honest LinkedIn, and I saw a guy who I think one-ups you. I actually want to tell you about this business in a second. Amazing! So, Google this guy: Justin Yoshimura. So, Justin and then Y-O-S-H-I-M-U-R-A. I want to read you this guy's LinkedIn. He goes, "I'm currently the founder, chairman, and CEO of CSC Holdings, one of the dime-a-dozen 'unicorn' startups." So already, I'm like...

Suleman Ali

wow wow

Shaan Puri

who is this guy

Suleman Ali

Unicorn startups are a dime a dozen. I've been trying for 15 years to make a unicorn. He's like, "These are a dime a dozen."

Shaan Puri

And then he goes, after being told that nobody would ever hire him, "I quit the bureaucracy and the negativity of Palos Verdes High School." So, already, he's holding a grudge against his high school to start a marketplace for unlocked cell phones. Anyone who sells cell phones, ringtones, or any of that stuff—they're like the best. They're great hustlers. So, already, you know, bonus points. So he's got two points: First, making fun of the fact that he owns a unicorn as a CEO. Second, he dropped out of high school and sold unlocked cell phones. He goes, "I was acquired by a family office when I was 19 years old." More recently, I started 500 Friends, a marketing loyalty thing. We merged with whoever and eventually were acquired by whatever. Then he goes, "I angel invest $50,000 to $1,000,000 in interesting companies run by interesting people." He names a bunch. When he names the companies, he also names the round he invested in. Another key thing that only real investors and honest people do is that they say, "I invested in Monks in the seed round." I messed up this one late stage, right? Versus what most people do, which is they'll go buy, you know, Airbnb shares in the public market and call themselves an investor in Airbnb. Right? It's like, we know what you're doing here.

Suleman Ali

I've seen big venture funds do that too, where they're like, "This is a hot company. We want to invest in the secondary in the Series D," right? A couple of $1,000,000 just to be able to put it on our website.

Shaan Puri

I'm sorry, but I cannot provide the formatted transcription without the content. Please provide the raw transcript again, and I will format it for you.

Suleman Ali

my god

Shaan Puri

this linkedin profile going

Suleman Ali

and then he

Shaan Puri

Then he goes, "I've been included in many vanity lists such as Forbes 30 Under 30, Inc. 500, whatever, 40 Under 40. But thankfully, I stopped advertising these on my LinkedIn headline when I was 19 after realizing I was being a douchebag. For a formal bio, go to my Wikipedia." So first, just...

Suleman Ali

to be frank to digest

Shaan Puri

this guy do you know have you ever heard of this company csc generation it's it's pretty interesting so what he did was he started buying up all these like kind of antiquated furniture companies so it's this it's this kind of hush-hush thing but they owned z gallerie which like half my house is like from z gallerie he owns what are the other ones here one kings lane he he owns surla latavla so he bought like surla table for 89,000,000 z gallerie for 20,000,000 1 kings lane and then he started making offers to buy I heard about him because my our buddy I don't know if you know metab but metab sent me this right here he goes this guy would be great for the pod and metab's like 100% signal to noise ratio if he sends me something a book I instantly buy it so this was like instantly just put it on the list do research on this guy so this guy's 32 years old and he's built basically like a sort of like a billion ish let's call it dollar company rolling these up and what he's doing is he's making them more like ecommerce and digitally like savvy so he'll close down half of the retail locations that aren't performing he'll get the ecommerce side to build up he'll take all the customer data that they have and he's like dude they they have like years of customer purchasing data but it's in a machine that's like 20 years old that they can't even like literally extract and like put into an email database or like find that you know put it into facebook ads or anything like that so he's like we take this to he's like we built a system to buy these companies and he's trying to build like what constellation software did for small saas companies he's trying to do that for large furniture companies he's like he's like that's my model they built an amazing intake engine to buy like 30 30 software companies a year and like unlock more value from them I'm trying to do the same with furniture companies and this guy gives like no interviews he's just this one guy and the reason he's on people's radar now is because he started making these wild public offers at these old school furniture companies so he went to them privately he's like I'd like to buy your company and they're like you know they're in nebraska they're 65 years old they're like you know my father's father built this table in this furniture store like what are you talking about and he's here's this 32 year old kid who lives in la and they're like no we don't we don't want your kind here basically so they don't like his offer so he's like okay this is getting me nowhere so he just started releasing press releases saying I'd like to buy this company for 20 or 30% over the public you know share price right now please respond board you have not been productive you have not responded to my offer in private you have not told me a counter offer you've said neither yes nor no your shareholders deserve this publicly so he's publicly making offers on these 2 public companies and that's how he's like now on people's radar because he was like pretty much doing this under the radar before this what do you think of this this guy and this idea

Suleman Ali

That's genius! I love it because there's just so much unlocked value in these businesses. He's focused on a specific vertical: furniture. I have no idea why he's focused on that vertical, but just that kind of focus will allow him to take the same product and sell it across a lot of these different retailers. He'll get crazy improvements in margin by combining the scale of all of these. The idea of going after publicly traded companies that are undervalued is so good.

Shaan Puri

And so, he said they're doing a little over $1 billion in revenue now. He mentioned that he's targeting furniture because it's undervalued. It lags behind; it's sort of like lagging. He pointed out that the companies that could benefit the most from a digital glow-up are those that are basically not participating in the right way in the digital world, the economy, and e-commerce. He goes on to say that a lot of these old-school furniture companies have a ton of customer data stored on old physical servers in their warehouses. The software is 30 to 40 years old, and the company that made the software is out of business. You can't even get them to update it. He said, "I'm just trying to get it to be modern." They've built a platform and a process to unlock the value of this customer data. I'm always a little skeptical of that type of claim, but he insists he has no desire to have his own brand. He explained that Constellation Software has no brand; they're just a $40 billion company that grows 33% a year. Ten years ago, the stock price was $100, and now it's $2,000. They created a platform to buy these companies, unlock their value, and tuck them in. They have the infrastructure, people, and process. They created a machine to unlock value in this category. He believes that nobody has done that in retail, and that's what they want to become.

Suleman Ali

Wow! First of all, I just love the tone with which he speaks. The humility is evident. He’s just kind of like, "This is what we're doing. It's simple. There's no magic to it. It's obvious." In fact, he asks, "Why isn't somebody else doing this?" Okay, nobody else is, so we'll do it. And that's kind of amazing.

Shaan Puri

So, I bring this up for two reasons. **1.** On the tone, he reminds me of you. Your LinkedIn is the same way. You'll be like, "I invested in this company. Kinda got it. It was kind of like a Yelp for this... I don't know, these guys could explain it better." No investor would write that on there. Or you'd be like, "Yeah, I kinda got acquired... acquihire-ish. I don't know, good outcome for the guys." You know, you're very honest with your portfolio, which I thought was good and unique. Nobody writes on LinkedIn like that. LinkedIn is basically like those dog shows. It's not like owning a dog. If you watch a dog show, you'd be like, "Is this what owning a dog is like?" And you'd be like, "No, that's nothing like what owning a dog is like." **2.** When I started my e-commerce business, you sent me a one-line email. I don't know if you remember this, but you said, "With my last business, we realized that we just had to do this one thing differently than everybody, than the current status quo, and it would work. We didn't need magic. It didn't need like ten genius things. We just needed this one fundamental thing. What's the one thing you're gonna do that's gonna make this work?" That one question had me spinning for like a week because I was like, "I don't know. I don't have a good answer to this question. Does this mean my business is gonna fail?" But this is a great question, and I stashed it in my great questions list. I thought, "Okay, I need to find that for this business, but also for every business going forward. What is the one thing that needs to be true or, you know, is true about this?" Do you remember sending me that?

Suleman Ali

No, not at all. But I think that sounds like the sort of thing I would do. For some reason, it reminds me of my first company. I started it with a friend of mine from college, and we sold the company. After we sold the company, we got into a fight. He sent me this email that was like "50 reasons this company succeeded despite your existence." I was like, "Ouch." So, I went and read it. He got to like 25 good reasons, and then at 26, he was like, "You get the gist." For a little while, I read that email every day for the first year that I got it. After that, I read it kind of once a year, every year, to just be like, "What is it that he said, and what was the truth to it?" I don't know why it reminds me of that, but that was such a great, great email. There was some truth to it, enough where I could kind of be like, "Cool, let me just take this feedback and act on it in the future." It's also ironic in that he kind of gave up the startup game shortly after that.

Shaan Puri

man you really broke him as a partner

Suleman Ali

Well, he actually tried to do a couple of other startups, and then I think he got into Y Combinator (YC) and did a YC-funded startup. But I think the startup game is a hard game, and so he was just like, "This game isn't for me" after some number of years. The other thing that's crazy is, you know, I started that company, then I started TinyCo, and we were raising our Series A from Andreessen Horowitz. He found out and sent them an email saying, "You shouldn't let this guy... you shouldn't invest in this guy. Call me." So they called him, and he was like, basically, "Read that list of 50 things." It almost killed the deal because they were like, "Yeah, we're worried about investing in this deal because of this." It's funny because there are so many things that people will admonish privately but kind of celebrate publicly. Like Travis, the Uber CEO, when he heard that some VC fund was investing in Lyft, he stopped what he was doing, drove down to that VC firm, and said, "Here are all the reasons you shouldn't invest in Lyft."

Shaan Puri

right

Suleman Ali

And that seems crazy, but because he was successful and brilliant, there were a couple of other things with Mark Pincus and Zynga where he did the same thing. So, it was just a funny experience going through that with him and the kind of Andreessen Horowitz Series A. It's funny now because somehow, 10 years later, we're great friends again. He got married, and I was the best man at his wedding, which is insane.

Shaan Puri

Alright, happy ending to this. You have also been talking about this kind of like "buy a public company" thing. So, I'm like, "Yo, what's next for you? What’s the next big swing? What are you excited to do?" You've talked about this, so let's go into some of those ideas. I don't think most people in the startup game think or talk about going and buying a public company or, you know, doing a hostile takeover or what have you. What's the idea here, and why might you do it?

Suleman Ali

Yeah, so I've been kind of trying to figure out what to do next. I think after TinyCo, I was like, "Wow, startups are hard. I'm going to try to take it easy." Now I've gotten to a place where I'm like, "Cool, let's do something big again." Starting a new company from scratch is really hard. So I've just been thinking, is there a public company that I can acquire where I don't have to go through that 0 to 1 phase that everybody loves but is really difficult? Can I go to a place where something's already at a 5 or 10, and then take that and scale it as a way of kind of running a business? To me, the perfect business out there to acquire is this company that is number one on my list. It's a company that was a $3 billion company but in the private market was worth $10 billion. So it's worth $10 billion before, and now as a public company, it's worth $3 billion. The company is Squarespace.

Shaan Puri

Squarespace is a different ad. I feel like the only time I ever hear about Squarespace is in their ads now.

Suleman Ali

Yes, Squarespace spends so much money on these podcast ads. You hear about them everywhere on podcasts or places that you wouldn't really expect. You don't see companies doing direct response advertising; like, I never see them on Facebook, but I always hear about them on podcasts. I think that's super weird. The stock is down, you know, 50% since the IPO. They're at this kind of $900 million revenue run rate now. It's a subscription business with more than 4 million subscribers. I'd love to buy it because I think it's a great company that's super undervalued. It's not being run to maximize profits; it's being run in a way that keeps it at break-even. I think you could run it to maximize profits, get rid of those podcast ads, and focus on direct response Facebook ads to get new customers. Where's the stat?

Shaan Puri

in their in their spending

Suleman Ali

They do a ton of non-direct response ads that are like TV ads or podcast ads. I think these are great to have this halo effect around the brand, but I don't think those are the optimal way to maximize return on ad spend, right?

Shaan Puri

And so they do, I think, $300 or $400 million in marketing spend. So that's one area where you could make that more efficient or cut that down. What is the other? Is it like, you know, when Elon buys Twitter and he fires half the staff? There's like a huge headcount. What else is like fat in their system?

Suleman Ali

Yeah, I think they've got a ton more people than they need. Their headcount costs are like $225,000,000 a year, and their headquarters is in New York City. I think you could just cut that team materially and get rid of the New York City headquarters because it's super expensive to be there.

Shaan Puri

Yeah, Sam was talking about... I remember back in the day, one of the earliest podcasts talked about Casper. He said, "You know how I knew Casper was gonna fail? They had like 150 employees in New York." He asked, "Why are you hiring all these people in New York? You don't need these people. They should be sitting in, like, you know, South Carolina, Omaha, and other places. Why is your customer support... you know, somebody making all this money in New York?" He was adamant about it. That was like his number one rant. This was at a time when Casper was still seen as one of the rising stars. Now, I think Casper's just kind of taking a beating in the market and all that stuff. I think it might have gone private again because, yeah, Casper went private. It couldn't last publicly, I guess. But I remember that was his number one thing. He said, "Say no more. I don't need to read the P&L. I just saw how many employees work in New York. I could tell you this business is mismanaged from day one."

Suleman Ali

There's this great Carl Icahn story where he buys a business that makes subway cars. They've got a huge team in New York and a team somewhere in middle America. He goes to the team in New York and is like, "So, what do you guys do?" They show him all these presentations for two days, and he's like, "Okay, I saw the presentation. So what do you guys do?" And they're like, "We just told you." So, he's like, "Alright, let me go visit the guy who runs the middle America operation that actually makes the railroad cars." He goes to visit them and hangs out with the guy, who is super charming. At the end of the day, he's like, "So, you know, there are these guys in New York. What do they do for you? Do you need them?" And he's like, "No, those guys don't do anything. In fact, I have four guys that are just there to manage those guys and all the questions that they bother us with. With a firewall, if you get rid of those guys, I think the business will continue to grow and we'll be fine." So, the next day, he goes back to New York and fires three floors of people.

Shaan Puri

It's like that scene in *Entourage* where Ari Gold just walks in with a paintball gun and starts blasting everybody. That's basically like the New York firing by Carl Icahn.

Suleman Ali

Yeah, he tells this story with such a smile. Actually, he tells it as, "This was pretty early in my career." It took me a couple of months to do this. If it was now, I would buy the company and fire them like the next week. And so, how...?

Shaan Puri

Would insurance... How does somebody actually do this? How do you go buy a $3,000,000,000 company? Because you're rich, but you're not $3,000,000,000 rich to spend on a company. So how does somebody do this?

Suleman Ali

Yeah, I think $3,000,000,000 is probably too much for my personal balance sheet. But the way you would go about it is just like the guy at CSC Generation is doing, which is to make a public offer. It's the same way Elon Musk did it. You first make a private offer, then you make a public offer. You make sure that all your financing is lined up when you do the public offer. And you know, the way that the U.S. stock market works and shareholder rights laws work is that the board has to respond to that offer. They have to have a really good reason to not take it if it's at a material premium to the current stock price. Otherwise, they're going to get sued out the wazoo by shareholders.

Shaan Puri

right

Suleman Ali

and so yeah that's kinda how you do it

Shaan Puri

Okay, so that's one way. Let's do some of the other things. So, that's from a big idea to fun, smaller ideas. You were telling me something like you helped your buddy—your, I don't know, high school friend or college friend or something like that—sell their dental practice. What? Teach me about that. I don't know anything about that.

Suleman Ali

Yeah, this was a chance for me to be a "deal doula." So, this friend of mine called me and was like, "Hey, I got a quick question for you. I started this dental practice, you know, 10 years ago. Somebody came in to make an offer. Should I take it?" I thought it was going to be one phone call, but it ended up being like 60 hours of work with a bunch of phone calls with him and the buyers of the business. It was super cool to see the inside of a dental practice, how the P&L looks, and how a company gets acquired like that. He has a dental practice that's massively profitable. He runs it in a way where he's optimizing for his lifestyle. He does 7 figures in EBITDA, has a 50% net margin, all while working 3 days a week. I was just like, "Oh my God!" Is what he's...

Shaan Puri

called mig what what is he doing the other days

Suleman Ali

He is making up new hobbies that he's getting excited about. Like, he's never gone fishing before, and he's like, "I got all this time to kill because I don't have to work."

Shaan Puri

on me gear now I have to learn this hobby

Suleman Ali

Yeah, so he'll go find a new hobby, buy the gear, find somebody in town who is good at that hobby, and go with them. Actually, I hung out with him recently, and he said, "Let's go fishing." I was like, "When did you take up fishing?" He replied, "I got so much time." He works three days a week and he's not optimizing the business for EBITDA. He has a big waiting list of patients who want to become patients, but he doesn't have the time to see them. He has one dentist that works for him and a bunch of dental hygienists, but none of that is being done in a way where he's optimizing for revenue or profit—just optimizing for his quality of life. So, this private equity firm is doing a roll-up of all of these dentists in that area, and it's super interesting how the private equity works. They've got a company that's going around and doing this roll-up of dental practices. The company is run by a CEO who is a dentist—a super nice guy, well-known in the area, and admired and liked by all of the other dentists in the area. So, he's kind of like the figurehead of the company.

Shaan Puri

good cop

Suleman Ali

Good cop, then they've got a COO who is this hardened guy. He's bought tons of businesses and worked for a bunch of private equity firms. He is an experienced acquirer, and you don't even like talking to him after, you know, five minutes. He's the bad cop. So, good cop and bad cop go in. Good cop does all the charming, saying, "This is going to be a great acquisition. Look at how it's turned out for me." Bad cop does all of the numbers and negotiating. So, they bought this business with a really simple premise. They bought it for a 7x EBITDA multiple, and they're like, "We're going to go buy all the dentists in this area that we can, and we'll sell it at a 15x EBITDA multiple because we'll get to a scale of, you know, $20-30 million in EBITDA."

Shaan Puri

That's just the valuation arbitrage, right? Which is basically that small EBITDA businesses, like let's say you're doing $1,000,000 or $2,000,000, they'll sell for 7x. But if you had $20,000,000 of EBITDA in a business, it'll get acquired by a larger institution. It's an easier buy button to buy $20,000,000 a year of EBITDA for 15x. So all you have to do is kind of accumulate, roll up, and put this together to get to that next stage of buyer.

Suleman Ali

Yeah, exactly right. So that's one aspect. Then the other aspect is, there are all these things that we can do to increase revenue for this guy's business. 1. We're going to add another dentist to eliminate the waiting list. Anyone who wants to see a dentist will be able to see one within a week. 2. They added another dental hygienist chair. The dental hygienist chair costs like $10,000, and my buddy just didn't go buy one and kind of put a dental hygienist there to increase dental hygiene revenue. They even told him that there are all these things they can do to maximize the amount of money they get from insurance companies. They mentioned this one instrument: whenever you're doing a cleaning, just pick this instrument up. You don't even have to put it inside the mouth of the patient; just pick it up for a second and then put it back down. Then you can claim this higher insurance code, and we're going to generate more revenue. So he called me and was like, "You know, is this moral or immoral? Can I go back to these guys and say, 'Hey, I don't want to do this. This doesn't seem right'?"

Shaan Puri

he said as he's holding the tool up for 45 minutes just to see what happens

Suleman Ali

That's right. Because they bought all these other dental practices in the area, they're able to take one dental practice and say, "Oh, you need braces, or you need a root canal, or you need whatever oral surgery procedure." We're going to refer you out to somebody. So, they used to refer to people who were just kind of third parties, and now he gets to refer to people that are in the network, already owned by the private equity firm.

Shaan Puri

Nice! Yeah, okay, that's great. So you see that machine and you're like, "Wow, this is amazing." What's your kind of big takeaway from that experience? Because I think most people wouldn't take the time to go do that. You did, and I think you probably got something out of it. What was your big takeaway?

Suleman Ali

Well, I thought it was amazing that it was a win for the private equity firm. Just being able to see the roll-up strategy and how good it was for them upfront was awesome. I also got to see it from his perspective, and from his perspective, it was also a huge win. It was an easy transaction; he didn't shop it around. It was a way for him to retire and become the richest person that he knows. He owned the real estate of the dental practice, so he got to keep the real estate. Now, the acquirer pays him rent every month for the real estate that he owns. He now gets to go on month-long vacations to Europe, Africa, or wherever he wants to go for fun with his whole family.

Shaan Puri

Yeah, that's amazing. I also like the "I'm the richest guy" concept. I think that's a funny thing that actually happens in a bunch of, especially smaller towns and niche markets. It's like if you can make $8,000,000 or something like that, you are done. You don't need anymore, and there's a beauty in that. If you're in Silicon Valley, you could build a $1,000,000,000 business, and you might not get invited to the big boy table still, right? Because it's just like everybody knows 50 people who are more successful, younger, smarter, and more ambitious than you. So there's this never-ending race that you're on if you're in Silicon Valley, New York, or LA, and that's just not true in these other places. I think there's something great about that.

Suleman Ali

That, yeah, it's amazing. The only way to win the rat race is to opt out of the rat race. He has opted out and has thereby won the rat race. It's so funny to compare my life to his because I spent so much more time working and, you know, have made a bunch of money so that maybe I don't need to work as hard or at all. Yet, I continue to work and he's like, "I'm chilling."

Shaan Puri

and you've thought about that or no it's like just not your nature

Suleman Ali

I have one of my goals for 2023: to take it a lot easier work-wise and spend a lot more time doing as many fun things as possible. Like, I'm in LA right now. They have this thing called the **Porsche Driving Experience**. You go with a bunch of friends, and they've got Porsches and a racetrack. You get in a Porsche and just drive it around the racetrack as fast as you can without killing yourself.

Shaan Puri

We, you know, when we got back from the weekend getaway that we did, I gave a debrief. I talked about this one observation I had, which was that at that event, we met people or we were hanging out with people that were of like four or five different life phases. So there was, you know, Victor and Jude. They're basically like 12-year-olds, and their mindset was like, "Yo, wake up! It's time to play!" They literally woke us up with a boombox by the window just playing music, or something like that. They were like, "Come on! The pool's already warm! Then we can go to the sauna, then we can play golf, then we can play football, we can play this, play that." They were just... from the moment they woke up to the moment they went to sleep, they were like, "Let's play!" So that was like the 12-year-olds. Then it was like the 20-year-olds we met that came over that night. They were basically building NFT projects or doing the TikTok D2C brand that was just taking off. They were like... I don't know how to describe it, but they were kind of in that hustle. They thought they had it all figured out, but they don't realize that yet. But that lets them do some cool stuff because they don't know what they don't know yet. So they were just young stallions, full of exuberance, and didn't understand where the limitations were or what the drawbacks were. But that's okay; they'll run headfirst into that wall when it comes. They're having a good time doing it. Then there was me and Ben. We're like in our thirties, and it's like, you know, the 30-year-olds are sort of like, "Okay, I still have enough energy to do things, but I'm not dumb enough to just do them blindly." I don't have that great ignorance yet. I really like kind of overanalyzing things almost. So the whole time, we were trying to think through our next project, trying to sit down and map it out, weigh the pros and cons, and all this stuff. And then there were you guys who were in your forties, and you were like...

Suleman Ali

yeah you

Shaan Puri

Were like, "Ramon?" Yeah, you're like, "Oh, Ramon's like throwing out his back playing pickleball." You know, you guys were basically some combination of, "Let's have fun! Let's go surfing! Let's play sports!" Like, "Yo, seize the day!" I don't know how much longer I'm going to be able to do all this stuff constantly. I'm doing it, and you know, I guess there was like an element of, "Yo, yeah, business stuff is cool, but life is a lot cooler than business." Where the 30-year-olds and the 20-year-olds were like, "No, winning in business is a..."

Suleman Ali

lot cooler than life

Shaan Puri

Business, business, business. I remember continually trying to be like, "Hey guys, alright, you want to just sit down and whiteboard for a minute?" It was like, you know, I was feeling this urge to do that. I feel you guys had this urge too. The sun is out, let's go outdoors, but let's wear our sunscreen because we don't want to die. There's this element of wanting to live and not wanting to die—that's where you guys were at. Then we hung out with a 70-year-old guy, and he was just sort of like, "Oh, you know, I want some action. I'm bored. I want some action." He wanted to contribute, to give back, and that was a big focus. It's just fun to have this energy around me. So that was kind of one observation I had. Is that accurate as far as you read it, or am I making stuff up here?

Suleman Ali

Yeah, it's super accurate. Ramon and I were like, "It's Saturday night, and we have a bunch of entrepreneurs who are just trying to sell us their business, get themselves excited, and meet people to network." Ramon and I were like, "It's 9 o'clock. I think it's time to go to bed." But these guys were like, "No, let's stay up till 2 AM! Let's talk about business ideas. Let's start a new business tomorrow!" Oh my God, this guy is selling mini katanas on the internet through YouTube and TikTok. Wow! It was a really funny thing. Then, you and Ben were like, "Let's talk about new business ideas." Here's a new business idea: what do you think? What do you think?

Shaan Puri

what do

Suleman Ali

You think, "Oh, what about this? What about this?" And Ramona and I are like, "How about we jump in the pool?"

Shaan Puri

yeah like just take an ice bath

Suleman Ali

Yeah, so it is funny to see these different seasons of life. I'm trying to kind of adjust to this new season. For example, now on Saturdays and Sundays, I try not to touch my laptop at all and be outdoors with friends as much as possible.

Shaan Puri

Well, that is... it's hard to make that shift in that season. I mean, even at the beginning of this podcast, I was like, "I'm gonna buy a public company and take it to the moon." And then it's like, "Actually, I'm gonna enjoy life and do family things and things like that." It's hard to even be congruent in a one-hour podcast with a kind of direction. I've observed this among many people; it's very hard to stay congruent. I noticed this about myself. I'll be like, "Oh, I love this content podcast thing. This is great! I think I could be the best at this." Then I get all this positive feedback where it's happening, and it's growing, and people like it. And then I'm like, "Yeah, but should I start this business doing this B2B thing?" And then it's like, "Wait, what happened to the whole 'I want to do this content thing'?" I don't know... it's hard to be congruent, and it's very easy to get distracted and get off mission when you're used to doing one thing. You know you can always go back to that well and do it, but there's this new thing that you think might be the right thing for you, but it's different and maybe a little less familiar.

Suleman Ali

I met this guy who started a company called Solo Stove, sold it, and then later went public. His name is Spencer. He was like, "I started this company, I worked really hard, I sold it, and now I made mega bucks. I'm good. I'm financially independent." He doesn't invest in any startups, private equity funds, or VC funds. When people ask him, "Do you want to invest in this, that, or the other thing?" he says, "No, I'm good." He takes all of his money and puts it in the stock market, specifically in the Vanguard VOO, the Vanguard S&P 500 index. He doesn't think about it at all. He says that everyone else who is an entrepreneur starts a company, makes it, and then goes back to start another company. They're only starting another company because that's the only thing they know. He believes they just keep building a new prison for themselves that's bigger and brighter, but it's still a prison. He questions, "Why would you do that?" After I had this call with him, I spent a week just walking in circles, muttering to myself, "What am I doing with my life? What am I doing? Why am I starting new businesses? What is all of this?" It's really interesting to see people on the other end of the spectrum.

Shaan Puri

I think I told you that once when we were at some park in San Francisco. You were telling me about your new thing, and it was working great. I was like, "That's great!" I admire that you do this with such ease. It's like watching Steph Curry shoot three-pointers. Wow, you just start a business and it works like this! What happened to all the hard, gritty stuff that I feel all the time? You're just doing it, and that's amazing. But then I also told you, "I feel like you're playing the same level of the video game again." You know, you kind of beat this level. Shouldn't you just go to the next level? I don't know what that level even is. I don't even know what that means. Maybe it's not even business. I said that, and I felt like a real jerk afterward. I was like, "That was a stupid thing to say." I remember feeling really bad. I thought, "That was just kind of like a... I don't know, that probably didn't feel good to say or to hear." Then I was also like, "Do I believe it? Would I want a friend to tell me that if they felt that way about something I was doing?" I was like, "Yeah, I think I would." I think you don't take that stuff seriously, so that's no problem. But you know, I've felt that, and I've seen that now in many people. It's the same: build a prison of your own making. Like you said, the only people who win are the ones who sort of opt out of the rat race. It's really jarring when you see that and you're like, "Wait, what? You're leaving?" But you could do...

Suleman Ali

still here

Shaan Puri

And they're like, "Yeah, we're still here." And they're like, "Yeah, that's great. I'm gonna go wander over here." And I'm like, "Oh my God, you can leave this room? I didn't know that was possible." It's honestly very jarring when you meet the one out of a hundred people in Silicon Valley who do that.

Suleman Ali

Yeah, it is stunning that people do that. It's so interesting when you meet people who do that and what they choose to do with their time. Like you were telling me about that Braintree guy who's like, "I'm trying to maximize my life. I'm trying to reverse my biological age." Yeah, and so I changed my diet. I've got a team of doctors, nutritionists, physical therapists, and trainers. I'm reversing my age, and that's what he's doing with his time, energy, and money. It's super interesting to hear when people...

Shaan Puri

yeah the the thing I've seen I

Suleman Ali

Now I have this thought: my life is actually limited by my imagination. Growing up, I always assumed it was limited by money or resources. Now I realize my life is just limited by my imagination. One of the things that made me do is I'm trying to hire a Chief Fun Officer. My definition of fun is often like, "Let's work and let's grind it out." I'm trying to hire somebody who's the exact opposite of me to be like, "No, that's lame. Here are five more fun things you could be doing right now. Go do those instead." I will literally close my laptop and just go do one of those five things in response to that.

Shaan Puri

That's amazing! Did you... that thing you just said? "My life is limited by my imagination." I think that's probably, like, I don't know how many minutes into the podcast we have, but that's a golden nugget right there. That's something I'm going to think about a lot. What... say more about that. Like, either how you thought of that or what's an example of that?

Suleman Ali

yeah you know it's funny because I'm living with my brother right now and the 2 of us wake up and we're like it's monday morning let's go let's grind it out let's go let's win the ball game and yesterday we like played paddle tennis for 4 hours until our limbs fell off and that was way more fun than whatever work we're gonna do today and so I just want somebody to like I don't spend enough I spent all this time being like actually what's what's happened for me is as I've seen more businesses and gotten older and more experienced I feel like this is a little bit of a hyperbole but I feel like neo in the matrix where you show me a business and I can like see through it and actually see the fundamentals of the business and have an opinion about whether it's a good business or not or I see opportunities where I'm like there's a $100,000,000 business here and it's just a matter of like doing the work and executing it and it could be a real business so I spend my so much of my brainpower thinking about that stuff and very little of my brainpower thinking about how to have fun and like other cool things that people do in life I spend a ton of time reading the wall street journal and talking to entrepreneurs but very little time talking to instagram influencers or just people who are like balling out and having a great life and so I just wanna spend more of my time and energy imagining fun things to do like I love magic I would love to have a magician show up randomly in my week like while I'm at a restaurant a magician shows up and is like hey everybody I got a magic trick for you and then does a magic trick at the table I a friend of mine told me that him and a bunch of guy friends would go to vegas every year and 1 year this guy was in charge of planning it and he hired like 5 little people in tuxedos to follow them around and then a bunch of like the brazilian carnival dancers to follow them around the whole weekend and so everywhere they went everyone was like who are these guys they got into every club they got free drinks they got to all these people coming up to them and they had a dope weekend as a result and you know lots of people just go to vegas and like go to the hotel and gamble and these guys just through their imagination had a better way of doing it

Shaan Puri

Yeah, amazing! Alright, this has been good. Where do people find you? You started tweeting, so shout out your handle, and then we can wrap it up.

Suleman Ali

Yeah, my goal is to get to **100,000 Twitter followers** by the end of the year. So, I'm going to be tweeting a bunch more. My Twitter handle is my full name: **Suleman Ali**.

Shaan Puri

yeah soleiman ali alright great thanks for coming on man

Suleman Ali

you bet thanks sean