Brett Tanner and Katelyn Mitchell open season two with a post Sam Altman wrote on what he wished he'd known before he started, and apply each point to Brett's own businesses. They cover a sales manager paid 5% on gross revenue who kept overspending until Brett moved his pay to the bottom line, cutting $20,000 a month from the budget. They also explain why Brett, who once owned over 100 rentals, rolled them into fewer, bigger deals.
Brett TannerHost, founder of Be Wealthy
Katelyn MitchellCo-host, runs operations for BrettBrett and Katelyn built their cryotherapy business by trying every marketing channel at once, including value pack mailers, Groupons, and a referral network with health care providers. The goal was to get as many people through the door as possible in the first 100 days, then look at the data to see what worked. Brett says a soft launch is the easiest way to fail, because you learn slower and make less money while you wait.
Jump to 23:07Brett once paid a sales manager running a $100 million a year sales business a 5% override on gross revenue, and the manager kept pushing to spend more money on leads. Brett switched the pay to the bottom line instead of the top line, and the next month the team cut about $20,000 a month from the budget. He points to Tesla's $1 trillion pay package for Elon as the extreme version of tying pay to the outcome the owner actually wants.
Jump to 33:37Brett once owned over 100 single family rentals and rolled many of them into fewer, larger deals, like trading 25 houses for one building. He compares it to lending money: a single $1 million loan gets far more attention than 20 smaller loans that add up to the same amount, because the due diligence takes the same effort either way. Spreading your money and attention across too many small bets means none of them get your best work.
Jump to 42:08Brett says he spends 30% to 50% of his available time recruiting when he is trying to solve a big problem in the business. He gives an example of paying someone $100,000 a year to solve a problem that could add $1 million in profit, which he calls a 5x to 20x return on that hire. He also looks for people already doing the exact job he needs somewhere else, then recruits them with a bigger opportunity.
Jump to 53:35Brett is 44 and plans his wealth goals out to when he is 54, 64, and 74 years old. He checks his progress every week. People who miss a goal usually had a fine plan in January and never looked at it again until months had passed. His rule is to think in decades and measure in weeks.
Jump to 58:47Brett uses Amazon Web Services as his example of scale creating opportunities nobody planned for. Amazon's total revenue in 2024 was $638 billion, and AWS, which started as an internal tool, brought in $107.6 billion of that on its own. Katelyn adds that AWS made up 50% of Amazon's net operating income in 2024.
Jump to 1:04:02Brett says a business can be a massive success and still be a colossal failure if you cannot stand the people you work with every day. He would rather work with someone less successful who has good relationships at work and at home than someone who traded every relationship away for money. For Brett, who you choose to work with matters as much as the outcome.
Jump to 1:09:23Optimism, obsession, self-belief, raw horsepower, and personal connections are how things get started.Brett Tanner · at 19:58
Tap any chapter and the video starts right there.
“Because I was tied to the net profit, I became a crazy person when it came to expenses.”
Katelyn Mitchell at 38:58Use the plan tool to turn the episode's lessons on incentives, bets, and recruiting into next steps for your own wealth plan.
Brett breaks down a post Sam Altman wrote, which Brett calls how to become a billionaire. It covers why raw effort starts a business, why incentives need to line up with what you actually want, why you should bet big on a few ideas instead of many small ones, and why recruiting matters more than people think. Brett applies each point to real decisions in his own businesses, including cryotherapy, real estate sales, and rental properties.
Brett believes a soft launch slows down your learning and your revenue, so you sit in pain longer than you need to. When his team launched a cryotherapy business, they used every marketing channel at once, from mailers to Groupons, to get as many people through the door as possible in the first 100 days. That volume let them see fast which channels worked and which ones did not.
Brett learned this the hard way with a sales manager paid a 5% override on gross revenue for a $100 million a year sales business, who kept pushing to spend more money. He switched the manager's pay to the bottom line instead of the top line, and the team cut about $20,000 a month out of the budget the next month. His rule is that if the pay plan rewards the wrong number, people will chase the wrong number.
Brett argues for fewer, bigger bets. He compares it to lending: a single $1 million loan gets far more attention and due diligence than the same amount split into 20 smaller loans. He applied this himself by rolling many of his single family rentals, once over 100 of them, into fewer, larger properties.
Brett says he spends 30% to 50% of his available time on recruiting when he is trying to solve a major problem in the business. He looks for people already doing the exact job he needs somewhere else and recruits them away with a bigger opportunity. He points out that paying someone $100,000 a year to solve a problem worth $1 million in profit is one of the best returns a business owner can get.
0:01Welcome to the Be Wealthy Podcast, where we bring entrepreneurs the strategies and tactics to grow your business and unlock new opportunities. Once you've achieved success, we'll teach you how to think about your money. Because wealth is about more than just cash flow, it's about freedom. Now, our host, Brett Tanner. Welcome back to the Be Wealthy Podcast. My name is Brett Tanner and today is season 2, episode 1. We're back and we have a jam-packed season for you and I could not be more excited to share it. Today's episode is going to be epic. But before we jump into that, uh, on be on this podcast, we do a couple of things. Number one, we teach you different strategies and tactics, and we bring in the best minds to help you grow your business. Next, once you've got success and you've got money, we teach you how to think about money, what to do with it, and we walk through all the things in wealth, which we realize are far more than money. Today's episode, I'm going to introduce to you my co-pilot this
1:03season, Katelyn Mitchell, and we're going to dig into Sam Altman's article uh really was a post he made around the 13 things that he wish he would have known before he started. I rephrase it to be how to become a billionaire. We're going to dive into the tactics, the strategies, what he shared, and how that I think about implying them into my business. Without further ado, let's jump in to the Be Wealthy podcast. Let's get started. We're bringing in my good friend, my business partner, and she's worked with me forever. She knows exactly how crazy I am. Katelyn Mitchell, welcome to season two.
Brent, I got to be honest, I was a huge fan of season 1. I felt like I knew most of the stories of season one because we worked together. Um, but I have to tell you that was such a fun season and I am super excited to be back for season two.
So guys, before if you watched season 1, if you haven't, go back and catch them. We've got tens of millions, some say hundreds of millions of downloads. We don't even track it. So, um, if you haven't seen that, go back and look at
2:06it. But what this season, I asked Katelyn, uh, to come along with me and we're going to film some episodes with my content. Uh, but I needed someone to come in with me that has expertise that could talk to you that we could brainstorm ideas as opposed to me staring into the abyss in the camera for 60 minutes. And so, uh, Katelyn, I'm excited you're here. So, those that don't know you and our our wide audience across the world and globally, uh, give us a little bit of your background. Well, first I like to think that my role here in Healthy on season two is to ask you the questions that I think the audience might be thinking. They might be driving in their car or watching this live and go, "Oh my gosh, Brett is way ahead of me or I didn't capture that and just like I do in our businesses, I'm happy to raise my hand and ask those questions." So, couldn't be more grateful to be here. Um, my background kind of a a weird background. Um, I went to school to college for nothing to do with real estate. In fact, it was
3:11professional golf management. I don't know if you knew that that was that's an actual career path that people go to school for, Brett.
Well, what's great about it is nothing fits the entrepreneurial box, right? If you say professional golf, people look for people who went to Harvard with a golf educate. I mean, that's what you're looking for. Nothing prepares you because if you could find your ball and you get a great golf shot and you could fix that and find it, there's not really a business problem you can't solve.
So, halfway through school, I realized this girl loves to play golf. Not passionate about working at the golf course. Um, when I found out that they work incredible hours and what that looked like, I just thought, you know what, this isn't the career path for me. So, I needed to make a really quick pivot. Um so I was sitting in class and decided um ironically we had watched Trump's A&E biography um in one of our entrepreneurial classes. It was a very prestigious school obviously and we had watched that and I said I got to go into real estate. So I got my real estate license. I went
4:13into new home sales because I was so young. Um I didn't really know kind of how to niche into real estate. Went to new home sales and had an incredible career just when everyone else was. Right. the market was booming and new home sales were crashing. Um, and we were having lotteryies for houses. It was a total blast. Um, but then the market crashed and I needed to look for some other opportunities, but I didn't have a whole lot of confidence in my work history, right? I had been to professional golf management and I was a professional lottery house person. I didn't really have a lot of skill sets or or didn't have a lot of confidence in my skill sets, I should say. So, I went to I had a litany of randomness. I worked at my gym for a minute because I loved going there. That was awesome. And then I was like, "This this isn't for me." Um, I ended up going into selling penny parts. Um, I sold nuts and bolts and fasteners to OEM manufacturers and construction firms um in Arizona at a great place,
5:18Copper State Bolt and Nut. They were absolutely fantastic and I loved working there. Um but soon I you know I had excelled and I I actually I hate to brag. I was employee of the year um for the sales.
Congratulations.
Yeah. And I realized as I was speaking with them that really the career path I wanted to go into the skills that they had given me this was a great pivot point for me. And that's when I decided to get back into the real estate industry, but to do it in a um in a a more of the business side of real estate rather than working directly with buyers and sellers. And I ended up working for a gal um who ran a region for Keller Williams. She had a huge team in multiple locations and really had a big future inside of Keller Williams. and I started working with her as her executive assistant and learned an absolute ton. And she got the opportunity to launch Mega Agent Expansion outside of or inside of Keller
6:21Williams through KWRI. And um that was a division, Brett, that um it showed agents how to expand their real estate business into multiple markets utilizing a centralized hub. And so that was one of the that's actually the way that I met you. It was one of the most pivotal points in my entire life because I got to learn not only or I had the opportunity to not only learn from her and her businesses, but now to sit in the rooms at KWRI and listen to Gary Keller and Mo Anderson and Mary Tennant all talking about Diana Groska talking about how agents and what systems agents should utilize to expand their businesses. So agents would come from all over the country to Austin and we'd study their businesses and teach them what Gary taught us about expansion and I got to be a part of all of that which is where I met you. So that's
we will well hold on we got to finish it
7:23out and I got to come back and tell the funny story here in a moment. So um so then you ultimately decide to leave working with this person
and walk through how kind of that journey of how we got together.
Yeah. So, um, at the time traveling really, we were traveling a ton on a road show for that event. And, um, I determined that I kind of wanted to take and and pivot into a different direction. And so, um, I let her know that, you know, hey, about six or it ended up being, you know, 10 months from now, I want to go ahead and and pivot into a different opportunity. And here's three to five people I'd love to connect with. And Brett, you obviously know now you were at the top of that list. It's not the top, but no one's
Well, the reason that I'll tell everyone the reason here, I don't mind being transparent in it. Um I had had the opportunity at the regional level with her as well as through all of those rooms that we got to be together seeing you consistently not only have one track of you which is I'm going to build our
8:28businesses to win and I'm going to be absolutely ruthless in that endeavor when it comes to the right productivity and the right strategies and having that one side of you mirrored or or counterbalanced, I should say, with your heart and always doing the right thing. And having watched you in that world for two two or three years, um, you were just at the top of my list. And so now, fast forward 10 years later, we've been working together since. Um, but your question was, how did we start working together? So, I reached out to you and I said,
I'd love to work with you. Go. Well, go ahead. You can come in.
Yeah. So, that's perfect. So you reached out and my version is I love it. I had a partner at the time and we had this collection of businesses that we were focused on other things that weren't really being grown at the level they could. And so I said, "Hey, congratulations. We love this opportunity. Great. You're in charge of these things. We're launching a we're going to be a franchise for cryotherapy. Uh we've got a market center. We got all
9:30these.
What is cryotherapy?"
Yeah. What is cryotherapy? So we back then you did a variety of things for us. You've opened title companies. because we've shut them down with too much revenue. Uh, and today you help run our family office, you run our businesses, help us deploy capital, help us buy companies. And we've been doing that 10 11 years together now. Something like that.
Yep. That's exactly.
I think we just actually we just said 10 years because it was your 10iversary as we call it. Uh, the 10 year anniversary. Wild. So, the story I have to tell you uh is I would show up to these events that Katelyn was putting on with the person she worked for and all of Keller Williams and these these folks were all like paid members of this group and they were in expansion and they were expanding their businesses. Well, I was none of those things because I was Gary's friend and Gary I early on when I got to know him, we became um I wouldn't say we were friends back then, but we became we knew each other uh acquaintances through Keller Williams. I I just said, "Hey, I'd love to see you speak. you you've had such an impact in my life. I'd love to just be around when you're doing things." And he goes,
10:32"Brett, anywhere I am, you can go." So that's the version, the way I heard it. So I would just show up to things he was doing and there would be a line of people with tickets and I would just come in the back door and sit in the front row. And so Katelyn walked over to me and said, "Uh, Brett, you uh you don't have a ticket." I said, "That's right." "Yeah, of course I don't. Uh I never have." She's like, "Well, but people paid to be here." And I was like, "Man, that's so special for them. congratulations to them and for all you're doing. She's like, "Well, I need you to pay." And I was like, "Ooh, no can do, right? That's hard. I just um I wish there was something I I would do." So, I would make these jokes and she's like, "So, then we get ready to get started at the event and she's kind of, you know, kneeling down beside my chair and I would say, "Well, should you tell Gary right now? Should we both tell him together?" And then she would, you know, kind of move off cuz Gary would come in to speak and then he would leave and she would come back over to try to collect my credit card. And I would always be like, "Hey, you're trying to vote me off the island. Is it Survivor? Is there a redemption island? Can I come back? What's going on? And I would do the bit from the internship, which you haven't, everyone. We got to drop that in the
11:35show notes if you haven't seen the clip of the internship and their interview where he's like, "You're shrunk down to nickel-sized men trapped in a blender. What would you do?" And he does this whole bin about getting flat on your back uh and how you fly out of the blender. I just had Katelyn, we're two nickels in a blender. We got to figure this thing out. And so I vent. You just keep talking. So, the lesson all of our listeners to hear, when you get in a tough sticky situation, you just talk through it and you may end up hiring one of the greatest people ever as a result of just uh being a wrecking ball. So, as we kick off season 2, Katelyn, we got we have the I could tell you of the things we've already filmed, I'm beyond excited for. Um, but we've got some content here today and it it's based on Sam Altman. made a post and it really just impacted me on these I I think it's 14 lessons. Uh it really impacted me on it things he wish he would have known before he started and he called it what I wish I would have known. I'm calling it how to become a billionaire. And so as we go
12:38through it oh today's lesson is all about what could we learn from some of the brightest minds out there. Sam Altman being one of them. Now Katelyn I just want to confirm you can see my screen. It says be wealthy. Is that right? Yeah, I can see your screen and I'm hoping you're going to start Well, this is perfect. Yep. Let's jump in.
I want to I want to start right here, which is I I think so often I hear the word failure, Katelyn, and when we're in weird times today as we're filming this, it's, you know, late 2025 towards the the middle of October. And you hear a lot of people are in pain out there. And I hear things like, Katelyn, I'm failing. I'm not making it happen. I'm not doing the things that I thought I would be doing today. And I think it's important to really think about failure a little differently. And um it's the way I talk to my kids about it. It's the way I talk to all my one-on-one private clients. Uh there's no failure, right? There's there's opportunity to learn and there's winning and that's it. And there's nothing in between. So just because you did something, I could tell you that and you know this firsthand, Katelyn, in my life, my greatest successes have come from my greatest
13:39quote failures, but I don't think of them that way. They were just opportunities to learn, right? Sometimes a business will have a ceiling of achievement or you have some revenue, maybe it doesn't work out, but the things that you learned inside of that are so infinitely valuable for the next thing that you're going to do. And uh that famous Steve Job quote, you can only connect the dots in your life by looking backward, right? You I don't think if we were to look your life as an example, you know, when you were selling bolts and nuts for a minute there, right? You might not look at that on a sheet of paper and go, "Oh my gosh, that's going to be one of the greatest stepping stones of all time or when you took that job at KW and expansion." However, those two jobs in your life, I believe, and I'm not saying they were failures, but I believe those the learning lessons there, you're using those today. So they might not have been massive the craziest successful things of all time but there those experiences if you take trying lots of things that weaves into experience and that creates the fabric of success and I think people are too hard on themselves to just go
14:42out and learn and you you actually don't learn by I'm the biggest fan of reading Katelyn you know that I read lots of books you cannot actually learn until you do something something has to occur and you've seen this a lot in our companies where and we're at a big project right now, which we can weave in here in a second. Um, and I tell you, you're like, "What is this going to look like? What exactly are we going to do?" And I'm like, "I have no idea. We're going to do all of the things. Then we're going to measure and track all of them and determine what was successful and then we'll eliminate the things that would been going to work because I don't intend to know all the things that will occur in the next 37 steps that we're going to take on at a given project." Brett, you you said this to me once when we first started working together, and sometimes you have these sayings, and I don't really know what they mean, so I have the follow-up question. And your sentence was, Katelyn, we're going to have to ju just throw our wallet over the fence,
which sounded crazy to me. What
What were you talking about there? I if I remember it was we were buying a large
15:45bundle of promisory notes. Um
that was the the time I first you first heard it when I was buying a bunch of seller finance debt. So I was buying a tape of debt that was owned by other people and we've not done that yet.
Research. You had traveled and visited two gurus. You'd read probably a hundred books, maybe 50 books on seller financing. You'd watched tons of education on it and said to me, "Kayen, we only have one thing left to do." going to throw our wallet over the fence. What?
Well, so you can only like I was the greatest at that moment, right? If you think about how you learn anything, you you read all the existing publications, right? Every single book that's out there, any data online that you can find that's relevant, like real, you know, articles, blogs, things that are relevant. And then I went and met with the two authorities in the space. So, at the end of that, I'm the most like knowledgeable armchair person that's never done anything in the space that probably existed at that moment. And so I said, 'There's a country saying that there's a cowboy riding along a fence line and wind comes up and blows his hat
16:48over the wall. And they say, 'What's the first thing you should do if you're that cowboy? And the answer is you should take your actual wallet out and throw it over the fence uh by the hat. And the guy said, "Why would you do that?" It's because I'll actually go get the hat. Point is, sometimes in business, you've got to throw your wallet over the fence. You actually got to do something to have the learning experience. So in that example that you gave, right? I bought a trunch of debt. Now, did it all work out brilliantly? No. There were some things that were crap and there were some things infinite amount of things that I've learned. However, I moved on from that like initial investment which was pretty significant. Uh to today, you know, we've done I don't know 100 million, $200 million in debt as a result investments as a result of that experience that I could have never have got had I not put my wallet offensor got in the game. And so, Katelyn, you you gave a great segue there, which is if you think about failure, like on one hand, did all that debt perform like I thought it would and would it have hit a perform? Would it all worked out great? Well, no. But the things that I learned created that
17:52second section which you can see on the screen, which is experience. And that is the fabric that all weaves together to create success. So, wherever you are in your life out there and you're listening to this, just realize just because in things that aren't working, as long as you're learning along the way, you are gaining valuable skills that likely will be hugely impactful and you won't be able to connect the dots until you go backwards. So, that was kind of how I wanted to set up. Um, and I think if you were to go to Sam Altman, Katelyn, I bet if we were interviewing him on this podcast, I bet you he said, "Hey, have you ever failed?" I bet you he would go, "I've failed so many times, you cannot even imagine the amount of times." I bet he's had failures even in like even in real time, right? You know, if we look at his bio here,
I don't believe that
Sam Altman is. Who is Sam Altman? Let's start there.
So, we we know him today as the guy that's the guy behind OpenAI and Chat GPT, right? That's who he is today. But, you know, he was the president of Y Combinator. Uh they really just kind of helped get startups going. uh they're a startup accelerator, but he had early
18:55investments in all in all these household names from Airbnb to Stripe to Reddit. Uh I didn't know about Helion Energy, but he's worth $1.2 billion, but this guy is created the technology today that you know is leading the AI revolution, him, Elon, and others. And you know, he's just got he's got a really brilliant perspective. He's a genius. There's no question. And again, he wrote this article um and we've broken it out. It was just a post, a simple post that kind of I think a lot of people miss and I just found so much genius in it. And so he called what I wish I would have known. I really called it Katelyn. This is when I when I think about this is how to become a billionaire.
I love it.
All right, let's jump in. So what do you wish someone had told him is that optimism, obsession, self-belief, raw horsepower, and personal connections are how things get started. And uh I've got a a a business that I've actually named around this idea around ignition. And and I believe that's my skill set. And and I think it's important to stop and
19:58pause for a minute here, Katelyn, to talk about the effort required to get something going, right? How things actually get started. Not what we think about when we read the business books online or, you know, we go on on the uh the social medias, but what it actually takes. It takes a tremendous amount of raw horsepower. And I love to use those words because that's the word you and I talk about. And Katelyn, of all the people I've ever met, you have one of the highest raw horsepower, that raw energy uh of anyone I've ever met. And you know that we share that that same raw horsepower. And I think about it like this, Katelyn, we're launching something. And again, I can't claim to know what it's like when Elon launches a rocket, but I uh I do in a way kind of know. and what it takes to get that rocket launch, Katelyn. I mean, shit's rattling and it's going, but it takes so much inertia to get it just off the ground, right? That's what it takes to launch a business. It's so much more than you could ever imagine. And so, you've got to actually, in my mind,
21:00you've got to overdo it because, and there's a saying that if if you knew everything required to do a business, right? All from end to end, what the next five years would look like, no one would start it. You know, they even interviewed the Nvidia CEO right now recently and he's like, "Would you would you start Nvidia again?" And he goes, "No." And he goes, "You don't understand what it took like what it actually took." And so this isn't a negative, but I think people miss the raw horsepower. So my advice to the listener is when you're starting something new, you know, the the 10x the effort, it's going to take raw horsepower and you're going to be running so hard. You're going to have some compressed timelines. you're going to just be pushing so hard to get it going. And I think and I just think that's the part that's it has to be all blue sky. It's obsession. You have to have an undying self-belief in yourself realizing not that you know all the answers because there's many times I have no clue what we're going to do next. But I have an overwhelming self-belief in myself and the team and I
22:05know that we could figure out answers to complicated problems if we apply enough obsession and horsepower. And so Katelyn, you've seen this in our world, you know, as you look at this, what do what goes through your head?
Um, our cryotherapy business would be a good example of how we started it. Um, you know, we went in there with a model that our intention was to prove the model such that we could become a franchiseor and develop a franchisee model and give a great investment opportunity to entrepreneurs across the country. And um, when we went in there, we had not a ton of knowledge of how to build the business because it hadn't been done before. It was new technology. It was the whole process was new. Um,
it didn't exist. It actually no one at that point in time
had a business.
Yep.
Based on cryotherapy. No one had it. People like you might have had a chiropractor that had one in a back room or you might have had, you know, some high-end spa type experience that had a machine, but no one was selling that
23:07service directly.
You applied such incredible um I'll use the term pressure because I think that's fair. pressure on the team, the business to ensure that we didn't have a slow start. What I mean by that is there was no soft launch. There was no, hey, let's see if this works. It was let's attack every single marketing channel we possibly can to get as many human beings through the front door to learn as much as we possibly can in the first 100 days. And we tried it all. We tried value pack mailers. We tried Groupons. We tried a referral network with the the healthc care providers. I even came up with getting a small prop plane, flying it over the Phoenix Open, doing hash Phil's hands because Phil Mickelson had arthritis at the time. You told me, "Bad idea. We won't be able to service it, Katelyn." But we thought of everything. How can we get as many human
24:09beings into that building as possible to learn as much as possible? And you do that every time you start. You say, "How can we get as much experience as possible and as many reps as possible such that we then can look at all the mud on the proverbial wall and peel down that data to determine what works and then streamline the business growth from there. And I think it is one of the if not the key reason that your businesses exist as they do today is that you never have the soft launch. You always go all out. Even my mom's, this is so strange, when you can go to church and get a business lesson. Talk about a twofer, Brett. My mom's pastor said, and I think I shared this with you, there is no soft launch. When his team says, "We're going to soft launch a new ministry or um we're going to soft launch this component." And he said, "It's the greatest way to fail." He said that from the pulpit, and I was like, "Amen. I agree. That is the greatest way to fail." A soft launch is the greatest way for a very quick failure. Whereas when
25:14you go incredibly fast, you learn incredibly fast. And I think that's one of the coolest things that you have taught me and taught many of our clients. So I love this. Now the pressure, guys, it's pressure. There's no joke about it.
Well, here's the thing. The way I think about it, there was an old book which no one should read, but the the title says it all. Uh it's kind of like the book Never Eat Alone. It's like I got it. You don't need to read the book. Uh, this one was called Fire, Ready, Aim, and Ar and I have talked about it, Katelyn, but the thing was like I see people getting ready their whole lives, right? They're getting ready and they're aiming. I'm getting ready and then I'm going to aim. And if you never fire, you never get the experience to actually learn. And so what a soft launch to me is is you're choosing to have pain over an extended period of time. Like if you soft launch, you're likely not to have the success you wanted initially because you launched it soft. um you're not going to learn as much as quickly because again we did it slower. Um you're going to make less money because it it's going to take you longer to get to profitability to have a learning experience to find
26:16product market fit. And so for me it's how quickly can we get the revenue in there? Number one to break even, number two to make the money we want, but how quickly can we get there? Because that's how we're going to learn and actually be able to scale something. You know, and one of the lessons that I've I've learned 10,000 times is hustle doesn't scale.
I've tried it. Uh I've tried it in. But Katelyn, you and I only all that horsepower that you have that if I could bottle it up and sell it, I could make all the money in the world. There's only so many hours in the day. And so hustle doesn't scale. So what launches something's raw horsepower and obsession. He goes to his second thing, which he didn't word it this way, but what keeps it going once it's reached its, you know, let's say it's got reasonable revenue. You're hitting your targets. You're pleased with the business. It's not your wildest fantasy. This is what I believe keeps it going. Cohesive teams, the right combination of calmness and urgency and unreasonable commitment are how things get finished. Long-term orientation is in short supply. Try not to worry about what
27:20other people think in the short term, which will get easier over time. So the way I think about this in our businesses is like what you and I do is raw horsepower launch, get revenue, make it happen. What Sabrina and the rest of the team does is they build processes, systems, strategy, compliance, checks and balances, um paperwork, contract system, all the things that it takes to actually run a business. That's when you can implement all these things and smooth out the ride. But initially the ride's rough. you're getting going and you've got to do that so you can go. In other words, if you build all the smoothness in the beginning, Katelyn, you got a really small thing. It the same strategy, structures, contracts, agreements, process, people, all that stuff. It's not the same in a small thing as is a much bigger thing. So, you've got to get it to its kind of natural size, so to speak. So, then you could go build process and system. I think there's a thread between these two that I don't want people to miss
28:25because I think it can be easily missed and then you aren't able to make this transition and it's really the secret sauce. So you have all this horsepower, Brett, but you running just as hard as you possibly can in a direction to create as much revenue and learning opportunity as possible. And that's only scalable and able to transition to this component when we know the data of what won and lost here. You are, and you you know this may not be the nicest term, but it's true. You are a psychopath about data. You want to know what every, you know, we were just talking about one the other day. You wanted me to set up a phone number for every single lead source that could possibly be and it was close to a hundred of them so that we knew the phone number rang and which ones worked, which ones didn't, and we'd figure it out within the first 100 days of a project. It's one thing to have a ton of horsepower and like you said, hustle cannot scale. It's the horsepower combined [0:29:27] with the data research. So then you can actually scale and grow the business. I think that if that piece is missed, you'll never be able to stabilize because you'll always be in the chaos.
Does that make sense?
It's a it's it's 100% right. And thanks for sh I mean like if you don't know the first thing is you got to have that raw horsepower and get it going. The second thing you got to get really clear. Every entrepreneur I believes I say it differently. They're in the data business. You're in the data business from you need to understand the data that is your P&L. like what are the drive but inside of that P&L there's lots of other data that's not in there you need to know what it costs for a lead what it costs you to acquire a customer you need to know the lifetime value of a customer so the project you referenced we've got all these different marketing channels so Katelyn the reason you know I want to track all those 50 numbers right it's really easy to get lost on what causes success right it's just really easy and again we let's just say we launch we've got this raw horsepower we got these 50 you know different lead sources coming in and we're like, gosh, we're crushing it. Which one should we double down on?
30:31Well, we don't know if we haven't tracked it. We've just got lots of stuff that's working. So, everyone on here should realize, again, back to the data, you've got data inside your P&L. You've got your lifetime value of a customer. You've got what it cost you to acquire a lead. You've got what it cost you to acquire appointment. There's endless data points in your business. So, what are you actually looking at? You know, this will be a different uh podcast for the future. We'll talk about flash reports and how we actually run our companies, but you've got to look at data on a consistent timeline to be able to see what did last week look like, what is this like, what are trends and benchmarks in the business. And so, you know, the right combination of calmness and urgency is that is that balance that we're looking for there. So, the next thing we look at,
I love it. So, let's go to um let's go to it's easier for a team to do a hard thing that really matters than to do an easy thing that doesn't really matter. Audacious ideas motivate people. And I think about it like if you're doing if you're just going in and doing hard work for hard work's sake, you've
31:33got to understand how to inspire your team. You got to rally them around a project. You've got to have outcomes. compressed timelines and big goals get people excited. Right now, there's a project we're in one of the biggest uh not not one of we're in the biggest real estate two biggest real estate deals of my career simultaneously. Uh one of which as we're recorded as we're hoping will close tomorrow. Um which is a resort which will we'll have a whole case study and a thing. Um but like getting our team has rallied around that project in a way that I'm incredibly proud of. Right. It's it's the most difficult transaction for a variety of reasons. Um it's a former time share being converted back to a resort which is going to be an apartment play and there's the possibilities are endless here. And figuring all of that out from unwinding the time share to the deed restrictions to assuming the contracts to monetizing it through workforce housing and working through the city and the local employers. I mean it's it's a complicated project.
32:35Um, but everyone's excited to be a part of it because it's something unique and interesting. And so, um, I don't know if you got anything to add there, Katelyn, but I think it's you've got to get people excited about a cause.
It's totally true. I think if people know the why or know the cause, they're really excited to be a part of it. And the task is is easier to accomplish. There's nothing worse than working on something when you have no idea where it's going or why you're doing it. you're just checking a box. That's not fulfilling at all.
Totally. Totally. Um it it so getting getting meaningful work goals that matter to everyone and rallying the team is critical. Uh we could do a whole podcast on this next one. um from Altman. I'm the biggest believer that in incentives Charlie Mer and Warren Buffett when they buy a company uh Munger is no longer with us but as Buffett buys one um they only actually do two things and I think it's fascinating. So as the company they
33:37determine is the company makes money do we reinvest it back to business or do we take that capital out and do something else. So capital allocation is what they call it. And the second thing is they determine the incentives for the top person. And because they want the head person, the person who's in charge, who's making the decisions, what they're looking for is alignment. And the biggest problem you have in all incentives are alignment. And that they're incentivized, but it's not actually aligned with your goals. And I I'll I'll give a really specific example. Altman says their superpowers. You've got to set them carefully. Katelyn and I I'll give you an an example uh for everyone out there. So, we once had a sales manager that ran our real estate sales business and we're doing a hundred million a year in sales in that business and he was paid off the gross. So, he got a basically a 5% override on everyone's production in that business. And so, that seemed like a really good incentive, Katelyn, like, "Hey, you get paid on gross revenue." And I thought it was genius. And yet our conversations that we had as I'm
34:40coaching him in his role in my business. Uh it was always about spending more money. We need to buy more leads. We need to spend more money here and we need to do this and well my goal as a business owner is radically different. I'm trying to spend the least amount of money to generate the same profit. Right? I want to spend the if I could spend $5 and generate X revenue. I would rather do that than spend $10 to generate the same amount of revenue. So what I found in that was we weren't aligned. He was his incentive was gross revenue and my incentive was more profit. And so I changed the incentive and I moved it to the bottom line. Now instead of being paid off the top, you're paid off the bottom line.
What do you think, Katelyn? And you know the story. What do you think the conversation around spending was like as soon as the bottom line was how he was paid?
We've got to cut all of these expenses.
Brent, we don't need half the things we're doing. And I think the next month we cut like $20,000 a month out of the budget. And that wasn't that wasn't his fault. It was my fault. And so we've got
35:44to you've got to realize that incentives are superpowers. How you think about the matters and make sure there's alignment in all things between your ideal outcome, which is the business owner's profit, uh, and theirs. And just because you set up the compensation package a certain way, doesn't mean that you're going to be aligned. If you look at, you know, Elon is now beyond famous for a variety of reasons, but Tesla just came out with a $1 trillion compensation package for Elon. It's all or nothing. So, he's got to hit these insane milestones. What And I've got to actually dig deep. I would I want to find deep into the the agreement, Katelyn. Part of it is a certain amount of robots. Like, there's no commercially available robots from Tesla today. and to hit the trillion dollar package, he's got to deliver like an insane number out there that's never been like that. We've not delivered one. So again, uh people could say, "Oh, should he make a trillion dollars?" Well, let me ask you, I mean, a different way to think about if he creates $20 trillion worth of profit or market cap value for Tesla, is it reasonable to pay him a trillion that
36:49didn't exist? Of course. Who wouldn't do that? I am so generous with the dollars that I don't yet have. Right? There's lots of ways if you're watching this and you're like, "Yeah, Brett, that's convenient. Tesla's giving me a trillion dollars." There are lots of ways you could structure a compensation package. It's upside without without risk to you. So, there's lots of upside to your person and it doesn't yet it doesn't impact you. One way, and you've seen this, Katelyn, to think about it, let's say you're making $100,000 in your current business, and someone comes and works for you, and you got to pay them a base of some sort, and they're running your business for you, and you said, "Hey, I'm already making $100,000 before you got here. Uh, for the first year, you're going to get your base compensation. And for the first year, anything over $100,000 you make, I'm going to let you have half of it. So, if we make an extra hundred,000, you get 50, I get 50. And the next year we raise the bar. You get 15% of this new floor. So now the company's making uh 150,000 in this example because we paid out 50. 50% of
37:54everything over the 150 and they might make another 100,000. Well, so all right. So Katelyn, I mean we've structured a lot of compensation throughout the years. I mean Jerome, others, you know, as you think about incentives, what are things that you think about or structures? What might be interesting or or one of the ones that you know people might be sitting on this call and saying you know I only I have an operations team member and how do you motivate them or incentivize them or they they may be looking to hire someone on the operations side. You can get pretty creative when it comes to incentives and figure out ways to make them equally aligned with yours their ambitions equally aligned with yours. Um, I don't mind sharing the one that you put together for me when we first started working together that I'd like to think worked pretty well because we've been together for over a decade now. Um,
yeah, that that'd be great.
When I came on board, you didn't really have a role for me. You just said, "Here's a gaggle of companies." Um, and so there wasn't necessarily a set salary
38:58in place yet, but security was really important to me. And so you got me as close to my previous salary as you possibly could um and matt genuinely matched it. And then you wanted to create opportunity for me that aligned with yours your ambition or your intention, excuse me. And so you gave me the opportunity that I could earn% of the net profit of one of the businesses that I was working on that was going to be part of my compensation package. um and I'd have opportunity opportunity to earn in later from an equity perspective, but really that profits interest of% changed my whole outlook on the company. So this company we did, I don't know if you remember, we did tons of events all across the country. We did events in Scottsdale. We had tons of technology. We were servicing tons of clients and there were expenses everywhere. Because I was tied to the net profit, I became a crazy person when it came to expenses. I
40:03would argue for weeks with every hotel after we left of was this a real charge? Was this not I remember one time you told me I had to cool my jets because I had told one of our salespeople I was going through their expense report and was like, "Absolutely not. Your flight landed at 10:45 at night. help me understand why you didn't leave the parking lot until after midnight because we had to pay a whole another day of parking. And I would I went too far, Brett. You had to tell me to cool my jets. But because we were aligned that you wanted someone on the expenses for that company. I was your, you know, your pitbull in that and that worked really well for both of us. So, I think you can get really creative and it doesn't have to be the majority of the company you're giving someone. you can give some small incentives that really line them up to be, you know, for lack of a better term, uh, protectors of what you want to protect or growers of what you want to grow.
41:05
I I love what you said. It's such a good example. Uh, I think that regardless the area of your company, I always say is how do you incentivize the behavior you want?
Like how do you create it in all areas of your company? Right? If you've got a marketing person, how do we get aligned on the marketing incentives? Right? So I would want we want the cost to acquire the customer to be less than X if you're in marketing, right? Like we've got to have people aligned so they know the decisions they're making. And if you set another way, how can you your incentives should get your employees to take an ownership mentality and a stake in the business
and
and when you get your employees to start thinking about the and you hear me all the time, I'm like, well, that person takes an ownership mentality. As a business owner, we all need no one succeeds alone. We all need more people helping us. And incentives done right allow you to get more people thinking like an owner, acting like an owner, and contributing your business. It's it's just I could talk about this forever. It's just so so important.
It's a superpower. I love it.
42:08
It's a superpower. All right, the next one. I could talk about this forever. Concentrate your resources on a small number of high conviction bets. This is easy to say but evidently hard to do. You can delete more stuff than you think. Um I'll give an example in our own world today, right? We had a lot. At one point I owned over 100 single family rentals. And as you scale to that level, right, you've got manager property managers on there, then you've got your team managing the managers. And what happens is margin just keeps going down. It's not saying you can't scale the single family business is not what I'm saying. It's just that there's a right size to it. Katelyn, if I if you're managing if you're the one and you've got a property manager and you're dealing with them, it works. But as you add more people in, it just gets harder. And so I I didn't originally I thought, well, I'd rather I'll have 100 of these or I'll have a thousand of these. And what I learned along the way is each one of those represents a management unit, right? It's going to occupy some some portion of my my mental capacity, my thought process, and just my attention.
43:11And so we're moving away from that and going I'd rather have a smaller number of really high convection high conviction bets. So my way of doing this was taking my single family rentals and rolling those up to larger bets. So I would take 25 houses and maybe buy one building or these 10 houses and buy one larger building. And what it allowed me to do is spend way more middle process and just make sure that one deal is perfect as opposed to fractionalizing my effort across a variety of assets. And so I give this example, Katelyn, you've heard me do it with our with my private clients and in our training business. Would you rather have one loan if you're lending someone money, let's say it's a hard money loan for a million dollars or would you rather have 20 loans in that million dollars? And so some people say, "I'd rather be diversified. I'd rather have. And from a diversification standpoint, you could argue that the 20 loans would be better. I would argue that 20 I know that 20 is harder to manage because it takes the same effort to manage. You know, one is one. So, it is 20 times more management. And so, I would rather have the one because if I
44:13get the one, I can put 20 times the effort into the due diligence on the front end into making sure it's the right deal. and I can make a really really strong high conviction bet that I can't do on 20 because I just don't have the time, effort, and energy to go out that way and the economics wouldn't support it. And so, you know, in your business, in your world, that could be a new lead generation channel. It's a high conviction bet, but really you you can't you don't have enough time, energy, and resource to do all the things you want to do. So, you've got to concentrate on a smaller number of bets.
Anything you want to add to that, Katelyn? the point you the the example you just said hit me so strong. We I just had a call earlier today with a lot of our mastermind members and we were really talking about direct mail and talking about lead generation for your investment business and how direct mail is a high conviction bet, right? You pay upfront for call it a 90-day campaign uh on a specific data set. It's a high
45:17conviction bet. But if that's your high conviction bet and you're looking to squeeze out every opportunity, answering every call, speed to leads the highest, you're going to get the highest rate of return versus if you just splattered in a million different directions. Let's try 10 lead sources, put fractional investments in each, your attention is going to be fractional. So, that just hit me like that's literally what we were just talking about, and I should have thought to share this with them. It's it's an incredible um incredible point. Thank you.
Thanks for sharing that. Yeah, it's Katelyn. We're talking about being communicating clearly and concisely and um I think people think they do it and I think it's easier. It's one of those things that's easier said than done. And it happens all the time. And so the easiest way I find we've got to go out there and I think number one, ask the person, right, Katelyn? I shared something with you. Could you tell me what I just said or what that meant? Right? It's not you being a jerk. you're trying to actually understand what happened. The next part of it I I find can go back and if you can you if you
46:20can actually take what you said and somehow get that to words, right? Words create infinite clarity. If you can have that clarity, it's a total it's a totally different game changer. And so just we all think we're clear and concise. Reduce it to words. Ask for feedback. We've got to get better at just are we clear and asking for that check-in. Uh Katelyn, anything you add to that? What I heard you say was number one after the conversation asking them did you understand it and then afterward going back and following up with a written call it bullet points of recapping our conversation and then you usually tie that down with a specific outcome or expectation as well. um you're one of the clearest communicators. And so the reason I was I just wanted to recap that is it wasn't rocket science. It's just a model.
Yeah. I mean like an easy way to do it, right? If you leave a meeting with someone, right? If you're having a meeting and you're in with one of your your direct reports and there's some action they're going to take, right?
47:22Usually I would say so when you come in here next Monday, uh and we're going to have this completed, I want to define what completed would look like. So we're going to have 30 of these things built. they'll be fully operational and we'll be producing revenue in this format. Um, and then you ask, is there any reason when you walk in next Monday that that would not be the case? Is there anything we should discuss now? So now what I've done is I've really clearly and concisely demonstrated what I'm looking for. Now, if you need more time or something comes up and and you know this, we do this all the time, Katelyn, things are going to happen. You're going to say, "Hey, I need more time." I'm great with that. What I'm not cool with is coming into the Monday meeting and say, "Hey, I I indeed did get to it and I don't I actually am not clear on what we talked about because I've actually we've typed it up. There was an action plan. It existed in our project management software. We knew how to go about it." So, we got to think we got to think about it that way. All right, let's go to the next one. So, Katelyn, we see this all the time and you know this in other businesses and it can creep into ours. Um, you know, he's talking about fighting and bureaucracy every time you see it and get other
48:24people to fight it, too. Do not let the org chart get in the way of people working productively. I I think the myth here is people think it's only large companies have bureaucracy and it's not true. You can have a company of three people where that's not my job or you know they're not helping. And so the more layers between decision maker in the field, the more watered down it can get. And you just want to try to I think as a leader you're trying to be as close as you can to the customer and understand the actual needs of the customer directly. Uh an example I use right like right now in Starbucks the CEO is trying to figure out kind of a new model like they had that Starbucks for a while Katelyn was known as that third space right you you work at home or you have an office you're at home and that third space is kind of Starbucks like it's a community you could be a part of it. Um so he's actually what is he doing? I mean, aside from leading one of the biggest companies in the world, he's actually going into stores and he's talking to customers. He's trying to figure out the next innovation that's
49:26going to matter to Starbucks. But he's doing that by getting in the field, not by reading the 19 layers of management reports that may not know. And you've heard me say this a million times. Sometimes companies are so big they're in some ivory tower. um when was the last time you went in the field and heard what your customer actually said or talk to a customer and ask them what their needs are, what their problems are and their fears and their dreams. And so you've just got to fight this all the time in your business because it's easy easy for it to creep in.
Wow. And we've all worked with companies that have lots of bureaucracy. They're hard to work with. I can only imagine what they're hard to work for.
Very, very well said. All right, the next one. As you know, I'm a very outcome centered guy. Outcomes are what count. Don't let good process excuse bad results. Uh when you think of
Well, I will hear Katelyn, you've I've heard some of my private clients like you don't understand. I'm like, did you hit the goal? Did you win? Like, did we hit the goal on the timeline to get the outcome we wanted? They go, no, but the process was good. Katelyn was really good. The team tried really hard. You
50:30know,
things are h
things are going and and Sarah's really gooseing it right now and making it happen. And I go, "What?" All that matters in business, right? I mean, is outcomes, which outcomes that lead towards your goal that create profit. It's not a bad thing. The entire purpose of business is to create profit. Now, you could give all the money away once you've made it. But if you don't focus on the outcomes that matter, that really matter and move the needle, and you can't focus on infinite amounts of them. We talked, you know, a little bit ago about high conviction bats. And I I just think it's removing this whole idea around I'm going to work I'm working really hard and and the analogy I use is my washing machine in my house works really really hard. It's not the greatest tool that I have. So just because something's working really hard doesn't mean it's going to lead to the best outcomes. And I just you've got to be outcome oriented and get really clear on what you want to measure, how does it work, and what are the very specific outcomes you want. Everyone wants more money. Then there's a whole concept of
51:31lead and lag indicators, you know, but we've got to be clear on the outcomes we want. If we want lead indicator outcomes, we want more appointments, okay? We got to get really granular on what is an appointment. What causes an actual appointment and what are all the things that lead up to that outcome. Uh it can't just be good process. It's got to be the actual outcome that you wanted when you started.
Completely agree.
Today, Katelyn, as we sit here, the world's in a weird spot. And so one of the things we talk about a lot in our training business is you are one person away from a breakthrough and a radically different life. If you define the right person, if you found the right person, you knew who they were and they had the skills that could go out there and solve the biggest problem in your business, you'd have radically different radically different outcomes. Uh recruiting is the thing that makes that happen. You've got to go after high impact, highc caliber people. Um, I would even say people says he calls it a fast rate of improvement. That's a I would look for high horsepower. You know who out there when you're walking with them, they're
52:33walking at a high rate of speed just cuz they want to get somewhere because they're they got so much energy to run. You've got to find those folks. And you know, we've talked about this K like one of the things in my world as I as I became successful as a real estate agent and an investor. I wanted a business where I would wake up, people are out finding deals and opportunities and I could wake up in the morning and take my team be looking at those deals and opportunities and picking which ones we wanted to go after, do deeper diligence and go from there. I didn't want to go I didn't mind finding the opportunities in the beginning but ultimately what I want to do is spend my time making sure the organization was finding them and I was able to go just look at those. So that was recruiting. I spent time on it you know getting into business with you bringing in Sabrina in this world getting Melissa like uh Jax all the folks in our world. I mean I recruited all of you to the business every one of you to the business. Um every high impact person in our organization that I specifically recruited them. Um, I'm not saying to brag, but I'm looking at
53:35other, you know, business owners. I'll say, "Well, how much time are you spending on recruiting?" And they give me some list of stories that they're so busy. I'm like, "Well, what are you busy doing when you study the high like like Mark Zuckerberg right now, love them or hate them, uh, is offering like a hund00 million compensation package to 21-year-olds that can solve very specific problems. He is doing that recruiting himself. Yet, Katelyn, you and I have people in our world are like, I just I just don't have the time for it. And we got to spend more time on making sure we're hammering hammering recruiting. It's it's one of those you go back one, what's the outcome? If I I need to have recruiting outcomes. I need more people. You cannot do more things with less people, right? Yes, technology helps. Yes, AI is making a difference, but at the end of the day, you need high impact people in your organization. I'm sorry. When you think about recruiting and let's say that you had a problem you were trying to solve in one of your businesses, what percentage of your time would you focus on recruiting and how
54:39long do you think finding a high power horsepower high horsepowered high impact person would take?
What's realistic?
It's a really good question. So depending on the size of the problem, right? Let's assume it's a massive problem in my business. It's like, "Oh my gosh, um, I need someone that can do this, right? Super technical. Um, but if I've got that person, I could make, let's just say their compensation is $100,000 a year, but they solving that problem for me would generate a million dollars in profit, right? Something. And by the way, when you're when you're solving a really big problem, the right person, it's that kind of return. I mean, it's 5, 10x, 20x. The greatest investment you'll ever make in life is a human being. um both financially, not only financially, right? Emotionally, uh winning and working with incredible people and accomplishing great things is is one of life's enjoyment. So, how much time would I spend um 30 40 50% of my available bandwidth um or more because I've got it's to me that's the thing that matters in that moment, right? And so when I'm
55:41recruiting, I'm looking for someone who has literally done the exact thing I need, who's currently doing it. So, these people aren't like applying for jobs on Craigslist. This person's likely very gainfully employed. Um, and I've got to go find them where they're achieving at their current spot. And then I've got to recruit them away with a bigger opportunity, right? And that could be lots of different ways, but you got to spend time recruiting. So, people I I would say another angle here, Katelyn, I think people focus only on bringing them to the business, right? Katelyn, you're going to come in here and you're going to do this and you're going to make X and it's going to be great. Um, and that's super important. Uh when I recruit people as as I've recruited you, um I actually go to all the soft things. Meaning I I actually go, what do you want to accomplish out of your life?
Yeah.
Where's that going? And if you joined our organization, what are the things in your personal life that if I could help you achieve would be meaningful in the time that we work together? And you know, I'm I'm really proud of this, but all of my you know, all of my direct reports are multi-millionaires today. And it's not because I did anything
56:43genius. Um, I just ask questions and I want to make sure people uh are accomplishing their personal goals as a result of being on organization. And so some people might be listening to this and say it's a little airy fairy or you know a little woowoo but what I would say Kim I think I think that's the stuff that matters. I think businesses have gotten so mechanical and you know you can build process and systems and drive outcomes but at the end of the day if you help that person accomplish all their personal thing they're going to help people accomplish the business goals and I think you if the I think the beauty in business is tying those two together.
That's right. That's 100% right. I also think that's why I'm, you know, in our organization, we just, we're over a decade working together and I think I'm one of your least tenured direct reports. I am your least tenure direct report.
You are? Yeah. I think you've edged Melissa out by uh a couple years. Yeah. And so it just our people But it was a very very long period of time, but um I think there was periods of time where
57:45some of our folks maybe could have made maybe slightly more money, go somewhere else or do something different. Um, but I care so much about their lives and I always want the opportunity to be the biggest one here. And yet I also realize if someone could get some massive opportunity that wasn't isn't with you, that's that's also okay, right? There are times where someone might be able to offer something better and that's also okay. You just got to be but you're going to be again you're always you're that's the re-recruiting, right? I'm bringing them back in and I've got to wake up every day as a leader and you've got to add so much value to your people it becomes impossible for them to leave. So, here's a good one. Um, fast iteration can make up for a lot. It's usually okay to be wrong if you iterate quickly. Your plan should be measured in decades. Your execution should be measured in weeks. I I couldn't love the way he thinks about this more. Katelyn, where I go immediately in my head is is wealth. And if everyone watching this said, "All right, I'm going to measure like my goals for wealth. I'm going to think
58:47about it in decades." Right? I'm as I as I'm filming this right now, I'm 44 years old. So, I think about all right, when I'm 54, right? What's the goal? When I'm 64, when I'm 74? But the measurement of those goals over decades, I'm doing it in weeks, which rolled to months. And I'm asking the question, am I on track based on what I did this week, this month, to be on track for January of 2026, to be on track for January of 2035? Right? Am I doing the right things? Right? So, long-term plans, short-term measurement, and I think if you can balance those things, but you've got to have the check-in. People do not miss their goals because they didn't have a brilliant plan when they started. Hey, I've got a great goal for the year. Let's just say for most people watching this, probably whatever you believed your goal was for this year got off track due to how the world got a little weird. That's okay. But if you never looked at that plan from January to now, you went off track four and a half, five months ago. But if you looked at it
59:51every single week, you would know if you were off track. And so more awareness, more check-ins, those things are the critical drivers that you've got to have as you think about measuring plans, right? Think long term, measure short.
I think one of the coolest parts, you know, spoiler alert, on season two that that you're doing on this podcast is, you know, I've seen your outline of the education that's to come and the things and the topics that you're working on, some of the special guests you're bringing in. It is going to help take our community and our group through exactly that. How do we create the right habits, spend our times in the right ways to ensure that we don't miss the goals? And then having special guests on sharing their story of exactly how they did it and what their tricks are and and their process. So, I love that you started season two with this outline and specifically this this specific point because it really is the map of what we're about to spend the next several months going over.
1:00:54
I uh I love it. So, here's one, Katelyn. Scale often has surprising emergent properties. Okay, that's a mouthful. What does it even mean? Uh, the way I relate it to our business, right, is your business grows, I'm going to use a real estate sales business as an example, and it could be any business. Uh, as that business grows and it reaches where you've got employees and you're really largely working on the business more than in it. At that point in time, let's pretend you launch an investment company alongside of it. Um, so now we've got scale. We've got this investment business because our team's so big, it's already stirring up some opportunities. But with that scale, we can formalize that, make that a business. So now we've got these two businesses that are going. And because we've got so many transactions, we might enter the title business because we've got we're we're closing lots of title and our customers love it and we could add a better value to the customer because our title company knows the way we want to handle our customers and they just can do things differently than if we've got if we don't have a deep relationship, right? What makes business helpful is you build relationships with folks who can do things that matter and
1:01:57they're going to do above and beyond or they're going to make exceptions or they're going to make things happen because you have a relationship. Then Katelyn, you scale it and you go, "Well, I'm going to launch a property and casualty business because I've got these customers and I want to better make sure they're insured and some people are underinsured and that causes problems." So, I it's another value I can add to my customer. Well, then I've got all this cash coming out of my business and I I I might want to go ahead and do some lending now to others because I can lend on things that I I own this real estate business. I know the values of real estate and I've got friends that are flipping homes. So, I can lend them money and help them and I could get a return on that. And so, the point I'm making and it just scale and I just kind of walked you through the early iteration uh of you know what Tanner Capital is in our our family office. So, as you scale your business and it becomes successful, you should be looking at, you know, and and we'll film a future podcast how to think about lanes of revenue and then kind of buckets of revenue. They're totally different, but you think about scale, Katelyn, just it creates so much more if you're asking the question, you know,
1:02:59what's the other opportunity? What business do I already have the customers for, right? What's the logical vertical add-on that plays that that that applies here? And I just think people miss this part that they don't realize, you know, they're they're I you and I see this all the time. Someone's like, "Oh, I've got all this money, you know, I'm making great money. Where do you think I should invest it?" Um, and my answer is always the same. It's probably either in yourself, your personal education because everything you know is leading you the outcomes you have right now. Um, or it's back into your business, right? What's the untapped opportunity inside of your current company? And so you just you got to keep asking now, where's the opportunity? Amazon and AWS is a perfect example if you want to take it outside of the real estate industry. Bezos looked at how much money am I spending on servers, right?
Well, two part, right? Number one, we're spending all this money and the product sucks, right? Like we're spending all the money. It's crap customer service. We're down x amount of time and and I don't I haven't seen it recently, but I I know the stat you're talking about. For a long time, Amazon Web Services was
1:04:02worth like twice as much as Amazon if you were to break them apart. like the spin-off thing they created is twice as valuable as the whole company come they started initially like that is crazy to think about but Katelyn there there's no better example that I could think of than the one you just gave right so Jeff be and now look at I don't know how many business Amazon owns like if they break them apart and I haven't read their you know their um the reports and I haven't dug into the you know the financials and all that but I guarantee they're probably running 50 to 100 companies that are huge inside into that business.
Amazon's revenue for 2024 was 638 billion. AWS, which was just the service he provided initially for himself, then realized all these customers that I'm selling their product, they also need this service. They're already my customer in one way. Now, let's add them onto here. AWS alone generated 170, excuse me, 107.6 billion revenue. So it's, you know, 16 15 16% of the revenue
1:05:10for the whole company was just from one spin-off, one extra vertical.
And what's crazy, if we measured profit, I think the profit on AWS was radically different. The profits might even it'd be fascinating to go there, right? Yeah. But it's a great it's a it's a great example. Now, here's another one. You know, Katelyn, I don't know where you're at in the Rocky movies in in how many
remember you have to hear it, Brett. AWS accounted for 50% of Amazon's NOI in 2024. 50%.
And it's crazy, right? Off a spin-off company, half the profit comes from the thing that they created on the side. So that applies to all of our businesses, Katelyn. So, I was telling you about Rocky. Um, you know, so there's a line in Rocky, Katelyn, um, that says, "It's not how many times you get knocked down, it's how many times you get back up and keep moving forward." That's Rocky. I believe that's Rocky five, Katelyn. I mean, one of our listeners will correct me. I'm I'm 98% sure that's Rocky five,
1:06:13him talking to his son. That's the truth, right? You're going to get knocked down. Business is hard. It's really hard. And the only way you lose is when you quit. And I think about that all the time, Katelyn. We've been through some we've been through the battlefield a lot together. And I tell you, we only lose when we quit. You're not going to quit and I'm not going to quit. So, we'll win. And but maybe we're not winning in this moment, but it's just about keeping going. Your first five ideas, you know, my my CPA has a line that one of his words that's on his wall is pivot. Just pivot. Get back up. Pivot the business. keep going. And if you It's rarely that's going to be your first idea, your third idea. It might be your 40th idea that works, but you got to keep going. I read a stat recently, Katelyn, and I just love the stat only because I think largely due to my age, and I know you're so much younger than me, so you've got so much more time to accomplish this. Um, the stat said, uh, Katelyn once told me she was a millennial, and I was like, I'm you're not a millennial. Absolutely not. And then she found some obscure stat that
1:07:15showed she was a millennial and then she quit claiming it. But let's just be clear. If anyone wants to reach out to us, let us know what the age of a real millennial is. And I don't believe Katelyn's one of them, but conversation for another day. Um gosh, now you I got off track making that joke. Um where was I going, Katelyn?
A great stat to share with us around um oh failure.
It it was founders their the founders their largest companies. Do you know what the age they started their largest company, what the average age of the founders were? Like a block of time.
It was like 45 to 55 years old.
You know, you had the unicorns that their first company, they crushed it at 21 or whatever. But largely what happened is they had some success, they had some failures. They had success, they had failure. And it wasn't their first company, it wasn't their third, but it was, you know, they'd had this library of experience. And then at age 45 or 55, it all came together and that was the one that took him took him over the moon. I just bring that up. Not because I'm 44 and I want to hear that, which is what I do. Um,
1:08:18but you only get there if you keep getting up and keep going because you're going to get hit.
Isn't that how we started this conversation, Brett? On the very first,
we started with failure and what causes it. Yeah, that's another another way to say it. Exactly. But I mean, and the failure thing didn't come from Alman. It's just something I found that I was the best way I've seen to express failure.
Interesting.
All right, the last one he's got here is, and this couldn't be more true, working with great people is one of the best parts of life. Uh, if you've got a massively successful business and all the people you work with, you don't like, you have terrible relationships with, and every day sucks, I would consider that a colossal failure, even if the business is a massive success.
That's just my way to think about it, right? And and so I would even say working with people just the people around you, right? If you've got all the success at home uh in the world, meaning you got this beautiful but yet you're failing at work, that sucks, right? So, and you know this, Katelyn, people I admire most in this world are are not the ones that overachieve in one area of
1:09:23their life. It's just really not that impressive. I know I know people that are infinitely successful in terms of money and have way more resources than I do and they have no long-term relationships. Their spouse hates them, no relationship, their kids. They're on their fourth or fifth spouse or whatever. And you're just like, I really, you know, you they traded everything to be successful. So for me, I I would rather have I would rather admire or follow someone with much less success that has it all. And it's whether it's working with people, the pe the people you choose to bring into your world, um significantly matter. And so, um Katelyn, anything there before we we wrap up?
No, this was awesome. You shared this with me. It was last week that we first started talking about um this post, and I'm so glad you shared it with me, and I know our our audience is going to absolutely love it. So, thank you, Brett. We're excited for season two.
All right. Our next podcast is actually going to talk to you. We're going to
1:10:24talk to you about my model around people, the circles of your life, how you think about how people get into different circles and the closer to you is more time and how do you think about time, relationships, and proximity. We're looking forward to seeing you on that episode. We've enjoyed our time here today. Katelyn's with us for season two. We've got tons of things to share. So, don't miss a single episode. If you haven't watched everything in season 1, that would be helpful. It won't be a requirement, but it'll give you some insights and things we talk about. We're not going to go back and cover those items. So, go check out all season one and see you back here next week for the next episode of season two. We'll see you. Bye.
Thanks, Matt.
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