Rishabh (00:00)
You know what, I will share something funny based off of this morning routine thing. I was at a conference this week and it was like this ultra swanky conference, okay? It was like hosted by like a well-known PE fund anyway. And so it was the evening event was at the Met. So it was like literally like a reproduction of the Met Gala effectively.
So like you go in and you like sit in that like podium area surrounded by water and I cage you not, the water that they served was the Saratoga water and I was like, this is ridiculous. Like I cannot believe how much of a stereotype I am currently living in right now. It was so absurd. But I was like, yeah, I was like, now I understand why this became a meme and like I'm kind of like sadly, living it in the regular world, you know, it was really something.
Jack (01:00)
I've never tried it and I imagine it just tastes like every other sparkling water. I think the funny part of it is the face washes in the morning, right? Washing your face with sparkling water in the morning. I mean, let's check this out because I think it's pretty entertaining.
Rishabh (01:15)
Yeah.
Jack (01:54)
I'm so bored.
Jack (02:21)
Alright, we have to stop. I mean, I don't understand how anyone is watching this. I'm so bored. yeah.
Zach Murray (02:23)
I like this shit. I like this shit. I like ASMR stuff. I like nice stuff. And so like, when I watch his videos, like, like I'm watching this to the bitter end, but like, I like this stuff. But the one thing that stood out to me in the way, like, I don't know, I tend to think I'm like relatively optimized. But the frequency at which he has to shower.
Like he should restructure this to not have to shower three times before he goes to work. Cause he essentially swims, works out and has a yoga class or something. And yeah, I'm pretty sure he showers at each one. Whereas like there's definitely a way here to stack the activities to only shower at once. Cause that's like, that's like my number one. ⁓ I always think, I don't know.
I randomly think about that with my morning routine is like based on when I work out versus how many times I have to shower. I also, anyway, I'm getting too deep in the weeds here, but that's the only thing that's not optimized in this video.
Jack (03:21)
Hahaha
Rishabh (03:27)
That's so funny. Dude, that's so funny.
I also like nice things for what it's worth, but I saw this and I was like, ah, he doesn't have kids. That was like it.
Zach Murray (03:38)
Yeah. ⁓
Rishabh (03:40)
That was like the entirety of what I thought. It's like, you know, the ability to control your schedule in this way is like a ridiculous, a ridiculous thing. So which is funny considering Jeremiah was supposed to be here and is not here, which is exactly what the unpredictability is like the only thing that you know for sure.
Jack (04:07)
Yeah, it's true. Hey, me and Zach, you know, we're not parents. So I could probably guess that, you know, our morning routines are a little bit more structured, whereas there's more, you know, the changes when you have kids. Right. Do you still have a morning routine, Shob?
Rishabh (04:23)
Yeah, but it's for like an hour and a half before the like kid portion of the morning routine starts. Cause I like wake up at 4.30, like between 4.30 and five. And then I wake up my first kid at 6.30. So between when I wake up and I wake up my older kid, that's when I have a routine. And then after that, I don't have a routine until I go to bed.
Sorry, that's not true. I work out two to three times a week and that's a non-negotiable. So like the only non-negotiable in my calendar is like my investment. But besides that, it's like basically chaos between kid and company.
Zach Murray (05:09)
What time do you workout? In the morning?
Rishabh (05:11)
In the middle of the day, precisely. So that way I control it. Yeah. So it's like one o'clock on Tuesdays and Thursdays and then on Saturdays in the morning.
Jack (05:19)
Nice. And what does that morning routine look like? What do you do in that first hour?
Rishabh (05:23)
For me, it's mostly like content consumption. so it's things like that just to sort of like set pace, so to speak. And then I'll like clear my inbox and then the kid part of the morning starts basically. But yeah, it's like mostly it's like time, it's the only time I have for like me basically, right? And then after that it's like all demands on time essentially.
Jack (05:42)
Nice. I've never asked you, Zach, about your morning routine. What do you do?
Zach Murray (05:56)
It changes based on like the season I'm in. like, I generally think that like your routine should be like aligned with like what is most important for you right now. So like when I was training for Ironman, I would do all of that in the morning before I did anything. versus like right now, the number one thing is to get the new product out the door. And so like, I wake up very early and I don't do anything other than sit at my laptop first thing. Like I roll out of bed, go to my computer and start working but I mean, when I'm in a more balanced state, meaning I'm not training for anything specifically, or there's not like a hard pressing thing to work on.
I would consider myself in a normal schedule. I usually work out in the mornings. I am like an ice bath person. ⁓ and so for me, the two things that like, and then if I am in like that good schedule, it's usually wake up, go to the gym, come back ice bath, which now is saying that it's not optimal to ice bath after working out. So I guess I to like switch that around. the only other like random weird thing I do is I have this like red light therapy device and I would never use it if I didn't stack it with someone at something else, but I just sit in front of the red light therapy and pray and then start the day.
So that would be like my general morning routine. And then, but if I have something that's pressing, meaning it's like the number one thing important to me. always just start the day doing that thing. but I would say a cycle between like morning routines, like four times a year of like, this is the way that I'm kind of living right now.
Rishabh (07:20)
You know what I think is interesting, Zach? I don't know if we want to really talk about this here, but I think the frequency with which founders are religious is higher than the general population of the equivalent person in their geography. Like I consider myself religious. And so I just like heard you say,
that you pray when you're doing the red light therapy and I will often pray as well. And I could like as a consequence, I consider myself religious. I think I find that interesting. You know, it's like neither here nor there. But I happen to notice that that happens to be it could be a fallacy, but it appears to be more common than the equivalent person in San Francisco, person in Toronto, whatever it may be. mean,
Zach Murray (07:53)
Yeah. It's, so your observation is actually why I started praying. like my like religious like journey in life was like grew up, went to a Catholic school when something's like kind of forced on you, you kind of like dismiss it. and then turned 18 became, ⁓ atheist because I was like, we're all just going to go into the ground and die and worms are going to eat us then I think that like that binary of thinking wasn't like, informed by really much anything.
And so then I became agnostic. And then I got into like, like manifestation and like self-improvement stuff in which like, was like doing these like thought experiments on myself over what I want my future to be. ⁓ and I did that for like a few years. And then I had this realization that I go like a lot of people that I admire, like tend to be religious. And I was like, I'm kind of, you know, in this like manifestation, like asking the universe for something and inherently praying.
And so I was just like, like, it'd probably be better to do this, like in a community than not. And so like, that that's been like my and so I wouldn't even consider myself like inherently religious. It's still like weird for me to think that but it's like, I've like put built it as like a part of my Yeah, just like my general like belief system. But I'm still like, I think I have more questions now than ever. But like, ⁓ yeah, that was my kind of like journey with it as like I found myself accidentally praying and then thought that, I should probably just formalize this more.
Rishabh (09:40)
Mine was a little bit more sort of like consistent over over time that I've always, always had religion but like it has been obviously like sort of tested through various like rationality eras of my life, right?
Because like I'm like a scientist, I got my PhD in solid state physics. you would expect it to be unusual that someone who's getting their PhD in physics is also someone who likes and appreciates religion. anyway, I just happened to notice that. I also think it is the case that people who push a lot of risk into work tend to not push a lot of risk outside of work, generally. And so generally you need an anchor somewhere as you are driving, as you like push a lot of risk into other parts of your life. And so I think that is part of it basically. like you'll hear a lot of like founders or people who have a lot of like professional risks, so to speak have routines is precisely because they're anchoring somewhere else in order to drive a lot of risk at work.
Because you sort of show up at work, and actually your job is to inject risk into the company because no one else is going to do it. And so, yeah, I think they all drive from the same place where it's like you anchor somewhere, and then you're able to do wild things in a different domain, basically.
Zach Murray (11:22)
That's a good way to think about it. Yeah, it's funny because like, in all cases, everything ends up becoming balanced even though it doesn't look like it, you know, to go on like super, super risk on this, but to go you don't understand, like, I'm actually not feeling that, like chaotic or risky.
Jack (11:36)
That might tie back to morning routines as well. If you're a very productive person, if you're a person that's taking a lot of risk, maybe you need some grounding to your day. That's just normal.
Rishabh (11:40)
Yeah.
Zach Murray (11:47)
One other thing on like building room morning routines. I actually think like the worst thing you can do is make them too rigid. like, I always look at it as, ⁓ when I create morning routines or decide to do something new, I look at it as like not something that I'm going to do forever, but it's like, I'm going to create a new tool tool that I can use in the future.
And like for a while for me, that was like breath work. And then for a while it was like, ran every morning and like, so now it's like, like I don't do like a thousand things, but I've been feeling off in a lot of instances I'll have you're feeling off or I'm feeling pressure. It's like, okay, like I know which tool to like pull out. And it's not like I'm doing everything every morning. It's like, I'm kind of doing what I feel like I need in any given time to like do my best.
Jack (12:30)
I have that sort of momentum mindset when it comes to your morning routine. If you can get a few things checked off that are hard or make you feel good and then you're in the right momentum for the day. Right? I like to exercise first thing in morning, get cold, really cold. I hate it. I don't actually like getting cold, like after it feels good when you get out and, ⁓ and afterwards you feel like you did something difficult. Right?
I met a bunch of people that, you know, do cold plunges for different reasons, there's health benefits, whatever it happens to be. But for me, it's like, I got to do this thing. I got to get really cold, and it's going to hurt. My skin's going to hurt a little bit, and I'm going to come out, feel a little bit better, and get on with the day. So yeah, maybe it grounds you a little bit. ⁓ Maybe it sets you up for challenge for the rest of the day. No, I quite like morning routine. got to say, mine doesn't really change much. getting cold and doing exercise has been pretty much the only two pieces before I start working for a long time.
Rishabh (13:32)
Totally.
Jack (13:33)
Why do you guys think that daily routines are popular? Why do you think this is getting a lot of steam?
Zach Murray (13:38)
Because the majority of the population are unhappy and by saying something as simple as a morning routine can fix it is a good enough hook. ⁓ like, yeah, but.
Rishabh (13:39)
Yeah, yeah, I don't think it's like I hate I hate like sort of what it has reduced to but I agree with Zach. It's like, you're basically selling hope of some kind. And so in this particular case, like the like the finance guru is the easiest to understand, which is like get rich quick, right?
So that that's the easiest to understand. And this one is like a gain control or be healthy or be happy. Like anytime you are selling the promise of like some sort of thing that people think that they want, it's kind of easy to sell. and especially if it's hopeful, ⁓ especially in America, like Americans love buying hope, like more than anything, more than anything.
Like, I mean, this is going to sound very controversial, but it's like literally why I think TikTok shop works or why people spend so much money trying to TikTok shop work is because I TikTok shop is like a total waste of time in general. Like, look, I think there are some businesses that have done very well in TikTok shop. And I think there are ways to be very methodical about investing into it. But I think that more than anything, like the reason that TikTok shop is so hot is because it sold the hope of being able to acquire customers without spending money on ads. And that hope, God, people love buying hope. know, like selling hope is always better than selling something else.
Jack (15:19)
I think I agree with you, but I also think Americans love buying substitutes. They love buying replacements, right? Like people have replacements for romantic relationships on their phones and on their computers. They have replacements for achievement in video games. They have replacements for pretty much everything. You can think of like ⁓ being excited and enjoying what you're doing with drugs, right?
Think about a gym, right? They buy a replacement for normally exercising in the world For a room that's just dedicated to lifting heavy stuff and running on a treadmill, right?
Zach Murray (15:58)
The thing with the morning, the reason why I think people get value from it is morning routine means things I do before the thing I have to do or the thing I choose to do before the thing I have to do. And I think a lot of people just like, aren't that excited about the thing that they have to do, or maybe they're underperforming on the thing they have to do.
And so when you give someone the power of being like, okay, now we're going to start your day with giving you, you're going to choose to do a bunch of stuff. think that's like relatively like empowering. but that being said, think the average person, the best thing to do generally is like figure out what you want most in life. And then the moment you wake up, do something that gets you closer to the thing that you want in life. And it's probably not an ice bath or working out.
The only reason that works because it gets you out of bed because you need to do it before. you can't, you know what saying? Like it's a time, it's a math problem, but like realistically, if you want to make more money, like probably don't go to the gym in the morning.
Probably just sit at your desk and work and do it three hours earlier than you used to. Like that would actually be the incremental like driver of success. Like, and so I think that's where people get like maybe misguided. like, I need to do all this stuff so I can like, then get a different thing. Whereas like, I think if you just chip away at the thing you really want, like that's probably the most impactful thing that you can do.
Jack (17:15)
I saw this tweet the other day. the people you're competing with or who are moving faster than you probably aren't moving faster than you, they're just more consistently focused. And I was like, that sounds about right. All right.
I should say when I was talking about Americans or people generally buying substitutes or synthetics for the real thing, I don't mean that in a degrading way. I think it's just a trap. It's really easy to fall for the short feedback loops and be like, well, I can get this and I can get it straight away. Like junk food, for example, instead of eating something healthy and nourishing, you go for the thing that feels very good in the short term. I think it's...
Yeah, it's an easy trap to fall into.
Rishabh (17:55)
Hey man, good artists borrow great artists steal. So, you know, just like the replica is not that bad. I agree. like, you don't have to be, you don't have to, like, it turns out the substitute can often kind of like accomplish the goal just as well, if not better. So you know what?
I actually don't think that's a I think that's such a good point when people get a synthetic substitute like they want to eat junk food They want to smoke weed every day All the power to you. That's how you want to spend your life, right? Then go do it I just I think it's a bit of a shame when you have young people who go down that path just because it's everything that's around them as opposed to a decision, right?
Feels good. I'm gonna keep doing this and then the idea of doing anything that's difficult where that time to that feeling of achievement, time to dopamine is long, is not possible. Because you're used to those really short feedback loops. I do this. I pick up chips. I put them in my mouth. It feels good. I pick up phone. I play, I don't know, Flippy Bird or whatever the game is. And I feel good. And how do you do something that requires more energy, requires satisfaction or gratification on a longer payback period? I don't know. Like, for those and people growing up like it.
Zach Murray (19:15)
I don't think they should because all of like, I'm a big believer in duality. So it's like for me to live like a really successful rich life. I actually believe that someone like, I think it all balances. And in the same way, when you're talking about Flappy Bird, it's like, okay, well without Flappy Bird, like all of these like really addicting apps, like Applovin can exist. And then the guy that's like advertising profitably on Applovin can't grow like a great business because there's not the inventory to sell the advertising to.
And so like, I generally just like think, I don't think there's anything like inherently bad or wrong about like the way that you choose your to live your life. The only time it becomes not aligned is like when the way that you're living your life doesn't equal the thing that you want. ⁓ and like that means want bad enough that like the, like the little dopamine hits. Aren't enough for you. Right. And it's just like, at some point in their life, you'll either get to that or you won't. Like there's people that, kind of get drunk on like cheap dopamine until the day they die. And like, that's good. Like we probably sold them a bunch of stuff and like, that's just like the way it is.
Rishabh (20:21)
It is a good segue to your other topic, which is like the biggest challenge in business. like directly attract directly addressing like highly challenging situations, which is like the inverse of like fast.
But yeah, it's sort of interesting because my experience with like addressing challenging situations is, I sort of feel like that's what I get paid for. So I actually feel like very comfortable with like highly challenging situations or like uncomfortable conversations or whatever it may be. And in like a weird way when things are easy is when I'm like the most nervous.
And I don't know, maybe it's like paranoia, but when things are easy, I'm just like something's about to punch us in the face and have like no idea what it's going to be because like it's for sure not something I've planned for because everything I've already planned for is going to be easy to interact with like it's going to be something ridiculous like incredible volatility caused by like tariffs flipping back and forth at least for me personally, it's like whenever there's like a highly challenging or acute situation of some variety, I find myself actually like clicking on because it's like, okay, like this is actually the job, right? Like the day to day is not actually the job.
Zach Murray (21:45)
Yeah, I mean, I think I agree with what you're saying about when stuff's going too well.
I think a lot of that comes down to like framing as well. Like I've found myself, you know, in the summers or something, you know, not working as much and. know, everything seems like it's going well. And it's like, like I, I'm, know, everything feels amazing. And then I feel like I've just rode that cycle enough that like, like it actually is like cyclical.
Generally my mindset is when stuff's going good, expect for things to go bad. And when stuff's going bad, just know that you're like almost all the way through it. ⁓ and like one of like my favorite quotes is like, if you find yourself in a hard situation, keep going. And like, I actually have like a visual of this in my head, which is just like, there's like the timeline of your life and then you hit like a challenging situation. And like, I truly believe that the end of that challenging situation is already defined.
And so like the only thing that you can do is like go and like the faster that you go, the faster you get through whatever that's going to be. But if you just always have like an understanding that like it's going to end sometime and you're going to get at it at some time, then it makes it lot easier to move faster. Cause like, the fact, the harder that I work in this situation, the more effort that I put in. It's just like, it's already been defined for me, you know?
And so that's just the way that I look at I would say like, I don't know if this is a good trait about me, but I do procrastinate things in which I don't think that I am in that moment ready to do the best version of like executing that. And I think like after a couple, I don't know how long I've been like, I guess like working intensely, like maybe a decade. I feel like I have a good like feeling for like, when is the right time for me to address something.
And so it might be cope being like, I'm just procrastinating, but I do have like a lot of confidence that like, not every fire is actually a fire. And the best situation would be like, I have like a very full tank and in like my like fire truck, rather than being like, I'm going to try to figure this out with, ⁓ you know, flapping at it or something. that's the way that I approach it. don't know if it's the best, but I feel like I do better, better work that way.
Jack (23:53)
You 100 % have the artist's approach to pretty much everything. We were talking last week about how to organize your day. And you have that agility to move between the tasks that need your attention. And then in morning routines, morning routine is going to change depending on what I need in my life. It's interesting. I think that's structured people.
Zach Murray (24:12)
Morning routines changes for me except for my like emotional biases, right? Like when I commit to a morning routine, if I'm tired in the morning, that doesn't mean that I sleep, right? Like it's like, it is, you know, it's not like a free for all. like if I say that I'm going be working, like waking up and starting work at five, like that's what I'm going to be doing regardless of how I feel emotionally or like physically. ⁓ but yeah, no, like I think, yeah, I am a bit more like adaptable that, that way. ⁓
I don't know, it's working up until now. We'll see if that changes.
Rishabh (24:43)
Yeah.
Jack (24:45)
When I had my first e-commerce business, I had a friend who had one that was bigger than mine and it was doing very well. And I asked him, mean, because we were both living in Bali at the time. So how do you, you know, stay organized when there's all these different things to do? Like, how do you have the time to get things done? He said, I don't, just, whenever I have the time, that's when I work. I thought it was really interesting, you know, because we both had to some extent hands off businesses that we've already grown and didn't need a huge amount of input from us.
But yeah, it was really interesting to hear from him how he had this more artistic approach. I needed to segment time away, get my head down and say, hey, if someone messages me, I'm not replying. I'm not going out for lunch. I'm not going out for breakfast. I'm working. Whereas for him, he said, I'm going to live life fully, enjoy his life, but then just find time around his lifestyle to do it. That would never work for me.
Rishabh (25:45)
Yeah, I think I'm much more structured generally.
I think the only thing that's sort of good is, the only things that procrastinate are things that I feel like ⁓ if I never do them anyway, it's not gonna be that big of a so for example, someone is upset about something and so they're like, considering quitting, right? Like if I were to take an extreme example, like that'll be the first thing that I do. And I'll just like drop other things. It's like figuring out what actually happened, why is that person feeling that way, whatever it may be. And like just re-prioritizing the day to like do the thing that actually matters. But I honestly, there's like the total number of like messages I never reply to, emails I never reply to.
Like things that I just like drop, like things I don't follow up on because I'm like, ⁓ Like if I never do this, it's not gonna actually matter. And so I'm just gonna like not do it. It's like incredible how big that list is.
Jack (26:49)
I'm jealous, If I think about my list of things, you know what, maybe it's just that not paying enough attention, but if think about my list of things, I'm like, this has to get done. That's why it's on my list. ⁓ But yeah, I think that's really well-targeted procrastination if you're able to de-priorize stuff that doesn't need to happen, right?
Rishabh (27:07)
So this is one thing that I remember. I think I was like Nawal who said this, but he was like talking about how he reads books. And he was like, I just buy like a bunch of books and then I'll like read two of every 10 that I buy. And then the two that I read, I'll like read the chapters that I care about, but I won't read the whole thing. heard that, I think I heard that like four years ago. And I was like.
I should just do that for everything. Like, if it's a thing I don't care, like I should never feel the need to complete it if I don't care. And so I just like started doing that for everything. And that's sort like where it comes from just total comfort with leaving things incomplete, which a lot of people like.
It would drive them nuts if something was incomplete. I don't think they would be able to go on to the next thing if they were just halfway through something and they were like, actually I'm just gonna not continue doing this. Most people would be like, it's halfway done, I might as well finish it.
Jack (28:13)
Next I've got here is growth versus profitability. I think this topic is super interesting. saw a video on your socials, Rishabh about growth at all costs and how you actually think it's ⁓ the only way to operate in a business or it's the right way maybe. ⁓ Zach, you and I talked about this not too long ago as well. Yeah, I'm interested to hear your thoughts.
Rishabh (28:32)
So I want to be very clear. I was talking about a venture funded business. So it's super important what I am trying to describe here, because it is a consequence of my belief in what does investment mean. So when you have a profitable business with a, let's just call it a slower growth rate. by the way, I'm not here to say that profitability and growth are always at odds with each other.
But for the purposes of what I described on social, it was in construct of those two things being opposing each other. context was coming out of 2022 going into 2023, the business environment was really negative.
And like people weren't able to raise money and things like this. So I don't, mean, don't know, Zach, maybe you remember, Jack, maybe you remember, but it was like super painful. And so the venture community in general, like I had friends who are VCs who would tell me that what they're advising their companies is to like flip to profitability in order to like stay alive instead of like hitting the gas on growth.
And so there was all of this stuff online. If you like transport yourself back two years ago about default alive or default fundable, like there's a lot of default stuff that people were talking about. And I remember hearing this and thinking to myself like, this is insane. Like all of this advice is horrible because if you're a venture funded company, the job of a dollar invested into the company is to grow the asset value of the asset that you have invested into. It is not the job of the asset to produce cash flow. Then you would invest in a treasury if you wanted yield.
And so there was this crazy thing that people were doing where they were creating this like narrative around, hey, you need to like be alive in order to actually be able to grow after this is done. But the problem is that when you do that and you do it at the trade of growth, then what you're doing is you're actually converting the asset from a growth asset where you're accumulating asset value or enterprise value to a yield asset, to one where you're aggregating cash flow.
And when you aggregate cashflow, you're returning back to the investor something different than what they invested into. And more importantly, that class of investor doesn't invest in yield, it invests in growth. And so you'll never be able to raise a next round. their job is to invest in growth. It's not to invest in yield, right? They're not an asset manager that has purview to invest in whatever they think is most appropriate, right?
That's actually the problem is that people like forgot like economics, essentially. It felt like, right? what I was trying to tell people is like, you cannot advise your companies to do this because what you're doing is you're making them uninvestable because an investment dollar from a venture capitalist must go to an asset that is an appreciating asset from an enterprise value perspective, which is entirely driven by growth. It is not driven by cashflow. ⁓ And so that's why I feel very strongly about this in terms of when you raise venture money, you should know what your job is as the CEO of a venture funded business. It is to increase enterprise value of the assets that you are responsible for.
This is in no way a view on business building in general. Like it is a view entirely on investing because like you can build an incredible business where actually explicitly what you're trying to do is build a cashflow yielding business in order to just like do awesome stuff with the cashflow that you are generating. but that's a different asset category.
And so it's super important to be like super clear.
Zach Murray (32:40)
I think like the result of that time was also potentially like a result of like a game of telephone. where like, think the narrative started as the standard stair step and timeline of your next round might be different than what you had projected when you raised your like first round. And so I think it was like probably some decent advice being like, Hey, you guys are like burning at you're making money in like six months.
We don't know what the market's going to be like that next step might be like a little bit wider of a step. and so like, make sure you survive until you can actually raise the next round. And it's like uncertainty. I think then it became like a game of telephone of people being like, no, you need to get the profitability. and like, that's going to be what's like sexy in the next round, which like makes absolutely no sense. And like, I agree with you. And so I think it was like a bastardized piece of advice that was potentially good of being like, yeah, like just make sure you can get to the next round.
You know, and I, I agree with it completely. If you, if you raise venture, then like the growth is the only, like, that's what you're getting your valuation based on. Like it has nothing to, like, there's zero, no one gives a fuck about profitability. Like, you know, like it's like, ⁓ the only time that matters is when you go to sell the PE, like that's literally the only time.
Rishabh (33:51)
Yeah. And I, I, I, I'm sure there's some people who were like thinking very strategically about it with like, there's a moment in time here that we need to like get past. dude, had like friends in venture directly tell me that what they're telling their companies is that profitability is more important than growth. This is crazy. Like, like, it's not like I heard that this is what advice was being given. Like I would call friends of mine.
And say like, hey, what advice are you giving? And then they would tell me what advice they're giving. And I was like, dude, I think you're going to crush your company if you do this. And they were like, no, I don't think so. Like, this is the consensus. See, this is the other problem is that a lot of people in venture, they don't run the fund, it is their job to like keep their job. And like people often forget that.
And so then it's actually better for them to run the consensus play because you're not going to get fired for running the consensus play. And so this rhetoric became the consensus. And so then people started advising it seriously.
Zach Murray (34:59)
Yeah, I think one of the most things, the thing that I'm the most grateful for of like running like a bootstrap company is that like, I actually feel like I make a lot of the decisions purely based on like what I think is best, you know? And I, I sometimes wonder and like, I couldn't imagine the pressure of like getting advice, right?
In one way when like in your like body, you're like, I do not agree with this decision. ⁓ I don't think that this is best, but it's like coming from people that, know, are like smarter than you or they've done this before. And, I love how like, I personally just get to be like, no, like, I think this is best. and, ⁓ and it's a very rarely like contested in a way that I feel like influences my decision. Whereas like when it gets contested, my goal, it's like another data point.
Rishabh (35:45)
So I obviously get those types of suggestions, right? But I do think that, again, you have to know what you're signing up for. So you have to know that, like, hey, you're going to have to be able to bat for your point of Or you're going to have to know how to influence appropriately so that way your view is like, accepted by your investors, essentially, I think there is a skill that a CEO of venture-funded business must have in order to be able to continue to run their business while continuing to have the confidence of their investors without having to feel like they just need to listen to what the investor is.
Jack (36:26)
Yeah, I think it's a question of time preference, right? Great things take time and a lot of capital. If the priority was to flip green on a really short timeframe, like a day, to be a cashflow business, then it wouldn't be the requirement for funding in the first place. I think that there are lot of parallels for bootstrap businesses as well. It's just the fundamentals of capital. Rome wasn't built in a day. And there are investments that have a payback period that aren't one day or one week or one month.
I think this relates back to what we were talking about before with quick dopamine hits. Flipping green on a short timeframe is not the goal, especially for a venture-backed business, right?
Zach Murray (37:02)
I'm pretty much about business. Yes. But like, I have like a really stupid analogy for this, which like gambling. And if I'm thinking about going into a gambling session with like a moderate bankroll, the thing that I try to do earliest to get ahead and like quickly double.
And so there was like a period of life when I would gamble the number, the thing I would do 100 % of the time is I would go and would take 100 % of my bankroll and I'd put it on red or black because it was like the easiest decision to either double up and then you essentially have like buffer for like session to take more risk. And I think the only difference between bootstrap businesses and venture backed businesses is like the rate in which you get like that freedom. And so for a venture backed business, it's like very similar to taking out a credit line at a casino where now you have that freedom and you feel like you have more bankroll than you did before and you have less, less emotional association with it versus if you're bootstrapped, you kind of put your own skin on the line. really go to zero cause you started with zero.
So it doesn't really matter. Um, and it's just like, like realistically, I think the best place to be is, is that a place where you feel like you're growing and playing with house money. And I think you can get there in multiple different ways. venture back, it's like, yeah, you go to cashier, you get, to credit line, you have it, you have to pay back that credit line. And so like, I think that's the only difference. But like when you actually start operating, and I think the only other, you know, change is like, as a bootstrap business, then you're still consistently thinking about your bankroll and then what you can do with like, whatever your bankroll is at that time when it comes to making bets. And so that's just kind of how I always thought about it.
Rishabh (38:27)
Yes. Good.
Jack (38:43)
I think when you bring this into the physical world, it's really easy to explain. If you were building an apartment building, there would be no expectation that you would flip green after the project started. It's huge capital investment. It's going to take a lot of time. It's going to take a lot of people. It's going take a lot of specialists.
You're not going to flip green until you have units to sell, units to rent. I think that properly explains it for a lot of people a lot easier for some of the businesses that you're talking to right now that are being advised that they should chase profitability before the building is That's kind of crazy
Zach Murray (39:19)
I have a friend right now that's thinking about buying a, so like right now the condo market in Toronto has like flipped and there was like a bunch of speculative pre-construction and he's working on a deal right now to buy back a pre-construction property that was sold like 900 and something thousand for like 650. And so yeah, it's like flood in the water right now in Toronto, which is like, seems like actually a pretty solid opportunity and the biggest issue with Canada generally is that like most residential properties don't cashflow.
So there's a lot of people that can't close on mortgages that they took that they bought the contract for in pre-construction. Um, and now they're like being built and they can't convert anyway. Um, interesting times. Yeah. Well, on the, on the flip side, like 2015 to 2020.
Rishabh (39:45)
That's wild.
Zach Murray (40:11)
Like I call it like 19, even into 2020, 2021. Like I know a lot of people that made a lot of money with pre-constructions where, you know, the pre-construction was like 250K. And by the time they got to the market, were 500 and you put almost $0 down and you made 250 grand. And you had like a ton of positive equity at the point. So it's just markets, man. They're cycles. It's it is parallel here with TTC businesses would be funds that buy up TTC businesses. ⁓ I got to meet this one not too long ago. They take debt to buy brands. They use those brands to get more debt. They use that debt to pay off their investors, to pay their debt.
Rishabh (40:47)
Yeah.
Zach Murray (40:52)
And then tariffs come. The Union Economic Exchange. Hopefully not.
Jack (40:54)
Yeah, yeah, hopefully
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