From $2K to $50M in 5 Years: The Exact Playbook

In the first episode of Boring Money, David Heacock sits down with John, co-founder of Ship Dudes, to break down how he and his partner turned just $2,000 into a business doing roughly $50 million in revenue in five years.

They talk through the real story behind that growth: starting with a small ecommerce brand, packing orders by hand, getting kicked out of the post office for too much volume, and eventually pivoting into a far more scalable “boring” business in third-party fulfillment.

This conversation covers what it actually takes to build from nothing, why boring service businesses can be better than sexy online businesses, how to think about expenses and hiring early on, and why control matters so much when choosing what kind of business to build.

David also pushes John on a challenge many entrepreneurs face once they start winning: fear. Fear of loss, fear of making bigger bets, and fear of reinvesting into the very business that made them successful in the first place. The two get into capital allocation, commercial real estate, debt, risk, and why the highest return on capital is often found by betting on yourself and the business you understand best.

They also discuss partnerships, bootstrapping, keeping expenses low, hiring for potential, estate planning, and the systems John needs to put in place to get from where he is today to his next goal: $100 million.

If you are interested in boring businesses, business acquisition, cash flow, entrepreneurship, capital allocation, and long-term wealth building, this episode is for you.

Topics covered:

• How John built Ship Dudes from $2,000
• Why he left ecommerce for fulfillment
• The power of boring businesses
• Early hiring and keeping costs low
• Fear, risk, and reinvesting in your own business
• Commercial real estate vs. operating businesses
• Capital allocation and long-term wealth creation
• The systems needed to scale to $100 million

Transcript

SPEAKER_01 0:00

We've turned$2,000 into like multiple aid figures. So when somebody goes in my comments and says that it's impossible to go from effectively zero to$50 million-ish, what do you say to that? Just bullshit. Bullshit. Most entrepreneurs think that they need millions to start. John proved them wrong, going from$2,000 to about$50 million in five years. I'm David, the owner of a boring air filter business that makes$23 million a month. I spent the past year mentoring John. John ditched a seemingly fun and sexy drop shipping business for a boring business doing eight figures. We talk about how you could start this business, why pivoting from a sexy to boring business could change your life, and the biggest mistake he's making with his millions. One buying a jet commercial real estate or expand my business. As we sit here today, you chose which one. So you do not view taking a six million dollar loan as risky at all.

SPEAKER_00 1:05

Do you not fear that like you can lose everything like tomorrow type of thing?

SPEAKER_01 1:14

Why don't you uh tell me the the origin story of Ship Dudes, how you got started and and um where you are today?

SPEAKER_00 1:20

Yeah, absolutely. So I'm one of the co-founders of Ship Dudes. Uh me and my best friend started the company now like five ish years ago. Um I've known my co-founder since we were in the fourth grade, so for a long time. Uh we saw a need in fulfillment. So like it's a boring business. We just push boxes through a warehouse and give it to carriers, a UPS, FedEx, DHL, all these people.

SPEAKER_01 1:45

Did you have a lot of money when you when you we didn't?

SPEAKER_00 1:47

No, we started with$1,000 each. So like it was a two thousand dollars total to start. We each had a thousand dollars and then just kept rolling from there. I remember when we started in the first 30 days, I looked at Joe and I'm like, hey Joe, we just made a thousand dollars in revenue. This sucked.

SPEAKER_01 2:04

What was the actual business that you started in the beginning?

SPEAKER_00 2:06

Actual business, we were in an e-commerce business, so we were we had a men's grooming brand, so we were selling shampoos, conditioners, oils, except for men um for like their beards. That was expensive.

SPEAKER_01 2:18

How did you get that idea? Like, how did I get that idea?

SPEAKER_00 2:20

I found e-commerce while I was in school. Um, a buddy of mine uh was pretty much selling stuff on Shopify. And when you sell stuff on Shopify, you hear a cha-ching off of every single sale, and he had his ringer on. So all day I would just hear cha-ching, cha-ching, cha-ching. And I'm like, what are you doing? And he didn't want to really explain to me because he was making very good money at that point. We were like 18 years old. Um, but anyways, we lived together for two years, so eventually we kind of figured out I figured out what he was doing, and I came back to like my hometown, my first like winter or summer break, and I just sat down, my friends, I was like, Hey, this thing called e-commerce, you spend money on advertising, and random people all across the world will buy on your Shopify store. Let's figure it out. Um, long story short, one of there was four of us. One of my buddies was like, No, this is like a scam, this is bullshit. Um, the other buddy was like, Oh, this is cool. Then me and Joe were like, Oh, this is interesting. So we just like kept testing different products. Like, if you're familiar with like drop shipping or like affiliate type of stuff, we're just testing different products, obviously. And then the guy who said that it was a scam the next summer or winter when we got back, he was like, I just dropped, I just dropped out of college. And I was like, Why'd you jump out of college? And he's like, Well, I just made like$300,000 this month, and I was like, Doing what? And he's like, doing e-commerce. So I was like, So it's not a scam. So, like, luckily, like we've been close friends since we were little, like elementary school, and we've had the same core group of friends, which has been awesome all these years. So then he started in the e-commerce space, and then he actually was saying he started testing products and he was like, Hey, try these products. So we tried a product in that beard niche and it worked.

SPEAKER_01 3:59

How did you source it?

SPEAKER_00 4:00

Uh, we found a manufacturer through China. Um, the initial product was like an electric device, like uh it was actually called a beard straightener. Um, so funny enough, really random. But have you ever had a beard? Uh I I can't really grow and my partner can. So some of the ads he was in them. Um, you saw Joe yesterday. Um, but anyways, like we found a manufacturer on Alibaba, like very simply, yeah. Alibaba reached out to them on WeChat and just started communicating. Say, hey, we want this product, we want this many units, what's the price? How does that work? And then we just start with a batch, I think, of a thousand units to start off with. And we're like, hey, if we can sell these, we'll buy two thousand next time. And then we started snowballing that into um into a business. Uh, but we always fulfilled the orders ourselves. So, like, I didn't know that my business even existed in the world. I just assumed that all online businesses just ship their own product. Yeah, so I would literally just sit in a garage every single day and just go to the post office and pack like a hundred orders, two injured, whatever it was, and just bring it to the post office every single day. And then I would just get kicked out of post offices. They were just like, hey, like you can't bring this here. You have to go to like the county post office or like different post office. You had too much volume, too much volume for the I would just bring bags and bags of orders.

SPEAKER_01 5:15

You start with a thousand dollars, like how long did you so how long did it take to go from like a thousand to fifty thousand to a hundred thousand?

SPEAKER_00 5:22

So, like realistically, this whole journey didn't just start with this business, number one, it started with other businesses before this one with the same person. Um, and I'd say we've been snowballing more. You're iterating exactly. So that you asked, where did I even get the thousand dollars to start with? Well, it was through like iterations of failures that I had through other businesses. But yeah, like the first month we used to put a thousand dollars in, that was just for the lease. It was like an 800 square, it was a small facility. Um, and then we just started snowballing from there. I guess probably the second month we did a few thousand dollars in revenue, third month, maybe ten thousand dollars in revenue. Um, and then I'd say maybe a year in we got to maybe a million, maybe like sixteen months, somewhere over there, kept selling.

SPEAKER_01 6:05

And so, like you you you go you go from zero to to one, yeah. You have and you have proof of concept, proof of a business. When did you realize that you were on to something and that you wanted to pivot the business into the business you have today?

SPEAKER_00 6:19

Well, like we had our f we had our e-commerce business, and then we started fulfilling for other people as well, too. So that's kind of how that whole piece happened.

SPEAKER_01 6:27

So it just happened naturally, somebody came in and asked you, or or like you you were like, Oh, I can make money doing this.

SPEAKER_00 6:33

What was the so we had to go we had we moved to a little warehouse and I don't want to pay the rent for the little warehouse? Yeah, so I was like, How can we subsidize this rent? Um, and one of our costs was rent. So I was like, maybe we can find other brands, or we had friends in the space that kept asking us, hey, how do you fulfill? And I was like, Well, we do it ourselves, maybe that can subsidize the rent in a sense. Yeah, um, so that's how we kind of took that next jump. It was just like natural progression, if that makes sense. And I think over time we just realized we actually enjoy this business more than the other business we were running, um, just the way it operates, like in the way we operate. And like I think in the e-commerce business, we just didn't have like the skill set from both sides to like uh be successful if that makes sense.

SPEAKER_01 7:17

Also less capital intensive, right? Which one? The um third-party fulfillment.

SPEAKER_00 7:21

Yes and no, it depends like how you do it. Like we had this conversation yesterday. Like if you from the beginning open up massive fulfillment center and racket and pack stations and a bunch of employees, that's not cheap to do, and you're taking big commission.

SPEAKER_01 7:35

You don't have to hold inventory, you don't have to hold inventory 100%. And you're not taking you're not taking the risk on the inventory.

SPEAKER_00 7:39

100% on the inventory, sure. That there's a risk to that, but I also put it this way like you can find a lot of products where you can start with a low number of inventory. Yeah, so we start with a thousand units, we probably spent under four thousand dollars to buy that thousand units or five thousand dollars, right? So I don't think to commit to a business, five thousand dollars is not that much money to commit to actually doing something. And we were I was twenty-one at that point, twenty. So anybody can go work a job and make a few thousand dollars to invest in themselves and start a business. I I think at least.

SPEAKER_01 8:13

So when you get when you went from zero to a million dollars a year in sixteen months college, um, how many employees did you have?

SPEAKER_00 8:18

It's a great question. I don't remember. Um, I would have to think. Probably it was like the three three, probably like six, seven, around six, seven, that's funny. Six, seven. My kids are like six, seven. Um, honestly, yeah, somewhere over there, probably like seven, maybe eight people. Yeah. Um and how were you fine? Like, how did how did you find these people? How are you finding them? Like, did people our first employee was we hired them off a Craigslist? We hired him off a Craigslist. Um, like we literally put a Craigslist ad up, and like a few people showed up, and one guy like he had like a box cutter with him. I remember this, he had a box cutter with him, and I was like, he came prepared, and then we're like pack a box, and he knew how to like tape a box, and I was like, Well, he knows how to pack and tape a box. You're hired. That's how it started. Yeah, he's not with us anymore. But honestly, shout out Rob. Rob was one of our first employees, I think our first employer we hired.

SPEAKER_01 9:16

Yeah, so you're a 21-year-old kid, um, and you know, just decided to go out and start start this business and start hiring hiring people. Um, did you have like how did you know how to do that? Like going out and hiring somebody is a a daunting thing. A lot of people have never never done before. So what gave you the confidence to well?

SPEAKER_00 9:35

I think it was just out of necessity, like there was too much work for us to do ourselves. So we just had either sit there for 20 hours and do it all ourselves, or know that we have some margin to hire someone and just hire someone to let us do more and more and more. Um was I scared absolutely? Every time I hire someone, I'm I'm still fearful of ill if I would have that conversation later. Um, yeah, because you're taking money that you could have made and using that money towards hiring someone and training someone and stuff like that. Um we took a leaf of faith, like we had no training protocols or we didn't have any like SOPs on how to train these people, but we made the jump and we knew we needed, we knew we needed somebody. So um we just we hired them and then yeah.

SPEAKER_01 10:18

So what was the point that you knew that the your current business model was the one that you wanted to stick with and scale? Like what was the what was the turning point there?

SPEAKER_00 10:28

So like I'd say I look like similar to probably you, we look at a lot of businesses and like we have friends now that own businesses, and like we try to I try to figure out what I like in a sense, and I like control, if that makes sense. So like I feel like the last business I was running, we didn't have much control. Why do you have more control in your business than you? Because like I I know if I want to grow, I can go find customers and I know how to go find those customers, and I'm not like reliant on like platforms. Like when you're doing different businesses, you might have to rely on platforms, right? Yeah, in our business, if I want to go find a customer, I can go find literally go and find that customer, whether it's online or physically, et cetera, and I can convince them that our service is better than the next person's service, right? So that I appreciate I I enjoyed that, and I enjoyed also communicating with business owners. The business I was in before was more consumer, like I wasn't actually talking to these customers, they were just buying my product and we would never communicate. Now, like we actually have a big impact on people's businesses day to day. That was why I liked it. So it's something you understood. I understood it, and my partner also understood operations and warehousing because he grew up in that business as well, too. So and he doesn't like selling, and both of us don't like running ads. So we knew what we didn't like, and we just found luckily found something that we both liked, and they were like uh they worked well together, right? So you need both pieces to be successful in like a service-based business. You need to do the fulfillment properly, like the service part properly, and you have to be able to like get customers properly.

SPEAKER_01 11:58

So, do you think having a partner for you was important for your journey?

SPEAKER_00 12:02

Yeah, it's like the best thing I've done. Like I've done I've worked with my partner since we were 16.

SPEAKER_01 12:07

This is like our if somebody is out looking for a partnership. Um, what is it that you think makes a good partnership or makes it work for you?

SPEAKER_00 12:15

So I've actually ran a business before in between of business with Joe with other people that I didn't know. Like I started a business with like two other people. Honestly, I'm so friends with them to this day, but I didn't know them. Like we met just and worked on this idea together. And the part that I realized, and I honestly Joe's taught me some of this too. Like, you don't need the smartest person in the room sometimes. You just need someone that you can actually like trust and you know is like loyal and like not looking for their best benefit, but also just looking for like collectively your benefit and their benefit together. Like my biggest thing is like trust and loyalty. Like, I don't need you to be the smartest guy in the room. I just need you to like care, want to show up, want to learn, and like not screw me if that makes sense. Yeah.

SPEAKER_01 12:57

Well, having dinner with the both of you last night, I would say one thing that you kind of alluded to before, but I do think is important, and I think you would agree is that you have the complimentary skill sets. Of course, yeah. And I think that that's really valuable um in our partner. I mean, obviously the trust and loyalty extremely important, but like you also um enjoy different aspects of the business, and so that allows you to do more.

SPEAKER_00 13:18

I'd say number one, complimentary, but number two, if one person for some reason can't do their half, the other person knows how to do that half. So, like, he's better than me at in a warehouse, but I can operate a warehouse, and I'm better than at selling, but he can sell as well, too, if need be, right? Um, because I remember when we first met, you're like, I know how to do every single thing in this business. Like I feel like I can I can do every single thing in this business. Some people could do better than me, but at least like we know that if I was gone, he probably could sell as good as me. And I could work run a warehouse probably as good as him, type of thing, which is great. Yeah, um, and you need those complimentary skills. I'd say like it's like dating though. Like when I hire people now, I just tell I sit down, I'm like, hey, like we're dating right now. Like, I want to spend a few hours with you, maybe a day, two days, go get lunch with you, and just like I want you to be happy with me, me to be happy with you, because like if we're both not happy here, this is not gonna work out in either way. So, like finding a co-founder, I think is a big probably one of your biggest investments you're gonna make is like finding the right co-founder.

SPEAKER_01 14:16

If you get into a partnership that you realize is not working for for whatever reason, then have then um addressing that early on and not just letting that to fester it. I think that like talking with another person last night, like I think one one mistake entrepreneurs sometimes make is they get into a partnership. Um, it maybe it is everybody's friends, but you realize that but what one person is pulling all the weight or one person's not their heart's not really in it, they just let it kind of happen over time versus having a conversation saying, hey, being like let's be honest with each other, this isn't working. How do we want to how do we want to move on? Sure. Um I just I do think that's important. 16 months for zero to zero to sixteen months, you get to a million. Somewhere like that. So now you're five years in. So you go from that that million to to what now?

SPEAKER_00 15:02

Yeah, so like we've turned like a I guess two thousand dollars into like multiple eight figures. Multiple eight figures, like high again, mid-a figures.

SPEAKER_01 15:10

I'm not going into exact numbers, but mid-a figures in five years, yeah, but from a thousand dollars. Yeah. So when when somebody goes in my comments and says that it's impossible to go from you know, effectively zero to fifty million dollars-ish, um, you know, what do you say to that? That's bullshit. Bullshit. You've done it. Yeah, yeah, and and you and you've done it. We talked to it. Now people have done it too. Yeah, yeah, but see, but but but you did it much younger than me. You're only 26 years old. Yeah. Today. You're today. You're only 20, 20, 26 years old, uh, which is what what I think is what I think is so impressive. What would you say allowed you to do that? We were talking about some of this last night.

SPEAKER_00 15:52

Number one, yes, it took five years, but I've all I've been doing it with the same person for 11, 10, 11 years now. So, like, yes, it's five years, but it's also been like six years. Since you were 15. 15, 16, yep. Doing the same thing with the same guy, failing, losing money. Like, we had hired people before this business even started, right? So, like, a lot of learning. And we wanted this too. Like, we wanted to start a business, have a business, grow a business. Like, I wanted it.

SPEAKER_01 16:19

The perception, I think, is go out. You need money, you need money to to be able to do it. You need to go raise venture capital, yeah. Um, get that$10 million check so that you have money to go out and grow a business. That's what people believe. Sure. Um, what do you think allowed you to do it with no with no money?

SPEAKER_00 16:34

A few things. Like, number one, control your expenses. Like from the beginning, you don't need the most nice thing in the whole. You don't need you need the basics, right? You need like the basics to give the service. I'll say we're in the service business, so I think that's a good business to start to make your first say million dollars, call it. Yeah. Um, because you can sell before you actually have to serve for anything. And there's no cost in serving if you're doing it yourself in the beginning, right? And as long as like you can charge more than you can pay someone to do it eventually, you'll constantly have a flywheel where you can make profit in a sense. Um, yeah, so like I haven't bought anything nice since I started the business, um, for myself at least. Like, um like we've saved money, like we've been very frugal, like we make financial decisions on it, like everything's thought through from a financial standpoint. I'm not just like buying a forklift just to buy a forklift, right? Like, well, let's think about it. If I let's maybe buy a walkie stack, which is like a third of the price of a forklift and buy used, don't buy it brand new. Yeah, these are the decisions that like we thought through early on and had to make, right? Another thing that I really like to do is like from an employee standpoint, people want the best of best employees. I actually like developing employees. It's been something that like I actually enjoy. I found another thing that I like. Number one, you see them grow, they build a career with you, they stay with you longer, they actually like learn stuff and you learn stuff with them. And two, like, it's like less expensive to hire and develop someone, in my opinion, than to go out and hire the best of the best that might not just be a good fit for your business. So, like expenses is like the big thing, like keep expenses low and like don't overspend on stuff you don't need, I think is a very, very big thing.

SPEAKER_01 18:14

Um so you went from zero to you know tens of millions of dollars of revenue in five years, um, and you're and you've been profitable the whole time. You've been you've been cash flow positive.

SPEAKER_00 18:24

I think only the first month we didn't make profit.

SPEAKER_01 18:26

Only the first month you didn't make my make make profit, and then every month since then you've been you've been profitable, um, which is super super impressive. I could I could not say that. What does success for John look like 10 years from now?

SPEAKER_00 18:38

I feel like success just keeps moving. So, like originally it was like I want to get to$10 million and sell this company. And we did that, and I was like, we've done nothing, let's just keep going. The next goal that we're trying to get to is$100 million, and I'd say within the next like 24 months, I want to get to it.

SPEAKER_01 18:54

So 20 24 months you want to get to$100 million, which is which is um more which is at least doubling the business. Sure, yeah.

SPEAKER_00 19:02

Um, and then like honestly, I see the path to get there, and I see us doing the things needed to get there, and part of my brain's like, how big can this go in a sense? Um, so yeah, we're marching towards that.

SPEAKER_01 19:16

So what would you say is the biggest blocker to you going from I we've talked about this.

SPEAKER_00 19:24

Honestly, it's like my fear in a sense too.

SPEAKER_01 19:26

It really is, yeah. Yeah. What are the what are the things you're most fearful about that are that are keeping you from pushing forward?

SPEAKER_00 19:32

It's funny. I watched your one of your videos yesterday, the one with the Warren Buffett one.

SPEAKER_01 19:35

Yeah.

SPEAKER_00 19:36

And one of the pillars was like uh never lose money.

SPEAKER_01 19:38

Rule number one, don't lose money. Rule number two, see rule number one.

SPEAKER_00 19:42

Exactly. Um that's like what I'm fearful of, right? Like every time we make an investment, I'm like, am I gonna lose money here? How much money am I gonna lose? And like I'm trying to visualize like in the future, will we lose money here, right? And I think that's good and bad, like taking risks is how you get the reward in a sense. Um working through that.

SPEAKER_01 20:02

Yeah, so so let's unpack that a bit. Um I I've I've known you for a bit of a year now, and about two months ago, um, you you called me you called me with the question. What was what was what was that question?

SPEAKER_00 20:13

So I I'll I'll tell you how I even got to that question. So I watched first let's start. What was the question? Should I buy a private jet? That was the question. Should I buy a private jet? Um how we came to that, so I I watched another podcast. And and why would you want to why would you want to buy a jet? Like what was the there's like tax benefits to it and so bonus depreciation, accelerated depreciation. There's tax benefits to it, there's like an allure to it as well, too. Um, but also like I I'd watched a podcast with someone who had had a jet and she was talking about it as well, too. And the only person that I knew who did do that was you. So and like you look at what you can get them for, and it's like knock on wood doable, right? But then you don't think about all the other pieces involved. The operating costs the operating costs are like way out outweigh just obviously.

SPEAKER_01 21:02

And the cheaper the plane, sometimes the bigger the operating costs.

SPEAKER_00 21:06

I also don't enjoy flying, I don't fly that much. Meeting you, I did fly more just because like I know it's important to show up and everything. Um but yeah, that was that was something I I asked you and you were like, do not do it.

SPEAKER_01 21:18

But to unpack the fear point, which I think which is what which is where my takeaway from it is um and that same conversation you asked me about another investment um that that you that you did end up making. Why don't you tell us about that?

SPEAKER_00 21:32

Sure. Can I ask you one question though? Please on the fear thing, like do you do you not fear that like you can lose everything like tomorrow type of thing?

SPEAKER_01 21:40

I'll always put food on the table. I really don't. I mean it's it's it's um for me, I I'm I'm I'm I think I'm built differently, but what it is is um once you've been faced with big problems and you've overcome them, sure, then you realize that um you know anything is um overcomable. And um, you know, I I think I told You and I've talked about it publicly. Um, I found out about a heart heart condition I had no idea about um in six months ago, and ended up um you know um having open heart surgery and thankfully went well, and I think we'll we'll have good outcomes from that. But um the the thing I always said before that was um if you study people that are end of life, they all fear the things that this the fear of omission, things that they did not get to do that they wanted to do, it's not the things that they did that they failed at. That's what everybody everybody says at end of life. And going through that experience, uh, so I always was aware of that and and tried to live my life that way. But then going through um, you know, a a very um kind of traumatic um health scare, um, I realized that for me, um, you know, I had all these things that I really want to do that I haven't gotten to get to do yet. And so it really focused me on making sure that I'm going to leave everything on the the on the on the field and attack everything with my full energy that that I know that I that the things that I know I want to do. Um that's extremely important to me. So since then I've even become more of that. But um, I don't live life in fear. I I really don't. You're gonna buy a piece of commercial real estate and take on a fairly healthy debt service with that, which in the commercial real estate world, that's normal. Everybody has normalized taking taking debt. Um, but my pushback to you is you somehow view that as less risky than um than investing in your business, whether that be through signing a lease or through um hiring employees. And I and that is the frame, that is the frame that I'm trying to get you to break is um you know you're fearful of something that you actually understand because you know it and you've seen it up close um versus something that you don't understand as well but but is more maybe culturally acceptable and you're less and you're less fearful of that. And I think that that is the that is um the irrational piece that I'm trying to point.

SPEAKER_00 24:00

Yeah. And the question is why am I scared? Yeah, so what are you scared of? Depending on the different assets you purchase, some are like forever assets and some are potentially could not be forever assets. So like business, like uh even the business that we run, it's it's it's amazing. I just there's unknowns when you do invest money into it, like what comes out of that. Does that make sense or doesn't make sense?

SPEAKER_01 24:25

Like if I if I say I put a hundred thousand dollars into the business, a tornado could could um wreck your apartment content tomorrow. Um, or you could get sued because somebody has like an and and any any number of bad things can happen in anything. So if you want to go down that rabbit hole, you can always you can always find reasons not to do something.

SPEAKER_00 24:44

Of course. No, I I'd I'd say it's uh just a fear, maybe if it was the way I grew up in a sense too, always thinking this could go away tomorrow, in a sense, and like trying to set myself up so that if it did go away tomorrow, you did have stuff there. But I think we've gone to a point where like you can't just go away tomorrow because it's growing.

SPEAKER_01 25:02

You're 26 years old, like most people um are you know are barely um you know doing anything with their life at this point. They're still trying to figure, they're still trying to to figure it out, have no money, probably trying to figure out what they want to do for a career. Um, like you're you know 26 years old and have have built this big business. And what I would say is that should give you confidence to know that, hey, if it goes to zero tomorrow, I could do it again. You have you have the ability and the knowledge to to to do it again, um versus being uh afraid of investing in the one in the one thing that you know, which is yourself in your in your business.

SPEAKER_00 25:42

I'd say as I get older though, I'm as you get older at 26. Well, no, but like I started when I was 21. So like I as I've done this more, I do feel more confident. I just think it's like a confidence issue. Um but like you see patterns, like you say, okay, I did spend this money on this, and it did create the this outcome. I don't know.

SPEAKER_01 26:01

But after our but but let's go back to the fear because after our last conversation, you didn't buy the jet, and you know, we can talk about reasons why that we we all know why that was a bad idea. Um but the um but you did end up doing the deal, yeah. The the deal, but you but but you didn't make the decision to expand your business yet. You didn't make the commitment to that yet. So why?

SPEAKER_00 26:26

Why? It's literally just the fear of taking over. There's actually a guy in my sales office that just says don't let the fear take over. He says it to me all the time. Um yeah, I I think it's just like the fear of the unknown of not knowing would you open a a building somewhere else that takes a big chunk of money to do, and then the money just evaporates because it's empty. I think that's the fear.

SPEAKER_01 26:48

How do you reconcile your goal of getting to a hundred million dollars in the next two years without that? With your fear of taking the action that is consistent with that goal.

SPEAKER_00 27:00

It's impossible. It's like impossible to hit that goal without actually taking the action to get to that goal.

SPEAKER_01 27:05

So you think that ultimately, but but knowing you, ultimately you'll end up taking the action because you're gonna realize you have no choice. Too late. And too late. Yeah um and you know it's all and and it ultimately is holding you back.

SPEAKER_00 27:19

Sure. So I'll I'm probably gonna I probably will do it. You probably or or you probably will do it on the other. I will do it. Yeah, um, just the timing might might not be the best timing. It'll be like retroactively in a sense, too, which will probably hurt me. Yeah, it'll probably be more expensive. It'll probably be more expensive, it'll hurt more, I'll have to go more and all that stuff as well, too. Yeah. So I should probably not do that.

SPEAKER_01 27:42

So so so what what would it what what do you think it takes for you to overcome that fear and choose to bet on yourself?

SPEAKER_00 27:50

Well, I'd actually say the fear is good though, too. I'm gonna fight you on this one because I don't think we would have gone this far if I didn't have like that fear in my stomach at all times. Because like I wouldn't have kept the expenses low in the beginning and like not gone like if I had no fear, I just would have gone.

SPEAKER_01 28:05

Let's be very let's that let's be very clear though, because I think it's almost an accusatory uh like there's nothing wrong there keeping expenses low is smart. Sure. Um not taking action on something that you know you need to take action against is is not. Yeah. Um so there's nothing wrong with like you can you can do both of those things at the same time. Sure. Um, you know, I've always kept expenses extra extremely low, and that's been that was a huge portion of my like I I'm a big believer in keeping your your your risk low, which is keeping your your expenses low. Um, but you're um making an excuse not to take action, which is a very different So the there I might have like fear and risk combined in a sense.

SPEAKER_00 28:49

Like when there's risk, I just feel fearful, if that makes sense. And like what you just said, you're you're like splitting.

SPEAKER_01 28:54

It's about calculated risk and knowing and knowing like you should never take a risk that is going to be existential to your existence. So like I I think um you know I think you have to be both very action-oriented and risk-averse. And so like you have to you have to make small bets that you know that you can win. Or not not not that you can win, that you can that that you can survive if you lose. I see. Um like you still need you only want to make bets like that you can survive if you lose, but then you need to be as aggressive as you can when you have uh when you have an edge, which when you built a business like you have, you have an edge. Going back to your fear, you basically pres you you have basically had um three options. One buying a jet, which we put out, but really it was gonna go buy a commercial real estate and take on take on the debt debt to do it, or expand my business and sign a lease, which is scary to me, but uh is consistent with my hundred million dollar goal. Um, and as we sit here today, you chose which one.

SPEAKER_00 29:59

I guess I chose the uh I I chose the commercial real estate one, but I'm also gonna do something else.

SPEAKER_01 30:05

So let's talk about the risk associated with each one. So on the commercial real estate, what's the risk?

SPEAKER_00 30:09

I don't think anything. Like I'm just gonna I'll just be there forever.

SPEAKER_01 30:13

So for you, so so so you do not view taking a six million dollar loan against a commercial real estate as as risky at all. For you, that that is that is just that that that is for some reason it yeah, it just the risk doesn't register for that.

SPEAKER_00 30:30

It just feels like you have tenants and they just pay the rent and it'll just pay off itself. Yeah, and then the other one just feels riskier.

SPEAKER_01 30:36

You know what's so interesting is like you just with that have more debt than I do, and it would make me uncomfortable. Having that kind of debt on an asset that I don't control really or understand would make me feel uncomfortable. I would, I would, I would find that I would feel risky doing that. Really? Yes. Wow.

SPEAKER_00 30:55

Um, and it's like I like if you say when you told me you're investing in like top of the funnel marketing yesterday would make me feel insane.

SPEAKER_01 31:04

But I do that with cash flow. I I I to me having the debt with a bank is that has covenants and like you can say, oh, that I have insurance and this kind of stuff. Um, I view that as very risky. It's like walk me through the the loan terms of your debt. Is it it?

SPEAKER_00 31:18

It's like a 30-year loan with like a five-year balloon payment.

SPEAKER_01 31:22

So you have a five-year balloon. So what happens? What what happens if interest rates are 15% in five years? How do you feel? That's a problem. It's a big, it's a big problem. And every real estate investor over the last five years has realized how big of a risk that balloon, that embedded balloon is, right? So, like me as a as a former trader, like I view that as incredibly risky. But then you so you you chose that over what is the what like but walk me through the the the risk matrix of expanding your business.

SPEAKER_00 31:52

You just have a building that you opened up in the middle of Texas, for example. And how much does that cost you?

SPEAKER_01 31:58

Oh, yeah, I'd say like 50,000 a month. 50,000, 50,000 a month, so six hundred thousand dollars a year. Um, how long how like how if if um in six months you couldn't fill it up, what what happens?

SPEAKER_00 32:10

You could sublease it. Or you would you would fill it up in six months, though. Or I would fill it up in six months, yeah.

SPEAKER_01 32:16

Yeah, so basically for the interest payment that you're making on your apartment or on your commercial real estate, um you could expand your business, but you view that to be a more risky endeavor.

SPEAKER_00 32:34

No, you're right. You are right. Yeah, I don't I don't know what to say to you.

SPEAKER_01 32:40

Yeah, but it but but you have to admit that it's wild, right? I mean no, it's definitely wild. And and um yeah, I mean like that's why to me, like I'm wired completely the opposite. Yeah. So I don't understand it.

SPEAKER_00 32:54

Yeah, I know you don't. I got it. Um and he's been grueling me on this for a year.

SPEAKER_01 33:06

Yeah, but it's true. I mean, you know it's true. I know it's true. Um whatever, I'm gonna I'm gonna open up the warehouse and I'm gonna put the Yeah, but I think my takeaway um talking to you and talking to a lot of other entrepreneurs, um, you know, I recognize that I'm uniquely wired and not the template that most people should follow. And I do think that people, you know, making sure that you feel are operating from a place of abundance and feeling safe is important. So you so taking chips off the table um is a is an advisable thing. And I I think there's absolutely nothing wrong wrong with that. Um, I do think commercial real estate and real estate in general is more risky, especially with balloon payments, than than than is sold. And I think like that is just a fundamental issue I have with with real estate, not with real estate, but how people talk about real estate because um it leads people like you to believe that a balloon payment in five years is not risky um when you know there are many events where that could be a hugely problematic thing, in my opinion. Um but the um you know I think that the the the biggest problem I see with you and a lot of entrepreneurs is that you value the the risk that you understand you view as um way bigger because you understand it, you know all the things that can go wrong. Um and so that is why you um you know see the grass as being greener somewhere else, where you say, hey, some other people are making money in real estate or these other things. You don't know as much about it, so you don't have you don't view it as being as risky because you don't you don't know what you don't know in it. Um and so you end up um getting distracted and putting more energy into that versus investing in yourself the thing that you really know. And I think that like that is the challenge that I would have for you and give for any entrepreneur that um I think being honest with yourself about you know why you're more like why you are gravitating to something um that maybe you just don't have the full picture on. Sure. Um and you'd be way when you'd be way better off investing in yourself.

SPEAKER_00 35:16

I think for every entrepreneur, the grass is always always looks greener, like it's just a thing. And I feel like probably that's why a lot of people got into business because the grass was greener, like or if a lot of people get jobs out of school, right? Like, oh, you can go work, and then you hear, oh, I can do entrepreneurship, I'm not gonna have a boss, I'm not gonna have I can work at any hours that I want, but then you realize, yeah, you don't have a boss, but then you have to work like a lot of hours, obviously.

SPEAKER_01 35:38

It's like if you talk to any almost any entrepreneur, and they would they they would and my I put myself in this bucket sometimes, although I try try not to. Um, you know, they they would say, Oh, um, I only wish I had gone into some other business. Like I pay the thing. I picked I pick the wrong business. Or um they'll they'll say, Oh, you should never go into a 3PL business. It's the it's the it's the worst business. Um, you that but I'm stuck in it.

SPEAKER_00 36:04

That that's how both most most entrepreneurs should be business is the worst business, and every business is the best business. Right. It really is.

SPEAKER_01 36:09

And that's and that's my point. And so um I'm a big believer in the Stan Drunken Miller philosophy of putting all your eggs in one basket and watching that basket very closely. Sure. Um, and I think that you know, from a financial perspective, you're going to be get the highest return on capital from investing in the things that you know really well, that you understand really well, that you control, um, versus putting money in things that maybe seem safe, but you don't control and you don't understand is true. True. Absolutely. And that that is the that is the the new the take that I would have on it.

SPEAKER_00 36:44

Oh, and I think social media doesn't help either.

SPEAKER_01 36:46

It it does not help at all.

SPEAKER_00 36:48

These videos don't help. No, it's it's true though. Like you see online, you see people, like even relatives, stuff like that, like, oh, you should do this with your money. But I guess when you do run a business and it's a successful business, you the best, like you said, return on capital of your money is just reinvesting it back in what you're doing. And that's why as we keep growing, I'm getting better at that too. So we're all not perfect. Yeah.

SPEAKER_01 37:11

I know you just got married. Yeah. And congratulations on that. Thank you. Um, and um, have you thought or talked with any advisors on estate planning and how you were going to um structure your structure your life? I have not. Yeah. Yeah. And that's something I would highly, highly advise because um now is the time before you are you know before you reach the goals that you want to reach, um, there you have a lot of um avenues for how you can um protect your assets and also let them grow in a smart way. And then if you have children and can can pass it on. Um and I think that that's another say area where I would say you're not investing in that you should be investing in, is like um you have this, like your biggest asset, aside from just yourself and your knowledge, which is I believe your biggest asset, but is your business, right? Um, and you know, you're you'll go out and you've hired lawyers to do your commercial real estate, but you haven't hired hired a lawyer or uh state planner to um put your put your business life in order, your biggest asset, right? Interesting. Um that's something that I think that most entrepreneurs, especially that are young and ambitious, um, are you know being negligent about. For sure.

SPEAKER_00 38:26

And like, thank god I have someone like you to tell me to do these things, you know? No, but it's the truth though, like uh I've only gotten so far because I've met for lack of a better term, people like you. Like seek out people like you who are 10 steps ahead that like tell you, hey, you should probably go do this. And like you don't take all the advice, but like you take the pieces that you like and stuff like that.

SPEAKER_01 38:45

Well, you should absolutely go and put your in a trust with like and go ahead and use up your taxable exemption so that you can put your whole business life into that and your your children will will thank me. Um you can just I'll I'll I'll have I'll I want to make sure that they they get a cliff to this video and I'll I'll take my my fee. But but but the the the larger lesson from it though really is that you're I think underestimating the value of what you have and overestimating the value of other stuff of other stuff. And I mean, and I think that that is the problem. Um like you're underestimating the return on capital that you can get yourself. You're over like overestimating the return of capital that you're gonna be able to get externally. Sure. Um, and it's because of that fear. It comes back to that fear because you're afraid, you're afraid, um, and so you don't value it as much. Um, but you're only afraid because you're too close to it.

SPEAKER_00 39:35

Isn't there a point at which you should take money out of your business, though?

SPEAKER_01 39:39

You know, I view myself as an investor, and I think you are an investor. We're all investors, right? So you're getting return, you're getting a return on your time, return on your return on your capital. You know, at the highest level, and this kind of goes back to your estate, like my my everything that I invest is my business, right? So I could filter by as a business, but I have other um investments within that within that business. And so like um when you have like my whole life is in is wrapped up in it in an LLC of some kind that is a business. But we're all in business for ourselves. So um, you know, it's just a matter of you're asking me a question of capital allocation. How do you decide where to um invest your capital like pay yourself or just put something into the business? Yeah, so there's no there like there's um I mean there's money you s you spend, obviously, but then everything else um is getting reinvested somewhere in some shape or form, right? And so your job as the um entrepreneur or as the business owner is to allocate capital in the and to for the highest risk adjusted return. I mean, like that is ultimately what you're what you should be kicking.

SPEAKER_00 40:40

Let me ask you a question then. Where have you seen the best returns in capital allocation? And don't just tell me your business. I'm curious, like, where is your business just like it's in myself, it's in myself and in my business.

SPEAKER_01 40:50

I mean, like really um like you look at doing this per like um you know we had we had drinks last night with a group of people we're working with today, and they said, Have you gotten a return on investment from all of your content, right? Um, well, you know, I've not gotten an immediate ROI on on doing this podcast that we're just launching or doing all of my content, but it's very much of a long-term play play for me of investing in myself, investing in my my personal brand, investing in um my reach, right? It's a it's this is me, the money I'm spending on this is me investing capital um with the idea of having a a some type of a future return in some way, shape, or form, right? Um, and so for me, I will always choose to bet on myself, whether that be in my business with filter buy, um, in my my personal brand, in my skill, in my skill set, um, you know, that's where you're always going to find your your highest return on capital. You know, you're you're not going to be able to get the rate of return in a in a public market that you're going to get from investing in yourself and in the and in businesses that you ultimately control. Um like you think about the rate of return for you from going from um a thousand dollars to a business worth tens of millions of dollars, right? In five years. Massive. Is there any is there any even venture capital investment that you can imagine a thousand dollar investment going to tens of millions in in five years? Like the rate, the rate of return on that is exponential. Sure. Um and so to me that's proof of you know where you're going to get the highest return on your capital. Ultimately, you say, like, okay, well, risk adjusted. Um ultimately what happens is What do you mean risk adjusted? So um if you have a um if you have an investment that um is has a 99% chance of of making a thousand dollars, um, it's a better investment than um a uh a business that has uh one percent chance of making um a hundred thousand dollars. I see. Right. So like risk adjusted, you're like you're you're gonna be you're gonna be much better off taking the thousand dollar options, even though you may make a hundred thousand dollars in the second thing. I mean, obviously it's all relative to price, but I'm giving you the that at a high level. So risk adjusted is like you do not want to take bets, you do not want to make bets that have a high probability or really have any probability of you getting taken out of the game, right? So like there's no bet that I'm going to make that that I believe could be existential to my business or to my life. Um so like that, those are gonna be non-starters. You're never gonna take that bet. You're not gonna play Russian roulette with your business over or with your life. Um, so you know, but with my options trading background, I view life as a as a series of bets, right? Um, I believe the poker player Annie Duke actually wrote a book on it, um, Thinking in Bets. It's a It's a it it it explains this in a in a approachable way, I think. Um but ultimately um you want to be making the highest air like when you when you have optionality in life, like oh I'm gonna buy commercial real estate or I'm going to invest in my business. Um and maybe it's not even maybe you have the capital to do both because you're John and you're super successful, um, but you don't have the energy to do both. Like you chose to put your energy into one and that's at the expense of doing the other, right? Um so you're it how you spend your energy, how you spend your time, um, like you want a return on that, right? And you want to make sure you're maximizing your return on that. Sure. Um, and it's not that you can't make money in real estate, absolutely you can, but um it that that that comes at both the financial and mental load expense um for uh versus something that you understand and um presumably and approvably gotten a very high return on capital on, right? To go from a thousand to uh to um tens of millions in five years, that's a exponential return on capital. So if you could do that again, if you could continue to grow that, don't you think that would be better than anything else you could do? Of course. So why are you going to spend an ounce of energy thinking about or worrying about anything else?

SPEAKER_00 45:14

You shouldn't. Or I shouldn't.

SPEAKER_01 45:16

Yeah. Yeah. And then like as you as you have excess cash, which you're going to have if it that kind of growth, then sure, you can put that in safe investments and whatever that looks like to you, whether that be index funds or commercial real estate, that's fine. But um, I don't think I think you should, I think you're spending way personally, way too much time worrying about that when you should be putting that energy into growing the thing that you know that you understand, and it's already proven that you could have exponential growth. Sure.

SPEAKER_00 45:45

Yeah.

SPEAKER_01 45:45

You got me there. So with you, the you know fear um is the biggest blocker. Sure. So we we we we we we we agree on that. Um and I hopefully today we talked a little about frame for maybe just reframing that fear and just understanding it a bit better because sometimes you just have to understand what you're fearful of, and maybe it's not not so so fearful. Um what are the what are the things you're going to shift over the next three months that are going to allow you to unlock it and put you on the path to well, like number one, I don't know if it's going live, but the last time we spoke on Zoom, you told me to do some research as to where I would put another facility.

SPEAKER_00 46:23

And we did that research, it's in Dallas, like Fort Worth area. Yeah. So like we made the first step into figuring out where do we put it. Uh the next step is just doing it. So in the next few months, we probably will open up another facility. Yeah.

SPEAKER_01 46:36

Yeah. I think we need to work on your lane on your on your language a bit. And it's a it's uh, it's um, you can find this villa. I did I've I went on the um um uh that podcast, um, what's his name? Um, the knowledge project, and and there's what the clip that he that went viral from this, but um you know I don't like I don't like saying I'm probably going to do it. Um it's very it's binary. Either you're going to do it or you're not going to do it. There's there's that you're it's a choice. You're making so are you are you uh are you going to commit to doing it or are you not going to commit to doing it? That's really the question.

SPEAKER_00 47:09

So I will commit to opening up a new warehouse in the next three months. Yeah. I'll let you know. And what and what do you expect to get from that? More space, more customers, growth, breathing room, etc. What are the risk associated with it? The risk associated with it is just um the lease to open up the facility, and that's really it, just the people to work in there. There's not much to it out, honestly. Yeah. I guess my time in doing and setting that up, but we have people that can also do that as well, too.

SPEAKER_01 47:39

And what what are the so so that's that's a great first step because open opening up for lots of reasons in the 3PL business, having having geographic diversity is very important. Um so to get to really get to 100 million, what are the other things that you need, what are the other things that you need to be putting in place today that are going to put you on that path?

SPEAKER_00 47:59

Yeah, it's it's people, space, um, and some marketing involved. I think those are the biggest things. Uh people-wise uh growth. So you need marketing and sales for that, but also more customers, more customers, obviously. Um, but I think we need more infrastructure and like the financial pieces and the accounting pieces of the business too. Because as we make these bigger decisions, it's all like to de-risk the decision, you have to know the numbers behind it to make that decision.

SPEAKER_01 48:26

So, like when we spoke two months ago in that same conversation, what was the one hire that I told you you needed to focus on?

SPEAKER_00 48:33

CFO type of person. Yeah. We're still working through it. I still haven't so like uh I've not found even a good uh like accounting firm for this business yet. It's been driving me crazy all these years. That's actually very hard, yeah, to find like a good accounting firm for a business.

SPEAKER_01 48:48

Well, have you ever done a formal budget process?

SPEAKER_00 48:50

After we spoke about it, I was working towards that. We have not done a real formal one yet, though.

SPEAKER_01 48:56

No. You've done all of this without even really understanding how you're actually allocating capital. You've just been doing it by the seat of your pants. Sure. So you've gotten exponential growth without even having any process to that. Do you think having a process to understand it would make a difference?

SPEAKER_00 49:13

Absolutely. Yeah, process systems and the right people.

SPEAKER_01 49:16

And do you think that maybe that would make you a little less fearful?

SPEAKER_00 49:19

Absolutely. Yeah. Because you're not flying blind? Because you're not flying blind. That's the thing. When you do these things, you're flying blind, and you're not flying in a private jet, you're flying in like a shitty airplane.

SPEAKER_01 49:29

Yeah, a shitty airplane that went from a thousand to tens of millions of dollars in five years. So you have all that success, and and but if you maybe put a little process to it and think about it as an investment or capital allocation, the same way that you do about a commercial real estate investment, um, that maybe um it'll start to look a little bit less fearful for you.

SPEAKER_00 49:52

And be a bigger return.

SPEAKER_01 49:54

And have a much bigger return.

SPEAKER_00 49:55

Yeah, I like it.

SPEAKER_01 49:56

Okay, John.

SPEAKER_00 49:57

Thank you.

SPEAKER_01 49:58

Three months opening in Dallas. Yeah, I'll do that. We're gonna do a butt. We're gonna do a we're gonna do a formal budget and hire some finance for some some finance um structure. Yeah. I think that that that that that's where I think it will un unlock a lot for you. Truly. Absolutely.