Tom Sosnoff on Risk, Trading, and Building Billion-Dollar Companies

Tom Sosnoff is the co-founder of thinkorswim and tastytrade, two of the most influential trading platforms in modern finance.

Before building billion-dollar companies, Tom spent nearly 20 years as an options market maker in the pits of the Chicago Board Options Exchange. In this conversation, he sits down with David Heacock to discuss how trading rewired the way he thinks about risk, entrepreneurship, decision-making, and wealth creation.

They cover:
- Why most people completely misunderstand risk
- The psychology of great traders and entrepreneurs
- Lessons from the 1987 crash and the 2008 financial crisis
- Building thinkorswim from scratch after leaving the trading floor
- Why thinkorswim was profitable from month one
- How tastytrade used content as a competitive advantage long before creator businesses became mainstream
- Why Tom believes content and attention are now the real moat in finance
- His views on retirement, legacy, and building companies late into life
- Why he hates real estate investing
- How options trading changes the speed and quality of decision-making
- Why young entrepreneurs should take far more risk than they think
- His new AI-driven company, Lost Dog, focused on career optimization and wealth inequality

Tom also shares stories from the early days of Chicago trading pits, competing against Interactive Brokers, selling billion-dollar companies, making 50 trades before breakfast, and why he still wakes up every day obsessed with building.

If you enjoy conversations about markets, entrepreneurship, risk-taking, investing, and building enduring businesses, this episode is for you.

Transcript

SPEAKER_01 0:00

Take as much risk as you can. I spent an hour with the godfather of options trading.

SPEAKER_00 0:05

99% of people are thinking about risk completely wrong. Real estate is the biggest bunch of horseshit. I hate anything that's illiquid. When somebody tells me they're retired, it totally turns me off. I can't accept that why anybody would ever retire. If you're hesitating to do something because you think that there's either too much risk or that it's gonna hurt your long-term game plans, it's crazy. 50 trades this morning. So when I said I'm a junkie, I'm literally a junkie.

SPEAKER_01 0:28

Tom Saznoff is the co-founder of Thinkorswim and Tasty Trade, two of the biggest options trading brokerages in the world. Both of us started our careers as options traders before moving to entrepreneurship. This episode is all about how trading completely rewired our brains.

SPEAKER_00 0:43

We actually took all the money we had made in the prior 10 years and we rolled the dice, and we didn't even tell our wives or families or anybody. We just rolled it all into thinkorswim and took a shot around the 1987 crash. So that was the scariest thing. What does an average day in the of life of Tom look like? Well, I'm a junkie. So, like, you know, the combination trading junkie and workaholic, which is bad. But I've moved all our offices up by where I live. So I live in Chicago. Um, do you know are you familiar with Chicago? At a high level. I live just west of Wrigley Field. Okay. And so we moved everything up to the north side, and um we have like a whole compound. And so I, you know, I go to work early and um and I build stuff and I trade. And we do a bunch of live shows, and so you know, it keeps me busy.

SPEAKER_01 1:30

You started off your career um on the CBOE um trading options, is that correct?

SPEAKER_00 1:36

I started my career actually on Wall Street working for Drexel Burnham and right out of college. And I lasted about six or seven months before uh somebody offered me an opportunity to go to Chicago because I was single and I was cheap. And um they said if you go to Chicago, we'll put up the money. And I didn't really know what that meant, and I had never been west of the East River. Yeah. So I I loaded up my car, went to Chicago, never came back. And at Drexel, what were you hired to do? Um, I was hired in their training. They had like this training program right at school, and then they figure out what they're gonna do with you. You know, so it's like you could have been a trader, you could have been a broker, like on a on a an institutional desk. Like they hired maybe like 25 or 30 kids out of school, and um it was 1980, and in 1980, interest rates were like 21%. You couldn't even get a job interview. And so, like, I was a political science major, but I bullshitted my way into that interview and they offered me a job, so I took it. And then when you say somebody backed you to go to the CBOE, yeah, what does that mean? Some some guys I met uh at Trexel put up 50 grand, which I thought at the time was like put up 50 grand, that's 50 grand for you to trade. 50 grand for me to trade in Chicago, but they were also gonna do stuff.

SPEAKER_01 2:50

The reason they wanted to do it is because they wanted to put their own orders in because they thought they'd have an edge from New York, put orders in using my seat because I had to so basically you were going to be the physical person on the seat, and then they were gonna call and give you orders, more or less. Yeah.

SPEAKER_00 3:05

Because it was all happening that that was that was the game plan. They lost all their money in the first two weeks, all 50 grand. I I was up eighteen dollars. You you're you were up eighteen dollars. I made eighteen dollars trading because I couldn't even figure out the language that everybody talked because it was like it was a free-for-all back then. But they lost all 50 grand, so I was out of a job and out of business in two weeks.

SPEAKER_01 3:25

So did you say they lost 50 grand, meaning you you you were trading and you lost 50 grand? No, no, no, no.

SPEAKER_00 3:30

They put on a bunch of positions. I was just standing in a pit trying to learn the just all the terminology, and they put on a couple positions, lost all 50 grand. I got tapped on the shoulder, they said, All right, you're out of here, kid. And I'm like, oh great, that lasted two weeks. So now I'm stuck in Chicago with a year lease and no money, and um and I had to figure it out. So what did you do? Uh I, you know, I I found somebody, luckily, to put up some money for me. Like some some random guy put up a hundred grand, and we had some deal where like I I got like 60% of the first, you know, and then up to like 80%. And in two years I made him, I don't know, like a half a million dollars. So I gave him his money back, bought him out, and I was on my own ever since. So what was your trading strategy? Oh, I was just in the pits. I was uh I was just a you know a market maker. A market maker. I I was totally a market maker. And all I did was, you know, take advantage of whatever um whatever order flow was there. There's no strategy. You just you buy on the bid, you sell on the offer, and you hope you stay busy all day long. And back then it was just it was the wild, wild west. And so then after you gave him your money back, you just started trading for yourself? Yes. And how long did you do that? Twenty years. Twenty years. 19 years till till the summer of 1999. Till the summer of 1999, and you're primarily trading options or any type of future. Options. Well, I was trading, so I was on the SIBO, which is the Chicago Board Options Exchange, but I traded the S P 100. There wasn't really a 500 then. So I traded the SP 100 and we would hedge at the Merck. Yep. But we had clerks that stood in the pit. You know, I I built a prop trading firm over those 19 years. So we had, you know, a couple dozen traders all over the place, and we um we were managing some money. We had a bunch, we had we built a pretty nice little business. Um, we were lucky, we were successful. And were did you have any interaction with the interactive brokers guy? Thomas Oh, Tom Peddafree? Yeah, Tom Pedriffy. Um uh Thomas and I have been competitors for 25 straight years. Yeah. Sometimes I think he hates me, other times he wants to do business with me.

SPEAKER_01 5:33

But um that's a typical Wall Street relationship. Yes.

SPEAKER_00 5:36

I mean, over the years he's called me up to tell me how much he I fucking hate you, and then he's also said, okay, let's do a deal together. Yeah. Um even tried to buy us a couple of times. Yeah.

SPEAKER_01 5:45

Um, well, I just think of him. I like he at least my understanding of his story is he invented like the per like the computer or the I think.

SPEAKER_00 5:52

He was right there. It was between it was kind of, I mean, he had a company called Timberhill, yeah, which was before Interactive Brokers. So he was he was like the first of the high frequency, but there was also another company, Blair, Blair Hall, Hall Trading. They they also were there too. But I think Timberhill was the biggest and kind of the first. And there was a few others, but um Thomas did it first, give him credit, because he was not on the CBO. He, I think he was on the Philly at the time, but Interactive Brokers is, you know, I mean, he's got 80 billion dollars now.

SPEAKER_01 6:24

Yeah, well, I just think of like what you've done. I mean, as you said, you guys are competitors, but it's you know, it's you came up around the same time, it just sounds like to me, and um kind of you went the software route, which I I think he largely did too. So I'm curious, like what was happening in the late 90s that you say, okay, um, you know, software is where all of this is going and where I want to be spending my time.

SPEAKER_00 6:47

Well, well, Thomas and the Timber Hill people, they were software from the start. I don't know if he was ever a really a pit trader. Okay. Um, he was really building software, you know, right from day one. I was in in the pit. So I what I saw was different. I knew I felt we were going electronic. Yeah, and I could sense that the days of open outcry were, you know, the end was near. I didn't know if the end was going to be six years from now or six months from now.

SPEAKER_01 7:16

And for people that don't know it, like you kind of explained it earlier, but open outcry was your edge, more or less. Like that is how you were making money because you had the seat in the exchange, and so you got to see order flow that you know somebody at home wouldn't see, and that probably helped to inform your edge and was uh at least a large part of how you were making money. Is that is that accurate?

SPEAKER_00 7:37

Yeah, it's pretty fair. I mean, there was in the where I traded, there was 400 guys. So it wasn't like they were handing you, you know. It's not easy. It's not it's not it's not easy, but it was a brutal existence. It was it was a I shouldn't say a brutal existence because it was really good. I loved it. I loved every year of it. Um sometimes were obviously better than others, but you learnt a lot. Um it was just a bunch of, you know, kind of it was like a locker room with a bunch of crazy alpha males. Every person was the exact same. Yeah, like it was it was the biggest collection of you had you had lawyers and doctors and high school dropouts and everybody and every single person was exactly the same person. Um, so it was kind of like a a almost of like the weirdest place on earth. And and there was, you know, three or four exchanges in Chicago. Right. So there was 10, probably 10,000, 15,000 traders like that. And they and every you know, 95% wouldn't make it. So so the flow in and out of the pits was just insane. But, you know, I survived.

SPEAKER_01 8:35

So were you at that point writing any software to help you to inform your trading decision? We tried. You tried. It was too hard.

SPEAKER_00 8:42

We did, we built some program trading software that, you know, for basket trading, but um I doesn't, I wasn't, I definitely was not I had a very so my edge was probably my I was quick and I had a very strong math mind. Yeah, but I definitely had no engineering or software experience. So when we decided to leave the floor to build thinkorswim, that was our biggest challenge. How are we gonna find developers, especially in 1999 when that was the dot-com boom, and developers in the US were like, you know, it was the marketplace was stupid. You couldn't find anybody.

SPEAKER_01 9:16

Yeah. So did you actually give up your seat at that point and went all in on Thinkorswim?

SPEAKER_00 9:21

Or were you doing both? Well, I yeah, I actually sold my seat and um because I didn't want any conflicts, and I went all in on Thinkorswim with a partner of mine, Scott Sheridan, and um, and we went, we both went all in. We actually took all the money we had made in the prior 10 years and we rolled the dice, and we didn't even tell our wives or families or anybody. We just rolled it all into thinkorswim and took a shot. So, what gave you the confidence to do that? I haven't we were just risk take we were stupid risk takers. We would we were attracted to risk. So wherever there was the most amount of risk, we'd end up there. And that's and it worked for us. Would you say that's still true today? Yes. Even even that's why I'm still working.

SPEAKER_01 10:06

Well, kind of fast forward a little bit in that you started Thinkorswim, which is an i like iconic platform, and you know, I can still hear today the ads of Thinkorswim by TD Ameritrade, who you who you ultimately um sold it to. So you had a you know a decent sized exit at in 2009. Yeah, what did you do with that money?

SPEAKER_00 10:25

Well, it's funny because so in 2000, so Thinkorswim turned out to be this really fun cult cultish firm, and it was an amazing experience. And we learned how to build technology and all this kind of stuff. But we were a public company in we we we became a public company like 2007.

SPEAKER_01 10:42

So by 2009, you know, so sorry, sorry, thinkers thinkorswim, your software platform, you actually went you actually took that public. Yes, we were okay. I did not realize that.

SPEAKER_00 10:50

So it was before it before it got bought by by TDM Air Trade, it was a public. Yeah, we traded on the NASDAQ under the symbol swim. Okay. And um we and we traded at one point. We were like, you know, we got up over a billion dollars, which remember, in in that time was was a lot. And um, and we were we had a really good growth trajectory. Like we never got in trouble. We had a beautiful platform. Were you profitable or not? We were we were profitable from first month. Wow. We were a cash machine.

SPEAKER_01 11:18

And which is which which to me that's more impressive than the valuation because you look at so many of these software companies today that are not.

SPEAKER_00 11:25

So to be profitable from day one, I think is a we only did one capital raise in 2000 and I want to say 2002, 2003, with a with a private equity firm in Palo Alto called TCV, Technology Crossware Ventures. Yeah. Um, we raised $22.5 million on $100 million valuation and we never touched the money. Wow. Never touched it, we put it away, we never looked at it. And so we were profitable from literally from the first month. I mean, we weren't we were organically profitable. So we just kept going up, but we never had that kind of that, we never had that kind of like Robin Hood explosion or whatever. You know, we were just we were just steady and organic for 10 straight years.

SPEAKER_01 12:03

Yeah. So this there's an interesting piece here that I want to dig into that may not be um obvious, but um you are an options trader. Yeah. Um how do you think um being an options trader changes your how you behave, how your decision process as an entrepreneur?

SPEAKER_00 12:21

Well, it's it's not options have nothing, just being a trader, let's say, because uh it doesn't matter what you trade. Um it just so so we're freaks about the speed at which you make decisions. Uh-huh. And our edge has always been quicker decision making than the next person. So for me, what trading does is it increases your the way you process your way your brain processes things because nobody really has like nobody's smarter than anybody else. Nobody has like this uh this you know this special magic edge or anything. It's just who makes the fastest decisions and who takes the most risk. But the risk is risk has to be probabilistic in nature. So so we are really good at probabilistic risk.

SPEAKER_01 13:02

Yeah. And so this is this is what this is exactly the point I wanted to get into. So I started my career at Goldman Sachs. I was an options trader. Okay. I was uh um I ran the emerging market options trading business in New York. Um and so um I traded options through the financial crisis. Okay. And um I think that going into business after that, the biggest advantage I have is being able to make decisions quickly. Exactly what you just said. But, you know, I think that the thing people have to understand is early on you said I'm a risk taker, meaning you you said for about yourself, I'm a risk taker. Um and I go all in. Um, but then you later tell me you have this business that is a cash machine, um, that you know, you took some money, but you, but you never used it. And what that tells me is that you're taking you're good you're uh good at taking calculated risks. So like you're you're when you when you take risk, you're doing it with the odds in your favor because you're able to think quickly and think through the probabilities quickly to understand like when you're putting money at risk, that it's actually a high probability bet that you're making. Do you agree with that?

SPEAKER_00 14:04

Yeah, I do. But I also was we were very focused on creating free cash flow right from the start, just because we weren't that familiar with raising capital. Like you gotta remember, you go back to 2000, the whole world of entrepreneurship, especially after the dot, remember the dot-com bubble burst. And then we come on the scene in the middle of the dot-com bubble bursting. So we weren't sure how available, you know, capital was gonna be in the middle of a meltdown. Nasdaq went from the Nasdaq composite in 2000 went from 5,000 to 1,000. It dropped 80%. So we're like, we're not sure how you know how easy it's gonna be to raise capital when we need to. So we wanted to create free cash flow. It turned out to be easier to raise capital than we thought because um we were good, we're good promoters. It's always been one of our strengths too. So um, so raising capital turned out not to be that bad, and then we, you know, we were in pretty good shape because we had positive cash flow and we raised capital.

SPEAKER_01 15:04

Yeah, so you know, I'm curious. You say NASDAQ went from 5,000 to 1,000. Yeah. Which, you know, I was a teenager, I guess, when that happened. And I remember I remember when it happened, and I lived through the um, you know, as a trader, the financial crisis. In today's market environment, I think, you know, people um you know, can't couldn't imagine, you know, an 80% drop in a in a major index. Do you think that in the current market environment that's some that's something that could happen today that they would allow to happen today?

SPEAKER_00 15:34

I wouldn't I can't rule it out. They they don't allow things to happen, but they but I do believe that uh since 2008-2009, things have changed um with respect to the amount of liquidity that's pumped in the system so that they try to avoid that stuff happening. Um But I think sometimes, you know, you can get extended to the point where it could happen.

SPEAKER_01 15:58

Yeah, I guess my my point is that you know, I think that if you I don't think that the average person today could withstand an 80% drop in a major index. I think that that would be a like for for you that's something that you lived through and it was fairly normal. And then it it changed um how you behaved going forward, as you just explained.

SPEAKER_00 16:18

And so you were 1987 changed how I behaved going forward. The 2000 actually did not. 2000, we kind of just took it in stride. 2008 almost the same. 1987 was the scary one. The crash in 87, because I was in the pits. Yeah. So why don't you explain um the crash of eighty seven? Well, because the crash of eighty seven, there was nice you know, you were an option trader, so there was no skew in eighty seven. Calls and puts were priced the same way. And so there was no premium built in for velocity of risk. So in 1987, the shit just went everywhere because there was no way to price, effectively price anything, you know, around that, around the 1987 crash. So that was the scariest thing because we didn't know if the money we had at the clearing firms were gonna was gonna be good the next day.

SPEAKER_01 17:14

Aaron Ross Powell Meaning you didn't know that they were going to have the money left to be able to make good on their own.

SPEAKER_00 17:20

I didn't even know if Schwab was gonna be able to open the next day because they were underwater, you know, on Monday morning um the day after the crash. You know, so I didn't even know if the brokerage firms, let alone the clearing firms, you know, most of us had most of the clearing firms we used at the time, like Goldman Sachs. It wasn't really Goldman Sachs, but it's like Spear Leads or or First Options, that kind of stuff. You know, they were Continental Bank. And the rumor was the Continental Bank was going under. Right. Because they were clearing for everybody at the border trade and and the SIBO and the Merck. And so we didn't know if our money was good. Like the trading was a bad enough, but 87 was scary. After 87, everything changed.

SPEAKER_01 17:57

Yeah, but but basically you didn't have like a real-time understanding of risk as a system. And so like you didn't know if your counterparties were going to be able to with the EP more or less. And you know, actually a similar thing happened in 2008, at least on the institutional side, where um like when like I was working at Goldman when you know Bear Stearns and Lehman went under, and then you're sitting there saying, Well, what happens if um you know I have a hedge position, but maybe it's with Lehman or Bear Bear Stearns, and then half of your your hedge goes away, um, and then you're left exposed. And so, you know, how do you deal with that?

SPEAKER_00 18:30

Because that counterparty risk. Yeah, well, we don't deal with we we since everything we do is you know is is centrally cleared at OCC. So on the retail side, we don't have that risk. That's like that's like institutional risk when you go counterparty to counterparty, you know, that's between Goldman and you know and and Lehman or whatever it was.

SPEAKER_01 18:48

Yeah, but you're you're kind of explaining that you're worried that even the the the clearing houses are. In 87 I was worried.

SPEAKER_00 18:54

In 2008, 2008, 2009, I was worried for the industry, but I wasn't worried like like our firm, we we had no we we had risk, but we very manageable risk. And we had, you know, among the we had among the largest kind of retail customer positions, you know. I mean, that's what we were. But um, we were in a good shape. We actually looked at, you know, we we took a serious look. We thought we could, we actually thought we had a chance to buy e-Trade in 2000, in the end of 2008, early 2009. Yeah. Yeah. I remember calling Ken Griffin asking him if he'd sell me a piece of e-Trade, and he said, you don't want it. I did want it, but he said you don't want it, so um, we didn't buy it.

SPEAKER_01 19:34

Well, I guess before we get off the finance stuff, I'm curious when you look at the um, you know, landscape today, yeah, are there any risk that you think could be, you know, fundamental or existential, like, you know, the 90 1987 or 2008, like you have obvious um risk in the system that people underestimated or or didn't see. Is there anything today that you think looks like that from your perspective?

SPEAKER_00 19:59

I don't know that there's anything that looks like it, but I'm sure there is. You know, like like that kind of risk is not something you can predict or you can even talk about. But there's no question that we've reached a level of complacency that scares me a lot. And so I feel like, you know, complacency and leverage is there's a lot of money borrowed and there's a lot of complacency out there. I it it could be a recipe for something bad. Um but you know, I mean we're at record highs. So it's it's a hard argument to make right now. You know, yeah, it's a hard it's a hard game to play. You can't really play that.

SPEAKER_01 20:36

Yeah. I mean, and kind of what I was alluding to before, whether or not they allow this to happen, like ultimately means that anytime something bad happens or people default, it seems that the Fed or the government comes in and ultimately pumps the system with liquidity and keeps it from keeps it from defaulting.

SPEAKER_00 20:55

Well they didn't know that until 2008, 2009. They figured that out. Um until then, you know, yeah, I think it was a different risk.

SPEAKER_01 21:02

So one of the things that I admire about the most about you is you seem to have been early in the create the content game as a marketing um exercise for to sell whatever product it is that you're you're building, in your case, software. Yeah. Um so can you walk me through your your thought press process on that? Like when did you when did when did you um start utilizing that strategy?

SPEAKER_00 21:25

After we sold Thingerson. So when we built Thingerson, we were focused on technology because we thought that would be our edge. You know, I mean remember that most most financial technology is pretty it's commoditized now. But um when we built Thingerson, we had a technology edge, we thought, based on our know how and based on kind of product knowledge, that kind of thing. After we sold it, we thought that one weak spot out there was content. You know, financial financial content was Bloomberg, CNBC, that kind of stuff. Um And everything was to me was fundamental or technical. That was it. Those were your two choices. You could get somebody to tell you what they were thinking. Like, like I don't care what anybody thinks. Like it drives me crazy that people interview people to ask them, what do you think? Who gives a crap what somebody thinks? Like, so fundamental stuff to me makes no sense. Like I don't care why you think the way you think. And the technical stuff I've never believed in. I'm not a technician. You know, I could care less about charts or anything like that. So so I thought there was going to be a marketplace for for quantitative slash slash math. So t basically kind of reverse engineering a black-shoals model to create a challenge for customers to tell them, hey, you know what? Here's the expected move. That's all you need to know about. In the in the world of investing, once you know what the expected move is, you can pretty much do everything. So we built an entire kind of our whole thing was no news, no guess, and let's just have fun talking about ourselves and just bullshitting, you know, whatever, food, sports, whatever it is. And then we'll and then we'll talk about math. We just hired a bunch of crazy mech math geeks to do an insane amount of research. And so our whole network was math and kind of fun stuff. And how were you distributing that? Just over the internet.

SPEAKER_01 23:26

So this was like before YouTube Live or YouTube. So you were just like live streaming on the internet, basically.

SPEAKER_00 23:32

Yeah, live streaming. And it took one year to be the largest digital financial network in the world. Took us one year. And what year was that? 2011. 2011. And nobody else was doing it then. There was no such thing. So it was kind of cool. You started Tasty Trade on the back of that, or you did it at the same time as that? No, we started Tasty Trade uh six years later. So this was Tasty Trade, but in 2011, it was the network. Okay. But but originally we didn't want to do the content. We wanted to hire a bunch of comedians from Second City. And so we went out and we hired like a dozen comedians from Improv Olympics in Second City in Chicago to create the content for us because we thought it would be way better. So comedians creating mathematical trading content. Well we had we had we had a think tank. We had a think tank of a bunch of PhDs and and and mathematicians behind the scenes that were creating content for these. That's fascinating.

SPEAKER_01 24:29

So they were they were coming up with concepts and then basically giving them to the comedians to deliver them.

SPEAKER_00 24:36

Yes. And then we hired a couple of shock jocks from the sporting world, from like um uh you know, sports talk radio to help to help everybody get together. And that was kind of our game plan, how we're gonna launch a network. Well, it turns out that all these comedians, as funny as they were during their stand-ups and everything else, were absolutely horrible together and they didn't like each other.

SPEAKER_02 24:56

Yeah.

SPEAKER_00 24:56

So so we never launched. And the day like a week before we were launched, myself and my buddy Tony and a couple other people, we took over the whole network. And we just did it for the next 15 years. And you started doing it yourself. You started ourselves. You're like, okay, we're gonna be the best. We gotta be better than these guys. We kept them. We we didn't get rid of anybody. We kept them and they all quit because they didn't like getting up at six, they didn't like coming to work at 6 30 in the morning.

SPEAKER_01 25:22

That's fascinating. Anybody from that from that era that has gone on to make it big that you can talk about in in as a comedian? As comedians.

SPEAKER_00 25:29

Oh, yeah, a lot of them. One um, a couple of them ended up on, I think two of them ended up on Parks and Recreation, Parks and Recreation, the show. Um, another, they're they're all over. Like one person made it to Saturday to Saturday Night Live. Um, yeah, I mean, I'll tell you, we I gave you a good story. So we we when we left, I think or something we started Taste Two, we rented a hip-hop studio in that had gone out of business in Chicago, and it was a really cool studio. And we're like, okay, we're gonna figure out this. We know we can build technology, but we have to figure out this media stuff. So we ran to this hip-hop studio and we started interviewing comedians because that was our first thing. So we interviewed about 25 of them. And we couldn't tell the difference because they didn't know that every comedian in Chicago knew each other, and they all had kind of the same thing. We couldn't tell the difference who was good. So what we did was we said, we kind of pulled the the old Zappos thing. We said, we're gonna give each one of you, and they were all starving. So we're gonna give each one of you 2,500 bucks to come back here in two weeks and do your best piece. And we gave them a topic, each one a different topic. And we said, if you don't want to come back in two weeks, just keep the 2500 and we don't care. And if you come back in two weeks, we we're gonna pick the top six or eight of you. And they all came back and we picked the top six or eight, and that's how we uh started. And now none of them, some of those went on to be, you know, second it went on to uh Saturday Night Live or Parks Recreation. There was a couple, the couple of them made made it pretty big and you know, different things, and but none of them in the financial world. So when did you decide to turn that into a software business? Um well, so we needed a revenue model. Um, and we decided we we had partnered with TD when we left TD, and so we made a deal with them where we would send them customers, content marketing. Right. And they paid us a lot of money because we sent them really good customers. And after we signed a five-year deal. And after the fifth year, they said um we'd like to extend it. And we're like, we knew we were good, we knew we did a really good job for them, but we didn't know how good. And they said, you know what? Better than extending it, we're just gonna buy you. We're like, okay, how much? They go, Well, we've thought about it and you're worth $200 million. Because remember you mentioned that number already this morning. Well, that that's what they offered us. Yeah. $200 million. Now we're five years into this new thing, and they offered us $200 million for the network. We're like, if they're offering us $200 million, we must be worth a ton more than that. Because these guys just don't go around writing $200 million checks. So we declined. And we said, no, thanks. Um, we're gonna do our own thing. And we decided to um because we hadn't even spent any of the money we made on Thingerson. And so we decided that we would um build another brokerage firm. And went all so you so you constantly bet on yourself. We bet on ourselves again. We had the same team. So everybody that built Thingerson was now a Tasty. Same CTO, same CFO, same co-founder. Everybody's the same. So we built Tasty from scratch, and then four years later we sold it for $1.1 billion.

SPEAKER_01 28:40

That that was last year, is that right? Or no, that was that was five years ago. Five years ago. Oh, okay. So we launched. Sorry, you sold it five years ago, but then you stayed, you stayed working.

SPEAKER_00 28:49

Stayed for four years. Stayed for four more years. Because I wanted, first of all, I wanted it to be a good trade for those guys because I like giving people like like Tasty now is probably worth double what we sold it for, and think or something is probably worth 10 times what we sold it for. Um, I like making good trades. And I like, you know, and and I also loved everybody at the company. They were all we're all friends. We've been together, some of us have been together for 40 years. So we um uh so I stayed on, and then eventually, you know, I it wasn't my thing. I had to, you know, I had to leave. I had no control. I was the largest shareholder of a publicly traded company in London, but that didn't do anything for me. I'm still the largest shareholder. I I don't really care. So you've kept your stock?

SPEAKER_01 29:32

Some of it. Not all of it, some of it. Yeah. I actually think the first time that I got served your content, um, I I had kind of aware who you were, then I got served your content when you when you did the video saying you were leaving uh tasty trade and then you were going to um do something, something, something new. Um and so why don't you um tell me about your new project?

SPEAKER_00 29:55

So my new project's called Lost Dog and L O S S D O G. And I decided um one because I want to do something different, um, that we're gonna build like a trading app, but without the trading. And so a trading app without the trading. Without the trading. Seems a little counterintuitive. I know. It's it's kind of when I say trading app, it just looks like a trading app. But it's really designed to opt. We have this something that's always bugged me is um the wealth gap, like wealth inequality. It always bothers me what CEOs get paid, like when they get paid, you know, 20, 50 million dollars a year and the some, you know, the average employee gets 80,000 or 100,000. So the wealth gap is like the wealth inequity has always been a just bug me. Like we never paid ourselves as CEOs or founders. We just took that at the end we you know, we cashed out. But um so so I wanted to do something like to work on to see what I can do on wealth uh on wealth and equity. So we decided that the whole issue you can't legislate, you can't mandate change. Like it's just it's impossible. So what you have to do is it has to be some form of context or education to narrow the wealth gap. So our premise is that most people are underpaid over the course of their lifetime. And they're underpaid because they don't know what they're worth. It's that simple. So the average person, I think it's about two million dollars. But for the people that we talk to, meaning that they over the course of their life underpaid by $1 million. Yeah, yeah, and that's compounded over 30, 40 years, whatever it is. So it's not like some crazy number, it's like, you know, 10,000, 15, 20,000 hours a year.

SPEAKER_01 31:37

Yeah.

SPEAKER_00 31:37

But um but a lot of people that we talk to, it's much more like six to twelve million because it's just a different, you know, it's like a different demographic a little bit. And so and and the reason is just people just don't know. And so we thought, well, one of the cool things about AI is we can build stuff now that can suck up a lot more data, and we have a you know, a gazillion data points, and we can actually give people a pretty good idea of what they're worth and how much money they're leaving on the table, and that might help to narrow the wealth gap over time. That was the premise.

SPEAKER_01 32:12

Yeah.

SPEAKER_00 32:13

Um, which we thought is interesting, but it's not enough. So we also built in portfolio optimization. So so you can optimize your career and you can optimize your portfolio on Lost Dog. And we're adding a lot of portfolio optimization tools, you know, with the help of agentic AI and and lots of other things. And for me, it's just you know, cool to build something new.

SPEAKER_01 32:36

Yeah, so when you basically like you can that could become your brokerage, more or less. Like you can We could, but you're not currently. So I currently you're just like on top of somebody's brokerage and saying, hey, this is what we think is.

SPEAKER_00 32:48

Currently, we haven't we haven't announced who we're gonna partner with. We're about to announce it. Got it. Um in the next two months, we will announce who we're gonna partner with. And that will be something, you know, that I think will be very valuable to to our partner, but that's how we'll create some revenue. I mean, makes sense.

SPEAKER_01 33:04

Yeah.

SPEAKER_00 33:04

So have you actually launched a product yet? Oh yeah. Yeah, we're just rolling it out now. There's there's um about 25 or 27,000 people on a wait list right now. Wow. And so we're just rolling, we we've rolled out the first, I think, 2500 or 3,000. This week it'll be we'll be up to 5,000. And so, you know, 5,000 people.

SPEAKER_01 33:24

So walk me through the the content play for this. So, like you're at least my understanding from what I can see is um you're building your content engine, yeah, which is going to you know lead to your customer flow, which didn't you ultimately put yeah put on your product? Um, so walk me through what that content looks like.

SPEAKER_00 33:42

So it's a combination of of investment and trading content and a combination of career content. So we do them both. And so we have um we built uh uh massive like stage and you know production facilities in in Chicago. Um and we produce an hour live show per day now. Now Tasty was Tasty Live, we did 12 hours a day. So this is nothing. An hour a day is easy. Um so we're just doing an hour a day right now uh because we want to keep it, you know, and we're also creating a lot of like a lot of just kind of production produce pieces, um, which have been very popular, covering a bunch of different topics on like careers, do's and don'ts, things like that. Um and we're just building up our, you know, we're building, we're just letting people know we're still around. I mean, we've we've had almost 1.5 billion of our videos watched over the last 16 years. So it's a big number. Big big number. And you're and you're primarily doing that through YouTube or uh YouTube, our own stuff, yeah. Mostly, I mean, more YouTube than anything else right now. But we use kind of everything a little bit, mostly YouTube.

SPEAKER_01 34:52

And that hour long um live stream is you and who else?

SPEAKER_00 34:55

My partner, Scott Sheridan, who we've been together work building stuff together since 1988. Wow. Um, and uh and then this there's a woman that um uh we we've been friends, we've worked together for a long time. So her name's Sol, she's um she kind of lightens it up a little bit for us. Yeah. And so how do you decide what you're going to focus on any given day? I pretty much write the script. It's actually it's not a script, just the outline. It's not hard. We we're used to doing it. Is it just a muscle? It's a muscle that you built. Yeah.

SPEAKER_01 35:28

So so it's natural for you. Yeah, it's natural.

SPEAKER_00 35:31

Yeah, this isn't uh we we haven't really got to the point. Like there's a there's a ton of content that I want to push out in this, but I'm waiting till we announce who our marketing partner is. Then our stuff will blow up. Makes sense.

SPEAKER_01 35:45

Yeah, I mean, like as we were kind of talking a little bit before we started recording, the um, you know, from what I can see is there's been a massive investment in, you know, content or or around content businesses. And it seems to be something that is like in the world of AI, more and more people think that, you know, content and attention and attention really is the scarce resource um that you know everybody is trying to to build um and it's getting harder and harder to do.

SPEAKER_00 36:14

Yeah, well, it's a it's a differentiator. You know, like as technology, technology's becoming very commoditized. Yeah. And if you think about the financial world, fees have been completely commoditized. They're all the same everywhere. And the technology is pretty much commoditized now. So what is different? You know, it's content, and everybody's trying to get in the content game.

SPEAKER_01 36:34

Yeah.

SPEAKER_00 36:34

Um, you know, I mean, when you see Schwab doing content, you know, you know, or a black rock or black rock. Yeah. Yeah. I mean, you know, like it it kind of cracks me up. But um Me too. Yeah. I mean, nothing I couldn't imagine something I I couldn't imagine having to sit through a black black rock content. Yeah.

SPEAKER_01 36:52

Yeah, but somehow they still get some distribution on on YouTube or whatnot. They do. I don't know how.

SPEAKER_00 36:57

I I I I don't know how.

SPEAKER_01 36:59

Yeah. So, you know, you you mentioned early on that you're a junkie, and that's what keeps you doing it. I mean, obviously you're not doing it for the money at this point in in your life.

SPEAKER_00 37:08

I'm doing it for the I I want it, there's a legacy thing to me. It's not yeah, the money is yeah, I have generational wealth, which I'm not bragging about just saying that's what I have, so I don't really care about that. You know, my kids are taking care of their their kids, everything. Like that's not that's not the issue. For me, though, there is a legacy piece to it. I want to be remembered as a really good entrepreneur. You know, there's you know, we've had five exits. We've had two exits of around a billion and and two over a hundred million. And, you know, we want to have a couple more. And just because I think that's a good cool legacy.

SPEAKER_01 37:43

So you basically you want a couple more big exits, is what you're that that is what you're shooting for.

SPEAKER_00 37:50

I don't care what it is. I just want it to be like I like to have a good story. It's a good story. Well, I think you already have a good story. I know, but I like more. You know, I'm not I'm not being gre I don't care. Like I said, I don't care about the money piece to it. I just like building stuff that that other people can take and run with it. You know, m fun for me is building something. Do you think you'll ever retire? No, never. No, I'm actually very opposed to the whole concept of retirement. It's a it's a pet, it's a really bugs me. I can't even when somebody tells me they're retired, it totally turns me off. Like I can't accept that why anybody would ever retire. It's just not it, I can't, I don't get it.

SPEAKER_01 38:28

No, I agree with you. I mean, I think that we're, you know, on the time we're on this earth, we're we should um be looking for ways to provide value and to um add to society or to the people around us.

SPEAKER_00 38:38

And um I mean, if we're lucky enough to make it into the mid-90s or 90s, you should be building something, whatever. Building something new, never ever, like why would anybody ever retire? It makes zero sense to me.

SPEAKER_01 38:48

So if you had one piece of advice for like a young young entrepreneur that was looking to um, you know, make their mark or to start their journey um, you know, and build to build something meaningful, what would it be?

SPEAKER_00 39:00

To just do it. Take as much risk as you can into it. I mean, my advice for young people is always, you know, like you, there's there's no chance that anybody in their 20s, even in your 30s, has really begun like the whole journey of wealth creation. And so if you're even thinking about, if you're hesitating to do something because you think that there's either too much risk or that it's gonna hurt your long-term game plans, it's crazy. I mean, whatever chance you have to do something where there's where it it could turn into something else, you should do it.

SPEAKER_01 39:36

Yeah, I completely agree. I mean, I I talk a lot about what drives me is that at the end of the life, at the end of my life, I know I will regret the things that um I didn't do uh that I feel like I should have, and not the things that I tried and failed at, you know. I mean, and so you know, I very, very much am driven by by that.

SPEAKER_00 39:54

And failure is a good thing because it just, you know, A, it motivates you, and B, it it um, you know, you you can't you have to have a ton of failures. We have failure. We we fail all the time at stuff. We don't talk about it, but we do. But um, you know, I mean, who cares?

SPEAKER_01 40:12

Yeah, but the only way you're gonna find the things that work is by putting yourself out there and and you know, trying things that maybe are not so obvious.

SPEAKER_00 40:22

Yeah, I think so. And that's why, you know, we'll also invest a lot in str we invest strategically a lot, like in different businesses that we think have some relationship or they're strategic in some way to us, like it might be AI or you know, data science or or crypto or um quantum or something like that. You know, we we'll invest in everything we can get our, you know, if there's an opportunity for us in in a private world, just so we can learn.

SPEAKER_01 40:50

Yeah, makes sense. Yeah, before I let you go, actually, I'm curious. Like, how do you manage your money? Like, obviously, you are very much, you know, all in on your businesses and you've rolled that forward, which which I understand. I'm very much the same way, but um, what do you do with the rest of your money? Like, how do you manage it?

SPEAKER_00 41:07

How do you think about it? Um, so I manage it myself, even though I have like bankers and stuff like that. I don't use them other for other than for cash management. That's it. So I manage all my own investments. Um we have like a family office. And so um I work with my daughter and um and we basically I choose the investments and she yells at me.

SPEAKER_01 41:37

And when you say you choose the investments, like what is your average like holding you know, time? Like it's something like your like long-term, you know, SP indexing? Are you constantly trading? No, I'm constantly trading.

SPEAKER_00 41:48

I I make to still to this day, like I've already made 50 trades this morning. So so I when I said I'm a junkie, I'm literally a junkie. You know, I probably made 10 or 15 trades overnight. You know, like so, so I uh do you automated it at all, or is it it's it's all it's all manual? Yeah. Yeah, yeah, I'm a manual trader. And you're mostly trading futures or I trade well last night I'm trading futures this morning trading futures, but during the day, you know, options and futures and options on futures. And um yeah, I pretty much trade anything. I trade stocks and I obviously trade a lot of options, but um, it keeps me really engaged, you know, in the markets and stuff. But when I invest, I invest in mostly in people.

unknown 42:28

Yeah.

SPEAKER_00 42:29

People and, you know, I I like to give young founders money. Not a not like a ridiculous amount, but I like to give young founders money if I like them and see what they create and if they're smart.

SPEAKER_01 42:42

And is there like a particular sector or group of sectors that you invest in, or are you just you're investing only in the person and they're gonna go figure it out?

SPEAKER_00 42:50

Yeah, like yeah, I don't have a big deep network. I don't I'm not really good at vetting things. So sometimes I'll like it if somebody else has already vetted it, you know, and and I'll say, you know, who's invested in you? But most of the time I'm like, you know, they want us, me to invest so that they can get other people to invest. You know, that that's which which I understand. It's totally cool. Yeah. So do you have any like real estate investments or I'm a horrible real estate investor. I only have the places that we own and live in and our our our office. Like we own our our kind of our compound. But um, other than that, I have never made any money in Chicago in real estate ever. Ever. Not a penny.

SPEAKER_01 43:31

You you and me both, but it's amazing how many people I'll have on here that, you know, their dream, but they they're entrepreneurs, they build a business, and their dream is basically to be in real estate.

SPEAKER_00 43:39

Real estate is the biggest bunch of horseshit. I I can't first of all, I hate anything that's illiquid. And second, I hate everything about real estate. I hate the illiquidity of it, I hate the fee structure of it, I hate all the bullshit with respect to pricing and everything else. It is, I don't understand why anybody ever buys anything other than to live there.

SPEAKER_01 43:59

Yeah, but they but They also all those things are true. And on top of it, it's oftentimes heavily levered.

SPEAKER_00 44:05

Yeah.

SPEAKER_01 44:05

And which which makes it even makes it even riskier. But like I had a young kid, um, actually in the first podcast that we did here, um, that you know, is effectively afraid of opening a new location in his very high cash-flowing business. Um, but at the same time, he's going and buying a six million dollar piece of commercial real estate with a four million dollar debt, you know, debt with a five-year, um, five-year, you know, balloon payment on the on his interest rate. Um, which to me, as an options trader, I view that as uh heavily risky.

SPEAKER_00 44:34

No, I I own zero real estate other than where I live, you know, that kind of stuff.

SPEAKER_01 44:39

So much of the finance education on YouTube is real estate centered, at least from what I can see. I mean, like and that's what I that that's what I'm trying to get. I find that so odd.

SPEAKER_00 44:49

I think it's because there is this you know, i if you go back to like my parents' generation and my generation, actually, it was always, you know, you know, buy your house, you know, own your house and you have something and it's kind of your nest egg and everything like that. I don't think kids today view the world that way, and they shouldn't.

SPEAKER_01 45:08

Well, I view it as it's been an interest rate trade. I mean, as you said in the early 80s, interest rates were 21%, and and you know, they they you know went to effectively zero four or four or five years ago, and still now, you know, four or five percent still still fairly low. And spent that whole time real estate values have gone up, but it's really interest rates have just come come down. Um, and I think a lot of people benefited from that trade. And so if you look in the future, it's unlikely to be the same trajectory that it was in the last 30 years.

SPEAKER_00 45:36

My first mortgage was 16 and a half percent, and I had to I had to negotiate. I mean, that was like a battle to get 16 and a half percent. Yeah, I never thought we'd see 7%, let alone you know, zero. It's kind of crazy.

SPEAKER_01 45:48

Well, Tom, is there anything we didn't cover that you wanted to get off your chest today?

SPEAKER_00 45:53

No, it's your show. I mean, it's fun. I mean, this was great.

SPEAKER_01 45:56

I appreciate it. Well, I really appreciate you joining me, and um, I can't wait to see what you do with Lost Dog. I mean, I think that it's uh it's a curious idea. I can't wait to see either.

SPEAKER_00 46:04

I have no idea either. So we're yeah, you know, we're we we both want to see what happens to it.

SPEAKER_01 46:09

Yeah, well that's that's the fun part of being an entrepreneur, is you ultimately get to take the journey with everybody else and and you know, make something be that, you know, um you don't even know what what it what the final form is going to be yet, but you're gonna you started that journey, which is the fun part.

SPEAKER_00 46:24

Yeah, when you get a when you've been doing it for long enough, you get you get the one advantage you have getting older is you have a little more duration. Like like you know, like when you're a young, uh 23-year-old or 25-year-old entrepreneur, you have a very short window. Yeah. You know, when when you're in your late 60s and you're building something, you got a long window.

SPEAKER_01 46:42

I think one of the hardest things being a young entrepreneur and something I struggle with and still struggle with is patience, you know. I mean, in that um, like when you look at what you can do in 10 years or 20 years, um then you're always shocked when you look back at how far you've come. But like in the moment over that one year period, it feels like you're moving so slow or you're not really making any any progress. And um, I think if you're able to kind of zoom out a bit and have that longer duration or that longer time horizon, um, that you can actually um accomplish a lot more with with less stress because you're not, you know, not so focused on kind of the short-term.

SPEAKER_00 47:17

Yeah, young entrepreneurs have the the real disadvantage is they don't have a network yet. So they they could be super smart. They just don't have the network that you need. And that network takes, you know. That's why I like entrepreneurs that are in like, let's say, mid-30s to mid-40s. Like that's the perfect range because you start to have, you know, a network that you you start to know people and you've learned a lot, you know, you've had a lot more mistakes, that kind of thing.

SPEAKER_01 47:45

Yeah. I think actually statistics show that entrepreneurs in their like early to mid-40s are have the highest um success rate, if I'm not mistaken. Yeah. That um that kind of a misnomer that it's that the earth the 20-year-old in their college dorm room being successful, I mean, is the outlier. Yeah. It's actually people that that are generally later on that have more experience. But I think like, you know, one of the other takeaways that I have from this conversation and from you, but you know, you and both of your exits, um, you stayed with them and helped them to um, you know, grow their value and you know, one times times 10 in the TDM error trade or double and tasty trade. Um, but that shows um that's how you build a reputation, right? It's by by going through and and doing that and and um leaving the leaving everybody better off than you call it honoring your trade. Yeah, honoring your trade, but being leaving everybody better off um for having had a relationship with you or or done business with you. And then that's all over time how you that compounds and and that leads to other good relationships, but which leads to future opportunities. So it's being long term greedy. Like it. So thank you, Tom. I really appreciate it.