Meeting Charlie Munger and Starting RE Costseg with David Senra and Mitchell Baldridge
This episode covers a range of topics, including dedication to creating the world's greatest podcast, meeting influential figures like Charlie Munger and Sam Zell, insights on Costco and conversational resourcefulness, podcast success and learning from experience, the future of podcasting, keys to podcast success and business fundamentals, podcast branding and engagement strategies, meeting influential figures and learning from experience, Jeff Bezos, technology entrepreneurship, and software investing, software innovation, capital allocation, and future impact, building a successful business and trusting your judgment, seeking information, ignoring negativity, and building successful businesses, building a self-funded business and raising patient capital, sponsorships, partnerships, and starting a new business, building successful businesses and trusting your judgment, trusting your judgment and focusing on value creation, effort, focus, and creating the world's greatest podcast, podcasting as a great business and investing in craft, upcoming event and gratitude to listeners
Podcasting is a low-status job with great potential for wealth creation
Despite being considered a low-status job by some, podcasting is actually one of the best businesses in the world with great potential for wealth creation.
Learning from experienced individuals like Sam Walton and Jeff Bezos is valuable
Focusing on new ideas constantly is unrealistic; learning from experienced individuals like Sam Walton or Jeff Bezos is valuable for entrepreneurs.
Building trust at scale is important for podcasters
Building trust at scale is important for podcasters like Chris Power to attract and retain listeners.
Software investing and venture investing are diverging
Software investing and venture investing are becoming separate things, with software companies having the potential to start earning money early on.
Successful entrepreneurs trust their own judgment
Successful entrepreneurs trust their own judgment and do not let other people's opinions interfere with their thoughts.
Ignoring negativity and focusing on value creation
Ignoring negative comments and focusing on providing value and solving problems are important strategies for success in business.
Building successful businesses with patient capital
Building successful businesses can be done with patient capital, without the need for traditional sponsorships or affiliate deals.
Podcasting has low expenses and great potential
Podcasts are great businesses because they have low expenses and great potential for growth and success.
Effort focused on one thing yields increasing returns
Effort focused on one thing yields increasing returns, and maintaining intense focus is crucial for success in the age of leverage.
Gratitude to listeners and excitement for upcoming events
The hosts express gratitude to their listeners and excitement for upcoming events, including a meetup in Miami.
- Dedication to Creating the World's Greatest Podcast
- Meeting Charlie Munger and Sam Zell
- Costco and Conversational Resourcefulness
- Meeting Charlie Munger and Podcast Success
- Charlie Munger, Sam Zell, and the Future of Podcasting
- Building a Successful Podcast and Business Insights
- Keys to Podcast Success and Business Fundamentals
- Podcast Branding and Engagement Strategies
- Meeting Influential Figures and Learning from Experience
- Jeff Bezos, Technology Entrepreneurship, and Software Investing
- Software Innovation, Capital Allocation, and Future Impact
- Building a Successful Business and Trusting Your Judgment
- Seeking Information, Ignoring Negativity, and Building Successful Businesses
- Building a Self-Funded Business and Raising Patient Capital
- Sponsorships, Partnerships, and Starting a New Business
- Building Successful Businesses and Trusting Your Judgment
- Trusting Your Judgment and Focusing on Value Creation
- Effort, Focus, and Creating the World's Greatest Podcast
- Podcasting as a Great Business and Investing in Craft
- Upcoming Event and Gratitude to Listeners
Dedication to Creating the World's Greatest Podcast
00:00 - 06:57
- The host expresses his dedication to creating the world's greatest podcast and his willingness to invest all his resources into it.
Meeting Charlie Munger and Sam Zell
06:32 - 12:39
- Charlie Munger's advice on having cash and being able to move fast is discussed.
- The host introduces David Senra, the host of the Founders Podcast, who recently met Charlie Munger.
- David shares his experience meeting Charlie Munger and how it has changed his life.
- The speaker had the opportunity to have dinner at Charlie Munger's house and spend three hours with him.
- Charlie Munger is a multi-billionaire and the speaker felt that spending time with him confirmed that he was on the right path.
- The speaker also had lunch with Sam Zell, another billionaire, and was impressed by his knowledge and familiarity with obscure figures and events.
- Charlie Munger emphasized the importance of minimizing or maximizing variables in business, learning from history, finding what you're best at, aiming for durability, and taking simple ideas seriously.
- The speaker was starstruck being in Charlie Munger's library and house.
- Charlie Munger is known for being frugal and controlling costs.
Costco and Conversational Resourcefulness
12:17 - 18:22
- The speaker discusses someone who loves a deal and mentions their admiration for Jim Cinegal, one of their favorite founders.
- They highlight the economic surplus created by Jim's unique business model at Costco.
- The speaker shares a story about their wife's family being loyal Costco members for 27 years.
- They express appreciation for Jim Cinegal's commitment to keeping the price of the hot dog low at Costco.
- The speaker talks about a viral tweet they posted featuring a picture of a Costco hot dog as the last remaining stable coin.
- They describe how the tweet gained significant traction and went viral, receiving thousands of likes and attention from various people.
- The speaker mentions David Trung helping them write the post and discusses conversational resourcefulness as an interesting concept learned from Paul Graham's essays.
- They explain that conversational resourcefulness is correlated with company performance and reflect on how it influenced their podcast episode title choice.
- The speaker praises Andrew and Chris for their intelligence and attention to detail in how they move, comparing them to other smart players in the industry.
Meeting Charlie Munger and Podcast Success
17:54 - 24:00
- The speaker discusses their unique experience and background, including being able to compare with Charlie Munger's insights.
- They highlight the value of having a sophisticated audience that can provide assistance and support.
- The speaker mentions the success of their podcast in terms of new listeners and rankings.
- They talk about collaborating with someone knowledgeable about Twitter to improve their presence on the platform.
- The speaker shares how they reached out to influential people for support in promoting their podcast episode featuring Charlie Munger.
- They express surprise at the overwhelming response and engagement the episode received.
- The speaker explains how they prepared for the interview by seeking advice from a researcher friend and coming up with unique questions.
- They mention feeling starstruck during the interview but being able to contribute due to their knowledge of books behind Charlie Munger.
Charlie Munger, Sam Zell, and the Future of Podcasting
23:30 - 29:25
- Charlie Munger has an incredible recall of historical events because he personally knew the people involved.
- Charlie enjoys connecting with young entrepreneurs and invites them to his house for dinner or Zoom meetings.
- Despite being wheelchair-bound, Charlie Munger continues to engage with intelligent people and help them.
- Charlie recognizes that young entrepreneurs like Andrew Wilkinson and Chris are building the future version of Berkshire Hathaway on the internet.
- Chris and Andrew are capable of learning from history, which sets them apart from most people.
- Podcasting is considered a low-status job by some, but it is actually one of the best businesses in the world with great potential for wealth creation.
- People often dismiss or make fun of industries that later become highly valuable, just like they did with cars in the past.
- Sam Zell is incredibly curious about podcasting and asks many questions about its business model and potential.
- Sam Zell's curiosity and hunger to learn have contributed to his success as an entrepreneur.
- Sam Zell feels obligated to pass on his knowledge and experiences to the next generation without taking money for his speeches.
- Both Sam Zell and Charlie Munger inspire the narrator to be more excited, curious, and hungry in their own work.
Building a Successful Podcast and Business Insights
28:56 - 35:08
- The speaker wants to be as excited, curious, and hungry to learn as Charlie Miller.
- Charlie Miller is still interested in what's happening in the market and on banks.
- The speaker's life has changed in the last year, with people knowing who they are and seeing their awesome work.
- Chris Power is an impressive person who takes his podcast seriously.
- Podcasts have economic impact and can reverse the flow of investment.
- Building trust at scale is important for podcasters like Chris Power.
- Sophisticated people building businesses on podcasts appreciate the advice given by David Moog.
- Metrics don't matter to the speaker; they focus on creating amazing content that people love.
- Audio is a medium for energy transmission, and the speaker will continue doing it forever.
- Mitchell highlights how few people spend five years building a great podcast in anonymity.
- Entrepreneurs should learn from those who came before them, like Sam Zel.
Keys to Podcast Success and Business Fundamentals
34:46 - 41:08
- Borrowing money to buy equity in a company with a high valuation is likely to fail.
- There is a fundamental mismatch in business models like WeWork, where long-term commitments are paired with short-term customer cycles.
- Building a successful podcast takes time, money, and perseverance.
- Many people underestimate the difficulty of building a podcast and expect quick success.
- Podcasts require valuable content and effective branding to attract listeners.
- Skipping important steps like creating valuable content and establishing branding can hinder podcast growth.
Podcast Branding and Engagement Strategies
40:45 - 47:17
- Creating a podcast that is worth listening to can be daunting
- Building a strong brand is important in the world of infinite scrolling
- The name of the podcast should convey information and grab attention
- Investing time in branding can change how people feel about the podcast
- The wrapping paper, or branding, matters as much as the content itself
- Podcasting allows listeners to feel like they are part of a community
- World building in podcasts is crucial for engagement and connection
- Matching the medium to the content is important for maximum impact
- Text-based clips on social media platforms can be more effective than video clips
Meeting Influential Figures and Learning from Experience
46:51 - 52:51
- The CEO of Colossus, Matt Russell, tweeted about a podcast episode with Doug Leone, prompting the listener to listen to it sooner.
- Charlie Munger's communication skills are impressive as he simplifies complex ideas and makes them memorable.
- Meeting your heroes can be rewarding when they live up to your expectations, as was the case with Charlie Munger.
- David mentioned that some speakers' ideas become less appealing the more you hear them, while Charlie Munger's ideas remain excellent and distilled.
- Focusing on new ideas constantly is unrealistic; learning from experienced individuals like Sam Walton or Jeff Bezos is valuable.
- Entrepreneurs should prioritize their customers over investors and learn from successful business leaders like Jeff Bezos.
Jeff Bezos, Technology Entrepreneurship, and Software Investing
52:31 - 58:47
- Jeff Bezos, the best technology entrepreneur, focuses on customers rather than investors.
- Bezos prioritizes serving customers and meeting their needs.
- Amazon's stock sold off when they announced they wouldn't prioritize profit, but Bezos knew that smart investors want CEOs to care more about customers.
- Richard Branson's description of a business is an idea that makes somebody else's life better.
- The entrepreneurship industry online doesn't match up with the biographies of successful entrepreneurs like Rockefeller and Bezos.
- Time is the best filter for ideas in business.
- Venture capital funding may not be necessary for all startups, especially software companies that can start earning money early on.
- Software investing and venture investing are diverging and becoming separate things.
- Some people feel that technology hasn't made significant progress in the last 20 years, but software creates value through data capture and new outcomes.
Software Innovation, Capital Allocation, and Future Impact
58:25 - 1:04:40
- Software is like wizardry and creates incredible value, but it's not as tangible as physical innovations.
- There is a corner of the internet focused on hard tech innovation that will have a massive impact on the world.
- Capital allocators and venture investors are looking for these businesses because they have bigger potential and create real-world change.
- Exciting advancements include building nuclear reactors for cheaper, creating abundant energy, and automating construction.
- Some argue that human behavior will always prioritize making money with minimal effort.
- The focus should be on building great products for customers rather than debating bootstrap vs VC funding.
- Businesses should use as little capital as possible to simplify and increase chances of success.
- Smart people advised against taking investment if the business could succeed with a smaller customer base.
Building a Successful Business and Trusting Your Judgment
1:04:15 - 1:10:22
- The speaker discusses the adverse fact pattern of a business being successful with 300 customers paying $1000 a month.
- Taking on investment may not be advisable if the goal is to stay at that scale.
- There are new options for raising small amounts of patient capital.
- Successful entrepreneurs are often indifferent to the opinions of others.
- Sam Walton's success with Walmart came from trusting his own judgment and reasoning from first principles.
- Henry Singleton and Warren Buffett are examples of entrepreneurs who trust their own judgment and do not let other people's opinions interfere with their thoughts.
- Soliciting opinions is important, but ultimately making decisions based on one's own judgment is crucial.
Seeking Information, Ignoring Negativity, and Building Successful Businesses
1:09:58 - 1:16:48
- Soliciting information and talking to smart people is important for decision-making.
- Not needing people to agree with you to feel that you're right.
- Twitter and public learning can be used to affirm opinions or gain reactions from others.
- Ignoring negative comments and not wasting time on unproductive interactions.
- The value of time and limited resources should be considered when engaging online.
- Elon Musk's view count on tweets helps in deciding whether or not to respond to negativity.
- Building businesses with a focus on providing value and solving problems.
- The constraint of growing a high-touch accounting firm while maintaining quality service.
- The need for middle-ground products between free content and high-touch services.
- The thesis of starting a business, buying real estate, using tax benefits, and minimizing taxes.
- Cost aggregation as an example of a business that aligns with the thesis.
Building a Self-Funded Business and Raising Patient Capital
1:16:19 - 1:23:45
- The speaker implemented a cost-aggregation business in their own life and for clients, leveraging distribution, technology, and great employees.
- The business has reached a million dollars in sales within nine months of starting.
- The speaker discusses the process of starting a self-funded business, including setting up a bank account and hiring employees.
- The initial capital of $40,000 was returned within three to four months.
- The business has achieved profitable growth from month two.
- Customer acquisition has been done without spending any money on advertising.
- The speaker believes that more creators will be given equity in businesses or sell equity instead of relying on traditional sponsorships and affiliate deals.
- There is high trust between the speaker and their partner Nick Huber regarding driving customers and sponsoring podcasts.
Sponsorships, Partnerships, and Starting a New Business
1:23:17 - 1:29:58
- The arrangement for sponsorships and partnerships in the podcast industry can vary, from paper ad sponsorships to affiliate deals to long-term partnerships and full-owned equity.
- For Lack of a Better Name, they trust Nick to drive customers and work together to drive customers, but there is no specific expectation for sponsoring podcasts or driving customers.
- When launching Tax Credit Hunter, they hired a subject matter expert who has experience with R&D credits for billion-dollar businesses.
- They will start with a senior operator in place and put around $60,000 into the business.
- The initial funding requirement won't be significantly different from their previous business Arikos, where they put in $40,000.
- They wrote an investment memo outlining how the business will be structured and who will own what.
- Eric's question about founders versus investors relates to the initial equity value of the business when capital is first invested by founders. Founders can start with a low initial equity value and increase it over time as they raise money at higher valuations. However, raising venture money can change the nature of the business and may not be beneficial for founders or investors.
- Tyler Tringus' calm fund specifically funds companies that don't have access to the first $50,000 or $100,000 needed to start a company.
- Having all the necessary pieces for a successful business on a founding team with equal exposure and clear expectations leads to better alignment.
- Not all companies need to raise millions of dollars through decks and venture capital. Microsoft is an example of one of the biggest bootstrap companies in history.
- Ari Costa and Tax Credit Hunter have potential to become significant businesses based on their playbook and previous attempts by others.
Building Successful Businesses and Trusting Your Judgment
1:29:30 - 1:36:54
- What did Bill Gates own when they IP it? I think like 40%, 45%, some crazy number like that.
- Ari Costa and tax credit hunter can be big businesses.
- No need to raise money if you can build your own marketing machine or distribution.
- With no code tools and AI, developing software doesn't require millions of dollars.
- Trust is a key factor in the tax credit market.
- Better bookkeeping has been software-first, but building the business took time.
- Selling value and creating lock-in are important strategies for success.
- Better bookkeeping has a larger long-term potential than Cost Egg due to market size and revenue per user.
- Cost Egg has a regulatory component that may limit its growth as laws change.
- The secret sauce of value levers gives better margins and a narrow target market for better bookkeeping.
Trusting Your Judgment and Focusing on Value Creation
1:36:24 - 1:42:51
- The mentality of successful entrepreneurs is to trust their own judgment and not seek approval from others.
- Entrepreneurs who haven't done the work yet tend to seek approval and opinions from others.
- Successful entrepreneurs are passionate and dedicated to their vision, willing to dedicate their limited life energy to achieve it.
- Mitchell is building businesses with the goal of capturing entire industries and driving prices down.
- Patrick Campbell built a successful company by starting with a pricing model consulting service and then adding a data component, eventually growing it into a $100 million+ business.
- Better bookkeeping has the potential to follow a similar trajectory, starting as a boutique wrapper and becoming a massive business like Mint.com.
- Eric's book release has been delayed but is expected to be out in about three months.
- David only invests in one thing, implying that he is fully committed to the Founders podcast.
- Podcasting is not a capital-intensive business, allowing for reinvestment of cash flow into growth.
- There is an observation that people undervalue their time and attention, giving it away for free on useless things.
- Learning should result in behavior change rather than just memorizing information.
Effort, Focus, and Creating the World's Greatest Podcast
1:42:25 - 1:48:31
- People undervalue their time and attention, giving it away for free.
- Learning should result in behavior change, not just memorizing information.
- Andrew sold everything to focus on his single best opportunity and avoid distractions.
- Effort focused on one thing yields increasing returns.
- Extending an existing convex curve is more valuable than starting a new project.
- Maintaining intense focus is crucial for success in the age of leverage.
- Ignoring distractions and staying on your path is important for achieving goals.
- The speaker's primary motivation is to create the world's greatest podcast on founders.
- Having cash and being able to move fast can lead to profitable opportunities.
- The speaker plans to reinvest in growth and wait for a great opportunity rather than investing in index funds.
Podcasting as a Great Business and Investing in Craft
1:48:07 - 1:54:19
- Podcasts are great businesses because they have low expenses.
- Investing in a podcast is not feasible.
- Having strong ideas and pursuing craft are important.
- Being accountable to others can limit freedom and time control.
- The speaker values reading books, making podcasts, and avoiding things that don't align with their interests.
- They believe technology can improve lives and find investing exciting on a craft level.
Upcoming Event and Gratitude to Listeners
1:53:49 - 1:59:24
- The podcast hosts discuss the length of their previous episode and the reactions they received from people.
- They mention an upcoming event in Miami with Shane Parrish and Mitchell's business ventures.
- They express excitement about branching out into live events and mention the location of the meetup in Miami.
- The hosts talk about matching outfits for symmetry and express gratitude to their listeners.
- They joke about doing a recap episode after the event at Mitchell's ranch in Texas.