Episode of My First Million with Sam Parr and Shaan Puri.
Transcript
Note: This transcript was auto-generated from YouTube captions. It may contain errors and lacks speaker identification. A full Gemini audio transcript will replace this.
Kind: captions Language: en this is very casual so I don’t even care we could record right now it’s recording now and we’ll put that up so this is very casual and I’m gonna ask you a lot of questions and if you don’t want to something just say it but uh oh I will yeah it’s very casual what’s going on you’re Randy right yeah ask me so I I’m a fan of your guys product and typically I own it I have my own my own gym downstairs I I do research on the businesses that we talk to and the people we talk to but in this case I didn’t do too much research on purpose because I only have the product as a fan of the products perspective and and I wanted to come from that point of view but do you know do you know what this podcast is and who we are or anything like that well give me a little more background because I’m yeah I’ve been doing a fair number of these since this crazy-making period took off and it’s hard to keep up with them it was funny because I love to support right because I do so much in the entrepreneurial community I love to support young entrepreneurs so I’m I’m basically you know taking pods that I normally wouldn’t take just because it’s you know we’re here we’re home and if I can support other guys that are getting stuff going that I’m all about it and what you said you’ve been doing a lot since the making what MIT what are you talking about well I said since this mayhem right yeah I mean I I do a quite a lot of stuff in the press normally just to promote you know to promote my brand but since we’ve all been locked at home there’s a massive proliferation of digital content in the form you know sometimes in the form of video blogs and podcasts and so I in fact I just got off another another one with a with a investment bank an industry panel basically but it was just a call so I I didn’t have to be as pretty as I am now for you Sam good well you look great so let me we’re gonna I’m gonna give you a 20 second or two minute background and then we’re gonna make this all about you but so i’m sampar i own this company called the hustle and what we do is i started it we just turned four years like a weeks ago so typically we have these conferences there were be hosts trade shows conferences where we host tens of thousands of people each year but we also have the hustle and the hustle is our daily email it goes up to millions of people so millions of people log in and they get our news from us and their email INBOX each morning and it’s a great business it’s a eight-figure wonderful business that we bootstrapped and then we also have trends and trends KO it’s our subscription product so we it’s those premium content community which is also great business so awesome and and we do this podcast as a that I think I forget how many listeners we have but we’ve had millions millions of listens all over a million lessons and what this podcast kind of started as was me and Sean my co-host who isn’t here right now but we both have started companies and we always had these interesting brain storms with people like you who were our friends and we would just riff on interesting ideas and on cool insights and most people don’t have access to those types of people and so we just do this publicly and so that’s what we’re gonna do today and so what I want to do right now is uh I want to learn up a little bit about your background and kind of how you came to be where you are now and where you are now well uh where I am right now is in my house in Mill Valley I’m sort of like I feel like Rapunzel I spend all my time up in the tower above my garage right it’s a become my sort of everything from the sports marketing department or sponsorship marketing department of TRX to the you know production studio for every one of our sort of you know blog interactions and that kind of thing but um you know I I so I’m the founder of TRX I I live in in you know Marin County prior to TRX I was a Navy SEAL for 14 years and uh actually created the first cornice while I was at the special missions unit and then just decided you know after I left the SEAL Teams I went to business school at Stanford and decided while I was there that this was a viable business concept you know which I think at the time I massively over over as made it how easy it would be because the product was so great but what i used stanford is basically an incubator second year as an incubator for this concept and TRX is i guess this is our 15th year in the market and you know we’re doing pretty well we’re one of the only truly global Fitness brands and we you know we’ve we’ve put close to 350,000 training pros through our our terrace coach qualification courses and we’re in about I don’t know somewhere between fifty and seventy thousand gyms and studios around the world most of which are closed right now which is an interesting you know experience but fortunately for TRX we we we were for 10 years all b2b just serving athletes training centers clubs trainers and and boutique studios and then about four or five years ago now we decided all right we’re ready to start to expand into the consumer the true b2c consumer space and you know it’s good that we did that because obviously that side of our business in the co19 environment is absolutely off the charts the commercial side of our business is really struggling because all the all the gyms and all the trainers are all out of work so it’s been a little bit of A Tale of Two Cities over the last couple months but that’s basically the snapshot of you know what TRX is and and I’m today I’m co-chairman and really promoter in chief of the brand do you own the company or have you guys been acquired or anything like that well the company is we have you know I raised a long time ago I mean it raised a bunch of rounds of angel money when I started and then and then took on private equity back in 2012 and then recently recapped the business to exit those initial partners and bring in some new partners because that’s one of the you know the dirty little secrets about institutional capital is once you take it it’s very difficult to get rid of so so it’s a you know it’s a private company but it’s co-owned by by a bunch of us including the capital partners that that came in got a twenty at the end of 2018 beginning at 2019 how much would you raise from the angel folks well in the way back I think I raised about Oh to think back to my round five million bucks from you know in several rounds of angel money and and that’s great capital right for I don’t know I don’t know what the complexion of your viewership is but think about raising don’t use you can use jargon it’s a very it’s a very highly intelligent not beginner audience so go ahead yeah well I mean that by far the highest may look the cheapest source of of money to grow business as always what they call non deluded capital right and and that mostly in the form of sales but if you’re gonna take on diluted capital the I think by far the best source is angel investors for a couple reasons I mean if presuming you pick your angels the right way because what you get in an angel investor if you’ve chosen well is you get somebody who has a lot of domain relevant domain expertise because angels tend to invest in things that they know and think that one way or another they can contribute value to if you pick the right angel you’ll get somebody who not only has domain expertise but super passionate about your venture generally angels are willing to to invest on a common stock basis which you know I strongly recommend to entrepreneurs that they stay away from preferred structures up until they’re ready to to sell a significant piece of their of their equity or exit all together is what you once you you know once you bring in a preferred layer of equity into the cap stack everything’s different in terms of the Solidarity that you once had right across the team and the investors because that changes and and it’s a you know it’s it’s a tough change in the variants of most people that I know to manage so so I’m a big fan of angel investors in which you get not only capital right but you end up getting pro bono experts effectively who are excited to be involved in your venture how how big was the company when you sold it to PE or sell parts to PE well it’s been you know two rounds of that now right so so the first the first money we took and I think we’re around I don’t know you know 30 million something like that revenue in annual revenue yeah and and you know and and who knows you know will be will be north of you know probably north of 60 somewhere who knows how far because kovat is a interesting experience but and we don’t you know we don’t really get into specifics because we’re privately held company so if you’re heading that way just to redirect you well so you already said it’s the ballpark is sixty million it could be way higher but you bet a number that’s been said um a company like TRX you guys so we talked to a lot of like these direct-to-consumer folks which you didn’t start out as but you are definitely are now yeah when I think of TRX I think that you guys are in the same category as a CrossFit or and this isn’t an insult but like Tony Horton like you guys are like a brand right like you’re not just some amazon you don’t rank on Amazon and that’s how you win TRX is something that people know and it’s a brand do you think that your valuation is significantly we you’re multiples be significantly higher because of that you think or is it still rough to get a high valuation on products like this well I mean so for starters I mean we aren’t we aren’t it we’re the number one selling fitness item on Amazon yeah but but I didn’t mean like your weight your path of success has not been like well we’re just gonna rank higher like it was just like people love it no I know yeah we built I mean look from day one this was never intended to to be a gift get-rich-quick scheme right it wasn’t a a trend I mean it’s funny because when I first started the business there were no predecessors to the product that I brought to market right our initial hero product which was the Suspension Trainer the the idea there seemed kind of crazy to bring this strap into the club landscape full of machines and think that you were gonna be successful but one of the things that we did that was that was a really great choice and I made plenty of less than great choices but the one of them that was a great choice was really finding this sweet spot in helping training pros of all kinds right from from chiropractors and physical therapists on one hand out to to MMA coaches and powerlifting coaches on the other end and then obviously you know and under the under the bell curve you know tons of personal trainers and group fitness instructors we decided we’re gonna become the part the business partner of them and that we were gonna give them this great tool that had it’s like I was described the suspension trainer like a magic wand right if you if you know the magic you can really make you can become a magician to your to your clients and your athletes and deliver them unbelievable results that always you know you look at a 12 feet of nylon webbing ago yeah what can that do with the right Pro and the right knowledge in that pros head you end up going oh my god this thing I’ve never seen anything like this right and that’s that’s a unique characteristic that not many products or services ever have which is you have people to come in with a very low expectation and leave with a very high level of astonishment and so that’s been a powerful benefit to us and then we diversified the book the the company’s scope of operations we became you know the largest provider of professional education to trainers and then we brought in the product line significantly all the while focusing on this premium brand that you alluded to which I do believe brings you know and enhanced multiple the reality though is that long if all a company wants to be is a product company right that delivers durable goods because our stuff lasts for freaking ever you know way too long from Yodo I’ve had the same on I’ve had the same one for four years I think I got it was gifted on Christmas and I’ve had the same one for four years now yeah I mean and that’s and you’re in four years is nothing for a one-on-one right I I talk to people that are that are still traveling around using our like first gen strap from 2005 in their bag you know and it’s I mean on one hand it’s a compliment on another it’s a nightmare right because you need what they called plan planned obsolescence yeah yeah the break after like you know five thousand push-ups we never we never planned that because I really wanted to be I look I I came at this whole thing you know I started my entrepreneurial career at 39 so after a career as a as a Navy SEAL so I you know I had a set of premium level delivery and if I was gonna be associated with this brand and that’s what we were gonna do so we built everything that way the unintended consequence is the one that you and I are beating around right now is your stuff lasts forever and that which means that you know you either have to create more products to serve your existing customers which is expensive right as R&D is not cheap or you have to constantly be in search of new customers which is not cheap and so you know it’s it’s I think that’s why pure product goes get uh what I would say you know unfair valuations relevant or relative to some of these fakers more fake companies that are you know tech based companies that have the potential not the promise but the potential to scale infinitely right and so those kinds of companies tend to get higher valuations than gear companies and that’s that’s just one of those realities and it’s part of what you know we’ve never planned to be just the gear company we we have always planned to expand our services into subscription services and con and that’s what we’ve done so let’s talk about that in a second but first right now you guys make what are your revenue streams your revenue streams are coming straight from the revenue streams our purchases from coaches and things like that well coaches and chiropractors and who like you know B to beat people with servicing clients right we make well we’re an omni-channel distributor so you know on the on the commercial side of the business which is the b2b side yeah we sell the gym so geared to gyms services and education to gyms and trainers yeah but and that’s what I want to ask about what is education so you well yeah so we knew so we we became early on I mean if you think back nobody knew how to use a strap that didn’t stretch and didn’t have any weight attached to it so if I was with you or one-on-one I had almost a hundred percent close rate in the in the earliest days problem was I can’t be everywhere right so and if I wasn’t with you and you were just looking at a picture of it say on the website the conversion would drop to you know five percent so that was something that I realized very early all right well I have to be able to scale my knowledge on how to use this thing and so I brought in a guy who was introduced to me very very early in the company’s history again in Frayser Quelch who had been a career trainer and had written a lot of education in the form of courses for other pros right to teach other pros the various skills I mean how’s a trainer or coach learned his or her craft they usually get a basic certification from a entry level certification body like American Council on exercise or or NASM or NSCA and then they go out into practice and they start developing practical skills and along the way they want to learn more about you know a particular tool or a methodology or and so they they do they have continuing education requirements right just like a doctor or a lawyer they have to they have to do so many continuing education units per year to maintain their basic certification we became one of the leading providers of those CEC courses that that help help a new trainer or coach move toward mastery so do charge them for I’m on your website now and that cost money yeah yeah our normal our knowing we have about ten courses different kinds and an hour all b2b and the P not 89 well know traditionally they were two hundred ninety five right so two hundred ninety five bucks for a one day qualification course and it was eight hours live in person what you're probably seeing now is we've done some some pretty incredible pivots with Kovan nineteen hitting and changing the landscape and so one of the things we did early on was try to figure out hey alright number one we're not gonna be able to provide education right as long as this thing lasts because you can't get people together number two most of the people who come to our courses are out of work and so what what what can we do to support them was sort of idea number one and then number two was how do we take this moment which is really a bunch of lemons being thrown at us and make lemonade out of it and we decided that well we can take our courses we can make them free figure out how to how to deliver them through zoom instead of live and we'll do that as long as as this you know crisis continues and we'll just try to fill our bucket with a whole bunch of new pros of all kinds of stripes right who on the other side of this will then appreciate that that we help them out when they were down and also just grows the community grows the TRX community and so that's what we've been doing so then you guys have revenue from selling the the main product the TR the main TRX which it looks like you have a few varieties but I imagine most is from the main one and then you make revenue from these hundreds of tuner 100 to 300 dollar b2b digital products what what's the breakdown is like is the actual product eighty percent of sales oh it's you know it's falling pretty pretty fast as as the education and now the with what's the big epiphany and the big unlock that's gone on over the last two months is that we massively accelerated our what already was a migration toward digital delivery and subscription models and so you know we've also got an app that that we make money off of that's a four ninety-five a month app that supports the end user and and we we have turned off the paywall on that during kovat but that will go back on once everybody gets back to work you know we're really using Cova 19 as an opportunity to develop new to solidify the relationships with our existing customers and bring new customers into the tribe through a free door that eventually obviously everybody knows that no business can keep their services free forever but in the meantime we're using it as as a big opportunity to you know to build a new relationship so the the mix is is really changing the other thing that that I think you know well what was the big pre kovat you know I mean it's probably probably 70/30 between you know equipment but you're defining equipment way too narrowly right you're looking at our hero products which are the suspension trainers we do the entire ecosystem of functional training so from yeah you know steel echo systems that you built the infrastructure that you know they not only hang straps on but you fill with kettlebells bands balls you do pull-ups on right everything you would see in a gym yeah you're right yeah which I which I've used do you have a sales team to handle that like did you have to do like hand-to-hand combat for that or is a lot of it inbound and you're just fulfilling orders um it's some of both right I mean no I don't think any business it certainly doesn't exist for very long as as all inbound flow right general you have to be out there knocking down the you know the targets yeah I mean but are you like running paid ads to them or do you actually have to have a sales force who's hitting the phones and mechana hello both yeah both we advertise into the commercial landscape through the traditional you know means to reach gym owners and trainers but then we also have a pretty significant direct sales force inside and outside that that does account development service say look I'm looking at um I use this tool that guesses website traffic if I looking at this tool I would imagine that your sales are like Forex in April what they were in February it looks like you guys are just like like you your web traffic has gone through the roof yeah well it certainly has and the reason is I think less to do with anything we've changed in our marketing then with the reality that you know as a ten year into B business we we've put you know we serve tens of millions of people around the world who identify themselves as TR extras but ironically had never bought a product for their home right because they use us Jim and I run into people constantly one of my best friends you know will tell me like oh I've never bought you know call me and be like hey can you give me a friends-and-family yet you know discount and I'll be like you don't have one of our straps these are people that I know are diehard TR Xers and then there would be like hello man I do it three times a week in the gym you know and so that that was that was a reality that comes with being a b2b business for ten years but what happened with the virus was when all the gym doors got shut all the sudden all of those installed that installed base of TR Xers went well how the hell am I gonna do my my workouts and so they turned to our Amazon site and our web site and you know that's that's been I believe the big source of of the the growth the explosive growth you have a unique advantage of seeing like consumer goods or well hard goods and digital products so you're able to see how they both work and my from my perspective and I've been an investor and I have friends who sell direct to consumer hard goods and then I also have a digital company and I've invested in them as well what my perspective is that the DTC guys can grow their revenue from zero to not zero very quickly but there's massive supply chain headaches where as digital it's often the opposite where it's maybe a little more challenging to get started but the margins are way better and you never have a supply chain issue what uh knowing both sides of the business which do you prefer well I mean I I think did which do I prefer I prefer the one that's easier and makes more money um you know I think with what's that yeah well the reality is that I think I think creating a digital company pure digital is is hard because it's a very cluttered field right it's a it's there's especially now I mean this this virus has unleashed the digital universe right and so now just like any other marketplace there's gonna be this explosion of would be you know participants and then there will be a consolidation and and some of the you know they'll separate sort of the wheat from the chaff and I think that we're in a really unique position because we started as a physical products company then we became an education company education and content right because we made I mean he'll we probably did 35 DVDs prior to DVDs becoming disintermediated by digital delivery we've obviously taken all that content and repurposed it into our digital echo systems but then we we became a brand like a really significant premium brand in the space and then we stretched that brand around the world so now we're in a really unique position because we have the best of both worlds right we have a large customer base that bought our physical gear and that then came to group classes in clubs around the world that we helped develop and and educate the instructors who are do those so it got comfortable and identified with our brand and then as we've done more and more consumer branding we've extended that brand from the the pro space which is great from a credibility standpoint because if trainers and physical therapists love you the consumer at home tends to go well these guys must be you know a quality operation and so now we're in a really unique position now we're turning on some new digital engines and subscription engines that give us the best of it all right we're you will have our products which you're right you stock out of I mean we're you know we've stocked out over and over and over during this thing because no one plans for a you know multi time step function change in the demand curve right and you you you scramble to try to catch up to it and I think a lot of us will find ourselves just about the time where we're caught up and we've got this you know a whole new stockyard full of product maybe the demand will settle down a little bit and we'll end up with Harry yeah and it's but that's just that's part of being a physical product you know just supplier is so so that's my question which one do you find which one do you personally enjoy more both in terms of working on and the results I'm a uh I mean I'm an inventor you know so so that is part of my like it's it's a it's probably what maybe want to go into the Navy SEAL Teams I have a MacGyver bent to me and I came up with an old man that can fix literally anything with almost nothing and so I I sort of grew up you know out in the garage until you know the middle of the night holding a flashlight for my oh man well he was you know jerry-rigging some kind of a of a fix to to a old motor or to what ever could be anything so I really enjoy a lot of time and energy at TRX developing our next products I also though appreciate and enjoy creating great content whether it's in the form of pro education or whether the form of end-user content a workout content and so I I would say I like both I like the economics of the digital side of the equation for the reasons that you've pointed out right you don't stock out of it and you don't it scales infinitely but I don't think that it's an easy business to just say oh I'm gonna become a digital content publisher and I'm gonna you know make a billion dollars yeah like you and the other billion would be digital content producers that are out there all right on the same path and so so I I like them both I like the multiples on digital content and subscriptions though I'll tell you that so I'm gonna ask you about some I'm gonna ask you about that in a second and I'm gonna ask you about interesting ideas that you're seeing it in new opportunities but first you said something that you're the chairman right so does that mean you're not the CEO yeah I'm what we brought in a a president you know I've tried a number of times to get out of the day day in day out management of the organization because a couple reasons one at this point you know I mean number one there's one founder right and so you've got a certain amount of founder cachet that is really valuable in working with the press and working with key accounts right in in generating love around the brand that there aren't others who can do that there are others who can manage the steady state sort of linear growth of a you know of a midsize and and growing company in fact there's those that can do that better than me because I'm more of a startup guy so I've tried you know several times over the last call it six years to to get more out into the market and less in the conference room and you know we hired a president about eight months ago who you know I've been doing a transition where I can you know basically hand most of the day and day out over him and to you know to to to the team and then with our new partners they're very good at the financial engineering side of the equation so I'm not right that ain't I mean that is just not something that turns me on I like the outcome but the process is just not something that you know floats my boat and everybody's everybody's cut a different cloth so what I'm really focusing my energy on is promoting the brand developing your products and and looking at new initiatives right that's something that I'm I'm very good at and passionate about is sort of trying to see around the corner and what what the next opportunities gonna be for the brand we're very similar so I've done the same thing I have a president who handles a lot of stuff and I do the exact same thing where I can lead vision but I also come at the very bottom and I could just change pixels and invent I do it digitally but the same exact crap where I'm just I have my computer up late at night I'm just making stuff and most of it sucks but every once in a while I'll show to someone and they're like oh yeah let's go make that that's the product patient dilemma right most of it most of it goes nowhere but but about every 10 you know every every tenth effort you go oh wait a minute there's something to this one right and that's you know and that's you got to be wired to not get frustrated by that just like you know just like folks who like to manage it that mid level they don't like the scariness and the ambiguity and the you know the vagaries of of the startup or creator they like the the consistent predictability of you know weekly staff meetings in a checklist and all the things that make me sort of you know make the hair stand up on the back of my neck because I feel like man this is not where I want to be so this and this is a consistent pattern that we've seen I don't know if you know this woman named Sophia Amoruso but she had this company called Nasty Gal and it's scale to I forget the exact number one or two hundred million a year in sales and had multiple offers around half a billion and it they screwed it up for a bunch of reasons one of the biggest ones that she was like I'm a brilliant at creating I'm horrible at operating and I I to him like that where I'm brilliant at creating but operating I just don't find it to be exciting and I think that most people who start stuff are the same way but I think there's actually a huge issue in your in Silicon Valley although you may or may not run in the Silicon Valley crew particularly amongst that group of people I've noticed there's a huge problem of people starting stuff who are afraid to hire people to actually run the thing and what I've really embraced and it took years to learn this is that there's actually people who like creating the car from scratch and designing it and then there's people who love modding it out and making it better and having both is really important how did you hire your president and what was that like going through that process and also how many mistakes have you made in hiring their own people because that's exciting yeah plenty I mean I mean look first of all so I I operated the company you know every single day for its first 10 years that's a long time right and at that point when you're winning it the engine of both creation activation aligned with why not in your three I mean well because we were still very much evolving right and I think one of the challenges with bringing in somebody to take over the daily management is you have to be pretty well-defined about where you're headed as an entrepreneur before you can now hand the wheel to somebody right if you're wheeling right wheeling left that's not exactly the moment to be like hey buddy here take this right because them guys like where do I Drive man so so I think that's the answer the short answer is I wasn't ready yet in terms of our our definition - and the enough certainty to the general direction of our course to want to hand that over but about your eight I was nice okay so I handed it over the first probably the first two presidents that I hired which are both great guys but the mistake that that I made largely from being from listening to my then private equity partners that you know had had sort of their their business school 101 playbook they were trying to run which is go hire a quote unquote best practice president well okay help me kill me kill me yeah I'm sure I was just gonna say I'm sure you're gonna you're gonna be hearing something familiar here right which is that a lot of the institutional capital investors they they they haven't run businesses themselves so they want to execute what they learned in Business School which is you know the idea of best practice well what is best practice that's the problem right and and generally they will say oh it's someone from the upper mid levels of a great big successful company that we've all heard of what I've learned and it took me to to go rounds to learn this by the way is that that is almost a disqualifier to be a good present company I need I need a guy with an MBA telling me what to do like I need a [ __ ] hole in the head I don't like right like what like oh my god I so I I've had a I got lucky I've had a lot of great success we have a guy Adam Ryan who's our president and I've known him since high school I'm from Missouri so I'm not from like this fancy San Francisco stuff like I live now and that was awesome because Adam has wonderful at being scrappy and things like this but he also can be like a big company suit if you wanted to and what I found is and I've hired some MBAs and it didn't work out what I found is these gray hair they're not actually great hair but it's more figurative these best practices this [ __ ] they just these people can't roll with the punches and I never had success with that test I've hired I have a few businesses on this like little investments I've made and we've hired CEOs who are like this and it just man it never works any but you think that it should yeah well it's it's a little bit akin to trying to get a cat to bark exactly a path yeah dogs bark so saying that well you know either one of them should be able to do this thing is just not right and you wouldn't do it because it would be preposterous and yet what people do all the time especially institutional investors make this mistake they assume that because somebody operated out of scale right and at a successful brand that well that person clearly can this will be easy for person and it's it's almost the reciprocal because what what they don't realize or haven't thought through is those people are playing a different game like Michael Jordan was you know arguably the best basketball player in history when he went over to the major league baseball ready hit with a thud why he's a great athlete he's playing a different sport so so what works for women on the basketball court you know doesn't work when you're on the mound of a baseball diamond and and so I think it's the very similar thing big company big company leaders have large staffs generally a lot of certainty in the direction that they're heading you know kind of single-digit management objectives right up or down it's it's it's a in a very long patient bureaucratic decision making process yeah you're almost more like a politician you're a politician a little bit you're not yeah consists of a small company right a small company and by that I mean anything south of 100 million bucks is it's constantly pivoting and in the the windows to make those pivots or not you know years you're not even quarters you know you're lucky if they're months and so though I think the difference in the operating cadence and style is profound and just going to a big company a successful big company manager and thinking they're gonna be successful as a small company president it almost never works out yeah I think that look if once it once my business becomes a financial arbitrage machine and I need someone to figure out how to milk out three percent off the bottom line by using less materials then I'm gonna get one of those nerds but until then I need innovative people who understand how to eat it's a perfect balance of art and science who understand like financial analysis and things like that but who also can understand what motivates buyers and who can think of widgets that you know make people feel good and want to purchase and be it's just I've been to this so I empathize you uh are you investing in anything at the moment or 100 percent of your time on this or like on Saturdays and Sundays are you tinkering with anything totally outside of this field perpetually yes yeah right now well I mean there's a lot of different things that interest me I'm you know I'm an angel investor in a bunch of different enterprises both inside and outside of health and fitness and I because I'm a super you know I'm a startup nerd so I I live and breathe you know that and I teach I teach classes at both my alma mater is at the Marshall school USC and at the Graduate School Business at Stanford so I get to see a ton of Liam badass so you're a fitness guy a Navy SEAL and academic you know I have to put that in quotes Sam I'm not sure that I would that I would put academic technically I'm right though be you tell you dude you teach at Stanford ok what I'm a lecturer right not a professor so so that means that you had all you had to do is have gone there and then I've done something that didn't suck subsequently right and made a list you're just an eclectic dude you'll like you can kick someone's ass but then also like you talk to them about Aristotle and like Britain's economic policy now the impact of imperialism then I think I'm at that part right right I'm gonna collective dude and I'm I'm a super geeky inventor you know which which I love I mean I've got like 40 patents that I didn't care less about the patents what I cared about was the thing right like bringing the thing to life and then once you do particularly in today's digital economy but you gotta protect it because if you don't you'll be knocked off and blown out of you know blown into oblivion almost immediately with factory direct stores out of China that have FBA shops on Amazon now so you know so that's why I became you know like I joke about having a minor PhD in intellectual property law that I never wanted but I had to learn and so all of that like all the nuts and bolts of creating and then you know articulating a vision and and wrangling a team to to to share that vision and then moving that thing forward that's the stuff that that makes my you know my heart pound what are your best angel investments well I mean I suppose we'll wait and see until they until they they pan out but yeah uh no not yet I'm sort of an equity investor right I'm I'm you know I make a good living now and and so I'm not you know I'm not I'm not in any of these for a quick turn but I think that they all will and you know most of them are in areas that I that I I tend to to both invest and advise only in things that I think I can make a difference in I've taken a couple of different fliers on on things that you know buddies that I trust and our domain experts in other areas have said hey man you should get in on this you know but I'm and also let's just qualify this I'm a small you know investor all I'm not I'm not placing six-figure investments one after and but I but I I tend to invest in things where I can help the operating team based on my own experience try and really experience is just the sum of all your mistakes as much as anything else and so I you know I can help early-stage businesses set up their their partnership arrangements right figure out what makes a good partner figure out what capital sources that make the most sense for them or because I know both the pros and the cons of all of them at this point and then you know team selection that's I mean I've been leading teams since I was you know 22 year old frogman and led all the way up to you know the national level and so I've got a lot of experience whether I've done all right I certainly haven't haven't done all wrong either but I've got a lot of experience in in helping you know build a culture create team dynamics that are that are durable and and performance oriented and build brands so if it's in those categories that's kind of my wheelhouse I have to polish real thing I go in the restroom real quick go we'll edit this part out sorry about that no no man yeah are you an MMA fan yeah big-time so I'm a huge MMA fan and I this quarantine thing I've gotten very healthy much like I've done higher Mane's and things like that but I've like actually started using my TRX by the way and there you go lifting weights I've gotten strong but I I have a weight loss challenge and I have 500 on the line and I have to hit it by Saturday and I have I’m gonna crush it just through diet and exercise but I began just I’m drinking like crazy amounts of water because I want to do like a MMA weight cut and just like destroy the benchmark oh yeah and so I’m uh I’m currently drinking three gallons of water a day and then tomorrow and the next day I’m gonna taper down my goal is to crush everyone that’s great yeah I’ve been an MMA fan since before there was MMA because you know coming up in the SEAL Teams right you do a it was very eclectic in terms of the the coaches that we would bring in so I I was a you know I’ve been the the full gamut I was I was an MMA guy before MMA was turned right everybody was still purists in there arts but because I had this Bedouin lifestyle of constantly deploying and coming back I didn’t have that luxury so I became you know I’d been a kickboxer and a wrestler in high school kickboxer through college then a then a got into jutsu at the end of college and and lean into that you know hard in as a seal but it was never I never had the luxury of being in one place for more than a couple years at a time and and so but I’ve been a huge fan of we did a ton of sponsorship actually of the fighters in the UFC prior to Reebok buying the you know the global rights to to the sponsorship placements so yeah I in fact Mike Dolce could should help you with your with your weight cut right he’s a he’s a freaking master that’s death well so we do you know do you know who Ben Askren is sure I’ve become friends with been through this podcast and media and so he’s been helping me out and name-dropping a little but I’m a huge fan of his and then I start talking to him like it’s awesome I’m principal I looked up to and then I think we’re having Michael Bisping come on and do a podcast as well yeah they’re great man I mean a screms a stud wrestler and biz beings just you know you talk about one of the veterans of the of the sport I was so happy when you know when he finally got to the mountaintop after all those years of racial fighting everybody that you know that was that was there to be fought and he just kept sort of somehow falling just short but he finally got there before retirement so I was stoked for him so you um you know about all this stuff and it’s sometimes whenever I talk about like MMA and UFC I’m like I think I’m being too niche right now no one cares I think it’s way bigger than I actually realized but when you were in the seals this the seal thing interests me for two reasons one Jaco wilt is it Willick yeah sure willing well link that guy’s everywhere right now so and he’s always fun and he’s got good clips that are fun to watch and then I’m also reading David Goggins book can’t hurt me yeah it randomly came up on my audible thing and I started listening to it it’s it’s emotional it’s sad it’s hard to listen to have you looked have you heard it well I mean I know I know David you know I did never work together but I you know you cross paths same thing with Jocko those guys are those guys are both way behind me in terms of age but the and so and the SEAL Teams you know if if somebody’s more than a couple of years ahead or behind you the the likelihood of you knowing him is possible but not high unless you worked at the same places right in which case then you then you transcend the age barriers because you’re all you know at a command together and you you work together and I never work with either one of those guys in fact I think as I was getting out they were both coming in but I certainly no you know of both of them and I like what what they both done with their brands and you know Jocko has done some really really cool stuff with his podcast and his other appearances in fact he popped up the other day on on the billions which I was laughing about oh I haven’t watched through the premiere and a few up so this new the new season he popped up in that and I was like yeah man that’s what I love it when I see other frogs doing doing good stuff versus stupid [ ] where they’re out there you know telling and selling secrets that are gonna you know put other guys at risk which I do not admire but I but I really love when I see guys out there doing great things post career because that’s what the whole country is supposed to be predicated on right it’s the citizen soldier you’ve come in you serve for however long you try to serve as well as you can and then you go on and do something something else cool out in the civilian community and be able to share some of the things you learned I love that Jocko does that and I love the Dave’s doing that as well so when I started my business I I was like like you or I’m just like I like to invent things and I like selling them and I like making money what I didn’t was what I always did track-and-field and running and weightlifting and swimming and those are all individual sports and what I really struggled with early on was how to be a leader it’s super hard because you like for a lot of people they start stuff because it’s like I said it’s fun and it makes money and it’s cool they don’t but then they like if it was successful then they’re like oh I got to be like a leader of men and women not necessarily a creator of products what do you think do you think that I mean I know the answer the answer is definitely yes but what specifically helped being in the seals in terms of business leadership and managing a team and by the way how many people do you have we’ve got about a hundred full timers and then we we you know we use another 350 master instructors to deliver our education courses so they’re 1099s but you know so it 100 full-time plus or minus and you know another several hundred that we need to we employ as contractors do you think people would say you’re a good manager and or or a good leader I think they’d probably say I’m a better leader than I am a manager right that’s that would be my guess because it maps to I mean I can manage and I the distinction between that to me is quite a wide gap right there are there are people I think who can do both at a very high level but not many because the I believe that most of the characteristics that make someone really good at one or the other almost prevent you from being good at both I mean there are some extraordinary people I think out there that can do both but but management requires just a a different level of you know attention to - - minutiae I want to say detail because I’m very detail-oriented but ongoing minutiae which is important in making a business go um you know I don’t have the patience for it and I also you know I never I never really liked corporate management I I liked leadership a lot and leadership is about storytelling being authentic right motivating and communicating and you think you’re good at that I mean you seem very charismatic do you think they’re a good leader yeah I think that’s one of the strengths that I have developed largely as as a result of my experience in the SEAL Teams what doesn’t think I can learn from you then through your field experience and that our listeners can learn anything well I mean we do you know so I do I do a key I do a keynote that is pretty massively oversubscribed frankly called lessons of a frogman and it’s leadership lessons a business leadership lessons that I learned as a seal which turns out almost all of the key lessons that I know I actually learned as a seal the leadership lessons not necessarily the tactical business lessons but and and you know you would think and I actually had one of the assistant Dean’s at Stanford Business School when I was out interviewing for two to be accepted there you know give me this sort of patron and put a shoulder hand on my shoulder and basically said well that you know why do you want it what do you think we should take you Randy I talked about you know my leadership experience you know I was at that point I was at the special missions unit as a as a troop commander and had been in the SEAL Teams for you know out of ten years or so and you know then he put his hand on my shoulder and said well then it’s it’s a bit different leading in the real world than it is in the military don’t don’t don’t you think because out here you can’t just tug on your collar device and have everyone snap to and do what you say i don’t livi it i was so astonished man i was like is this guy for real right now or is he baiting me and and i basically said to him you know uh dean if that’s your view on military leadership that i think it says a lot more about how little you know than it does about the subject of leadership and you know not surprising that i didn’t get in that time but but but you know i think that if you’re talking about people and groups of people there are many many more commonalities to how to lead and motivate the group then there are differences depending on you know like irrespective of domain because you’re talking about anthropological behavior and that changes very slowly over millennia you know and whether you’re a you know a baker or a freakin frontline soldier or a software developer if you’re dealing with other people humans behave you know largely the same way they have different micro cultures but but we’re all part of the Homo Sapien species and we we’ve evolved our behaviors over you know hundreds of thousands if not millions of years so the commonalities are that people want to be inspired they want to be they want to associate with something they believe in and other people you share that belief system they want to feel important right like they’re contributing everyone wants approval and reinforcement that what we’re doing is is good and so figuring out how in a context to provide those basic human needs is what leadership is all about and and I think that it’s not actually very domain-specific whereas management arguably is much more domain-specific right depending on the industry and and I think that requires you know a different set of skills and very often the things that makes them one a good manager prevent them from wanting to be on the podium prevent them from wanting to take risks right and and those are things that you know you can’t lead anybody if you’re not willing to get on point and and so I think that you know leading and managing or related but not same thing as this lessons of a frogman is that available publicly if I google that can I watch it I hope not because it’s one of the is it’s one of the you know the side hustles that I enjoy doing I actually it’s obviously I’m doing them during covert 19 but but I’m I’m working on a couple of books in the early stages one of them is is going to be that it’s gonna be the deeper look into the substance of my you know keynotes that I do for corporations the other is is gonna be an entrepreneur Survival Guide because what I discovered right is that the gap between what I learned at Stanford Business School and the stuff I actually needed the day I launched this scrappy little strapped startup couldn’t have been wider right and and that’s at one of the best business schools in the world but what it what those business schools really prepare you to do is enter as a mid-level manager into a large organization very few of them prepare you to be a boot scrape entrepreneur right that needs to walk out and figure out how to how to find some space how to get pesky little things like insurance you know when you when you start thinking about somebody you’re gonna partner with what’s that all about you know how do you go about the nuts and bolts of raising money without screwing yourself you know there and ever after all that stuff you don’t really get in Business School you get that by getting out there and doing you know hope so no I agree and we’re gonna be wrapping up soon so I want to ask you just I wanted to wrap up the questions on angel investing any companies that you’ve written checks to that we would know about well I mean I can tell you a couple of ones that I’m super excited about right now there’s there’s one of my ironically one of my board members started a company called basil Street Cafe which is a really cool automated Pizza Kitchen concept that I think co19 has has actually now made more viable even than before but it’s a really sophisticated combination of technology branding and distribution to create a nationwide initially and then global automated Pizza Kitchen and and that produces some of the most kick-ass pizza that I’ve ever had in my life which is really astonishing because your expectations have a machine or very low and it turns out it’s every bit as good or better than blaze or any restaurant quality pizza so that Softbank backed one of those automated pizza companies hopefully you guys have a better a better run at it than those guys I think sometimes you know like there are things that that you know we’re a great idea but we’re ahead of their time and I think some of the some of the plays that have attempted to do this before had an interesting idea but the technology they didn’t get right and you know and it’s largely a distribution business as well because you have to make great great pizza and be able to you know keep the keep the machines stocked with it and so it’s a but I’m excited about that one you know I’ve got another buddy that I’m helping that has a company called ever ins which i think is a really cool you know opposite end of the spectrum and a lot of in a lot of respects it’s it’s basically a very unique way to to collect capture and then encapsulate can be anything but the idea is hair ash could be any kind of material you know from a flower from you know the mountaintop where you got married or buried your gran mother or whatever and then enables that to then be put into either jewelry right that that you now have for instance I’m having some stuff done right now that I’ll have my boys you know lakhs of their hair encapsulated and put into a bracelet right that’ll happen with me always and so it’s like with Billy Bob Thornton and Angelina Jolie had filed the blood you ever read about that they’re [ ] weirdo but the other thing they do that’s really interesting you you choose to put it into jewelry or into tattoos so for everybody who has tattoos and wants to ascribe a little more meaning to them right it’s a it’s kind of a cool thing to be a MacRay to cut a lock of you know everything from your dog’s hair to your kids hair or a cheek swab and you send it off to them and they’ve got this patented unique process what the call into what what you know keepsake basically a permanent keepsake with a jewelry or a tattoo how do you spell it Everett’s e ve R and C E and they’re cool they’re website severance dot life but yeah there’s a couple you know that and and then I’m involved in a in a technology company and lidar radar called lumen R which is a cool a cool company and that’s one of the example of one of those that all right not exactly in my wheelhouse right not an area that I can necessarily add value to but you know very exciting and another friend who pays a lot closer attention to that space you know put it in front of me and it just made sense it’s it’s you know one of the companies that’s out there vying for supremacy in the self-driven automobile category and I feel like if you if you tell me that category and that you’re starting a company in there I would just invest in there just because it’s like yeah probably right it’s kind of in that category and then you look at that you look at the you know the leaders and go well those people are really smart people this is us this is a sector someone’s gonna win in probably more than one so you know reasonable and again as I said you know I’m I’m uh I’m a you know 20 to 50 K investor in any given one thing I’m not taking huge exposed positions usually I like to invest in things where you know I can help based on my experience as a brand or as an entrepreneur you know some government stuff that I’ve got involved with because obvious I spent a long time and you know in the government space but and then just some cool companies right there’s cool companies that I’m trying to help right now like in d.com is an awesome new platform to help influencers monetize their followings right with content and I’m a big believer in that space and it’s in it’s an area where I can help them by exposing them to our large installed base of trainers who all of whom are influencers in their own right and trying to figure out how to scale themselves right and create new sort of passive streams of income so you know it’s a smattering right and and there’s you know there’s a handful of others that are kind of in the same same category were you able to get some liquidity from the first PE event in order to make these investments the first one no I should have right and that’s one of the I mean one of the big lessons for anybody who’s listening and I really believe this unfortunately I didn’t I didn’t hear it or or if I heard it I didn’t listen the first time I heard it but I really think for entrepreneurs you really should not with I’m speaking generally because there are exceptions to every you know every generality but in general I don’t think entrepreneurs should take institutional capital without pulling a significant piece off the table it just you know from the time that you do and you introduce a preferred class of shares into your cap stack things change right what would be your definition of significant a million five million five hundred thousand I think it depends on the venture I I would view I would view it from where I sit now as you know if you were building and then running a successful company that and you thought that the only option for financing was to go raise it institutions I sell at least 1/3 you know of of my holding to bring those people in enough basically enough to be ok if things go differently than you expected that that would be sort of the you know the rule of thumb ant answer so that we’ve had a wait but you had a way for the second round then to make that happen yeah yeah and and you know I probably could have sold more at the first stop but I I was very bullish and very you know as entrepreneurs need to be and I thought hey this is you know I’m not selling anything right now um and that you know that was a big mistake that when I look back on it later on on it you don’t realize it you could be locked up with these guys for a long time right and once they’re in front of you then getting any kind of liquidity becomes really problematic so you know that’s just something that entrepreneurs need to keep in mind and you know you could you could lose control obviously if you sell control but there are other ways where you know through the Preferences that institutional investors tend to get into term sheets where your autonomy and your ability to drive the bus at the very least get impaired in ways that you didn’t expect and you didn’t have the ability and we’ll wrap this up a second what you didn’t have the ability to take a couple million bucks like a million dollars off the profit each year to pay yourself I mean so like you are just strictly earning a low salary as the company grew or were you able to like because if you raise five million bucks right out the gate I would imagine you wouldn’t even have had the ability to say like well this year we made three million in profit I’m gonna write myself a seven hundred thousand dollar check no of course not and and you don’t you know and that’s not frankly that’s I mean that’s that’s a tough way for an early-stage entrepreneur to even think because if you’re starting to think about trying to extract stuff out of an early stage business chances are you’re gonna impair that businesses growth and so my my view is never of that I mean I wanted to start making money right because the first if you count you know two years of Business School where I was where I was working on this idea I went the first that those two years blessed the next three without any pay right so I was five years you know into a no pay environment baseline and that’s why I’m saying like but you’re like ten years in before you raise the first round I think right yeah we were maybe a little less time a were nine years in don’t think by that point like alright if we’re doing okay like I could definitely I can definitely work I should have taken money off the table then that was one of the mistakes right because what I focused on instead was hey I want you know to up my up my my salary right and my bonus structure to a point at which I can start making you know a good living on an annual basis but I should have I should have done both right because that that was possible and I chose to just focus on all right let’s get my cash comp up to a up to a level that feels right for you know what I’ve built in the hundred hours a week that I’m working and not worry so much about you know extracting value right now right oh man you’re saying you should have it just increase your salary and bonuses not I should have done both is what I said I I did increase my salary and bonus structure I did not pull money out of the business right and that we’re gonna stake all were you paying yourself that to where I mean we paying 50 grand a year well I mean no probably more than that by by then but early on yeah I mean should for the first three years I was paying myself nothing then I think I started paying myself 50 grand you know and it just sort of if you if you dollar cost average back you know it would have been a very bad financial decision right on an on an hourly basis but you know you get there and and I make you know a good living today that’s that’s that’s plenty so you know it all evens out but if you dollar cost average the first ten years I probably made fifty grand a year you know which which after 14 years as a Navy SEAL with a Stanford MBA right eight killing it and in Mill Valley where I lived in San Francisco at the time I thought the alley like everyone does eventually or to Marin you know but but yeah I was living in you know living the city paying a mortgage up on Twin Peaks and oh no [ ] I’m in Glen Park oh well that’s that’s where I was I was right behind tower market Austin Park my Glen Park was my my my rake dealer you know the Chenery rest strong I was still down no but that was my rage and I live it down the hill and you know you Glen okay I live in Park I rang Glen Canyon today and I have a house here with like a garage and a gym with my TRX this is awesome man you’re cool [ ] I appreciate you taking the time what’s your preferred method what’s your preferred method of chatting with people to Twitter that rainy hat trick ride Instagram Instagram and on Facebook at TRX training is is the brand and TRX training calm is is obviously our website I’m working on a Randy Hetrick calm website right now we’re where some of my stuff that you know my next big big vision is to to take a page out of Richard Branson’s you know handbook and and basically figure out ways to grow my brand that can help the brand that I gave birth to do things that maybe it can do and vice versa right you ladder yourselves up just like he’s done with virgin and the Richard Branson brand that’s that’s you know sort of a goal that I have maybe you know I’d be wildly fortunate to get to his scale but I could I could be happy with a lot less than that scale as long as I’m still contributing value to with the mothership and it’s giving me opportunities to do cool stuff well I I think you you you look you you have the story you have the look you have the charisma Navy SEAL who’s fit and also went to Stanford IV yeah [Music]