Speaker 1: Coach, the energy out there felt different. What changed for
Speaker 1: the team today?
Speaker 2: It was the new game day scratches from the California
Speaker 2: Lottery players.
Speaker 3: Everything.
Speaker 4: Those games sent the team's energy through the roof.
Speaker 1: Are you saying it was the off field play that
Speaker 1: made the difference on the field.
Speaker 4: Hey, little play makes your day, and today it made
Speaker 4: the game. That's all for now, Coach, one more question.
Speaker 1: Play the new Los Angeles Chargers, San Francisco forty nine
Speaker 1: Ers and Los Angeles Rams scratchers from the California Lottery.
Speaker 1: A little play can make your day. Peace made responsibly.
Speaker 1: Must be eighteen years or older to purchase late or claim.
Speaker 3: All right, guys, welcome back.
Speaker 5: So we have a very special addition today, very special guests,
Speaker 5: very special topics. It's just very special all the way around.
Speaker 5: So all right, we're gonna get this started. But before
Speaker 5: we get it started, first we gotta give a shout
Speaker 5: out to the d All did you know that we
Speaker 5: was number two in d off a business podcast.
Speaker 4: I did not know that.
Speaker 5: Yeah, we have a very strong following at the some
Speaker 5: of our best guests, Lord of the Slump Man, Fernando.
Speaker 3: Shoza, shout out to Caesar and shout.
Speaker 5: To everybody in Dykeman. Yeah, it's like a second home five.
Speaker 5: They show us so much love out there.
Speaker 2: It was the first place when we stepped out the car,
Speaker 2: somebody was like, yo, Troy was shot and we were like, oh,
Speaker 2: they know it's out here.
Speaker 3: Ye shots.
Speaker 5: Shout out at the tournament, specifically, shout out to Miguel
Speaker 5: Chris Kenny, Mikeylo, keV and shout out to Katrina Castro.
Speaker 5: She's a huge actress in Don She's a big fan
Speaker 5: of the podcast too. So the reason why I say
Speaker 5: that is that our guest and letting John Henry is uh,
Speaker 5: you're Dominican, right, one hundred percent right?
Speaker 4: Yes, I am from the Heights, from Heights as well.
Speaker 4: That's pretty much to making republics for those who don't know.
Speaker 5: Yeah, so if you don't know, John gave you a
Speaker 5: brief introduction. He's the man, the myth, the legend. Yeah
Speaker 5: Forbes thirty on the thirties. Whole team actually made that.
Speaker 5: I just I just realized that he sold his first
Speaker 5: company when he was twenty one, four million dollars. He
Speaker 5: started co Fund Harlem. He owned seventeen apartment in two
Speaker 5: buildings in Pennsylvania and he has a venture capital firm.
Speaker 5: This is something I'm really interesting. He has a venture
Speaker 5: capital firm. And he's twenty six, twenty six, twenty six
Speaker 5: years old, twenty six years old, So that's a lot.
Speaker 3: Lot, that's a lot.
Speaker 5: So yes, can we get your story because it's I
Speaker 5: did some reading and it's it's crazy. So you started
Speaker 5: at eighteen, you were dormant, right.
Speaker 4: That is correct?
Speaker 3: Yep.
Speaker 4: So first off, just shout out to you guys. Man.
Speaker 3: Thanks, I appreciate you. Appreciate you.
Speaker 4: Of course behind the camera too, never forget behind the
Speaker 4: can for sure. Because we've been making we've been wanting
Speaker 4: to pop off for a minute, and I've been getting
Speaker 4: tagged on your guys, and not only just tag but
Speaker 4: DM and like people.
Speaker 2: We gotta I think we're gonna call him the earners,
Speaker 2: like every Yeah, we're gonna call them the earners.
Speaker 4: I've been looking for a little thing like that.
Speaker 2: We're gonna go. Shout out to my man Kennon in Detroit.
Speaker 2: He was like, Yo, Troy, you gotta call him the earners.
Speaker 2: So when the earners come to your page, yep, they
Speaker 2: come with.
Speaker 4: A man and and then I had a homegirl who
Speaker 4: was like yo, and put you guys in touch, and
Speaker 4: we ended up in touch. So I'm glad. I'm glad
Speaker 4: this went down. So yeah, So there's that because I
Speaker 4: know it's not it's not easy to build a community,
Speaker 4: and you got to stay very consistent, and it's very
Speaker 4: difficult to remain consistent, whether it's original content and or curation.
Speaker 4: Like your guys, curation is a very specific point of view.
Speaker 4: So as a fellow content creator, I don't take that
Speaker 4: for granted. So thank you.
Speaker 3: I appreciate that. Thank you.
Speaker 4: Yeah, no doubt So yeah, man, I mean my story
Speaker 4: is what it is that's out there as well documented
Speaker 4: and all that's just true. You know, just like kid
Speaker 4: from the Heights, you know, grew up in a very
Speaker 4: poor family. We grew up below the poverty line, so
Speaker 4: Dominican immigrants to Dominican immigrants. So both my parents combined
Speaker 4: didn't make thirty thousand a year. And there were six
Speaker 4: so I'm the youngest of four. So it's four kids
Speaker 4: plus two parents, six of us, you know, living just
Speaker 4: like pretty much everyone else in the Heights of New
Speaker 4: York in the nineties in a little one bedroom apartment
Speaker 4: and my pops put up a little fake wall to
Speaker 4: make everybody know that curtain. And so my sister had
Speaker 4: a full bed, my oldest brother had the top bunk,
Speaker 4: and I actually split the bottom bunk with my brother
Speaker 4: closest to me in age. So it's not even like
Speaker 4: we had a bunk bed. We split the bottom bunk.
Speaker 4: It's not like a goal, which, like I guess these
Speaker 4: days sounds like, oh my god, you know, but it's
Speaker 4: just is what it is. And yeah, man, that was
Speaker 4: just a formative DNA. I think one big blessing that
Speaker 4: I had was grown up in a two parent household,
Speaker 4: despite you know, a lot of adverse New York in
Speaker 4: the nineties, just very crazy, a lot of shit popping off.
Speaker 4: I had an oldest brother whom was of age when
Speaker 4: when my parents moved to the States, so he was,
Speaker 4: you know, thirteen, fourteen, fifteen, so you know, my parents.
Speaker 4: I feel like, like Kendrick, like good kid, mad City,
Speaker 4: definitely mad City. But my mom's who was who was
Speaker 4: already like dealing with the effects of watching after my
Speaker 4: oldest siblings, like made sure that you know, we were
Speaker 4: busy or some ship you know, or stayed and we
Speaker 4: only you know, we could play just in the lobby,
Speaker 4: you know when we were and uh yeah. So anyway,
Speaker 4: so that was the early DNA man and then you know,
Speaker 4: I moved to We moved to Florida after nine to eleven.
Speaker 4: Also one thing that I don't talk about that often,
Speaker 4: but there we we there was an arm burglary in
Speaker 4: our home. Complete mistake, you know, but some casts like
Speaker 4: broke into our crib and you know, there were eight
Speaker 4: guys that were all armed, tied us all up except
Speaker 4: for me because they didn't expect two people to be
Speaker 4: in the bottom bunk and I was. It was crazy
Speaker 4: kind of stuff. And just like that couple with nine eleven,
Speaker 4: my folks were like, yeah, we're not gonna do this.
Speaker 4: So we moved to Florida, spent some time there. My
Speaker 4: mom worked as a custodian in an affluentighborhood. And so
Speaker 4: one of the perks that you get is that your
Speaker 4: kids can go to that school district, whether or not
Speaker 4: you live in that neighborhood. And so that was a
Speaker 4: very big blessing because it's like a children horse got
Speaker 4: to go to this schools, specifically high school where it's
Speaker 4: just a lot of affluent kids and for the first
Speaker 4: time we were like we were broke alone, Like I
Speaker 4: was the only broke kid. It's one thing when everyone's
Speaker 4: broke is one. There's another thing when like your friends
Speaker 4: have enormous homes and getting whips at age of sixteen
Speaker 4: and all this kind of stuff. So that kind of
Speaker 4: put a chip on my shoulder in an interesting way.
Speaker 4: And I guess, just to speed it up, I actually
Speaker 4: fell in love with music. At that point in time.
Speaker 4: I was damn near rosta. I had grown out.
Speaker 3: Of my locks choice making.
Speaker 4: That's a fact. Oh really, you know, spunked a little
Speaker 4: too much, weak, was tied down my own shirts and
Speaker 4: shiit picked up the guitar. Oh, just like roots, like
Speaker 4: real real roots, like Barrington Levy he was in Trench. Yeah,
Speaker 4: Ziggy's okay, like Damian Moore, you know Bob as well,
Speaker 4: Steel Polse like roots roots. I actually joined a roots
Speaker 4: reggae band. It was a whole Rosster Farign family. It
Speaker 4: was a whole, the whole thing. But I pursued. I
Speaker 4: fell in love with the instrument, and then through reggae,
Speaker 4: discovered blues and reggae, which I love. It's but it's
Speaker 4: very static as a music. It's boommmment and it sits
Speaker 4: in the pocket. And then I discovered blues, it progresses
Speaker 4: a little more, and then I discovered jazz. And at
Speaker 4: that point I cut my hair and I was like,
Speaker 4: I was playing eight hours a day every day. No,
Speaker 4: it was not like a casual thing. I was very
Speaker 4: committed to the music, and I actually moved back to
Speaker 4: the city to pursue music. I wanted scholarship. I came
Speaker 4: here for that. And then you know, coming back to
Speaker 4: the city as a young adult and all the stimuli
Speaker 4: that you have and all the drive you could really
Speaker 4: apply towards anything. And so I got a job as
Speaker 4: a doorman and that kind of started off my whole business. Dren.
Speaker 2: Yeah, so the doorman situation, you said that a lot
Speaker 2: of residents, wealthy residents will come in and out and
Speaker 2: you decided that, hey, this is a chance here, and
Speaker 2: one of them changed your.
Speaker 4: Trajectory forever, forever. That's exactly right. The special thing about
Speaker 4: living in a big city is the proximity. There's a
Speaker 4: lot of power in proximity and like you just you know,
Speaker 4: being exposed to different life paths and that can come
Speaker 4: in the form of anything. For me, happened to come
Speaker 4: in the form of working the desk and just seeing
Speaker 4: I first at Dormant on Wall Street, seventy five Wall Street,
Speaker 4: which is a residential building, and like I got exposed
Speaker 4: to you know, trum, like the most affluent people in
Speaker 4: the country, but that never felt attainable to me because
Speaker 4: it was like, oh, white money. I then later got
Speaker 4: the chance to Dormant in Brooklyn, and who was there
Speaker 4: in that building A lot of different people with a
Speaker 4: lot of different life paths. For instance, some folks that
Speaker 4: come to mind, notable people. The founders are rap genius,
Speaker 4: y genius, crazy, like few white boys, like oh what
Speaker 4: you know them pastor Carl Lentz, mega pastor of Hillsong,
Speaker 4: mega pastor now like globally known. There were directors. There
Speaker 4: was the founder of Voxy, this cool startup, Christina Ricci,
Speaker 4: this actress. I mean, there was this guy named Ivan Green,
Speaker 4: a professional rock climber, professional dating coaches, I mean, every
Speaker 4: kind of career you can think of. Yeah, like some
Speaker 4: of us got paid thirty g's per client to show
Speaker 4: losers how to pick up girls. And so yeah, at
Speaker 4: some point, you know that kind of sustained proximity showed
Speaker 4: me that you can make a living doing exactly what.
Speaker 2: So like as people are coming in, you're just having
Speaker 2: casual conversation and we're just passing it like this.
Speaker 4: Guy, I like this kid, Yeah for sure, just being interested,
Speaker 4: you know, like you know, there were dormant who had
Speaker 4: been there for years, who were sleeping on you know,
Speaker 4: the power of now.
Speaker 5: You know, I'm glad we having this conversation because it's
Speaker 5: something that a lot of times people take for granted
Speaker 5: the power of networking. And like, speaking of Florida, I
Speaker 5: used to play basketball, so I went to IMG Academy.
Speaker 5: I don't know if you're in the sports, but it's
Speaker 5: a real big sports academy in Florida. And one of
Speaker 5: my biggest regrets is that when I was there, like
Speaker 5: literally it was so many people that was there, like
Speaker 5: John McEnroe's son, Maria Sharup over like all these different kids,
Speaker 5: and it's like every like a lot of these people
Speaker 5: came from very wealthy families or they they did extremely
Speaker 5: good things. And I was kind of like just in
Speaker 5: my vibe just you know, sheltered off just people. I
Speaker 5: played basketball, but I wish that I would have. It
Speaker 5: was right in my fingertips, right, And it's like a
Speaker 5: lot of times people don't fully understand like you were
Speaker 5: in the building and you networked. You wasn't like their peers,
Speaker 5: but that didn't stop you from actually networking making relationships.
Speaker 4: Yeah, And I just you know, want to bring a
Speaker 4: little color to the word networking because that, to me,
Speaker 4: it's got to up fake connotation of like networking, like
Speaker 4: you're looking for something out of someone. And that was
Speaker 4: just never my whole that was never my thing. I
Speaker 4: was never like, yo, I'm going to meet with this resident,
Speaker 4: because it was just like I'm just interested in you
Speaker 4: as a person.
Speaker 2: You become part of their daily life, Like I see
Speaker 2: you every day.
Speaker 4: For sure, right, Like we have kids, just like.
Speaker 2: You've watched their kids grow, you watch them get a pet,
Speaker 2: you watch all these things happen.
Speaker 4: And there's something special about when you connect with someone
Speaker 4: with no expectations in mind, and like that's what builds
Speaker 4: to me, builds real depth and allows you to transcend
Speaker 4: beyond the networking bucket and then you develop a real relationship.
Speaker 4: And I'm still friends, actual friends with a lot of
Speaker 4: these people. Man. And it's crazy, because you're right, we
Speaker 4: weren't peers at that time, some you know, and allow
Speaker 4: a lot of us are peers for real, and it's
Speaker 4: just they still look at me and like, damn, that's
Speaker 4: crazy because the door for me.
Speaker 3: Sorry, So how'd you get the cleaning business? Though?
Speaker 4: All right? So the cleaning business? And I'll run through
Speaker 4: this quick because this is well dot com and I
Speaker 4: suspect that maybe some of the folks listen might have
Speaker 4: heard this bit of this. But yeah, man, there was
Speaker 4: one resident in particular. His name is Hugo. Shout out
Speaker 4: to Hugo. Love him like a brother, and yeah, he
Speaker 4: comes from from where I come from, you know, different neighborhood, Brooklyn,
Speaker 4: but you know, just from being poor. And he was like, Yo,
Speaker 4: what fuck you doing? Bro? Like like you know, at
Speaker 4: that time, so I was making fourteen dollars an hour
Speaker 4: and I was in a suit and in an ac
Speaker 4: and like that in and of itself, you know, my
Speaker 4: my pops was paid forty cents a garment, you know,
Speaker 4: so like damn your sweatshot conditions and so like there
Speaker 4: was a notable step up. And it was enough for
Speaker 4: me to I may maybe nine hundred bucks every two weeks.
Speaker 4: So it's enough for me to help the family out.
Speaker 4: But like he just quickly let me know, man, you
Speaker 4: don't got to set up for being a dormant. You
Speaker 4: could have your own dormant, you know. And he saw
Speaker 4: my earnestness, so he put me up to something. And
Speaker 4: there were actually a number of residents who were trying
Speaker 4: to put me onto different hustles. But eventually you got
Speaker 4: to find a vehicle that feels right for you. You know.
Speaker 4: Some lady tried to put me onto editing videos, making
Speaker 4: five hundred bucks of video. Like if that was in
Speaker 4: my DNA, I could have done that, right, But I
Speaker 4: ended up resonating with this approach. Hugo, who had a
Speaker 4: franchise a dry cleaner. He has like maybe he had
Speaker 4: like at that time, you know, dozens of dry cleaners.
Speaker 4: And what I didn't know is that the facility is
Speaker 4: the most expensive part. And then most of the dry
Speaker 4: cleaners that you guys go to are actual their drop shops.
Speaker 5: So let's talk about that, because I know you've probably
Speaker 5: told this story before, but on Eyo, we like get
Speaker 5: deep into So these are kind of businesses that you
Speaker 5: see you use every day. But I've never heard anybody
Speaker 5: explain the business model of how dry cleaner makes money.
Speaker 5: So you had a successful dry cleaning business. You don't
Speaker 5: even have a business background. That's interesting as well. How
Speaker 5: do you know how to run a business and how
Speaker 5: do you like, how is that Profitablecause at one point
Speaker 5: you say he was making like a hundred like, well
Speaker 5: the revenue was one hundred thousand a month.
Speaker 3: Right, yeah, yeah, how is that possible?
Speaker 4: Yeah? So you don't you don't need a business background.
Speaker 4: You just you just gotta be you gotta be able
Speaker 4: to make a transaction happen. And that's really at the
Speaker 4: essence of the business of any business is transactions and people.
Speaker 4: And so if you know, a lot of people don't
Speaker 4: get off the ground because the weight of their expectations crushes,
Speaker 4: you know, the seed of the thing. Because you place
Speaker 4: all these experts, you know, I need this shit to
Speaker 4: be a full blown business. Now, motherfucker, you don't like
Speaker 4: make a sale, you know what you know? And so
Speaker 4: Hugo showed me.
Speaker 3: That.
Speaker 4: So this is the way the dry cleaning model works.
Speaker 4: Is like there's a facility and that is the expensive
Speaker 4: part because these machines cost a lot of money, and
Speaker 4: dry cleaning uses something called perk, which your clothes do
Speaker 4: get wet, so dry cleaning is like a false pretense,
Speaker 4: but it gets wet with a solvent chemical of sorts
Speaker 4: solution called perk, and so anyway, that stuff has to
Speaker 4: be handled in a very specific way and whatever. So
Speaker 4: the facilities are typically expensive. However, most dry cleaners that
Speaker 4: people interface with are actual what they call drop shops.
Speaker 4: So this is a small retail facility, you know, like
Speaker 4: might be four five hundred square feet where customers go
Speaker 4: and it's typically in a residential neighborhood, and customers go
Speaker 4: and they drop off their garments. Like if you know,
Speaker 4: if I were to drop this off, this blazer would
Speaker 4: cost me like nine bucks and my parents and whatever.
Speaker 4: And then what those retail shops do is they actually
Speaker 4: outsource them to the facility and then you typically pay
Speaker 4: on a per piece basis. So for me, Hugo gave
Speaker 4: me wholesale pricing without me having wholesale volume, i e.
Speaker 4: This blazer as a regular customer would cost maybe nine
Speaker 4: dollars to dry clean. Hugo was doing it for me
Speaker 4: for two bucks. That's a great margin.
Speaker 2: Now, did you have a facility or are you doing well?
Speaker 4: So Hugo did so Hugo was like, yo, I can't
Speaker 4: really help you out and that much, but I can
Speaker 4: give you access to a facility. I was like, perfect,
Speaker 4: that's all I need. So my job that's why it
Speaker 4: was like there was no silver spoon or anything. My
Speaker 4: job was. He was like, all right, bet you have that.
Speaker 4: Oh think something happened. That's it. Yeah, see you later.
Speaker 4: So then, you know, I took the same suit that
Speaker 4: I was doormanning in and made some cheap business cards
Speaker 4: and some fucking flyers and I called the Giant Ree cleaners.
Speaker 4: It was not that original, you know, And I just
Speaker 4: went to I was walking around Harlem and just knocking
Speaker 4: on doors literally and getting to knownother doorman and saying, yo,
Speaker 4: I know you're the key to the building because I'm
Speaker 4: a doorman too, and like getting them to refer their
Speaker 4: residence to me anytime they had an issue or whatever,
Speaker 4: and I would break them off on the low. And
Speaker 4: I remember when I got my first call from a lady,
Speaker 4: you know. And I actually had gone to AT and
Speaker 4: T and paid them two hundred bucks to get a
Speaker 4: two one two cell phone number, so they thought they
Speaker 4: were calling in a real shop. And I was having
Speaker 4: lunch with my parents and I stepped out. She was like, hi, yeah.
Speaker 4: I was like yes. She was like, I like to
Speaker 4: place an order. I was like all right, cool. Yeah.
Speaker 4: She gave me her dress. I took the subway. I
Speaker 4: had no whip, but at the time took the subway.
Speaker 3: You know.
Speaker 4: She opened the door and I was expecting, you know,
Speaker 4: I don't know what I was expecting, like to be
Speaker 4: grilled or something. And she she didn't even know I
Speaker 4: was on Henry. She just always a delivery guy. She's like, well,
Speaker 4: here you go.
Speaker 2: So it's like an on demand service.
Speaker 4: Yep, she called.
Speaker 3: I went.
Speaker 4: I picked it up. I took it to the facility
Speaker 4: where hego was at. Yeah, on foot via train. He
Speaker 4: cleaned it. The next day. I went back to Bushwick
Speaker 4: where he was grabbed. It, went all the way up
Speaker 4: to Harlem, delivered it. And then when I delivered it,
Speaker 4: she gave me seventeen bucks. And like, yes, I traveled
Speaker 4: three or four hours total to make seventeen dollars. But
Speaker 4: those seventeen dollars changed my life because it was seventeen
Speaker 4: dollars from my own system, and one dollar from your
Speaker 4: own system is worth a thousand dollars from another man's
Speaker 4: that's powerful.
Speaker 5: And also, you know I like that story is that
Speaker 5: it's a lot of creativity in that. If you want
Speaker 5: you watched Casino, No what you gotta watch what Casino?
Speaker 5: Sam Rosstein? Who do you say the most important people
Speaker 5: in Vegas was.
Speaker 4: Troy to Do?
Speaker 3: Nope, the the people at the table, the valet parkers.
Speaker 2: Oh yes, yes, they know everybody know everybody.
Speaker 3: I like the average person.
Speaker 5: If I'm starting to clean a business, I'm going door
Speaker 5: to door, Like, but think how much you went to
Speaker 5: the dormant because they know everybody. You was already a
Speaker 5: dormant yourself, so instead of having a knock on you
Speaker 5: probably couldn't get in the building anyway. But instead of
Speaker 5: trying to knock on three hundred doors and people was
Speaker 5: like who are you? You just you cut the middleman out.
Speaker 5: You went straight to the person that speaks to everybody on.
Speaker 3: A day to day basis exactly.
Speaker 5: You gave them an a sentive because you get them
Speaker 5: some money for every person they preferred. It's actually a
Speaker 5: brilliant system. See things like that is like who thinks
Speaker 5: about stuff like that?
Speaker 4: I mean you're in the industry, so you know, yeah, right,
Speaker 4: And I can't. I can't take it for having some
Speaker 4: brilliant idea. To your point, it was really just that's
Speaker 4: what I knew, and so like like some people hear
Speaker 4: this and want to replicate my path, But that was
Speaker 4: just what I knew. So what do you know?
Speaker 2: Yeah, well we got to give you credit though, right,
Speaker 2: because there are four hundred to one thousand people who
Speaker 2: were doing the same job who didn't have that.
Speaker 4: Sure, you see what I'm saying. Sure, so I'll take
Speaker 4: credit for having the drive, right, but I can't take
Speaker 4: credit for having some kind of brilliance. It was just like,
Speaker 4: you know, the connection with the doorman ran deeper than
Speaker 4: the incentive because at some point you stop even breaking
Speaker 4: them off. They do it because they talk like that
Speaker 4: and like that. Man. People underestimate this shit. Man like
Speaker 4: business is a lot more the art of connecting with
Speaker 4: people than it is the art of making numbers. Later,
Speaker 4: the numbers you know you'll yield. You'll make some money
Speaker 4: as a result of connecting with people, in my opinion.
Speaker 3: So you you skilled it to one hundred thousand a month.
Speaker 4: Yeah, we grew, man, we were then. There was no
Speaker 4: way we would get to that volume just doing little
Speaker 4: individual residents. There was another resident of the build that
Speaker 4: same building. I was planning a quip. You know, I
Speaker 4: was waiting for December twenty fifth, you know, Christmas. I
Speaker 4: was the building's favorite. So I was maybe gonna make
Speaker 4: like four or five g's and that was enough. Man.
Speaker 4: I was going to quit and get all my ship.
Speaker 4: And I actually got fired because you know, entrepreneurs don't
Speaker 4: make good employees. At that point, they were hitting me
Speaker 4: with conflict of interests. You know, they were like, yo,
Speaker 4: he's trying to convert residence to customers. You know that
Speaker 4: wasn't true. But like you know, when they want to
Speaker 4: give you the can like they oh, they'll definitely find
Speaker 4: a way. So they found a way and they fired
Speaker 4: me in December. So I was really distraught. Man. I
Speaker 4: thought that my ship was over. And then I got
Speaker 4: a call from a seed that I've been planting for
Speaker 4: a minute. It was you know, one of this resident
Speaker 4: introduced me to the film industry wardrobe supervisor for The
Speaker 4: Wolf of Wall Street, which did end up becoming the
Speaker 4: first movie I ever did.
Speaker 2: You did the so you became the cleaning service for
Speaker 2: all the wardrobe for the film.
Speaker 4: If you've ever seen the World Wall Street, every single
Speaker 4: piece of wardrobe from the principal actor Leonardo, to the
Speaker 4: extras in the Stockbruker scenes, like all that shit is money.
Speaker 4: And one thing people don't know is at production companies,
Speaker 4: they actually for the most part rent garments unless they
Speaker 4: are very specific pieces and they're they're custom. For the
Speaker 4: most part, they're rented. And the cool thing about when
Speaker 4: they're rented is that they have to return the garments
Speaker 4: dry cleaned, and so they you know, at this point,
Speaker 4: the dry clean industry didn't have anyone that was willing
Speaker 4: to go and picture it up at three in the morning.
Speaker 4: And so when a multimillion dollar production has no choice
Speaker 4: but to go with an eighteen year old kid who
Speaker 4: dropped out of college and had no business experience, that
Speaker 4: tells you they have an actual need. Yeah, you know.
Speaker 4: So we met and like, I didn't get the business
Speaker 4: right away. Months passed and then he called me. He
Speaker 4: was like, yo, you're in luck because I got no
Speaker 4: other option. You know. He's like, you want to come
Speaker 4: the ship and I was like yeah, And I actually
Speaker 4: went to pick up my first load of laundry. When
Speaker 4: you're in the laundry business and you see big sacks
Speaker 4: a laundry. You don't see sacks of clothes. You see
Speaker 4: giant money bags. Literally, like I'm just like, oh my god.
Speaker 4: There was like maybe five or six big ass bags,
Speaker 4: and and I didn't have a whip man. And they
Speaker 4: were like, yo, you want to sell? They were like, yo,
Speaker 4: you want us to help you carry this ouse? Like no,
Speaker 4: no, no no. I got the band right around the corner,
Speaker 4: and I actually brought the sack one by one and
Speaker 4: left them around the corner. And then when I was
Speaker 4: sure they wasn't looking, I went and I lugged them
Speaker 4: up the a train to my put them on the train.
Speaker 4: I put them on the train, all six. So so
Speaker 4: when you watch street, all them ships were dragged through
Speaker 4: the uptown train.
Speaker 3: A train is the worst.
Speaker 2: Literally, just just just curious bags. Bro, what what what
Speaker 2: type of revenue comes from that type of cleaning?
Speaker 4: So I must I must have made on that order
Speaker 4: something like uh maybe two g or something like that.
Speaker 4: And then the margin works out to you net like
Speaker 4: damn near seventy or sixty five percent because you pay
Speaker 4: on a perpose basis and all this other stuff. But
Speaker 4: the point is here, I was making nine hundred bucks
Speaker 4: every two weeks and I just made two g's in
Speaker 4: an order. Now, not every order. I knew at that
Speaker 4: point not every order was going to be two g's.
Speaker 4: But you know in theory that if you can hit that,
Speaker 4: then you can hit it again, and so like that
Speaker 4: was a point with which like I kind of broke.
Speaker 4: I mean, really, the seventeen dollars order was what let
Speaker 4: me know, Okay, it's the measure of your effort, but
Speaker 4: that one let me know, all right, there's some real
Speaker 4: money to be made. And then long story short, we
Speaker 4: did a great job with that. I did not bring
Speaker 4: that one to Hugo, respectfully. I actually brought it to
Speaker 4: my father, whom I mentioned was a presser growing up.
Speaker 4: And that's how you put us through. And it makes
Speaker 4: me cry sometimes when I think about it, man, because
Speaker 4: you know, I was embarrassed about my father's profession growing up,
Speaker 4: and that is the same thing that ended up. I
Speaker 4: was able to bring it. And my father's actually a
Speaker 4: master presser. He's not like an like, he's a master presser.
Speaker 4: Highly saw it out and he pressed these garments very beautifully.
Speaker 4: I brought him back and then David Davenport, he gave
Speaker 4: me what's called the rap, which is the final order
Speaker 4: of the entire movie, when they clean every garment. And
Speaker 4: he said, Yo, bring a truck. And I went upstate
Speaker 4: and I brought an suv and he was like, John,
Speaker 4: bring a truck. And I came back with a truck
Speaker 4: and he opened up the fucking enormous garage door and
Speaker 4: there was sacks of laundry maybe fifteen or twenty feet high,
Speaker 4: literally every garment in the entire production. And when I
Speaker 4: was looking at that, all I saw again it was
Speaker 4: just giant money rags. Yeah, and that order, I think
Speaker 4: we made twelve to fifteen thousand, and that was enough
Speaker 4: for me to buy my first whip and just kind
Speaker 4: of keep the motion going because after that he was like, Yo,
Speaker 4: there's a new account town. If you get them, you're
Speaker 4: gonna be okay. For a long time. That was Borwalk,
Speaker 4: and then after that Law and Order, A Person Adventures,
Speaker 4: White Collar, Made a Spider Man two, Ninja Turtle, Spike Lee,
Speaker 4: Mike Tyson, Barclay Center.
Speaker 3: Yeah.
Speaker 5: But let me ask you this, because you all right,
Speaker 5: you sold it for a million dollars, and I heard
Speaker 5: you said that you sold it because you wasn't passionate,
Speaker 5: but My thing is, you got a nice thing going,
Speaker 5: you're making a lot of money. If you're not passionate,
Speaker 5: why not just have somebody else run it and just
Speaker 5: do something else.
Speaker 4: Because it's not it's not really that simple. I don't
Speaker 4: believe in that. In that, I don't believe in that.
Speaker 4: I believe that you're either running things with a tremendous
Speaker 4: energy and looking to grow, or you're slowly declining and
Speaker 4: now you can have a system in place that makes
Speaker 4: a decline very gradual so you can cash out a
Speaker 4: lot over time. But I really think it's a myth
Speaker 4: that you can have this you know business kind of on.
Speaker 4: You know, you can have a little small business kind
Speaker 4: of on that you've set up and you have you
Speaker 4: deploy a manager. But that was not the way that
Speaker 4: my business was set up. My business was very high touch,
Speaker 4: specifically with the film industry, very high touch clientele. It
Speaker 4: is not a hands off like it's a job we
Speaker 4: need you at three like it's incredibly intense and the
Speaker 4: only person who would deal with that shit is the owner.
Speaker 2: And so how many staff did you have at the peak,
Speaker 2: fifteen fifteen people?
Speaker 4: You know, we had a creative director. I was very
Speaker 4: creative with my hir and I had a branding guy,
Speaker 4: I know what cleaners do? You guys know that as
Speaker 4: a full time branding person, and he taught me I
Speaker 4: credit to omesh personage from the Bronx Indian guy. He
Speaker 4: taught me my initial appreciation for font, font typography, spacing,
Speaker 4: brand touch points, you know with the product. And so anyway, yeah,
Speaker 4: I sold that shit. Man. I sold it because it
Speaker 4: was a headache and frankly, the macro environment was not
Speaker 4: one that I wanted to I didn't want to be
Speaker 4: in this business anymore because I saw a very bleak
Speaker 4: future for the business. Because that was twenty fourteen, which
Speaker 4: is when I sold the December third, twenty fourteen. That
Speaker 4: was the time when it was not clear if it
Speaker 4: would be Uber or lyft. I don't know if you
Speaker 4: guys remember those days, but it was all about the
Speaker 4: Uber for everything. It was Uber for this Uber for
Speaker 4: that funding funding fun and I was like, damn, I'm
Speaker 4: just looking at the picture and I was already going
Speaker 4: toe to toe with these people and I'm like, damn,
Speaker 4: I just don't see this fair and well like it
Speaker 4: just it's clear to me that people are subsidizing their
Speaker 4: operations with ridiculous amounts of venture capital. At that point,
Speaker 4: I didn't have confidence in my ability to raise venture capital.
Speaker 4: And you know, I was like, dude, I got some
Speaker 4: decent that I built. Someone's willing to pay for it.
Speaker 4: Let me just sell the shit million dollars. And I could.
Speaker 4: That was a gross that was not the net ticket price.
Speaker 4: But that was like to me, the power of narrative
Speaker 4: and the power of confidence, and like, I started something
Speaker 4: in my own mind. I started this shit at the
Speaker 4: desk with my own mind, put some brand behind it,
Speaker 4: bells and whistles, whatever the fuck you want to call it,
Speaker 4: grew it, and a more experienced competitor and businessman whom
Speaker 4: I mean, this guy was really one of the smartest
Speaker 4: guys I know, a Mexican guy math. He was a
Speaker 4: mathematician by trade, and he saw value in it, and
Speaker 4: I sold it man, and at twenty one, at twenty one, yes, sir.
Speaker 5: So all right, you just talked about VC. So this
Speaker 5: is gonna bring us to our next time. We're gonna
Speaker 5: talk about a bench of capital. That's what you're doing now.
Speaker 5: And this is something that I'm really interested in because
Speaker 5: we haven't really covered this in depth at all. So
Speaker 5: he were gonna talk about that next, all right, So
Speaker 5: now we're gonna talk about VC. So we talked about
Speaker 5: vcs before. Previously we had an x NFL play shout
Speaker 5: out to Mike Brown and he's doing equity crowdfunding and
Speaker 5: he went to Duke. He used to work in Silicon Valley,
Speaker 5: so he's Silicon Valley and we know. So yeah, he
Speaker 5: told us about the whole VC process and all that.
Speaker 5: But like I said, one of the good things about
Speaker 5: Ernie Lisia is that it's kind of turned into like
Speaker 5: a college course in sorts where it's like, you know,
Speaker 5: a lot of these things you hear about, but nobody
Speaker 5: really knows the inner workings of it. And from his perspective,
Speaker 5: he told us to the outside end, but you actually
Speaker 5: have a VC firm. Yes, so this is we're just
Speaker 5: getting the apple sauce from the apple orchard. Yes, So
Speaker 5: this is dope. So all right, how did all right,
Speaker 5: so we gotta tell a story on this.
Speaker 3: How did you? How did you come into the venture
Speaker 3: capital world?
Speaker 4: Okay, so after I sold my business, I at that
Speaker 4: time was very passionate about building some kind of startup
Speaker 4: community in Harlem. So I did that, and it initially
Speaker 4: started as like a little meetup that we call co
Speaker 4: found Harlem, and it just kind of turned into you know,
Speaker 4: at that point, because I sold the business, I had
Speaker 4: a lot more bandwidth and creativity and runway, and I
Speaker 4: wanted to make some shit happen. So we added a
Speaker 4: little business model behind it. It was not a great one,
Speaker 4: but it turned into incubator of sorts. I convinced a
Speaker 4: developer to g me space for free. By the way,
Speaker 4: this is a thing you can I learned. I learned
Speaker 4: a lot to co Found Harlem because it was a
Speaker 4: non for profit that focused on economic development, so improve
Speaker 4: in the area. And so that that got me to
Speaker 4: interface with politics.
Speaker 5: So cupful because people might not be familiar. Co Found
Speaker 5: Harlem was an initiative that you started to help small
Speaker 5: businesses in Harlem get capital right.
Speaker 4: Yes, it was the first incubator in Harlem, and so
Speaker 4: that kind of project I stepped up a little bit
Speaker 4: in my thinking. I got a little bit more macro
Speaker 4: because I was going from just operating a business. Now
Speaker 4: I'm helping other people operate. So I'm interfacing with politics
Speaker 4: because I discovered, oh shit, politicians care about the area.
Speaker 4: Getting better, but more important than politicians. Politicians have power,
Speaker 4: but real estate developers have a very long term interest
Speaker 4: in the area. I discovered longer term than politicians because
Speaker 4: politics are just like looking for the quick election. Yeah,
Speaker 4: these members are here forty fifty years. And so I
Speaker 4: pitched a developer to give me free space. And you know,
Speaker 4: it was a very bold thing, and it was like
Speaker 4: why would I do that. I was like, well, because
Speaker 4: I'm gonna incubate businesses and the only thing I'm going
Speaker 4: to ask for them is that they stay in Harlem. Yeah.
Speaker 2: I think that's one of the things you said, right,
Speaker 2: that the businesses had to put their headquarters in Harlem.
Speaker 4: Yes, for four years. It ended up. It started as four,
Speaker 4: I ended up being two, okay, and so anyway, so yeah,
Speaker 4: so we were able to get free space because they
Speaker 4: were like, all right, bet, like, we want the value
Speaker 4: of our proper our main business residence is to go up.
Speaker 4: So they had some retail that was opened, so our
Speaker 4: bet cool take that. So yeah, so we got the space,
Speaker 4: we got mentors, we made a little bit of buzz,
Speaker 4: we got companies applying. All of a sudden, I'm running
Speaker 4: an incubator. It's a non for profit incubator. I'm raising
Speaker 4: money through grants and fund you know, and sponsors and
Speaker 4: shit like that. And I inadvertently got into running kind
Speaker 4: of an event's business. We had a little bit of
Speaker 4: an event. That's when I really started dipping my toe
Speaker 4: into content and building a community type business. And then
Speaker 4: eventually one of my biggest don owners who I didn't know.
Speaker 4: His name is David Rose. He's a very prolific angel investor.
Speaker 4: He's one of the most active in New York City.
Speaker 4: He pretty much was like, Yo, I come from a
Speaker 4: big real estate family. You might not know that, but
Speaker 4: I want you to do what you did for Ko
Speaker 4: found Harlem for us and learn the investment side.
Speaker 2: Can you describe what an angel funder?
Speaker 4: Yes, So, an angel investor invests in startups with their
Speaker 4: own money. A VC, a venture capitalist invest in startups
Speaker 4: with other people's money. And that's really the key distinction.
Speaker 4: And so David Rose is a prolific angel and he
Speaker 4: wanted me to He wanted to recruit me and help
Speaker 4: him run a fund as a real estate technology fund.
Speaker 4: So we invested in real estate technology, not physical stuff,
Speaker 4: property management software. And I told Dave, I was like Yo,
Speaker 4: I don't really know any of this. He's like, John,
Speaker 4: we know real estate. You bring your energy. So anyway,
Speaker 4: fast forward a year, we learned, you know, we made
Speaker 4: some good investments and like I sourced the deals on
Speaker 4: my own, like I did everything on my own because
Speaker 4: they were too busy to really give me guidance. But
Speaker 4: the most important thing I learned had nothing to do
Speaker 4: with the job itself. It had to do with like
Speaker 4: the family had generational wealth, like they controlled thou dozens
Speaker 4: of thousands of units in New York City. I mean
Speaker 4: truly a legacy family, man. I mean when you go
Speaker 4: to you know, Dizzey's Club, that's that's the Rose. You
Speaker 4: know the Rose Hall. If you go to the American
Speaker 4: Museum of Natural History, that's the Rose Planetarium. Like they're
Speaker 4: embedded in what it means to be New York. Mister Rose,
Speaker 4: as David's father, large and part funded Martin Luther King
Speaker 4: Junior's original Millenmire in March in nineteen sixty three. I mean,
Speaker 4: we're talking about a legacy family. And so at that point, man,
Speaker 4: I really caught the bug. I was like, yo, I
Speaker 4: gotta go do this for us. So I went back uptown.
Speaker 4: I met, I met the fellas whom are now my
Speaker 4: partners at ACP. They had their own background. They come
Speaker 4: from a more academic background, and they were fortunate to
Speaker 4: be exposed to finance early. You know, I learned this
Speaker 4: shit through being an entrepreneur. They learned this through like
Speaker 4: there are pathways and programs in place. There's one called
Speaker 4: SEO and there's one called MLT. These are placement programs
Speaker 4: specifically for people of color to break into investment banking.
Speaker 4: That's only in New York or this is nationwide, I
Speaker 4: want to say. And and yeah, these brothers actually all
Speaker 4: you know, they the group was bigger back then. They
Speaker 4: all met in these placement programs, all working for banks,
Speaker 4: Goldman Bank of America, shit like that, and they decided, like, yo,
Speaker 4: let's put our bread to work. So that you know,
Speaker 4: they started doing that, and they kept hearing about me,
Speaker 4: because that's one thing. If you are top of mind
Speaker 4: at whatever you do, you're going to get more opportunities.
Speaker 4: And so you know, eventually they came on my radar.
Speaker 4: We met, and we started investing together. And one thing
Speaker 4: to clarify, and this is really important because you know,
Speaker 4: people want to get into VC, like they think, if
Speaker 4: you don't have a million dollars, you can't do it.
Speaker 4: But in reality, our first few checks were like ten
Speaker 4: or fifteen K by the way, split between like five guys,
Speaker 4: So it's like it was like literally two or three
Speaker 4: k each.
Speaker 3: So that's what you all came to the table, like
Speaker 3: three thousand piece.
Speaker 4: Yes, that's enough right now. Now, Look, if you can't
Speaker 4: make slash save enough to make two or three K,
Speaker 4: you're not ready. But if you're not bullshitting and you're
Speaker 4: serious about your shit, you can stack two K, two
Speaker 4: or three K.
Speaker 2: So five of you come up with three thousand.
Speaker 3: You got fifteen.
Speaker 4: We put together fifteen and then what's the vision now?
Speaker 4: And then and then it's like all right, bet, now
Speaker 4: where do we put it? You know? And so the
Speaker 4: quality of your deal flow increases over time. But at first,
Speaker 4: you know, we caught word of a local cafe that
Speaker 4: was looking for money. Cool, We put a little bit
Speaker 4: of bread into that, got to experience what it was
Speaker 4: like to be invested in small business. We caught word
Speaker 4: of a dental practice, a guy that was buying in
Speaker 4: dental practice is looking for money. Boom, you know, because
Speaker 4: you start communicating y'all'm looking for businesses to invest in.
Speaker 4: You do get deal flow back. You put it out
Speaker 4: and you start getting deal flow back. We caught word
Speaker 4: of a venture company, and so we invested in a
Speaker 4: couple of different a few different assets.
Speaker 2: The initial fifteen nohere gross as we go.
Speaker 4: So it was like we did capital calls, which is like, hey,
Speaker 4: we found a deal, it's time to put bread up.
Speaker 4: So that's a capital call, and you hit the whole group.
Speaker 4: Between all the five of you, there was like six six,
Speaker 4: there was like six all right.
Speaker 5: So now it's like, okay, we put the first fifteen,
Speaker 5: and you have to put five more in each.
Speaker 4: Yeah, I mean five was a lot for me at
Speaker 4: the time, but like you know, it was like, hey,
Speaker 4: we found a deal, who can put what was really
Speaker 4: the question? And like if I was more liquid at
Speaker 4: that time and really liked the deal, I might have
Speaker 4: put four. And then we might have had a partner
Speaker 4: who was like, yoh, I can only put one right now,
Speaker 4: and so it would vary and so yeah, over time.
Speaker 2: You know.
Speaker 4: The interesting thing, and this is credit to my partners
Speaker 4: at harm Capital, is like we always treated twenty five
Speaker 4: k like it was twenty five million. And now we've
Speaker 4: closed on twenty five million. So you know, so it's
Speaker 4: just crazy because you got to treat the baby step
Speaker 4: with as much respect as the end goal.
Speaker 5: So how did you all right, how did that work out?
Speaker 5: As far as the first early like look at even
Speaker 5: the first deal that you had a dentist office or
Speaker 5: the bakery. You gave him like what like five thousand
Speaker 5: dollars something like that or yeah.
Speaker 4: So, so the way the actual mechanics is, I know
Speaker 4: Yl likes to get into that is so the way
Speaker 4: you do it is you form an LLC. Okay, okay,
Speaker 4: and so each of the partners become members in that LLC.
Speaker 4: You name that shit whatever you want. And yeah, so
Speaker 4: it ends up being what we call an SPV, which
Speaker 4: is a special purpose vehicle, which is pretty much fancy
Speaker 4: talk for saying like, hey, anytime we invest in said company,
Speaker 4: it's gonna come through this entity, right, And the LLC
Speaker 4: is a fascinating legal entity because it's a flow through entity.
Speaker 4: So it's like you become members in that and like
Speaker 4: you on the company, Let's say we invest in you know,
Speaker 4: the cafe on that company's docs, on the formation documents
Speaker 4: for that company, they're going to see Harlem Capital Partners
Speaker 4: LLC on there. But then you know, if we make
Speaker 4: a profit or a loss, the profits and or losses
Speaker 4: from that entity flows through to each of the individual partners.
Speaker 4: So it's really just like a like a shield. It's
Speaker 4: like a step step away, it's removed. So anyway you
Speaker 4: make an LLC, you invite whomever for anyone listening who
Speaker 4: wants to create a little syndicate, that's what you call it,
Speaker 4: an angel syndicate. You invite homies that you think are serious,
Speaker 4: you join the LLC, you brand it, come up with
Speaker 4: a cool name, and then you start communicating it to
Speaker 4: the world at large that you're looking to invest.
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Speaker 4: You know, and then you look for deal flow and
Speaker 4: that's you know that's how it works, and so we
Speaker 4: would put ten k, and then I think we ended
Speaker 4: up doing like six deals as angels, ten, fifteen, twenty
Speaker 4: if it was a hot deal ten if I was
Speaker 4: low on cash, and like, man, it's not really about
Speaker 4: we haven't seen a dollar, by the way, from any
Speaker 4: of the Angel investments we've made. In fact, we've lost money. Okay, yeah,
Speaker 4: the cafe closed down. You know, we've seen some distributions
Speaker 4: from the dental practice, but not really a lot of
Speaker 4: stuff doesn't work out according to plan. But the most
Speaker 4: important thing is being on the ride. Like I don't
Speaker 4: listen to anyone in business who hasn't lost more money
Speaker 4: than me. Like, you gotta get skin in the game.
Speaker 4: I can't take you serious if you don't have skin
Speaker 4: in the game. Like like you guys got cameras, you
Speaker 4: got mics.
Speaker 5: A lot of money, this would have worked out.
Speaker 4: Like you know, you got the focus, right, you got
Speaker 4: the mac put like you know what I'm saying, Like
Speaker 4: you guys are putting bread in. You put bread up
Speaker 4: to buy the shirts. You're putting bread in, right, and
Speaker 4: and so anyway, with the Angel investing thing, it's a
Speaker 4: lot more important to get in the game and you
Speaker 4: will not know. This is why at the beginning you
Speaker 4: asked me, like, yo, if I got any book tips,
Speaker 4: and I said, I don't really fuck with books, because
Speaker 4: you will not know what acid class you like until
Speaker 4: you invest in it. I thought I loved investing in
Speaker 4: small business, and then I discovered I really don't like
Speaker 4: this shit because when I was meeting with the business owners,
Speaker 4: we were talking about napkins and forks, and I'm like, dude,
Speaker 4: you know I want to talk about scale, and you know,
Speaker 4: like this just wasn't wasn't for me. I discovered that
Speaker 4: I like real estate a lot. I love real estate.
Speaker 4: I wouldn't have known that unless I jumped in. So
Speaker 4: I'm a really big fan of jumping in. And if
Speaker 4: you can't jump in a big scale, you jumping in
Speaker 4: a small scale. Just jump in. So how does that work.
Speaker 2: When it's six of you right as far as decisions,
Speaker 2: is it like majority or if it's like you know what,
Speaker 2: you don't like it, you're just not part of this deal.
Speaker 4: Yeah, So it has changed over time. So when we
Speaker 4: were an angel syndicate, it was like, hey, are you interested?
Speaker 4: Some folks might have said no, but also you know,
Speaker 4: going back to this business is really a people first thing.
Speaker 4: You know, it's also respect for your partners, because your
Speaker 4: partner might find a good deal and you know, might
Speaker 4: have gotten in a good rapport with that founder and
Speaker 4: then two months in it's time to invest, and like,
Speaker 4: you know, I want to support the fact that my
Speaker 4: partner is excited about this deal and I'm gonna put
Speaker 4: I'm not gonna step up big. I might put up
Speaker 4: a thousand and be like yo, all right, cool, you know,
Speaker 4: put that in the deal. Conversely, when it's a hot deal,
Speaker 4: when it's by the way, hot deals, you're not they're
Speaker 4: not pitching you, you're pitching them to get in. Hot
Speaker 4: deals are oversubscribed, meaning a company typically will raise a
Speaker 4: finite amount of capital that's what we call around at
Speaker 4: a fixed evaluation. Okay, so they'll say, hey, I'm raising
Speaker 4: one point five million dollars at an eight million dollar valuation,
Speaker 4: i e. They're giving away twenty percent of the company.
Speaker 4: And then if it's a hot deal, you get good
Speaker 4: funds in investing and so like a fund you know,
Speaker 4: is like for anyone maybe doesn't know, is like you know,
Speaker 4: entrepreneurs who go out there and raise money from the market,
Speaker 4: you know, in institutions and Dowmons shit like that, and
Speaker 4: you know they have a great brand name. And over time,
Speaker 4: especially from Silicon Valley, you've had prestige funds emerge. These
Speaker 4: are funds that have proven track record that they know
Speaker 4: how to spot winners Sequoia, Benchmark, Kleiner Perkins whenever you
Speaker 4: see them on the cap table. The cap table is
Speaker 4: short for capitalization table, which is the page on your
Speaker 4: company's documents that shows who owns what. And so the
Speaker 4: cap table, you'll see a list and it'll say NAS
Speaker 4: invested fifty k owns two. Yeah, and so he also
Speaker 4: invests an angel, you know, such and such invested this,
Speaker 4: So the cap table. So we have this thing in VC.
Speaker 4: You want to be on cap tables. You know, like
Speaker 4: a lot of motherfuckers talking shit, But I never see
Speaker 4: you on the cap table. You know, you might be
Speaker 4: at the club table, but I se you at the
Speaker 4: cat table.
Speaker 3: They at the crap table.
Speaker 4: Yeah right right, so that's good on the table. So
Speaker 4: so so anyway, Yeah, when you see a marquee fund,
Speaker 4: meaning a top fund on the cap table, it's a
Speaker 4: competitive deal. That founder has options and we were fortunate
Speaker 4: a couple of times to squeeze into a very competitive deal.
Speaker 4: And in those deals, when a deal is hot, you
Speaker 4: want to make sure you as much as it costs you.
Speaker 4: I don't care if you got to pawn your fucking watch,
Speaker 4: get in the deal in as big of a way
Speaker 4: as you can. You might lose that money. I'm not
Speaker 4: gonna lie. But when you can get a good amount
Speaker 4: of exposure into that deal, you know those deals that
Speaker 4: end up doing ten twenty x.
Speaker 3: I'm gonna ask you a question for some good deals
Speaker 3: before I forget this.
Speaker 5: The reason the reason why I like this podcast is
Speaker 5: that we get to interview people and nobody. Like the
Speaker 5: last guest that we had was talking about stock Shot
Speaker 5: the Wallshet Trapper and he was saying how it is
Speaker 5: excites him and like you I could see like it's
Speaker 5: like you seen paid in full before.
Speaker 4: Yeah, okay, so so and.
Speaker 3: Mitch he was like, I love a game.
Speaker 5: Obviously he was somebody illegal game, but business is like
Speaker 5: a it's like a competitive sport.
Speaker 4: Yep.
Speaker 5: So it's like that's what I really loved. Like even
Speaker 5: with Steve Jobs when he said that it's the process
Speaker 5: that really excites.
Speaker 3: Him, not even getting it.
Speaker 5: Is not the journey, and it's like for people I
Speaker 5: really want everybody to understand, even like with the podcast,
Speaker 5: it's like it's ups and downs, but it's an exciting
Speaker 5: rise and I could tell it. I could see the
Speaker 5: excitement when you're telling a story, and it's like for
Speaker 5: people that have never been entrepreneurs, I just encourage.
Speaker 3: Just to have that feeling.
Speaker 4: Yeah.
Speaker 3: Man, it's like a natural.
Speaker 4: The feeling is everything, bro.
Speaker 3: But I wanted to Askual you, so, how do you all?
Speaker 4: Right?
Speaker 5: So you started as angel investors and you said that
Speaker 5: didn't really work out for you guys for the most part,
Speaker 5: it wasn't profitable.
Speaker 4: Yeah, I mean so, so one thing to know is
Speaker 4: like when you make an angel investment, the yield curve
Speaker 4: on it, meaning the amount of time with which you're
Speaker 4: expected to make anything back, if at all, is typically
Speaker 4: seven to nine years, because that's the average life cycle
Speaker 4: of a business. And so when I say we haven't
Speaker 4: made any money, it's like chance for sure. And we're
Speaker 4: in some companies that we're expecting to make some money back.
Speaker 4: But like I quickly found out, like it's funny because
Speaker 4: you know I'm making you know, we're making deals and
Speaker 4: every time we make a deal. We announced that deal,
Speaker 4: and so my social was blowing up, Yo, your angel
Speaker 4: invest I'm like yeah, yeah, you know, and then I'm like, fuck,
Speaker 4: I'm not seeing any money, Like it just literally feels
Speaker 4: like you're just like your money's just disappearing because it
Speaker 4: goes to work. And then what happens for anyone who
Speaker 4: doesn't know how you make money adventure? You only make
Speaker 4: money adventure on a liquidation event, which is the company
Speaker 4: is sold. You do not, contrary to small business investing,
Speaker 4: if you invest in an ice cream shop, barbershop, restaurant, whatever,
Speaker 4: you're yielding profits, so you have a profit split.
Speaker 2: Because the example would be like when nas Or in
Speaker 2: his firm invest in ring and the ring gets put
Speaker 2: by Amazon or.
Speaker 4: Pill pack correct right, pill pack. So if you invest
Speaker 4: in a restaurant, you're making quarterly dividends. You get cash
Speaker 4: flows in venture because you're typically reinvesting profits in the
Speaker 4: business because growth and profits are inversely correlated. If you
Speaker 4: want to grow, you got to sacrifice profits, and so
Speaker 4: it's a very different kind of investing game. So you
Speaker 4: don't invest in a startup with the pretense that you're
Speaker 4: going to get profits. You would be hurting that business.
Speaker 4: So the trick is jumping in and getting in early
Speaker 4: at a nice valuation. On average, we invest in businesses
Speaker 4: along the businesses that are coming from the Midwest are
Speaker 4: on average valued between four to six million inventure, and
Speaker 4: businesses along the coast are valued between eight to ten million.
Speaker 4: So now eighty percent of m and A, which is
Speaker 4: mergers and acquisitions, are happening right now between the one
Speaker 4: hundred and fifty to two hundred million dollars price point.
Speaker 4: Like Gimblet Media got acquired for two hundred million by
Speaker 4: Spotify or whatever. If I would have gotten into give
Speaker 4: them media when there were worth ten million, you do
Speaker 4: the math on that. You get in at ten, they
Speaker 4: get sold that two hundred whoop. You know you got
Speaker 4: a twenty x. So what money did you put into
Speaker 4: that deal? You know, if you put in one hundred,
Speaker 4: that'll tell you what you net at the back end.
Speaker 4: So anyway, I'm just clarifying how you actually make money
Speaker 4: and venture. You get in into the sweet spot and
Speaker 4: then that business grows and if you're fortunate, it gets
Speaker 4: acquired and then you net.
Speaker 2: What's the difference between the valuation of cities out of
Speaker 2: Inland and the ones against the coast.
Speaker 4: That's a great question. And the real reason that businesses
Speaker 4: are priced differently based on geographies is due to cost
Speaker 4: of living. Okay, so like businesses make, you might make
Speaker 4: more as an individual in New York, and so as
Speaker 4: a result, employees are more expensive, offices are worth more
Speaker 4: and so, and there's also more capital in that market,
Speaker 4: and so you can usually justify a higher price point,
Speaker 4: whereas I love investing in businesses from the Midwest because
Speaker 4: they're reasonably priced. In fact, they say this is a nugget.
Speaker 4: Vcs say that the actual valuation, the true valuation of
Speaker 4: a business is the Midwest valuation, and then when you
Speaker 4: go out to the coast, you get inflated because when
Speaker 4: you're in Silicon Valley, those motherfuckers will pay any price
Speaker 4: for any business. And so we actually rarely invested. We
Speaker 4: haven't invested in a single business from the valley because
Speaker 4: by the time they come to us, they're like, oh, yeah,
Speaker 4: we're worth twenty million dollars. I'm like, show me a revenue.
Speaker 4: They got one hundred k revenue. I ain't paying twenty
Speaker 4: million for one hundred k and revenue, So like there's
Speaker 4: one thing to know as well is like there's actual
Speaker 4: different investment climates among the coasts. The West coast is
Speaker 4: very like, Yo, we're looking at scale by any means,
Speaker 4: and the East coast is a little bit more like conservative,
Speaker 4: We're looking for revenue and a little bit more modest growth,
Speaker 4: but revenue.
Speaker 3: How did you go from being angels to having like
Speaker 3: a VC.
Speaker 4: Add to the question, right, So, and we get this
Speaker 4: a lot because people say, yeah, I want to break
Speaker 4: into VC. Well, there's a number of ways. You Either
Speaker 4: work at a venture firm, good luck breaking into one,
Speaker 4: they're very exclusive, or like the path that we took,
Speaker 4: we started as angels and eventually, once you have enough
Speaker 4: of a track record you can you can go out
Speaker 4: to the market as a whole and say, hey, here's
Speaker 4: my thesis, Like, here's my idea. And it could be
Speaker 4: like our ship is around investing in the you know,
Speaker 4: diverse founders, like we invest in women and minorities. But
Speaker 4: that doesn't have to be your thesis. Your thesis could
Speaker 4: be around sports. Your thesis could be around music. Yo,
Speaker 4: I want to create a fund that invests in you know,
Speaker 4: music companies, sports companies, sewage, you name it, and the
Speaker 4: the true test of whether you can raise a fund
Speaker 4: or not is if you can convince enough people to
Speaker 4: believe in your ship. And what I found out raising
Speaker 4: money is there's a lot of motherfuckers with money for wealth.
Speaker 2: You said you said that the founding the coal is
Speaker 2: to invest in a thousand companies over the next twenty years, right, sir,
Speaker 2: So that would mean like fifty companies.
Speaker 4: Is that the goal?
Speaker 2: Like you're doing fifty companies.
Speaker 4: We're just we're doing a thousand founders over twenty years.
Speaker 4: So like if we invest in one company as four founders,
Speaker 4: we're counting that as fourka. But yeah, the way our
Speaker 4: fund model is structure. Right now, we're looking at doing uh,
Speaker 4: you know, thirty deals out of this first fund and
Speaker 4: then you know it'll accelerate, so it's not very linear.
Speaker 4: It's like our first fund might be twenty five to
Speaker 4: forty million, our second fund is going to be one
Speaker 4: hundred million, then court you know, then quarter billion and
Speaker 4: then a billion. You know, we're you know, we're thinking
Speaker 4: pretty big.
Speaker 5: So it's our relationship people. You build relationship people when
Speaker 5: they invest in your fund.
Speaker 4: Yep, that's right, the same way that entrepreneurs are asking
Speaker 4: for money we're doing the same shit, okay. And so
Speaker 4: the biggest misconception, like when we close our fund and
Speaker 4: we make the announcement, I think it's gonna make a
Speaker 4: very big splash because we're gonna be like, you know,
Speaker 4: young of color, and I think we we're gonna raise
Speaker 4: a considerable amount. People are gonna look at the headline
Speaker 4: and automatically think that we're it's our bread, okay, full disclosure,
Speaker 4: not our It's very important that.
Speaker 5: A lot of times people the ANGEL in the VC,
Speaker 5: they kind of get that mix and they think, if
Speaker 5: you have a VC firm, all of that money is
Speaker 5: your money that you're putting up.
Speaker 4: Yeah, and if you want so, I'll just break this
Speaker 4: down quickly. The fund model. All right, this is how
Speaker 4: you make money. When you cross over from ANGEL to VC.
Speaker 4: You get paid on what's called the two and twenty.
Speaker 4: That's the fee structure. So the two refers to your
Speaker 4: management fee. So whatever the total size of your fund is,
Speaker 4: this is why your INCENTIVI is to go for a
Speaker 4: big fund. Whatever the total size of that fund is,
Speaker 4: two percent of that annually is what you make as
Speaker 4: your fee. So on a twenty five million dollar fund,
Speaker 4: two percent of that is five hundred grand. So you
Speaker 4: get five hundred grand every year to pay for a salary, office, travel, everything. Now,
Speaker 4: if you know, with a team of four in office
Speaker 4: and stuff like that, like you know, you might make
Speaker 4: one hundred g's on salary. Like that's nice, but you're
Speaker 4: not gonna get rich off of that. You're not meant
Speaker 4: to get rich off of that. The LP, there's two
Speaker 4: kinds of partners in the fund. There's the GP, the
Speaker 4: general partner, which is the partner's putting in the work,
Speaker 4: and then there's the LP's a limited partner, this person
Speaker 4: who's investing. So your LPs do not want you to
Speaker 4: get rich off the fees because then you would never work.
Speaker 4: You get rich on the other side. I remember I
Speaker 4: said it's two and twenty to is a management fee.
Speaker 4: The twenty is what we call the carry, and the
Speaker 4: carry is your share of the profits. So now because
Speaker 4: we can, because we can get into a little detail,
Speaker 4: I'll just explain this. Typically, you as the GP, if
Speaker 4: you set out to go raise a fund, your commitment
Speaker 4: to the fund, you put up one percent of the
Speaker 4: total fund. Okay, So if my partners and I are
Speaker 4: set out to raise as an example, twenty million. One
Speaker 4: percent of that is two hundred thousand, so we have
Speaker 4: to come up with two hundred g's across you know,
Speaker 4: the four of us. Okay, beat now, But here's a
Speaker 4: mind blowing shit. Remember I said the twenty is that
Speaker 4: refers to your share of the profits, which is twenty percent.
Speaker 4: So we're making twenty percent of the profits on twenty million.
Speaker 4: So it's just like, you know, I guess it might
Speaker 4: be complicated. It's like ingrained to me now, so it's
Speaker 4: not the complicated to me now, but like in a nutshell,
Speaker 4: you're if you can put together two hundred g's, it's
Speaker 4: buying you a ticket to get the profits on twenty million.
Speaker 3: Like, so that's two million.
Speaker 4: Well, it depends on how much money you make with
Speaker 4: the twenty million, and that's the incentive. So it's like,
Speaker 4: can you make this twenty million and turn it into
Speaker 4: one hundred million. If you do, you get twenty percent
Speaker 4: of that, you get twenty million million. Yea, you know.
Speaker 4: So it's like it gets complicated, but like.
Speaker 5: How can people if they want to? We're going to
Speaker 5: move on to the next segment, but I want to
Speaker 5: so if people are interested in like pitching their business.
Speaker 3: It's like shark Tank. How realistic is shark tank?
Speaker 4: Shark Tank is to angel investing what Indiana Jones is
Speaker 4: to our.
Speaker 5: So they're not coming in front of you. So how
Speaker 5: the Jones Indiana.
Speaker 4: Nothing like that ship? Yeah, so yeah, the real ways
Speaker 4: like people send in a pitch deck and we you know,
Speaker 4: and then you know, if the pitch deck looks good,
Speaker 4: then we'll sign apart. There's different levels of a deal screen,
Speaker 4: so you know, pitch deck looks good. If not, then
Speaker 4: we'll well, we pass pretty quick. And we see a
Speaker 4: thousand deals a year. We invested ten deals a year,
Speaker 4: so we're talking about one percent investment rate. So if
Speaker 4: we see a hog deal, one partner is jumping on
Speaker 4: the phone with that founder. Then that partner reports back
Speaker 4: with about a page of notes to the rest of
Speaker 4: the team. Yo. Cool. And then if there's interest, then
Speaker 4: another partner will jump in as many partners as are interested.
Speaker 4: Then we jump in with the full with the full team,
Speaker 4: we try and get a fuller team situation, and we
Speaker 4: learn more. We have interns, so then our interns might
Speaker 4: go and do market research and analyze what we can
Speaker 4: expect to make, and then interest grows and usually you
Speaker 4: have every partner leads their own deal at the fund.
Speaker 4: So it's all about like, yo, all right, what deals?
Speaker 4: What deals am I getting versus Brandon versus Jerry versus
Speaker 4: a reed. We're all looking for our own deals. And
Speaker 4: to your question about voting, we have a we have
Speaker 4: a conviction over consensus philosophy. Like it's not like all
Speaker 4: of us have to agree. It's like if someone really
Speaker 4: worked up about this deal, and can you get people excited?
Speaker 4: You're judging off the passion of one of your partners
Speaker 4: for sure, and their ability to defend the deal. And
Speaker 4: we'll test you. We'll heat check each other and grill
Speaker 4: each other, like, yo, I don't know if this deal
Speaker 4: is gonna make it. Like like I try to get
Speaker 4: a media deal through and I couldn't get it through.
Speaker 4: It got shut down because my partners were like, yo,
Speaker 4: you know, the media climate is really hairy right now.
Speaker 4: You know Vice and BuzzFeed and Refinery twenty nine. You
Speaker 4: know they're not doing too well and they're the big dogs,
Speaker 4: so how the small dogs and you just it's a
Speaker 4: mental game, and if you can get people excited, then
Speaker 4: we close the deal and we say, all right, bet
Speaker 4: we're gonna invest X amount and then we just wire
Speaker 4: them the money and then we prayers up.
Speaker 5: There you have it, ladies and gentlemen, one on one,
Speaker 5: one O three, one O four and one on five.
Speaker 5: That it, right, Benurecathlo and Angel Best. Going to our
Speaker 5: last segment. All right, So in the last segment, we're
Speaker 5: going to talk about something else.
Speaker 3: Yeah, and dear to our heart, absolutely it is media, right, sir.
Speaker 5: So I heard you talk previously and you you have
Speaker 5: interesting views about media and you used to have you
Speaker 5: still have.
Speaker 4: Your podcast, Yeah, I have a out. Yeah if I've
Speaker 4: done a number of podcasts, yeah.
Speaker 3: Okay, and then you have the show on Vice.
Speaker 4: Yes, I do hustle, hustle, hustle.
Speaker 5: So all right, so how does that work as far
Speaker 5: as being on the all this out of the coin,
Speaker 5: as far as like, because Vice is a huge operation, rightm.
Speaker 3: Like what's the end of workings of that? Like having
Speaker 3: your own show?
Speaker 2: How that even come about?
Speaker 4: Yeah? So the interesting So the the essence of media
Speaker 4: is communicating who you are, what you do, and why
Speaker 4: you do it in a way that resonates with an
Speaker 4: end consumer, with another person pretty much on the other
Speaker 4: side of that screen. And like that's just a very
Speaker 4: unique opportunity that we have specific to this generation. And
Speaker 4: like at the essence of having a show and all
Speaker 4: this other stuff, like and even earn your leisure, Like,
Speaker 4: at the essence of it is like people are picking
Speaker 4: out what you're putting down, like the funck with what
Speaker 4: you're saying and what your guests saying and all this
Speaker 4: other stuff. And that's really the most important part, man,
Speaker 4: And and once you're able to over time, if you
Speaker 4: stay consistent, if you look at my earliest videos, man,
Speaker 4: really bad, you know, cheesy, stiff, and like, you know,
Speaker 4: some I have people that reach out to me that
Speaker 4: are trying to get into video now, but they're comparing
Speaker 4: their day one shit to like my stuff now. It's
Speaker 4: like it's not going to be the same. But if
Speaker 4: you're willing to deal with the discomfort of being new
Speaker 4: at this for enough period of time and you get
Speaker 4: through some of the kinks and you learn to express
Speaker 4: yourself on this specific medium, whatever that is. It could
Speaker 4: be writing like my Boy Julian Mitchell Rester Forbes and Beats,
Speaker 4: it could be podcasting, it could be video, whichever the medium.
Speaker 4: Once you have gone through the reps, and get good
Speaker 4: at expressing yourself in that medium. Then what happens is
Speaker 4: you start building a community and audience of people who
Speaker 4: fuck with you, you know. And then once you have that,
Speaker 4: which is like messenger, message and audience, and that virtuous
Speaker 4: cycle opens up the door for a lot. And so
Speaker 4: the first big media project that I was invited to
Speaker 4: do was a podcast that I hosted for eBay that
Speaker 4: was produced by a company called Gimlet Media, and that
Speaker 4: like that project, Like I got paid like fifty g's
Speaker 4: to do that, and like, I didn't even know that
Speaker 4: you could get paid to do some shit that I
Speaker 4: would do for free. So something eBay was like, yo,
Speaker 4: we have millions of sellers, and Gimblet's like yo, we
Speaker 4: have millions of listeners. And you know, they so they'd
Speaker 4: cut a deal between themselves. eBay was looking at produce
Speaker 4: a podcast gimblin that's their business producing podcasts. Boom that's
Speaker 4: a branded podcast, meaning it's brought to you by eBay.
Speaker 4: And then what happens is they look for hosts, and so,
Speaker 4: you know, because I was already out there doing my thing,
Speaker 4: my name came up in the conversation. And that's why
Speaker 4: I really believe if you're not out there doing your
Speaker 4: thing with the fucking phone, then you're never gonna get
Speaker 4: to a bigger screen. So start with whatever screen you got.
Speaker 4: And so I was fortunate to come with conversation. I
Speaker 4: met with the lady. She really liked me, and yeah,
Speaker 4: and and I got Boom. I got the opportunity to
Speaker 4: host my first bigger scale, branded production. And that was
Speaker 4: a you know, Gimlet is very special the way they
Speaker 4: do their podcast. Like, we had four producers, we had
Speaker 4: a creative director. I mean, it was like a big production.
Speaker 4: I was traveling, yeah, so it wasn't like a regular thing.
Speaker 4: But but so that was my first like thing. Okay boom.
Speaker 4: We did two seasons of that, and then you know,
Speaker 4: my speaking started taking off because it's all a virtuous csychic,
Speaker 4: all feeds each other. Once you have a lot of listeners,
Speaker 4: you're being requested in all places. So then I started
Speaker 4: doing speaking first for free, and then I found out
Speaker 4: you get paid for it. So the very next time
Speaker 4: someone said, yo, you want to speak, I said, instead
Speaker 4: of just saying yes, I said, what's your budget? You
Speaker 4: know an important question these days. I don't ask for
Speaker 4: the budget. I just say my price. But those days,
Speaker 4: I was like, what's your budget and she was like
Speaker 4: a thousand bucks. I was like, cool, I'll take it.
Speaker 4: So like I got paid a G and then I
Speaker 4: tried to go for G again, but you don't always
Speaker 4: get it. So then I got two hundred bucks four
Speaker 4: hundred three fifty five seven fifty thousand, two gs back
Speaker 4: to one. You know, just like the reps, the motions
Speaker 4: like okay, cool, And you know, when you're first doing something,
Speaker 4: whether it's vc, whether it's media, whether it's real estate,
Speaker 4: you want to prioritize in the beginning for reps. So
Speaker 4: I'm doing whatever it is for free to start. It
Speaker 4: doesn't matter to me. I just want to get the
Speaker 4: reps in. And I started getting better and better, and
Speaker 4: so speaking started picking up. I got signed by an agent.
Speaker 4: To anyone listening, yes there is a profession that exists
Speaker 4: where it's like a salesperson whose sole job is to
Speaker 4: sell you and you don't pay them anything. They just
Speaker 4: make a commission the catches. They only take people on
Speaker 4: that they feel like they can sell. And so I
Speaker 4: found an agent who was like, yo, you know you
Speaker 4: got a lot of stuff going for you. Let me
Speaker 4: represent them. I had a literary agent was like, yo,
Speaker 4: you know you should do a book deal, and then
Speaker 4: I asked her if she knew any speaking agents introduced
Speaker 4: me and the first time I signed to an agent,
Speaker 4: my rate for speaking got up to like thirty five hundred.
Speaker 4: I was like, all right, bet you know it was
Speaker 4: higher than my one thousand I was charging. But they
Speaker 4: take twenty percent percent of thirty five hundred. It's like
Speaker 4: seven hundred bucks, so I was not in like twenty
Speaker 4: eight hundred. All right, cool, I could do and it
Speaker 4: was just whatever they brought me, so it was really
Speaker 4: net net. So anyway, so here I have, this podcast
Speaker 4: is being listened to by people, is feeding my speaking business.
Speaker 4: And every time I went and spoke, I noticed people
Speaker 4: weren't recording their shit. I'm on, dude, you're leaving out
Speaker 4: the main value recorded so you can turn it into
Speaker 4: small business content, so you can feed it to social
Speaker 4: so you can get requested in more places. And it
Speaker 4: just all feeds each other. So that's what I was
Speaker 4: really doing. I had the chance to do another podcast
Speaker 4: for the Washington Post, similar sized deal, and so just
Speaker 4: over time, this all feeding each other. I'm speaking a lot,
Speaker 4: I'm capturing it. A lot of cats don't want it
Speaker 4: capture their shit because they don't want to pay for
Speaker 4: a video guy to travel with them. I'll take it.
Speaker 4: I'll take a haircut all day. Yeah, I'll pay my
Speaker 4: video guy whatever I got to pay him, and the
Speaker 4: flight and the lodge. These days, my agent knows that
Speaker 4: I always travel with video, so now that shit gets
Speaker 4: covered for me, and I just pay my my guy
Speaker 4: for the craft. But so as you can see, as
Speaker 4: you grow in the game, you get efficiencies dialed in,
Speaker 4: but when you start, you gotta come out out of pocket.
Speaker 4: So I'm eating into my own profits, sometimes not making
Speaker 4: any money, sometimes costing me money to pay for the
Speaker 4: video guy. But the video and capturing is essential to
Speaker 4: the craft because that is what allows that particular engagement
Speaker 4: to live beyond that engagement. And there are some companies
Speaker 4: throwing massive conferences with no fucking no one capturing anything.
Speaker 4: It did happen. And so anyway, so I'm capturing these talks,
Speaker 4: communicating it. I'm one of the only kind of younger
Speaker 4: cats like doing it this way. And so then that
Speaker 4: picks up and next thing you know, man, the phone
Speaker 4: turned into a vlog, turned into the podcast turned into
Speaker 4: someone hit me up and saying, hey, you want to
Speaker 4: do a TV show? You know, and then it happened,
Speaker 4: So the TV show Mark Samuelson, Marcus Samson Ye, yeah,
Speaker 4: Top Chef Harlem, tizz too. Yep.
Speaker 2: How did I mean? Did you know him or did
Speaker 2: you meet him? And I guess at least a Ke's
Speaker 2: also the executi producer as well. Right, yes, did you
Speaker 2: know them prior have a relationship or you know, during
Speaker 2: the process.
Speaker 4: So Mark shout out to Marcus Samerson man good brother,
Speaker 4: one of my original mentors in Italian Guy. He told
Speaker 4: me he's like, yo, and this is I don't know
Speaker 4: if you guys heard me say, like, you got to
Speaker 4: be top five and whatever you do, you got to
Speaker 4: come up top of mind. If not, then you're missing out.
Speaker 4: You're leaving opportunities on the table. That mentor taught me that,
Speaker 4: and he told me he's like, you got to be
Speaker 4: top five in Harlem if you're gonna build in Harlem.
Speaker 4: And right now, number one in Harlem is Marcus Hammerson,
Speaker 4: So you got to go and build with him. It's
Speaker 4: crazy to think years later he's executive produced by show
Speaker 4: and now we're making money together. But at that point
Speaker 4: in time, I was like, fuck, all right, I gotta
Speaker 4: get to Marcus, and I was emailing him stuff like that,
Speaker 4: and eventually the restaurant, yup, well that's the restaurant. Eventually
Speaker 4: he invited me by. We had coffee. He liked me
Speaker 4: a lot, and I interviewed him similar to this. You know,
Speaker 4: I like using interviews as a way to build relationship.
Speaker 4: For sure. For sure, now you guys know all the
Speaker 4: players and then yeah, man, And so then I had
Speaker 4: someone approach me about doing the show. And the cool
Speaker 4: thing about packaging the show is that there's junior talent
Speaker 4: and their senior talent. You usually will have the junior
Speaker 4: talent kind of be on camera, which is what I
Speaker 4: was in this production, and then you find bigger names
Speaker 4: and attach them to the product, to the project. In
Speaker 4: this case, it was Marcus Sammerson. Marcus who signed to
Speaker 4: WM that's Alicia's same agency. We lobbed it up there,
Speaker 4: We're like, yes, she might be interested. She was interested,
Speaker 4: came onto the project, and now it's four of us, Marcus, Alicia,
Speaker 4: me and then Beth, the original creator of the show.
Speaker 4: And you know, then we had two likes to stand
Speaker 4: on and what you do is you develop was called
Speaker 4: the Sizzle Reel, which is like a two minute preview
Speaker 4: of the show. Where people go wrong in TV is
Speaker 4: they spend way too much money on the pilot. They'll
Speaker 4: drop like ten, fifteen, twenty g's I don't care how
Speaker 4: much money you spend on the pilot. Your pilot's gonna
Speaker 4: be fucking terrible your first go round cause you don't
Speaker 4: even know what you're making. And so my producer the
Speaker 4: EP of the show, she actually was like, she's a
Speaker 4: very seasoned TV executive. She made Pimp my ride, and
Speaker 4: she told me she's like John, that show bought me
Speaker 4: my first house. So she made a real hit show.
Speaker 4: And so as a result, she knew, hey, let's not
Speaker 4: spend any money on the Sizzle reel. Let's actually just
Speaker 4: rip existing footage splice it together. What we did was
Speaker 4: she camped out outside of Alicia's trailer one day after
Speaker 4: outside of an event, and she got Alicia's voiceover on
Speaker 4: the Sizzle. So that gave us enough credibility. And with
Speaker 4: that two minute sizzle with Alicia's vo on a voiceover,
Speaker 4: we were able to go to market and like one
Speaker 4: thing about selling a TV show is not enough to
Speaker 4: know the companies. You got to know the specific buyers
Speaker 4: within that companies, because there's buying departments whose sole job
Speaker 4: is to look for things to put on their cable roster,
Speaker 4: on their lineup. And so we you know, we went
Speaker 4: BT was interested. Netflix, we had some interest, Oxygen, we
Speaker 4: had some interest, but Vice emerged as very interesting. They
Speaker 4: called us in like it was very clear from the
Speaker 4: beginning that they were very very interested. And what they
Speaker 4: did was what happens with a series, is they bought
Speaker 4: the pilot, so they actually funded instead of us shooting
Speaker 4: our own pilot. This is what I said, hold off,
Speaker 4: use a sizzle reel, use that as a selling mechanism.
Speaker 4: Then the network will buy the pilot. They'll fund the pilot.
Speaker 4: So now your pilot is coming from the specifications of
Speaker 4: the network and they're telling you how they want to
Speaker 4: see it. And the cool thing about this deal is
Speaker 4: after you shoot the pilot, they have four months to
Speaker 4: pick it up. If they pick it up, great, you're
Speaker 4: you know, you got picked up. You're going to season one.
Speaker 4: If they don't pick it up, you get the show back,
Speaker 4: and then you get to sell it with a pilot.
Speaker 4: That was made on someone else's dime. No one knows
Speaker 4: that shit, Like I mean, like experience TV execs know that.
Speaker 4: But I was blessed because Beth gave me the insight
Speaker 4: and and I told her. I was like, hey, look,
Speaker 4: I'm gonna be I guess, on camera talent, but like
Speaker 4: you know, I'm a fucking businessman, and you know, like
Speaker 4: I want to do this only if you'll lift the
Speaker 4: curtains and give me a real honest look at like
Speaker 4: what this whole process is, budgeting, developing, the concept, creative producing,
Speaker 4: you know. And you know, she was like, all right,
Speaker 4: let's do it if we're fortunate to get on a
Speaker 4: ride because point zero one percent of all pilots get
Speaker 4: picked up. And we defied the odds. We got picked
Speaker 4: up and it was a razy ride.
Speaker 3: Bro.
Speaker 4: It was a twenty two person crew. I mean it was.
Speaker 4: It's a multimillion dollar budget show. And how does that work?
Speaker 2: So like when you get picked up after the pilot,
Speaker 2: is it per episode or are you getting paid for
Speaker 2: the season?
Speaker 4: So so full disclosure, I you know, is just on
Speaker 4: camera talent for season one because you got to start somewhere.
Speaker 4: So the way that the mechanics work, because I got
Speaker 4: insight is a production company gets paid a per episode fee.
Speaker 4: That production company will say, hey, it's going to cost
Speaker 4: us three hundred grand, four hundred grand, two hundred grand,
Speaker 4: one hundred grand, whatever it is to make the show
Speaker 4: you quoted out. The network agrees, and then the production
Speaker 4: company typically keeps like ten percent of the budget is
Speaker 4: their fee, and then they get to make whatever this,
Speaker 4: you know, whatever money they don't spend. So like if
Speaker 4: if it's one hundred thousand dollars per episode, but they
Speaker 4: made it for seventy, they keep thirty plus their fee.
Speaker 4: So anyway, that's how the actual mechanics work. But just
Speaker 4: like you're gonna find a common theme here, you're not
Speaker 4: really gonna make a lot of money in your first
Speaker 4: real estate deal. You're not really gonna make a lot
Speaker 4: of money your first angel deal or your first speaking
Speaker 4: gig or season one. You use season one as a
Speaker 4: way to get it going. Now, Beth, who sold the
Speaker 4: show device could now turn around to another network and
Speaker 4: sell another concept a lot easier, and then we can
Speaker 4: get picked up season two and so forth.
Speaker 5: Said that, remember we had an actor. We was in
Speaker 5: la and he so seventeen. He said that he said,
Speaker 5: he's actly what you said. He's an actor, he's not
Speaker 5: a producer of the show. Where he was saying that
Speaker 5: even for like an actor, your first year or two
Speaker 5: years is like nothing. Then now you can negotiate like
Speaker 5: a like it's like sports. Your first contract is a
Speaker 5: little bit of money, and now you're in a position. Okay,
Speaker 5: I performed. You know my work ethic. You see this,
Speaker 5: da da da, Now you the second deal is like.
Speaker 2: It's just like your resume.
Speaker 4: And the interesting thing is I went through the negotiating
Speaker 4: table with illusions. Dellusions are grandeur. I was like, Yo,
Speaker 4: I want twenty g's an episode that I had heard
Speaker 4: that that's what you get paid, and they were like, yo,
Speaker 4: remove a couple of er and so like. But I
Speaker 4: was like, Yo, how can that be because I had
Speaker 4: I had a reference where I was making more per
Speaker 4: episode on podcasting, and I realize, actually that that is
Speaker 4: the case. TV has so much leverage because they know
Speaker 4: that once you're on air, you're gonna make a lot
Speaker 4: of money, and so you actually get paid very little
Speaker 4: to be on unscripted i e. Reality television because they
Speaker 4: know that you're gonna make money on the exposure, like
Speaker 4: love hip hop, like lost of the characters. Yeah, well
Speaker 4: people not even they are characters. Yeah, we know some
Speaker 4: of them. So so that's how it works. So anyone
Speaker 4: looking to make you know, a gatin TV, Well, let me.
Speaker 5: Ask you this before we before we end this. All right,
Speaker 5: you're you're an entrepreneur, right the way this is going,
Speaker 5: does it make sense for somebody to go that traditional
Speaker 5: route or to go in route YouTube?
Speaker 3: And like, what's what's your thoughts on that?
Speaker 4: I think right now that's a great question. I think
Speaker 4: right now October twenty fifth, twenty nineteen, that the current
Speaker 4: climate right now, there's a lot of money to be
Speaker 4: made in branded projects. Branded projects that is, a brand
Speaker 4: like Modello, Corona, Nike, Adidas, Cadillac or whatever. Like all
Speaker 4: these brands are looking for ways to reach consumers. Remember
Speaker 4: we started this media segment by me giving the basic truth,
Speaker 4: and that was for a reason. Messenger message audience. It
Speaker 4: could be on the phone, it could be on the vlog,
Speaker 4: podcast writing, TV doesn't matter. But the reality is that
Speaker 4: these days brands are looking for new and elevated ways
Speaker 4: to reach audiences, and the way they're doing that is
Speaker 4: via smaller content creators like us and if you could
Speaker 4: position yourself the right way, you can position yourself to
Speaker 4: extract some of those dollars. Because those budgets are flowing around.
Speaker 4: I'm fortunate to see them. They're flowing around. Brands are
Speaker 4: spending quarter million dollars for one event one night, quarter
Speaker 4: million dollar for an event, you know, five hundred thousand
Speaker 4: on a podcast literally a podcast season, a few million
Speaker 4: on a show. You know. These these brands have budgets.
Speaker 4: Now here's the thing. I don't know how much longer
Speaker 4: this is gonna last. I'm looking around like, yo, what fuck?
Speaker 4: Like there's money and everything these days. Yo. The other
Speaker 4: day I got a I got uh, you know, product
Speaker 4: from a company called Poopery, which is like you spray
Speaker 4: this spray in a toilet before you take shit, And
Speaker 4: like when I got paid to take a shit, I
Speaker 4: was like, yo, you there is literally nothing that you
Speaker 4: can't get paid for. So so right, So with that
Speaker 4: in mind, I'm like, all right. One thing I know
Speaker 4: is that there's a lot of budget flowing around for creators.
Speaker 4: Another thing I know is that nothing lasts forever. So
Speaker 4: the third thing I know is I'm gonna try and
Speaker 4: make as much of this bread while it's around get
Speaker 4: to the back. This is a market reality that's specific
Speaker 4: to our generation. There are companies spending you know, incredible
Speaker 4: amounts of bread to create content, to build communities, to
Speaker 4: reach people. So with that being said, are you gonna
Speaker 4: put in the effort to build the community? And if
Speaker 4: you do and you become top five, you will get
Speaker 4: hit up for opportunities to get paid to do what
Speaker 4: you love.
Speaker 3: It's a lot.
Speaker 5: Yeah, man, that was powerful. Man, Thank you, Thank you
Speaker 5: for coming in and appreciate that. Something that you will
Speaker 5: even looking forward to. And I think every segment it
Speaker 5: was I learned every single you.
Speaker 2: Know, as you're talking, I'm just thinking like, Yo, this
Speaker 2: guy's twenty six years old, or those experience that you
Speaker 2: had sound like a lifetime, sound like a biopic. Like
Speaker 2: you know, I'm thinking like he's doing that at twenty two,
Speaker 2: twenty three, twenty like what we're trying to figure out? Yo,
Speaker 2: we're going to caravan? My god, this is great, prody.
Speaker 3: Thank you.
Speaker 4: Oh wow, we're not worthy of that, but thank you.
Speaker 3: Man.
Speaker 4: You know, just a kid that started doing early. The
Speaker 4: earlier you start doing, you know, the more time you
Speaker 4: get under your belt. But thank you guys man, it
Speaker 4: was great to hop on this platform. And I hope
Speaker 4: that you guys audience fucks with it and if they do,
Speaker 4: we can do a second installment soon.
Speaker 3: Yeah, for sure, for sure. Anything you want to tell
Speaker 3: the people.
Speaker 4: No, man, just I love you guys man, for real,
Speaker 4: even if we haven't met, because damn man, Like, proximity
Speaker 4: is everything. Man, you can't be what you can't see.
Speaker 4: And I appreciate each of us playing our part, whether
Speaker 4: it's consuming the content and then taking action on that content,
Speaker 4: or it's distributing the content or sharing the mess, whatever
Speaker 4: your role in this whole thing is. I really do
Speaker 4: think we're living in some special times, bro. Like we're
Speaker 4: living in the same way Dizzy and Bird knew each
Speaker 4: other when they were playing jazz, in the same way
Speaker 4: Nas and Hove like knew each other coming up. Like,
Speaker 4: I really think entrepreneurship or whatever is the new zeitgeist.
Speaker 4: And I'm just, you know, honored to be part of
Speaker 4: this whole space.
Speaker 3: For sure. We honored to have you Troy any housekeeping items. Yeah, yeah.
Speaker 2: We just want to give a big shout out to
Speaker 2: everybody on patreon dot com that is proud to pay
Speaker 2: program you already know how that works.
Speaker 3: This five tiers.
Speaker 2: It allows the podcast to do a lot of things, travel,
Speaker 2: put on events, like we said, we got something to
Speaker 2: coming for DC and we.
Speaker 4: Got some new numbers.
Speaker 2: Yeah, Curvin's shout out to you, Al Swin, Andrew, Jeff,
Speaker 2: and shout out to Rex. He's a T five member,
Speaker 2: so shout out to him and everybody supporting the merger
Speaker 2: on earnielisia dot com.
Speaker 3: Patreon is in the community.
Speaker 4: That's a big one.
Speaker 2: Yeah, we we We said that we're gonna do something
Speaker 2: when we get to one hundred. We had like ninety
Speaker 2: six right now, so we're going to do something what
Speaker 2: we get to one hundred patrons the.
Speaker 5: Show and the book tip of the week is Steve
Speaker 5: jobs autobiography.
Speaker 3: Actually write that book.
Speaker 5: It was actually a really good book, inspirational when it
Speaker 5: kind of outlies his whole journey in business. So yes,
Speaker 5: once again, thank you guys rocking with us. We'll see
Speaker 5: you next week.
Speaker 4: Peace Peace, Peace Earners.
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