Passive Income Expert: How To Make $10k Per Month In 90 Days!

0:00 A lot of people are looking for passive income from side hustles. Yeah, it's the financial ompic and it's more accessible than ever. Like 90% of the ideas I talk about can be launched with $500 or less. And there's [music] enough time in the day to do these on the nights and weekends. So in these three suitcases in front of me, I have three different amounts of money. And during this conversation, I'm going to pass you a box at random. And your job is to tell me what kind of business you would start with that amount of money. Sounds good. Let's do this. Known as the king of side hustles, Chris Kerner has launched over 80 businesses, earning millions in the process. [music] And now, the serial entrepreneur is going to teach us how to adopt a business mindset >> and launch simple, overlooked, but profitable ventures with little money. >> Many of us struggle financially and they see a side hustle as a solution to that. Like for me, growing up kind of poor,

0:45 business allowed me to take hold of my life and make it what I wanted it to be. And it started when I was 9 years old and wanting a Red Schwin bicycle. My friends had a bicycle. My neighbors had a bicycle and my parents didn't have money for it. But I lived across the street from a golf course and these golf balls would fly in my yard and I would go to my neighbor's yard and go across the street, dig through the ditches and I'd pull out all these golf balls and I started selling them. That was my first business. That taught me that business is approachable and we all have ideas, but we usually don't do anything about it. Why? I think number one, they're afraid of what people think. Number two is they don't have the tools or they're not connecting the tools with the ideas. If we can get over those, the world is our oyster at that point. I have $1,000. What side hustle would you start? >> The first thing that comes to mind is my favorite business idea of all right now. This is a zero employee business. It's highly profitable and that would be so how important is it for you to love the

1:31 thing to be successful at it? Ignore passion. [music] Follow the profit until you can afford to follow your passion. Do they need a business partner? No. If you look at the stats on business failure rates with companies that have co-founders, it's significantly higher than companies that have solo founders. And how does someone validate a business idea? If I had to pick one tool, it's one that one in four humans use every day. That's everything you need right there. I see messages all the time in the comments section that some of you didn't realize you didn't subscribe. So, if you could do me a favor and double check if you're a subscriber to this channel, that would be tremendously appreciated. It's the simple, it's the free thing that anybody that watches this show frequently can do to help us here to keep everything going in this show in the trajectory it's on. So, please do double check if you've subscribed and uh

2:18 thank you so much because in a strange way you are you're part of our history and you're on this journey with us and I appreciate you for that. So, yeah, thank you. [music] [music] Chris, >> who are you and what is the mission that you're [clears throat] on? >> I am a father. I am a husband and I'm a serial entrepreneur and I love talking about business and starting businesses and inspiring other people to do the same. >> Why business has given me everything. Um, growing up kind of poor, it was my outlet. It was my way of just kind of taking hold of my life and making it what I wanted it to be. And I have

3:04 immense gratitude for that. Um, and I love I just love talking about it. I it's the only thing I know you I can't talk to you about history or nutrition or anything, but when it comes to business, I just love it and I want other people to love it as well. How have you made your name in the world of business? Because I've heard your name a lot recently. People call you the king of side hustles. Where has this come from? I think I just published my life on the internet now. Um, I I'm always testing and launching and starting businesses, but only over the last couple years have I started publishing that. And I didn't try to be like the king of side hustles. That's not something that I've ever like intentionally tried to brand myself as, but I think people see what I do as a side hustle and they call it

3:50 that. But I think that anything is scalable. Any side hustle could could be a multi-million dollar business. Um, I mean, we we live on a planet with eight billion people and we're all connected and anything can be scaled. >> And you make a lot of content now, so you've probably had a bit of a feedback loop in terms of understanding what it is that you say and do and create that's resonant with people and also why it's resonant like what is the crux of what people like my audiences are are looking for. As humans, we all want a silver bullet. We want a solution to our problems and many of us struggle financially um and they see a side hustle as as an outlet to that or as a solution to that. I think everyone has ideas. um most people are very hesitant

4:36 to execute on those ideas. And so when they see someone like me freely executing on all the ideas, it hopefully it opens their mind and helps them look at their ideas in a different way or a more approachable way and maybe gives them confidence to do the same. In the boxes in front of me here, I have three different amounts of money. $500, I think I have $1,000, and $5,000. And during this conversation, I'm going to pass you a box at random. And your job is to tell me what kind of business you would start with that amount of money because I know my audience, you know, they're many of them are interested in starting their own business one day. And I use specifically sort of low amounts of money just to make it as accessible to them as possible. So, we will do that at some point. I'll pass you the boxes. You give me three business ideas. You'll

5:21 start with $500, $1,000, and $5,000. Um, but I want to get a view on on you and the businesses that you've started and the sort of the variety of success you've had. So, can you give me an overview? >> Yeah. So, I was 9 years old living in Utah and I lived across the street from a golf course and these golf balls would fly in my yard and I don't know what gave me the idea, but I started selling them. Um, I just wanted money for a bike. I wanted this Schwin bicycle and it was red and my friends had a bicycle, my neighbors had a bicycle and my parents didn't have money for it. And so for whatever reason, I connected that white golf ball in my grass with money. And I would go to my neighbor's yards, I'd go across the street, I'd dig through the ditches, and I'd pull out all these golf balls. I'd wash them. And then I put up this huge piece of plywood

6:06 in front of my house that said golf balls three for a dollar. And that was my first business. And at the time, it was just normal. It was natural. Uh I didn't know any different. And now I have a 9-year-old, and I was nine when I did that. And we live on a busy road today. I lived on a busy road then. And the thought of him like negotiating, haggling with grown-ups wearing polo shirts on our doorstep is unfathomable. But that's what I was doing. And that planted the seed that kind of taught me that business is approachable. Um, preferably it's approachable. Approachable and scalable can be the same thing. They don't have to be at odds with one another. So, and how many businesses have you started since then? >> I lose count. I have a spreadsheet. Um, but it's at least 80. And what's the what have the outcomes

6:53 been? How much money have you made? What kind of how has that changed your life? What freedom has that given you? >> Yeah. So, cumulatively uh all of the businesses have generated low hundreds of millions of revenue. Um low tens of millions of profit. Um but on a real number basis, the majority of them have been abandoned or fizzled out or failed or there was too much opportunity cost so I pivoted to something else. Um, it's just a numbers game. >> And how has that changed your life? What does your lifestyle look like? >> My life is awesome. Um, we built our dream house in our 20s. Uh, we had all four of our kids in our 20s. We travel a lot. Uh, we're I've been married for 17 years. We're a very close family. We take a lot of trips. Um, we live in a

7:40 good school district, but my kids go to public school and, um, we have everything we need and more, and we're very grateful for that. What is the overt sort of underpinning mentality that's required for someone to be successful at starting businesses in the way that you started them? Starting these side hustles at volume and seeing success. Is there like a foundational mentality or personality or character trait required before we get into the tactics? Yeah, the I should say that the the pain of your problem needs to be greater than how much you care about what people think about you. It needs to get to that point because by far that is the biggest roadblock to success is people caring too much about what people think about

8:26 them. And so they don't want to do the thing or they don't want to talk about doing the thing because some random person from high school follows them on Facebook and might comment something, right? Which is really silly, but I I've been there. I get it. Right? If we can get over that, if we can just flip the switch in our brain that says people are thinking about me, people are caring about me and just switch that to off. Right? Because the world is our oyster at that point. And in terms of where we sit at this moment of time with technology, with AI, with in fast internet, with mobile phones, do you think this is the best time for people to start something to to start a side hustle or to try? Every day that goes by, the timing gets better for people, right? Things are getting more competitive, but there are more tools

9:12 than ever. Um, 10 years ago, if I wanted to start a business, and this is like the internet's in full swing, social media is in full swing, I probably had to spend a lot of money or move to San Francisco or raise venture capital. That's like I I would love for you to try to convince me. Try to give me an idea where you have to raise money or where you have to go allin or where you you have to quit your job. It doesn't exist. With all these AI tools, software tools, you can make a website with one prompt. You can make an app with one prompt. You could post to Facebook Marketplace and have hundreds of inquiries within an hour. You could post Facebook ads. You could go to Craigslist. Like, you could put a sign up in front of your house. You could go launch a survey to people. Like, there are so many tools for testing and validating and experimenting with these concepts that it is more accessible than

10:00 ever. Why don't people? I think number one is they're afraid of what people think. Number two is they don't have the tools or at least they're not connecting the tools with the ideas, right? They'll use Facebook Marketplace to sell a sectional, but then they won't think to use it when validating their woodworking idea, right? They're just not connecting the dots. There's too many tools in a sense, so we don't know how to tie them all together. Um, they also probably don't know like how much the law of abundance is a real thing, right? People think business is a zero sum game. What does that mean? >> Well, they think that things are oversaturated. They'll have an idea for a product or a service and then they'll

10:45 get really excited and then they'll go Google it and then we'll see it exists and they'll move on. And when I do that and I see it exists, I'm like, "Yes, this is it. Someone someone went to the front lines of the battlefield and validated this for me." And then I'll go to the web archive. I'll go to who is and I'll go look at what their website has looked like over the last decade. See where they started. Maybe their product was $99. Now it's like 49 every 2 months. Interesting. Okay. I'll look at the the copy of their headline. I'll look at like how many tabs they have on their website. Do they post their Instagram feed on? I'll look at all these things and see how it's evolved over time and think awesome. I'm going to start where he's at today. like this guy already proved it out for me. He took all the risk. This is amazing. This

11:31 exists. I don't need to like do it better. I don't need to do it differently. I just need to do the same thing. Um and the market is big enough, the world is big enough to where I can win as well. >> You said um web archive. What role does web archive play? What is that for anyone that isn't familiar? And how do you use that? >> Yeah, it's just a tool that shows snapshots uh over time of what a website looks like, right? So, it's a great way of kind of reverse engineering what businesses have done to be successful. And then there's another tool called Similar Web where you can see what their traffic has been over time. And you can kind of overlay the two and you can say, "Oh, interesting. When they when they redesigned their website to be more mobile friendly, their traffic went from 3,000 a month to 4500 a month. Interesting. I'm just going to make it

12:16 mobile friendly from day one." Right? So we are at a great advantage when we start where our competitors or our future competitors already are instead of starting where we think we need to be starting like trying to be different or innovative or unique. In my experience, that's more of like a signal of our pride or our ego. We feel kind of like weird or odd or even dirty or unethical if we're just like copying and pasting a business. Even if we had the original idea ourselves when really there's nothing to be ashamed of. We don't want to steal their intellectual property or their logo or anything, but copy what's already working. >> People think, you know, people don't think that that's a thing because they think if I copy a business that's already working, then I'm not going to get any customers because that this

13:01 existing business has all the customers. >> But it's interesting. I had someone on the show where they talked about how some of the greatest entrepreneurs in the world basically just copy 95% of the blueprint. I think it was Walmart. I think he was talking about Walmart, but yeah, they copied other like regional grocery chains. Mhm. [clears throat] Copying as a strategy. >> Yeah. Have you done that? >> Oh, absolutely. >> Give me an example. >> Okay. Well, I I had a phone repair business in when I was in college, 2010, and I got a call one day from someone that said, "Hey, Chris, I want to buy all of your broken iPhone screens." Do you have any broken iPhone screens? Sure. We don't throw them away cuz we think it's bad for the environment. We just have a box of them. How much will you pay me? three bucks a piece. Why?

13:47 Why? Why will you pay me $3? It's just broken glass. And they said, "Well, there's actually a way of remanufacturing these. We can send them to China. We can remove the broken glass, put new glass on them, and then we can resell them as a remanufactured unit." And that was just like a light bulb, right? So, most people, I think, at this point, would say, "Yeah, like, yeah, where do I ship these?" You know, but I was like, "Oh, I need to be in that business. I want to copy that guy who called me." right now. I don't know what his website was. I don't know. I don't know what the name of his business was. There was no web archive at the time to look at. I just wanted to copy the business model cuz I thought this is going to be a thing. I'm in the industry. I know the industry. I'm going to do this as well. We did 2 million the first year, then five, and then nine, and then we exited a few years after

14:32 that. >> It's interesting, but you know, you often don't think that everyone's in search of a new idea. >> Mhm. >> And it's tough to find new ideas. Yeah, like I think was it Einstein that said there's no such thing as a new idea? Sounds right. But you have an orientation just to look at existing models and to replicate them. Do you put a spin on it at all? I'll develop my own spins over time. Right. Because we're all a product of our environment. And so in in the case of this business, I started copying. Exactly. Right. Um I went and found people in China. I just went to Alibaba. I messaged a ton of people that sold iPhone screens and I said, "Do you recycle? Do you recycle? did you recycle? And like five or 10% of them said yes. So then I shipped them samples and then they shipped me some back and and then over time I started

15:20 like taking some marketing principles principles from previous businesses like Facebook ads, cold calling and I started applying them just cuz I didn't know how this other competitor was finding success. I knew he was cold calling and that was working. That's all I knew. Remember I didn't even know the name of his business. And so over time, you start using your previous experiences to apply these tweaks to the business and to make it your own. But if you do that right at the outset, right? Like if I got a call and he said, "I want to buy your broken iPhone screens." And I said, "Okay, I'm going to do that, but I don't want to just sell iPhone screens. That's lame. I'm going to do Samsung." Right? Pretty good chance there's not even a market for that or there's not even a method for that. And because of my my ego, my pride, my unwillingness to just copy what's already working, I wouldn't that I wouldn't have that successful

16:05 business in my back pocket. Right? [clears throat] >> So, if you do twists in the beginning, it's kind of like your um I'm kind of thinking of an analogy like if you're on a long road trip and you start taking detours early on or if a flight is on a flight path and he starts like getting off track just a little bit at the beginning, he's going to end off he's going to end up hundreds of miles away from his destination. But if he starts making tweaks along the way, then he'll be much closer to where he would have been anyway. >> Mhm. And you [clears throat] might reach a better destination with some of those >> tweaks because you're blending it with your your experience, what you know better than the person that you're copying. >> And so it's important to to copy the model exactly at the beginning because you're also going to learn what it is about that existing model that works.

16:50 Yeah. >> And therefore what you can iterate on, change, expand. If you if you didn't, then you might miss something. Exactly. Cuz so often I made the mistake of looking at another business and saying, "Oh man, why are they doing that? Why are they charging like that? Why? Like they're charging all these different things. That's so confusing." I made this mistake. I had a an e-commerce fulfillment business where brands would send us all their products. We had this big warehouse and we would ship all all of their stuff out, right? And I was like, "Why do they have storage fees, pick pack, and ship fees? They they charge fees for tracking their expiration dates. They charge extra fees if there's five items in a box versus four. Like there's so much friction there. That's so messy. Like we're going to make this simple. We're going to just one flat fee, no storage fee, and that's

17:36 going to be our differentiator, right? And then over time, over the course of months and years, we learned, oh, storage fees. It's because sometimes your customers go out of business and then you're left holding the bill and like your storage costs are actually very high but there's nothing to pass on. Oh, pick back and ship fees because you learn all these things and you're like, "Okay, I wasn't like this genius that had an MBA. I was just like trying to put my own spin on it cuz I thought I was smarter than that business owner." Turns out someone that's been doing this for 15 years versus 15 days knows a lot more about the industry than me. And I'm much better off just copying his pricing, copying the layout of his website, copying the size of the warehouse he has, copying the same niche that he's going after, cuz that's clearly working for him. So, I don't make that mistake anymore. I don't I

18:22 don't assume that other competitors are idiots, right? Yeah. >> I've been proven wrong too many times. I assume that they're doing that because they've learned the hard way. Yeah. >> And if I copy them, then I won't have to learn the hard way. >> I had um several of our executives over at my house over the last couple of days and we were looking at different models of so basically we're looking at other companies that do similar things to us that have been around for a long time. And the question that I ended up asking at one moment when I was had the exact same epiphany. I was like why do they do it that way? Isn't that shitty? >> And there was a second where I think we were tempted to try and reinvent the wheel. But the question I ask myself now with the wisdom of like many years of business is like why did it end up that way? >> Which is why did our competitor who's been doing this for 50 years end up

19:09 there? >> Because that as you said there's clearly a set of things that have happened that have made them conclude whether it's at scale or some other factor that's made them conclude that this is the best way of doing it. And just like you I've been wrong so many times where I've thought they're just idiots. That's why they they they can't see this obvious thing. But actually their model is stress tested in the market much more than mine is. So maybe I should >> I should put my ego aside and at least start how they start as you said which I think is really important advice. >> Yeah. Well, there are times when a company just keeps doing something because it works. >> Yeah. >> And so they don't take the time to test something that works better, >> right? >> But it's almost impossible to guess what that is, right? Like if a if a clothing brand is growing their business entirely through Facebook ads um and they've just

19:55 never tried Google ads, maybe Google ads could convert twice as better. Twice twice better, right? But I don't want to guess that. I just want to start with Facebook ads and then I'll still take 5% of my budget and start testing other concepts. But nine times out of 10, I ended up just coming right back to Facebook ads. It got me thinking about how in business basically everything, again speaking broadly here, can be put into one of two categories. either like old problems where thousands of people have come before you and the same solutions and same thinking is still relevant and then new problems you know things like AI have created a set of new problems new opportunities as well and what I tend to find is that like 95% of the things in business are like old problems like hiring cash flow how finance is done legal all those kinds of things

20:40 >> and the and when when you're dealing with a new an old problem expertise is usually the answer which is like find someone who knows hire someone or mentor or whatever and then you have these new problems where >> there is no blueprint in our industry. It's a new new challenge. So experimentation is the answer. Does that like broadly hold in your in your mind? >> Oh 100%. Yeah. I I like to say test everything except drugs. >> Like we're always testing. Um it's the basis to everything we do. >> But do you test when it's an old problem? >> Can you give me an example? So like things like cash flow management um >> hiring principles around like probation and uh notice periods um a lot of legal structuring and deals

21:27 things with like a wellestablished president >> well established presidents where like nothing has fundamentally changed in the world that makes that invalid. Yeah, I think if it's an old problem, I look to an example of someone within the last decade that's solved it in an interesting way and I'm more likely to copy that. Like in hiring, traditionally companies will they'll spend hours and weeks or days hiring, going from round to round to round, person. And if you look at Y Combinator, arguably the greatest, you know, startup incubator in the world, they have seven-minute interviews. Um, and they said they would make it five minutes, but it just felt rude, right? and in their interviews, they really know in the first three minutes if it's a fit or not, and then the interview's done. Like, they're either in or they're not. I I approach hiring the same way. Um, I would much

22:13 rather um take a like a a law of large numbers approach to it and give five people 30 days to show what their skills are as opposed to spending 30 days going all in on one person. Because in my experience, that one person that I spent 30 days on is not any more likely to succeed than those those other five people that I might be testing. >> Okay. And your example of that storage company you started. >> Mhm. >> It sounds like you hit an old problem. >> Yes, very much so. >> And you tried to innovate and experiment, but this was an old problem where the laws of human beings and how they behave and businesses going bust was still pertinent. >> Yeah. And at the end of our our 2-year experiment, like we look just like all of our competitors, right? So, if we would have started there, we could have

22:59 saved two years. >> And this is what I find is founders waste years trying to experiment where old problems are still um strong and still hold. >> Yeah. >> And this is what I the mistake several of the mistakes I made in my company was I should have spent all of my time experimenting on the new problems. >> Uhhuh. and should have hired people to tell me um how to navigate the old problems. >> Yeah. >> What what was your um I think one of the videos that made you go pretty viral was your story of >> BIES. We don't know what BIES is around the world. I think it's a US brand. >> Yeah. >> But this shows I think how you've always had an orientation to think slightly differently or in innovatively. >> Yeah. >> What happened with BIES? >> So this was during the time when I was running that business shipping products for other companies. Right. Bies is a

23:45 gas station brand uh with only 50 locations. And from those 50 locations, they do billions of dollars of revenue. I say gas station, they're between 40,000 and 80,000 square feet. Wow. >> They're massive. They have an amazing brand, an amazing logo, and they just have a lot of trust from their customers. But these gas stations are like they're on the way out to these road trip destinations. They're out in the middle of nowhere. And so if you're if you live in Dallas and you're driving down to the beach, you're going to stop by Bies on the way there and on the way back, and you're probably going to spend hundreds of dollars, right? You're going to fill up the tank, then you're going to buy shirts and snacks and all that stuff. So, at the time we were running this e-commerce fulfillment business, we went to Buckies. I brought my cousin, my business partner, um, just to kind of show him the experience. And we were just having a conversation. I remember

24:31 exactly where I was. I was like under this underpass, this huge under pass in DFW. We were driving home and I said, "Man, these guys must kill it online. They must sell so much stuff." Um, >> why? >> Because I knew that Disney sells like billions of dollars of t-shirts on their website, right? I read a stat recently. So, I kind of just took that data point, connected it to Bies, and said, "All right, Bies is a fraction of the size of Disney, but they have the same amount of brand loyalty. People love their shirts. You'll see their shirts all over the world, even though they only have 50 locations like in the Southeast, right?" And so we went to their website and there was no shop button. There was no place to buy their stuff and I was just like like all the light bulbs were going off at once, right? It was like, "Oh my gosh, okay, we need to reach out to

25:16 them. Like we need to bring them online." I just had all these ideas and my cousin is is much more balanced than I am. He's like the the operator and I'm like the ADHD crazy guy, right? So his role is to like calm me down and he's very good at that. But I just couldn't be calmed down from this. I'm like, "No, no, no. We got to do something here. We're going to buy one of everything. We're going to hire a photographer to take pictures of it. We're going to launch our own BIES online store, and we're going to try to go viral." Like, it's viral or bust, right? If we don't go viral, then I'll just be eating these unhealthy snacks for the next 3 years of my life. And so, we did. We bought one of everything. Uh, it cost thousands of dollars. I brought all four of my kids. And, uh, we brought it back to our warehouse. We took pictures of it. We launched a website. Um, and I emailed

26:03 all the reporters I could find. Uh, and one of them just loved the idea. He ran with it. And so he reached out to BIES for comment cuz they wouldn't respond to my cold emails. I wanted to launch this like with them in tandem, but who am I? They didn't care about me. And I don't blame them. And so he wrote this big article about me. Millions of people read it. All these other news outlets uh wrote about it. And we did hundreds of thousands of of dollars in our first 30 days organically from that. How did Bies feel about that? >> They wanted us to make some key changes to the website. They wanted us to like basically put disclaimers everywhere that said we are not Bies. We're not affiliated with Bies. They wanted us to change the name. It had the word beaver in the name. That's their mascot. They just they didn't want it to be confusing

26:48 at all. So, we made all those changes and then we got like the unofficial thumbs up from them. They said, "We're not going to sign anything, but like you have our blessing. Um, have fun." And did that website make you a lot of money? >> Yeah, it still is. It's been 5 years. We still own it, 100% of it, and it's going great. >> And it's made you millions. >> Uh-huh. >> What can someone listening take from that in terms of applying that to their own life, finding opportunities like that out in the world, or is that just a oneandone? Is there only one opportunity like that? Okay. So, specific, I get asked that question a lot. How could someone do that with another brand? I don't know. If if there was another brand out there like that, I would be doing it, right? Trader Joe's is similar, but they're very ligious. Um I

27:35 think that was kind of lightning in a bottle for that particular experiment as in launching an online brand for an in-person business. Okay. But people should not be disheartened hearing that because on a macro level like people should take their curious ideas very seriously. [snorts] They need to shorten the amount of time spent between having the idea and doing something about that idea >> because that will strengthen their bias for action muscle, right? We all have ideas, some of them good, some of them bad on a regular basis. We usually don't do anything about it. It's just a passing thought, right? Whether it's a business idea or a hard conversation I need to have with something, any idea, right? But the the the more we shrink

28:20 the amount of time between doing something about that idea and having the idea that that idea, the more often we'll do that. And it becomes this self-perpetuating snowball that just compounds. And then before we know it, we'll get more ideas. We'll do more about those ideas. We'll be testing things. We'll be learning tools. We'll be experimenting. And we'll have a whole portfolio of businesses. Is there something in your mentality or perspective though where you walk into a Buckies and you even think about how you could do something whereas most people walk into a Bies and buy their stuff and leave? Like is there something foundational in the way that you're looking at the world? Yeah. But I don't think I'm any different. I think um I think a lot of people have ideas like that. Like you walk into a BIES and you see something about something that could be improved and people have these

29:06 passing thoughts and they move on. I think that you become an expert at doing something about those ideas. When you do something about those ideas, you just you get better at at what you do, at what you test, >> cuz you've built up some kind of muscle, which means that you don't really care about it seems failure as much as the average person. And also in that particular case, >> the average person might think, well, I've got no experience in doing that. >> Mhm. No, no one has any experience in anything until they do it, right? Like every every expert started out as a beginner right? Sometimes though, people try this and they learn h doesn't give them energy. It's not for them. That's okay. Now, when they have ideas, they can know, all right, box checked. That's not really

29:52 for me. That entrepreneurship thinks someone else needs to do that. And great, good. All the power to them. I just want people to answer that question for themselves. I hate seeing regret in people's faces. Like I have friends that want to start a business. They've always talked about it and I know they would be good at it and I know it just eats them up and they have really really good ideas objectively and I I just hate seeing them have that question for the rest of their lives. I just want them to to taste entrepreneurship. Is it for everybody though? You know, you can think think of all your friends. >> Yeah. >> You can probably put them in groups of this person should, this person shouldn't. Mhm. And what defines who goes in which group? >> To me, it's how far they go in doing

30:39 something about that idea because I will have friends that will text me ideas or talk to me about ideas and then I never hear from them again about that thing. I don't worry about them. Right? I I feel like there's a selection bias at play. Like if they really wanted to do something about it, they would get a little further down the line. They'd follow up with me. that's, hey, I did this thing. Cuz I'll always give them tips and feedback. You should do this. You should try this. And they'll follow up. And then, you know, at some point along the line, it'll die, right? But if they don't get any further than just telling me their idea, then I don't I don't lose sleep over them. >> So, it's kind of surviv. It's kind of sort of self- selecting itself anyway. >> It is entrepreneurship. >> Yeah. Absolutely. But then I have other friends that are like they'll follow up, they'll follow up, they'll follow up,

31:25 and then and then it dies, which is okay. A lot of my ideas die, too. And to me, that's a signal that it was supposed to die, right? I'll just move on to the next thing. Um, so it's those people that maybe I'm just biased and they look more like me, you know? Um, maybe that's not an accurate signal or not, but if they look more like me, then that's a signal that they they should get further down the line and actually launch something that gets to revenue. Yeah. >> In your head, think of one person you know that should never start a business. >> Okay. >> Why did you think of that person without telling me who they are? because they make a lot of money at their job and they like their job well enough. They're not miserable. Um, and they're in their late 40s and they probably feel like it

32:11 would be too big of a risk to start something. >> And do you objectively agree that it would be too big of a risk for them? >> I do. >> So, you're looking at that on a risk-reward basis thinking the reward doesn't out outweigh the risk here for you? >> Yeah. Yeah. Cuz people come to me like hoping that I'll encourage them to quit their job, right? Like begging me to do that without actually begging me. And I don't want to do that. Like I I've never had to quit a job. Like I I started with entrepreneurship, right? So the thought of being 48 with four kids and quitting my $400,000 a year job to test something. It just sounds crazy to me. >> On the other hand, think of one person you know that isn't an entrepreneur, but definitely should be, but you always think, "Why don't they do it?" >> Yeah. Why did you think of that person? >> Because it's a person that comes to me

32:58 the most often with ideas and they're really, really good ideas. He's an engineer. Um, and so he sees the world in that way. Engineers make great entrepreneurs. Um, and he has a great work ethic and he's like mid-career but not not so far along. And I know objectively that he's not he's actually quite miserable in his job. And I hate that for him because I see the talent that's there. And I want him like I think he would excel and I want to see that dream come true for him. >> Why isn't he doing it? >> I think it it's insecurity. >> Fear. >> Yeah. fear of probably fear of just letting go of

33:45 something certain that's provided his family a nice lifestyle and not getting that back again ever. Um I think that insecurities are at the root of our best and our worst selves and it can drive us to be our best or worst selves um depending on how self-aware we are about those insecurities. Is there a little bit of a flaw in his thinking in your perspective? Like why is it you you still even though what he's saying there about you know what you think he believes there about the security for his family is true you still think he should >> which suggests that there's some kind of flaw you see in the way he's thinking about it. >> Yeah. Because he doesn't have to quit his job. um there's enough time in the day to do

34:32 this on the nights and weekends to to do enough of it to really prove itself out. Often times like whatever our side hustle is, uh it has a very low ceiling if we're only working on it um after hours, right? Let's say we're spending 20 hours a week on a side hustle and it makes us $50,000 a year, but our job pays us $200,000 a year and we spend 40 hours a week on that. One thing that I've noticed, which is kind of contradictory to how I feel about quitting something, um, is when we go from 20 hours a week on our the $50,000 a year side hustle to 40 hours a week and we quit the full-time thing, that $50,000 a year goes to 500,000, right?

35:18 We double the amount of hours, but we 10 times the amount of money that comes from it because of the fact that we burn the boats that it has to work. I just I don't want people to burn the boats too soon, right? Like there has to be a pathway. Like let's say our Facebook ads are converting really well. We've tested scaling it and they're profitable and we know what that would look like. But if we scale it, then we're going to have more customer service complaints. We're going to have to do more architecture of the website. But we like we see a path to scaling and it's already profitable and we know that like probably my boss will take me back like we have kind of these uh safety nets. That's like the perfect time to really burn the boats. Not when like we have an idea or we've tested it a little bit but not thoroughly. Um that's too soon in my opinion. >> And but by burn the boats you mean the

36:04 analogy of I guess some of the the wartime leaders who would pull up on an island that they were invading and burn the boat so that they had no plan B. >> Mhm. Exactly. Yeah. to quit. >> Do you think that really matters? The whole idea of a plan B. Do you think people should have a plan B when they embark on entrepreneurship? Can I contradict myself 100%. All right. So, the rational Chris, the Chris with four kids says absolutely like you got to be a dad, you got to be a husband, you got to provide for your family, right? Um, and again, there's so many tools out there for testing, for scaling, for outsourcing. We could find a business partner to help pick up the slack. We could use our kids, we could use our spouse, whatever. There's so many ways to really vet something out before quitting that we don't have to quit. But

36:50 the other side of my mouth, there's been um two times in my entrepreneurial career when someone burned the boats for me, right? I pull up to an island and it's I've got my plan B. I'm testing this business. This business is profitable. It's paying the bills. And then someone else in the middle of the night, they snuck out. They burn my boats and I wake up and I'm like, whoa, where's my plan B? I wasn't ready to burn those boats yet. Um, and plan A just freaking thrives, right? And it's not so much because of the fact that I don't have a safety net anymore, but it's because that event put a chip on my shoulder that makes me want to to prove those bad guys wrong. Right. To oversimplify, those guys that burn my

37:35 boat. >> Toxic motivation. >> Exactly. That's a that's a good way to put it to show them I didn't need those boats. I'm not going back, right? This island is better than where I came from. >> I remember reading about a study on Plan B's where they got a group of students, two groups, and then they told them to do a puzzle to win a treat. And then in one of the groups, they told them that they could get this treat at a vending machine down the hallway if they if they wanted it after. And the group that didn't understand they could get the same reward from a plan B >> worked significantly harder to complete that puzzle. >> So there's something in the human psyche of know when you know that you could >> get the reward in another way. When you have a plan B, we work less hard at the plan A. >> Logically, maybe we should, you know,

38:23 practical and >> unresponsible remove the plan B from our mind. >> Yeah. >> Yeah. Yeah, I just like I I can't think of any stories from people in my sphere of influence that have tested something, quit the plan A, and then plan B just failed and like they just lost everything. Like surely that's happened, right? That does happen when people like prematurely quit, but in my experience, it just it doesn't happen. Like it it has the opposite effect. It becomes this huge motivating factor. And when they quit, I ask them like, "How do you feel? Are you freaking out?" And it's always always, "I'm so excited right now. Like, I'm going to go all in on this. Like, this has to work." And it does. It just

39:09 does. >> A lot of people are looking for passive income from side hustles. And I wondered what your your op opinion was on passive income because it's a word that comes up so often in the comment section of this channel, but when we're doing sort of sentiment analysis and what people are what they're interested in. Passive income seems to be a bit of a buzz word. >> Yeah, it's the silver bullet, right? It's like it's the uh it's the financial oic you could say. >> What is passive income? How would how would one define that? I would define it as income that you receive um that you don't have to continually put effort towards like uh buying treasuries, earning 4% on on your money and you don't do anything and you just get paid. And it's it's very hard to find especially early on. Like we have to be willing to create active income, sweaty

39:56 income, ugly income, like by whatever means necessary. And the more we do that, the longer we do that, the more um realistic true passive income actually is. Sweaty, ugly income. >> Yeah. Give me an example of some sweaty, ugly income that anyone listening right now could could create. What are your favorite examples of non-obvious businesses that people have started that have resulted in passive, sweaty, ugly income? >> Yeah, I mean, most things that I've started have been just that. I had a uh a concierge car buying business. Um >> a concierge car buying business. >> Yeah. What's that? >> So, picture a traditional car dealership, a used car dealership. You got to get your dealer's permit. That uh enables you legally to go to the

40:42 auctions and buy cars at wholesale, put them on your lot, and sell them. So, I did all the regulatory stuff. I got my my dealer's permit, but then I would go to individuals and they would say, "I want a 2024 Seoia. I want it to be blue, under 30,000 mi." and I would just go to the auction and buy it for them for like $700 fee. So, they get wholesale, they save money, I make money, I don't have to bear the inventory risk and I can buy exactly what they want. Um, that sounds great, right? On paper. People do that business successfully. I didn't invent it. I copied it, right? I hated it. Uh, I was breaking down on the side of the road driving these things back from the auction. I'm not a car guy. I don't care about cars. I don't work on cars. It's not my passion. That was ugly. It was hot in Texas. I was standing out on the black top. I was making money. It was

41:28 profitable. And I got to the point where I just like quit it. I just shut it down. Moved on to something else. Um that was very active. It was not scalable on the surface. It was ugly. I hated it. And so I pivoted because I had a plan B. I didn't have to do that, right? Um that's one example. Uh if someone likes cars, it's it's a actually a great business. Like I know a gentleman in Alabama that makes a lot of money doing that, right? For me it was it was not great. >> So how important then is passion in this equation? Like how important it is for for you to love the thing to be successful at it in your view? I think you need to fall in love with business with commerce and if you can love entrepreneurship turning $1 into two and that like if you could focus on that being your passion then anything that

42:13 falls underneath that you should win at, right? But I I like to say follow the profit. pro fit T. Um, until you can afford to follow your passion, right? Because if we're trying to follow our passion from day one, we're probably not ever going to get there because the statistical likelihood that what we love and what makes us money overlaps in the beginning is almost zero. So, ignore passion for a time. Try to build your passion around commerce. Um, and then start anything. And then once you're able to have more passive income, then start things that you're passionate about like in the in the actual industry that you're passionate about. >> Persistence.

42:58 Persistence is obviously going to create repetitions to like understand the problem to learn more to, you know, so I wonder as it relates to passion and persistence, they seem >> sort of inextricably linked. Something I'm more passionate about, I'm more likely to continue at even when the rewards don't show up. Yeah, like my car my car business, right? I had no passion for cars and I had another business that was doing great. So, so I abandoned that. Um, but people think that like people sometimes look at themselves as lazy or they're not a hard worker. And so they're just they're not confident that they could do this. But there's like everyone is a hard worker. Everyone on this planet has the same DNA that enables them to work hard. But the problem is what they're working on probably gives them no energy, right?

43:45 They're probably not passionate about it. So, what am I passionate about? Well, we got to we got to test everything. We have to try new things. We have to take that curious question and turn it into a business. Maybe that's fun. Maybe it's not. Right? We need more surface area for finding what our passions actually are. Cuz we might think that like like I love woodworking, right? I don't have to build a business around that cuz I love business, right? So, I can build a business around anything. But if I got super hung up on like I cannot make a profit from this woodworking business um then I would fail at entrepreneurship if I started there, right? Whereas if I approached this from um the angle of all right, I like woodworking. What else do I like? Maybe I like running, maybe I like cooking, maybe I like short form videos, and I just start trying all those new things. Then eventually I'm going to

44:30 have enough surface area for testing that I'm going to find things where um you've heard of the eeky guy principle. >> Mhm. >> Right. So what you love, what you're good at, what the world needs, and what you can charge for, right? The overlap of that is the sweet spot. That's what's scalable. That's what you can do until you die. But if you get super hung up on that on day one, like I'm just not passionate about that, like you're never going to find it. Like you're going to be in that job forever. My career follows the same same arc which is I tried tons of things and then I built this marketing business and then that became more of a product business and grew and I didn't love it. Like it wasn't my passion to do um to help like Coca-Cola sell more cans of Coke or like you know Uber sell more Ubers necessarily. That wasn't like my passion in life. However, it taught me a bunch

45:17 of skills >> which then in when I quit that business and I spent some time in psychedelics, DJing, building software, web 3, you name it. Um I came out on the other side and could ask myself that guy question which is of all the things that I have tried what is the thing that I would do like really irrespective of money. Now I had that luxury to do that and actually in 2020 the answer was this. >> Mhm. >> Like this was the answer. This answer was I I literally moved to London from New York and found a place without viewing it properly that looked like this because I thought this would be a good podcast set and moved into that place called Jack and then we started about five five years ago um doing doing this weekly >> and it's become a business off the back of it. >> But I didn't have that luxury at the start. If I tried that from day one, I wouldn't have had a the skills to know

46:03 how to scale an audience. Mhm. >> I wouldn't have had the flexibility to buy all these cameras which cost like 50 grand or whatever at the start. Um so and I do think some people sometimes get that inverted. >> Yeah. And you you're not distracted anymore, right? You're not looking for the next DJ thing or like you found it. [clears throat] You're here right now. You're focused on scaling. It's like people get so hung up on focus or lack thereof and they just beat themselves up over it. But in my experience, like a lack of focus is a signal that there's something else out there, right? right? Then maybe we shouldn't be focusing on that thing cuz you've probably worked on things that had perfect product market fit and were just crushing and you weren't thinking about starting a DJing business at that point, >> right? You were all in on this one thing. >> But in the times when you were working

46:48 on something, you're like, "Maybe I'll try this. Maybe I'll try this." And you beat yourself up. You're like, "Oh, and focus, focus, focus." Like, "Let's actually pay attention to those signals. Why am I distracted from this thing?" So that's I don't know if that's just me coping with my own ADHD or if that's actually a true principle, but I I try to lend some credence to those signals of distraction that I get on a regular basis. >> Yeah, I have a a Sunday shelf, >> which is just a digital board on my Monday board where when I have ideas that like captivate me at 11:00 p.m. at night one night, instead of trying to act on them immediately, cuz I think I'm in some respects like you, I put it on the Sunday shelf. >> Mhm. And um I wait and see. >> Yeah. >> I wait and see how much it pulls at me to come off the shelf. >> And then sometimes it comes off the

47:33 shelf. I get a little bit of the way down. I discover that actually there's something I didn't realize. And then I quit. But then there's this, you know, when you think about the like the excitement arc of a new idea. You have the like initial surge of excitement like this is the best thing ever. I'm going to become a billionaire. Why has no one ever thought of this before? And then you kind of get into it and you get into that sort of valley of oh this is a terrible idea. I'm an idiot. Yep. >> If I can come out of that valley, if if something pulls me up out of that valley, then I think it's worth pursuing. >> Yeah, that's a good way of looking at it. The the valley of despair or something that's what they call it. >> Yeah. >> Do you follow a similar sort of path with idea your ideas? It's funny cuz I my kind of framework is if I have an idea, am I thinking about it still two weeks later? For whatever

48:19 reason, that's just my timeline. Two weeks. I had an idea yesterday and I was at the airport. I was excited about it and I was doing research. I like forgot about it, right? Who cares, you know? But I have ideas where I just cannot get it out of my head and I'll see something out there in the world that adds to the idea and I tell my friend about it and I I send these manic voicemails or these manic voice notes to my friends about it and I'm still thinking about it 2 weeks later. That's my signal that there's actually something here. Um, >> you used the word validating earlier on when you're talking about these ideas and I I think this is something that could really really help a lot of people who have a lot of ideas is this idea of trying to validate your ideas as fast as possible. >> Mhm. >> How might one validate an idea and can you give me an example of an idea that

49:04 you have validated? What does validation mean? >> Mhm. [clears throat] Yeah. So, I like to see people get joy from my product or service, right? Not just like, well, it's good. Like let's say I'm selling a food product. It tastes good. It's good. [clears throat] Okay, people might buy this, but I'm not going to have product market fit. I'm going to be pushing a boulder up the hill, right? But if people are like, "Oh my gosh, this is the best thing I've ever had. Where did you make this? How did you make this?" It lights up in their face. That's an example of a validation in my case, right? Same industry, food product, completely different reactions, right? So, one specific example is um my wife has a cookie bar business, right? Square

49:52 cookies, and they're amazing. And we're not trying to scale it. We don't want to scale it. It's a way to teach our kids entrepreneurship, and we love it. But the best way to validate this was going to our local farmers market and just posting up and just giving people samples and just watching them, right? What do they say versus how do they react? And is it the same? >> What do you mean by that? >> Well, sometimes we try to use the internet in places where it's it's not needful, right? She sold these online, right? She shipped them to friends and family across the country. Like, they're great. We love them. Okay. I didn't see you eat it. I don't know how you actually love it. Are you saying that because you're my mom, right? Or you're my friend. But when you solicit feedback on your product or service in person, even if it's like an internet tool or an app, in person makes all the difference.

50:39 You want to take note of what they say and take note of their body language and how they react when they experience your product or service, right? And if all three of those things overlap, then either they're a psychopath and they're just lying for no good reason or you have something really special on your hands. Uh, and so that's what we did with her cookie bar business. And um, and they loved it. And you can do that with any business. It doesn't have to be food. >> And what does validation mean? is it's checking if the market gives a about the thing you're making as fast as you can. Yeah. Yeah. Um I like to kind of picture a you know a boulder up a hill, right? And most people in their businesses, even businesses that are working, there are two steps forward, one step back. Two steps forward, one

51:25 step back. And that's okay. Like that's not a bad thing. But in my experience, 5% of the time I'll have a business where the boulder is chasing me. Like I'm trying to not die because this boulder's chasing me down a hill. And that boulder in this case represents customers demand, right? Like I can't sleep because I'm fulfilling orders. I'm answering emails like I'm not getting distracted by the next shiny object. That is validation. That's product market fit in my experience. You don't have to have that to launch. I don't want people to misunderstand. Um but if you have that, like you have something very special and you need to go all in on that thing. There was a book published uh several years ago called the lean startup which talks about this idea of just like testing an MVP as quick quick quickly as you possibly can.

52:11 >> Can you explain that to the audience who probably have ideas but in their head are thinking I've got to quit my job. I'm going to have to raise money. I'm going to have to spend two to three years building something to figure out if this is a good idea or not. What is the alternative approach that you adopt when you're trying to stress test an idea quickly? >> Yeah. So, if I had to pick one tool, I mean, it's one that one in four humans use every day, and it's Facebook, right? You've got Facebook groups, you got WhatsApp um Instagram Facebook Marketplace, Facebook pages, uh, Facebook ads, right? Let's just say there's six different meta products, Facebook products. That's everything you need right there, right? Why why don't you give me an example of just a random business and I'll I'll tell you or the the audience how they could validate that with a Facebook product.

52:58 >> Okay. Um I'm thinking of starting a creatine brand for women that has makes creatine taste good. Okay. All right. Are we talking powder gummy? What form factor? >> I don't know. >> Okay. Well, let's let's try both. Okay. So, I'm going to do something that seems very non-obvious and probably won't work, but it's the lowest amount of friction. I'm going to take a description for that and I'm going to use Nano Banana, Chad GBT, any of the AI image generators to come up with what the product could look like, right? In both a gummy form and a powder form. Okay. Then I'm going to go to Facebook Marketplace. You You're just going to post a photo. >> Yeah. I'm just going to say like women's

53:45 creatine brand actually tastes good. tastes good, right? Like, did you know that creatine and improves cognitive function or whatever? Just your standard pitch. I could even use AI to generate it. It doesn't really matter at this point and I'm gonna post it to Facebook marketplace simply because that's the lowest amount of friction to get some level of validation or not, right? Because in my experience, focus is overrated and momentum is underrated, right? And so you could have told me any idea and my first step that I tell you to do is going to be something very very low friction because I want you to get something back from the world, right? Cuz the most likely way to sell that product is with meta ads, right? But there's a lot of friction there. Like it's it's hard to use. So you're going to be like, "Okay, you're going to go choose met ads and you're going to burn

54:32 out and you're going to have be on to something else by tomorrow." But that might be an amazing idea, right? So, I'm going to tell you to go to Facebook Marketplace, even though people don't sell creatine on Facebook Marketplace. And then we're going to see, you know, Facebook gives us like three stats when you post something to Facebook Marketplace clicks and then how many people that reach out and then how many views. Okay, so I'm going to post one Facebook Marketplace ad for the gummies. Different picture. It'll look like gummies. Um, basically same headline, same benefit, same description. post to Facebook in the same local market with the same radius. Don't want to change any variables. And then I'm going to open a Google sheet and I'm going to say how many views, how many clicks, how many messages for that ad. Then I'm going to do the same thing. Take the same features, the same benefits,

55:18 different picture cuz this one's powder. Post it in the same market with the same radius to Facebook Marketplace and have a new column um views, reachouts, and um clicks, right? And then I'm going to watch and I'm going to see what's getting more clicks and I'm going to know within two hours where there's more demand. Now, does that little sample size indicate like what form factor I should go all in on? Not necessarily, but it's something. It's a relevant data point, right? There's not very likely to be a large amount of people searching for creatine gummies on Facebook Marketplace, but it doesn't matter because there's two billion people using it, right? So, we're just trying to capture some of that traffic. So, I'm going to do that with two ads. And then after a day or two, I'm going to boost those two ads, put $10 behind each of

56:04 them to see how my results differ. Does it make any difference? Do I get a lot more clicks, a lot more views, or is it just wasted? And then I'm going to um I'm going to probably post like 10 more ads of like different photos, different headings, different descriptions, different price points, and then put all those in a Google sheet and track it. All right. Now, I have a lot of data. Now, concurrently, so while I'm doing all these things, I'm going to go to Facebook groups and I'm going to join Facebook groups like moms who work out, moms who love creatine, moms who love rucking, ultrarunner moms, like healthy

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