Season 3 - Episode 3 - Special Guest Brendan Wallace

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Cousin Bill 0:32

Welcome to give them the biz podcast. We are here on episode eight. welcome your host, the king of calla lilies, the ayatollah blue Viola's Pittsburgh PA's favorite son has started an online flower company, John Tabis.

John Tabis 0:48

Wow. favorite son that started an online flower company. I

Cousin Bill 0:53

don't know how many of those there are.

John Tabis 0:54

You know, my mom says to me all the time that I'm her favorite son. I am the only one. I get the feeling. I have two older sisters. So I get a feeling What's up everybody? Good to be back.

Cousin Bill 1:05

What's up?

John Tabis 1:06

We're, we're gonna have a first here. Tonight. We're super excited. We have our he's out in the waiting room right now. Brendan Wallace gonna be joining us as our first podcast guests. And we have a guest just super exciting. But first, before we get an enemy house, I just first wanted to say thanks. So we did not know how many people were listening to this show.

Cousin Bill 1:27

I was convinced it was 12.

John Tabis 1:29

And I think 13. Last week, we said thanks to the 10s of you listening literally, I think that was something we said. And and the great folks at podcast one gave us access to the stats. And actually we have 1000s of listeners. And that is all because of all of you who are sharing us so much. Thank you peeps for listening and for and for sharing what we're doing here. Please, if you do like what you're hearing, subscribe, that's the number one thing to do. And then post and share on Facebook, on Instagram on Twitter on snappy rappy

Brendan Wallace 1:57

rate us review us on all these things.

John Tabis 1:59

That's how we make this little pirate ship sail. So thanks again for for all the support. So I just talk at Hawk fest. What's up hog media, Eric Huberman is the founder of Hawk meat. He's gonna be joining us in a couple weeks. And his talk and they asked me to speak about something that was sort of unique to my journey in running this company. And one of the topics I talked about was, how do you make the transition from being a founder to being a CEO? And it's this, it's this fascinating thing. That all not all, but a lot of the things that make people good at being a founder are Katie Rotolo, put it on silent.

Cousin Bill 2:37

Bill,

Unknown Speaker 2:38

number one, why Bill's phone looked over

Unknown Speaker 2:40

Instagram.

John Tabis 2:42

All right. But all the skills, not all the skills, a lot of the skills that makes a founder, a really great founder, are often not skills that make a really great CEO. And, you know, I think it's this magical thing that happens when you have a founder who actually runs the whole way, especially when a company gets really big, like Mark Zuckerberg isn't unique in the sense that he created Facebook, he's unique in the sense that he created Facebook, and then was able to run as CEO the whole way to what it is. Now, that makes zero sense. It is a fascinating, amazing, sort of metamorphosis from one to the other. And you know, Brendan will be in here later. And I'm sure we'll talk a bit about this. But like, founders are scrappy, they make things happen really quickly, they point and shoot. They're they're really directive. And they they have this massive sense of urgency. They're, they're really individual contributors who sort of have this passion and this need to make something exists in the world, which is, which is pretty amazing. CEOs are amazing at setting a long term vision, aligning resources, getting great people that work for them to do all the stuff. There's this massive chasm between these two things. And we could spend a lot of time talking about that. And maybe we will when when Brennan comes in, but more than that, what I was struck by when I was actually giving this talk and my Oh, by the way, my whole thing on this talk was like, I think I'm a pretty good founder, I am not at all a good CEO yet, like there's there's still a long way to go and learning how to do that. I'm just not there. But what I was struck by when I was having this talk a little bit was how much I had changed since I started this company and what I thought was important and as a human being and then and as a as a executive, I guess, and I got I got really hung up on this, this sort of word metamorphosis. And then I went to this this conference called worlds it was down here in Los Angeles last week, which is epic conference for people that want to change the world. And in there is a lot of theme theme, thematic surround metamorphosis. And I thought a lot about how we as people think of ourselves is pretty consistent, right? Like, I still talk about how I'm the same person I was when I was nine and I'm sure of it. which I'm sure is actually not true, but we tend to same height, we tend to want to have consistency right all rough low. I was sub five foot but we tend to see Humans have this natural idea, ideal to be consistent. So like, I don't know, if anybody else told me if you've ever done this before you get into, you're in the right lane you're driving, you put your blinker on, you go into the left lane, cuz you think up ahead, you're gonna go left, and then you realize you have to go right. And then you feel bad. Because the people behind you are going to recognize that you didn't know what you're doing. But usually, you're

Unknown Speaker 5:23

that guy,

John Tabis 5:24

right? You there's this cognitive dissonance that comes with changing your mind. And it's like, who cares, that person's never gonna see you, again, we have this moment where you're like, Oh, I'm not comfortable, this idea that I'm changing my mind so quickly. So we have this, this idea that we're going to be consistent, but then when you actually sort of look at, especially a founder to CEO, but like, you know, a first time person coming into any gig, whether it's acting or producing or starting a company, or marketing or whatever it is, and then that person a couple years later, there's this massive transformation that occurs. And I guess what got hot for me over that over that talk was this idea of getting really comfortable with the change, and, and recognizing and embracing it. So, you know, sometimes people really have struggles with change, you know, in my company all the time, I talk about how the only thing constant is the change, change is not good, change is not bad, it is just what it is. And you're never gonna avoid it. If you're in a world like this, if you're in a world where you're trying to create something new, if you're in a new relationship, if you're in a new job, if you're in a new company that doesn't have everything figured out, this change is going to be constant, and it's never ever going to stop. And the best way to get comfortable in it, is to embrace it rather than sort of battle against it. And I've seen folks who have really done that, and they've thrived and they've been happy. I've seen folks who really, it makes them uncomfortable, and they sort of fight against it, they say they're open to it, they fight against it, and it becomes really tough. And so you know, whatever it is in your lives out there, you know, where you're dealing with, with a lot of change, you know, try to try to understand that that is inevitable, because you are not the same person you were and the situation that you're in is not the same situation you were in and try to embrace that and sort of live with it any does that spark anything for you guys, in terms of like your personal journeys, right now, I know that there's a lot of change happening in some lives around this table.

Brendan Wallace 7:10

I was just gonna mention, you mentioned consistency. And it makes me think of having control. And in my life, I'm very type A and I like to have control over things. And if things aren't consistent, and going that way that I can sort of not be okay with that. And the older I get, and the more I change and the war, my life changes and my business changes, I've sort of just had to start being better about that, and embracing change and letting go. And that's actually something I focus on in my business. And in my, in my meditation in my own yoga practice, is letting go because I have such a hard time with like, not, you know, having things go my way or go the way they usually go or go the way you know, and there are going to be growing pains and that's okay. And

John Tabis 7:58

that's why it's hard, though. Hard, though. Those go into some change right now. Wow, let's

Cousin Bill 8:04

please talk about it. But no, I will say on that note, I change has been a huge part of my, what I call my la story, like I moved here to do stunts, and I was very successful at it for a while. And I had to make a decision. Am I going to keep doing this and put my body at risk? Or am I going to do something different? And I made a huge change for me concussions Have you had Oh, man, somebody I don't remember at least a dozen. But oh, but yeah, I got up before I, you know, really, really hurt myself. And I started off as an again, as an office PA, which is like coffee go getter essentially. And in the TV world, at 13 years old is unheard of. And I did it anyways. And I've worked my way back up. And one thing that people have been telling me a lot this week, my change that I'm going through is I'm I give 1,000% so no matter what that change is, like there's there's no energy drop from each thing. And I think if you are not afraid and give 1,000% or whatever that changes, you know, that's how you win. Right? Keep moving forward.

John Tabis 9:08

Yeah, yeah. So, you know, keep that in mind. If you're going through one of those things, you know, shoot us a note, drop us a tweet at at give them the biz gi ve m th e bi z, we'd love to hear from you and talk about you know, what you're going through in your career, your life, whatever it might be, where this topic is hot. And you know, stay strong through those things, folks, but but just don't don't fight the fact that change is there. You're not going to end it. You're not going to shorten it. It's not going to be faster because you're battling it. Trust me from experience. I know you're just beating your head against a brick wall and it's not gonna feel great. Awesome, awesome. Really happy to be back here in the studio. Really excited to bring in Brendan Wallace. Brendan Wallace is epic dude. We've met you know, a number of years ago now and is one of the coolest people I've ever met. So excited to bring him in. But before that, I think we're gonna do a little bit of news. What's up Katie Rotolo

Unknown Speaker 9:58

coming up on today Tom

Unknown Speaker 9:59

Cruise has an Movie we're gonna be talking to him. Hey, funny man, Al Franken will be stopping by for a visit. And Wolfgang

Unknown Speaker 10:06

Puck shares his recipe for apple strudel. Hey,

Unknown Speaker 10:09

so stay tuned, because we've got all this and more coming up in the next hour.

Unknown Speaker 10:15

Oh, well, nevermind.

Brendan Wallace 10:16

So you all have heard of Ben Moe, obviously, right?

John Tabis 10:19

So old man, john over here.

Katie Rotolo 10:22

Okay, just making sure.

John Tabis 10:25

But But I actually am like one of the very few people that does not use Venmo.

Katie Rotolo 10:29

Wait, you don't use it? No, I don't? Do you use PayPal,

John Tabis 10:33

I used to use PayPal and I don't I kind of don't

Cousin Bill 10:35

still have a Hotmail account. Now

John Tabis 10:41

ever changing in my life Check, please swear to God. So sorry to interrupt.

Brendan Wallace 10:47

So Venmo. familiar, it's an app where you send money. And generally there's a standard 3% fee that they actually waive once your transaction is funded on the back end. But basically, now they are adding fees, which are for their their instant transfer fee. So this is basically people that want to get their money right away, this is within 30 minutes, you'll have your money. And so now they're charging, it's going to be 1% of your transaction fee. So for people that are charging, you know, or sending small amounts to friends for pizza and things, it won't tremendously affect them. But for bigger transfers depends on

Unknown Speaker 11:23

much PT,

Unknown Speaker 11:25

right? Depends on how many

Katie Rotolo 11:31

how many bills to beer have,

Unknown Speaker 11:33

I have not had any.

Brendan Wallace 11:35

Anyway, so there's going to be So currently, there's a sorry, I lost my place, guys. So there's two ways to get your money out of your account, which is the instant transfer, and then the regular way, which is if you have a little more patience, which takes about a day or so. So yeah, this is a change for them. The minimum fee now will be 25 cents, and then upwards.

John Tabis 11:56

Well, this is this is one thing that story sparked for you when we talked about talking about it. And this is this is classic in any an almost any sort of consumer focus startup and often on the SAS or the business side as well, which is the pricing in the early days is never the real pricing. So you know, you got your raise money for books, we've raised about $50 million for the company this point. And you know, whoo, yeah, yay. Running gave me some of that money. So I don't want to comes in here. But but in the early days, what ends up happening when a business doesn't have to be profitable, and profit actually isn't even sort of a consideration. It's all about growth, product market fit, sort of figuring out the business and scaling it up. Pricing can be one thing and then at some point, sort of you have to become a profit business gets to grow up in sort of standing on two feet. And often that pricing changes. And it's like, it's my biggest fear right now is that the Uber price is gonna go up by 35 4050 100%. Because when you can raise pricing,

limitless funds, bajillions of dollars, you actually don't need to be profitable in your sort of individual ride or unit economics. Because you can absorb that because of all the cash you have, as long as you're grabbing market share and growing. The market says that's fine. I mean, and only amazon for whatever reason doesn't have to make money, everyone else has to make money Amazon doesn't have to. And so I'm curious if this is sort of one of those evolutions for Venmo, where, you know, it was, hey, we didn't we don't need a lot of fees, we can keep it super simple, super cheap. But then at some point, somebody says, like, Hey, I didn't get some cash out of this thing. Where can I sort of pull some levers and make some changes? I mean, we have this, we have this books, we were a free delivery company for four and a half years of our existence. And we looked at the economics of the business, we saw that we had to charge for delivery, were significantly cheaper than the market the markets like 15 to 25 bucks, we charge nine. And if you subscribe, it's free. So we still give you a way to get to free if you sort of commit to us to say I'm in long haul, we'll give you free delivery. But it was the same thing. We didn't know that at the time. It wasn't like a known thing. But the end of the day, like as your business scales, and you get to a place where you're not going to raise. Most companies aren't Uber, you don't sort of have a limitless checkbook. You gotta get to profitability, those pricing changes. I wonder if that's one of those inflection points for Venmo?

Katie Rotolo 14:06

Probably. And I wonder if they're I'm

John Tabis 14:08

personally not sure. Because of the 1% of my $0 spent on

Brendan Wallace 14:12

Yeah, no. But I wonder if they're going to also the regular so that slower way is still free. So I bet eventually, to your point that that will not be free forever, either. Yeah.

Cousin Bill 14:23

What's next?

Brendan Wallace 14:25

we're actually talking about Uber. So Nice job. Nice. Nice work. So Uber has reportedly been developing a short term staffing business. So in Chicago for the last few months. It's called Uber works. And it's going to have 1099 independent contractors where companies can hire short term workers for events and things. So

John Tabis 14:46

Whoa, whoa, wait, I just understand. So Uber is gonna have an on demand worker app.

Brendan Wallace 14:54

Yeah, instead of just an on demand car, they're gonna have on demand additional services. waiters, bartenders, different types of interests like it's like a staffing agency, but now they're expanding and you know, in addition to bikes and scooters and everything else,

John Tabis 15:10

yeah, it seems so it seems so out there. I mean, given that, like everything they've ever done is really been about moving things around, right? First it was moving people as a sort of taxi replacement that is moving food for, for Uber Eats Uber rush failed, I guess it was a sort of just a rush delivery service. And now the fact that we're sort of spinning into this, just on demand work, which has almost nothing to do with the network that they've created is really interesting.

Brendan Wallace 15:35

Yeah, well, they're actually they're in their recent job posting for a position they're hiring. It says Uber, it says our business is based around providing a flexible on demand supply for our business partners. It's imperative that we have intuitive and responsive responsive account management to support our business partners in addressing their needs promptly. So I guess they're just like, in all the prompt all the ways we can be prompt, we have all the capital on demand

John Tabis 15:59

everything, which is that's interesting. When I when I was starting books, I got a lot of like, really hard pushback from investors in the early days, who would just say to me over and over again. Well, you should do Uber for flowers, like that's super cool. Like, you should totally do that. And I was like, why? Like there's you can already get flowers fast. Just go to 100 flowers calm and you can have it today. The problem isn't the last mile The problem is the first 3000 miles. But it was this like when

Brendan Wallace 16:24

you can send Postmates to get flowers for you,

John Tabis 16:26

you know, back then Postmates wasn't really a thing. But Sorry, I'm rubbish, revisionist history. But but but at the same time, you know, there used to be over flowers, and I'm like, Look, if there's gonna be Uber flowers gonna be Uber, like, Ubers gonna be the best at doing Uber for whatever it is. So it's interesting to see that one of the first places they're going is into labor. Essentially. It's not the first place I would have imagined would have been the kind of start with

Unknown Speaker 16:51

labor but with kind of

John Tabis 16:53

driving. Yeah, it's interesting, like

Unknown Speaker 16:56

seated labor.

John Tabis 16:57

Yeah, it just seemed like it would have been something more around transportation or logistics because that seems to be what the value that adding in the world but um, they're

Katie Rotolo 17:04

already doing all of that. So they

Cousin Bill 17:06

might as well do this to sounds like the gigs section and Craigslist, like, but for Hoover. sounds like to me. Well,

John Tabis 17:13

I'm awesome. Thanks, Katie for the news. So guys, it's pretty exciting moment here.

Unknown Speaker 17:19

Oh my gosh,

John Tabis 17:20

very first. Yes. We have a guest. We have a guest. We have a guest. We have a guest. We have a guest

Cousin Bill 17:33

Please welcome our first ever guest, the Vice serie the vice ROI of venture capital. He puts the why in the fifth wall to be done. You can't order chicken wings from Brandon lawless.

Unknown Speaker 17:46

Here he comes. Brendan, welcome to the studio, man.

Brendan Wallace 17:51

Thanks for having me. This is exciting. I understand. I'm your first guest. first ever.

John Tabis 17:57

Yeah, we're super excited to have you man. Thanks for coming in. Yeah, this is uh, you know, the pirate ship. We've talked about it a little bit, we're sort of figuring this thing out as we go. So don't, don't be too nervous.

Brendan Wallace 18:06

I'm just excited to be here have

Cousin Bill 18:07

a good time well oiled machine as you can tell.

John Tabis 18:11

So just as quick background and for Bill and Katie do so Brent and I met a little while back through friends of friends. But we'll get to that part in a minute. And, you know, the Brett and I were talking before we came on about what this show is about and what we want to get out of it. You know, I use an example of may Ron What's up? Hey, Ron, how's it going buddy, who works in our finance department, and, you know, may Ron's a guy who is in the business world, really interested in what goes on sort of behind the scenes and the stories and how, like, we all do this thing that we do, so that maybe someday he wants to do those things. And so we're sort of ripping off these layers and, and digging into like, the meat of what it's like to start a company, run a company, scale, a company, etc, etc. And so, you know, we're gonna go deep in these things, Brendan, as deep as you're willing to go. And, and we're just gonna sort of tell the story and help everybody see, like, what it's like to have gotten to a place I mean, and and I'm gonna just go, you know, praise you and toot your horn for a little bit for a second. But like, Brendan is one of these guys is a force of nature, like whatever he does, he does it and it becomes this amazing thing. has founded companies has invested in companies that have gotten massive, is now a Founder and Managing Director of one of the coolest, the newest and fastest growing funds in Los Angeles. And so yeah, man, really glad to have you here. So, let's, let's go, like, I don't know how this is gonna work over time. But let's go way to the beginning. Like, let's start with, tell us about like, where you were born, your parents like chat, like just a way back way back. Like, just give us and you don't have to go to like, you know, we're not gonna go through every grade in detail, but just give us a sense of like, what growing up was like for you.

Unknown Speaker 19:51

Okay, so let's see. So I was born in 1981 on a snowy night, and now I'm getting I was born in New York. I grew up in New York City. My parents were in the real estate business. So I just kind of naturally gravitated toward it.

Unknown Speaker 20:12

Real Estate.

Unknown Speaker 20:13

So just development like kind of small scale, middle Manhattan. So all in New York, and I grew up just kind of with it in my blood.

John Tabis 20:21

Just I just I wanted to do I didn't really know why probably one of those How old were you when you first like, if you go back and think about like, when did you actually realize that you liked it? Or you're interested in it? Like, how old were you? And do you remember sort of what triggered it?

Unknown Speaker 20:33

I can, I can remember vaguely my dad used to love like pointing out buildings. We were walking around and telling these like long historical narratives over who built them or you know, why they were located where they were. And he would oftentimes do it like, like a typical New Yorker just jaywalking the whole time, kind of walking through traffic, you know, cars screeching to a halt horns blaring. And

John Tabis 20:57

he's just up in the building, he

Unknown Speaker 20:59

ends up in a building, he's not even looking where like me, his son was like, following him, right? Just kind of listening to these.

Unknown Speaker 21:06

These buildings,

Unknown Speaker 21:06

like love buildings, and he loved you know, I think that's probably what resonated with me is I loved, I loved and I love today, thinking about how physical space conditions like human behavior, both individually and at scale. And, you know, in large part, that's, that's like driven my career that's driven the choices I've made. And it's like what I'm passionate about, like, if you came over to my house, you'd see a lot of maps and a lot of books with maps, and I have a lot of books of buildings. I just love thinking about spaces. So I guess from a very early age, I just gravitated towards that. And then I went to college. And where'd you go? I went to Princeton for undergrad. Why did you go to a good school?

John Tabis 21:53

Not try.

Brendan Wallace 21:55

Exactly. And

John Tabis 21:56

hold on a second. Let's let's go back really quickly. I just want like the, the, like the five bullet points on what you were like in high school?

Unknown Speaker 22:03

Like, what did you do? Total nerd. I was a total nerd. I happen to be good at sports. So that was kind of my get out of jail free card. So I was like a partial nerd who you know, happened to be good at sports. But all told I was a nerd. What's worse? lacrosse squash cross country, which we're actually cool in northeast. And yeah, and I was I was very, very competitive, frankly. I was I went to a very competitive all boys school. I was just very into school, and sports, and then went to college. And it was kind of the first time I'd ever been in a coed school. And I loved it. Like, were

John Tabis 22:45

you in an eating club? thing at Princeton? I

Unknown Speaker 22:48

was it still is a thing. Yeah.

Katie Rotolo 22:50

In club.

Cousin Bill 22:51

Yeah, yeah. Yeah. What

Unknown Speaker 22:51

is all you guys go on together?

John Tabis 22:53

So there's this really quickly reason ask questions. I remember like flipping through the book, you know, that you got like which college you go to. And I read the prints and things as I said, like art prints, that would be really cool. And the eating club thing stuck with me forever. So I was just like, What in the hell is an eating club? So Brendan,

Unknown Speaker 23:09

it's the weirdest name ever. But yeah, you you eat there. Among other things. You it's a kind of the the hub for your social activity. It's a little bit like a fraternity or sorority, it's co Ed. Some you have to kind of apply to get in, some are opened. But they're like the it's like the nerve center socially of campus. And there's all they're all these kind of old Victorian houses that line this one street adjacent to campus. And just where you go to exactly like

John Tabis 23:39

what you'd picture it.

Unknown Speaker 23:40

Yeah, it is very much like what you picture it to be. It's like something out of an F. Scott Fitzgerald not Yeah, basically. So really quickly, though,

John Tabis 23:48

so you get into prints. I mean, that's, you know, it's one of the best colleges in the world. Right. So you said you were competitive? I think I started know where that's going. But like, talk a little bit about how, like, how did you end up in that spot? Like, how did you end up in a place where you were, you cared that much about school, you cared that much about being the best? You could be like, what do you think drove that in you

Unknown Speaker 24:08

growing up? You know, I think at the earliest stages, it was probably a bit of a true competitive spirit. To be honest, I think that way, yeah, just kind of naturally born that way. And part of it was obviously, like, I wanted to impress my parents. And I think it evolved actually at Princeton is where I think I developed more of a respect and kind of humility around like learning in and of itself. And an appreciation for like, where I was and the opportunity that I had. I think when I first got there, I didn't get that at all. When I first got there, I was applying the same ways of being and modes and just behaviors that had led to success in high school and college. And I think I slowly

John Tabis 24:56

just became self aware in college. Yeah, that's, that's weird. I became software like last week.

Unknown Speaker 25:02

Myself still

Unknown Speaker 25:03

working on it.

John Tabis 25:04

It's a journey. It's a journey. That's amazing, though. And so so you're at you're at Princeton, you're studying what? How did? What did you study?

Unknown Speaker 25:13

So I thought a lot about what to study, I study a little bit of philosophy. I studied politics, I studied economics, and ultimately settled on like a combined major between politics and economics. And I actually wrote a Princeton and make you write these senior theses these like, basically a book, You're horrible. It is, it's pretty brutal. Yeah, you bet you basically lock yourself and I

John Tabis 25:33

couldn't get through eighth grade right now. Someone was like, hey, write an essay. I'm gonna be like, Oh, no kidding me?

Unknown Speaker 25:41

No other doing addition? Oh, no, no

John Tabis 25:43

new math I like, but like writing up paper? Oh, it was so what was yours on?

Unknown Speaker 25:49

So mine was on urban development, and why cities locate sports stadiums where they do. So kind of all your worlds. Right? Exactly. It's also is, I actually, you know, I didn't enjoy the process of writing it. But having something like the longest thing I've ever written. And looking back at it now, and kind of even thinking through the moments of where I was, when I was writing it is kind of a nice, like, artifact of that that period of my life. It has weight to it. Yeah, it has weight to it a bounded, it's like, it looks like a real book. And I think Princeton is actually one of the few schools that for everyone's thesis, you can look them up publicly. So anyone who went to Princeton, I think you can look up and actually request the thesis they wrote. So

John Tabis 26:36

this thesis was around how many concussions can you get as a stunt man, before you retire?

Unknown Speaker 26:39

What's the answer?

Cousin Bill 26:43

When you can't remember my lucky number.

John Tabis 26:46

So so you're at Princeton, eating at the eating club, writing really long books and becoming self aware, which is pretty awesome. And then and you graduate, and what happens next?

Unknown Speaker 26:57

So then I went, you know, this was probably the least self aware period of my life, I knew. Exactly. So I immediately went to what I consider to be like the best in quotes job that I could get, which was a job at Goldman Sachs doing investment banking, and I happened to apply the one thing I was interested in, which was real estate. So I did real estate investment banking, right at a school. And I got in New York, in New York. And I was super lucky to happen to enter that market. And that opportunity, right at the beginning of like this massive bull cycle. This was 2004. So I was in real estate, capital markets, I was structuring mortgages, I was trading mortgages. I did that for two years. And then I went to Blackstone. And Blackstone is a private equity fund, they had a big real estate private equity fund, defined private equity fund for our listeners. So basically, a private equity fund is a big building. So it's basically a big pool of capital that an investor like Blackstone will raise from big institutions. And what they do is they'll go out and they'll buy real estate, they'll buy buildings, or they'll buy huge portfolios of real estate. And they'll try to improve them or they'll try to redevelop them, basically try to like increase the value of the assets, and then they sell them and return the money to investors. So it's like any kind of asset management, they're basically investors. And you contrast that to Goldman Sachs, which is an advisor. So Goldman Sachs advises the investors on which buildings to buy and how much to pay for them. Whereas Blackstone actually does the buying and the selling. So I went to Blackstone, we worked on a couple big, really exciting, super dynamic deals. One where we acquired the largest portfolio of real estate assets ever a company called equity office properties, Sam Zell, that kind of the guy who bought the Tribune, he built the company, it was like 550 buildings. And what Blackstone did is they actually saw that you could sell off the buildings kind of retail, so to speak, for less than you could buy the entire company wholesale. So is this really interesting, call it a trade or a play effectively, where they were able to buy something relatively cheap, break it into its constituent parts, and sell it off individually to owners that wanted it. And keep in mind, this is not like, one of those situations where people are getting laid off at these are these are, you know, real estate assets. So there's not a lot of personnel behind it. That was really exciting. And then we bought another company that probably everyone's familiar with Hilton. And then about four months later, the world just ended 2007 so the music stopped. It was nuclear winter, and in the industry I was in. And you were you were like, couple years in you're into the workforce at

John Tabis 29:54

that point.

Unknown Speaker 29:55

Yeah, I was too immature to appreciate the gravity of what I was living through and what was happening around me. I mean, you go back to that moment in time in history, and it is, you know, it's oftentimes easy to forget that we live in history, like history is happening. And there was this period from like, 2004 to 2008, where it was like, Oh, the economy's just gonna go up into the right, everything's great things are kind of just progressing. And then suddenly, the music painfully stops, and people lose everything. People lose all the equity in their homes, people are on unemployment lines, the government is borderline bankrupt itself, bailing out some of the most important financial institutions that like, underpin our economy. I mean, I remember this distinctly, like, I was talking to traders who were taking it, too, it's kind of far extreme. They were like, you know, if you have a breakdown in confidence in banks, you as a knock on effect, have a breakdown in confidence in currency. And if you can't trust currency, how can you trust people and law and order? and property rights, which is I know, a little extreme?

John Tabis 31:09

No, man, I asked my wife, I go buy a shotgun. Yeah, I mean, seriously, and I'm a pacifist.

Unknown Speaker 31:15

It was, it was the time to stock up on canned goods and shotgun. Yeah, that was that was how people were talking. And so it's hard to today. even put yourself in that position of, you know, what it was like, and also being as immature as I was, to just kind of for

Brendan Wallace 31:31

you at this time.

Unknown Speaker 31:33

I was 26. I think.

John Tabis 31:35

And by the way, like, there's people that have been in the workforce now for a while, who came in, you know, two years, three years into the recovery, who've never their entire career. It's been up into the right I mean, it's the recovery has been Astro freakin phenomenal, right? But like, people haven't been through that. Like, for me, it was I started in 2000 in the workforce, and like, it was like, it was everything was great. And then all of a sudden, it wasn't in 2000. Because the bubble sort of the sort of original internet bubble burst. So talk to me a little bit about so you, you're out, you're out of Princeton, you ate all the food at the club, you're having a good time, you get a killer job at Goldman Sachs, like the gold, literally standard. And then you go to Blackstone, which is doing all these amazing deals, like you're like the young dude, but you're the upcoming guy. And then the bottom falls out, like, what was that like for? Like, what do you think? Like, what happened around you? Were people getting laid off in your firm? Were you worried about it? Like what happened for you personally, in that moment?

Unknown Speaker 32:31

So the way it unfolded was kind of interesting. I had, I had applied to business school. Not really thinking I would go, and I because frankly, the world was in a great place. I was like, why would I? Why would I ever leave this awesome thing, this position

John Tabis 32:46

on a train train is rolling.

Unknown Speaker 32:48

Yeah. And, you know, I had already had some misgivings about doing what I was. I didn't love the business of working at a big company. I didn't love the dynamics. I didn't love just aspects of working at a just a huge organization like Blackstone, how many of you What was it? This was they went public while I was there, but call it in the 1000s. So quite, quite big. And I'd applied to business school I got in, and right as I got in the world ends. And so suddenly a decision which at the time felt it's kind of trite thing I was just doing I don't know exactly why frankly, it might my parents advice. My dad,

John Tabis 33:32

you did it because you felt like you were supposed to

Unknown Speaker 33:34

Yeah, I did it with no intention of actually doing it truly. And then I was like, Well, I think I should go and this is a good time to, you know, make a Irish exit from the real estate industry. And and so I did, I went to business school, and then it got worse. And that was even more interesting to see. Like I had friends that stayed in the financial world. And I remember our one of our first days at Stanford, Lehman Brothers collapsed. You know, this, this venerated financial institution that had been, you know, one of the behemoths of wall unthinkable gone, gone in a matter of days. This is like when Hulk Hogan

John Tabis 34:19

lost the title,

Unknown Speaker 34:20

and exactly, it's impossible. can't ever beat the Hulk well, to the ultimate sort of the Ultimate Warrior. I was gonna say the Ultimate Warrior. I have a funny story, but well, not kind of funny story about the Ultimate Warrior. I was a huge warrior fan, right? Yes, yes.

John Tabis 34:33

So we're entering Bill's world,

Unknown Speaker 34:35

right? Yes. Yes, exactly. When I when I want to get excited. I shake the ropes. Yeah. You know, the move. Yeah.

Katie Rotolo 34:40

What's the story though?

Unknown Speaker 34:43

Let me get. I'll get back to that. So, yeah, so I went to business school, and I went into business school, actually, with an open mind.

John Tabis 34:53

And by the way, like really quickly, like there's a couple reasons why you go to business school, right. One is, the economy's tanking. You don't know what else to do. Do you need to like buy in a couple years? Turns out, it worked for you sort of in that favor, not planned that way. But one is to get new, new different skills or change industries where maybe maybe you didn't have any business training. And then one is just to have a vacation for a couple years and drink. So it sounds like the first one was definitely you? How much did the other to apply? Were you trying to change something? We're trying to go into something different? Are you just trying to figure out what that was, and then how much was just like a, you know, a little bit of a break from from adult life?

Unknown Speaker 35:28

You know, I don't think it was a break as much as it was. I wanted to, I believe that there was certain skills I had innately that weren't being realized at a place like Blackstone or Goldman Sachs. And I just wasn't sure exactly what they were, or where the best path to articulate them would be. And where it would lead me, you know, that there's that kind of ever seen the Steve Jobs commencement address at Stanford, where he talks about how you can't connect the dots forward, you can only connect them in reverse. And so I think I went into business school with a healthy amount of self awareness that I didn't know what I was going to do next. And what I've been doing previously gave me skills and gave me insight and gave me relationships, all of which were super valuable, and I would take with me, but that I wasn't going to stay on that path. And I was very open to other paths. So in the first few months of business school, I met a classmate who had started a company in Spain. He launched and sold a company before coming to business school. And he's actually told me the story. He basically went through the entire list like the Facebook of Stanford Business School, selected the five people he wanted to start a company with, I happened to be one of the five. And he approached me and he was like, here's what I want to do. Who is this? audio? Me? Do you know how to me? No. So he's an awesome name. Yeah, he's half Nigerian, half Spanish, founded a company in Spain. And but he saw them five, nine. What's that? But he's taller than five, nine years old, taller than five, nine.

Katie Rotolo 37:05

A lot of people are taller than you, john. I'm

Unknown Speaker 37:06

sorry. I'm just gonna keep keep I'm

Cousin Bill 37:08

not he's not worried about it.

John Tabis 37:10

I'm fine with it, guys.

Unknown Speaker 37:11

I think you look tall.

Unknown Speaker 37:14

So kind,

Unknown Speaker 37:15

so kind. So he approached me and he was like, here's I want to do, I think you'd be a great co founder. And I was just very open to the idea. So I jumped right into it. Having never worked in technology. I still used Yahoo as my search engine. I was done all day. Yeah, you might still use that. Power.

Unknown Speaker 37:33

I don't use the search engine. I don't use the search engines. Okay.

Unknown Speaker 37:35

All right.

John Tabis 37:37

There's a there's value in continuity, folks, I'm gonna defend myself.

Katie Rotolo 37:42

No, we have to No wonder we can change.

John Tabis 37:45

If someone from eight, nine years ago wants to still get in touch with me, they can.

Katie Rotolo 37:50

You know, you can have that forward to it.

Unknown Speaker 37:52

Adult email. I

John Tabis 37:53

don't know about all these fancy features. Sorry, Brendan. Continue, please.

Unknown Speaker 37:57

So yeah, we started a company. And the idea was basically to do what LinkedIn had done for like white collar labor. So you know, as you think about LinkedIn, typically think about, oh, it's how I recruit a lawyer or an accountant, but like white collar jobs, but Facebook Around this time, opened up their platform where you could actually search all of the demographic and professional and other information inside Facebook. And we had the idea that there was a trove of information there that be really useful for employers of blue collar and semi skilled labor. So could you do what LinkedIn was doing for an accountant, for a long haul trucker, or for a cashier and help recruit them and taking it actually one logical step further, could you improve who they were hiring? So could you go to like McDonald's and say, McDonald's, did you know that the people who are the longest tenured people, the people who get promoted the fastest within your organization, previously worked at Dunkin Donuts and not Wendy's? and that therefore, you should recruit more people from dunkin donuts? they actually did not know that information. But if you mind the information inside Facebook, which I know is today a dirty word, but are a dirty phrase. It wasn't back then. Right? We just kind of unlocked this this goldmine of data for recruiters to help people get jobs which felt noble and it felt exciting. And so we did that. And I had to read it

John Tabis 39:26

once again, though, so So this dude out of me approaches you, you know him from school, right? You're you're in class together, but you don't know that well, and says like, hey, let's start this company together while you're at school. Yeah, you're gonna start at while you're in school. Is that the idea?

Unknown Speaker 39:41

Correct? Yeah, it was it was between my first year and my second year so over the course of the summer we fundraised

John Tabis 39:48

for like so instead of taking an internship or to take an internship and do that. No, I didn't take an internship. So you decided to like I'm gonna bail on this whole internship thing. Don't need it. I'm kind of an all in guy.

Unknown Speaker 39:57

So when I when I go at Something I go all in love. So there was no, there's no hesitation. I mean, I definitely underwrote him as a person. And his integrity, his complementarity to me, I was very thoughtful about that. And I've kept that's one thing. In my career, I'm very focused on getting right. If you mess up the people you partner with, it reverberates negatively through everything you do. If you get that, right, it actually doesn't matter exactly what you do next, because people are really deterministic ideas are malleable and plastic and change and sometimes ephemeral. Right, I got chills. That was so amazing.

John Tabis 40:40

Yeah, it is full or deterministic. Everybody at home, write it down, put it on a sticky note, stick it on the wall. And remember that and I we've talked about a couple of times, like the people part is in this journey, here are books anywhere people's the most important part and always it sounds cliched. Right. But so amazing. But really quickly on that. So you decide to like bail on the internship, which is some level of risks, like you could have gotten some great job after Stanford if you had this great internship with whomever. Right. When you did that calculus on whether you wanted to jump in on this thing, like, what was your thought process there? Were you? Were you at all nervous about, like, bailing on that, and having this other experience instead was just so ingrained in the Stanford culture that it just seemed normal? Like he had worked at a startup before? This isn't something you've done before talk about? Like, how did you think about that at the time to make that call to say like, yeah, I'm gonna give this a shot.

Unknown Speaker 41:29

You know, this, this will be a very honest answer, maybe a hard one to understand. When something feels right, when when you meet someone or an opportunity feels right. I didn't even think about the opportunity cost, the opportunity cost wasn't a consideration that calculus you're describing. It did not happen. In my mind. I became extremely focused on how do I how do I realize this vision that we both have the tactics, the strategy over how you pursue it. But now, I was, I would say, willingly and almost delightfully foreclosed the other options, because I believed in it so much.

John Tabis 42:14

Do you think, how do you think you're at that place? Because I don't think that's what the average human when presented with multiple paths all pretty good. I don't think that's how the average human would evaluate that. And, you know, the fact that you didn't even do the calculus. And for me, personally, by the way, like, I told the story when we first like, I mean, like my wife, and I spent like, three to six weeks penciling out the milestones that will enable me to try this this journey. So we did lots of calculus. So I'm curious about like, what do you think about you or the situation or the timing that enabled you to say, like, yeah, this is this is right, is it? Do you think it was watching your parents who were entrepreneurs? Or, you know, other examples that you saw? Or just who you were innately? Like what? What made it possible for you to make such a big call? Because it is a big deal, right? I mean, you're you're shooing, and saying No, thanks. So a bunch of really mean, I mean, everyone comes to Stanford to recruit, there's a million awesome jobs that come out of those internships. So what about you? Or what about that moment that enable that to happen?

Unknown Speaker 43:13

It's a really good question. You know, I think, from my perspective, I do I'm a very analytical person. So I will analyze situations I will analyze trade offs.

John Tabis 43:27

Yeah, I expected like some, you just say, like, I went, I did this. I did that. I did that. And then so this is a surprising answer. And I do that in many

Unknown Speaker 43:33

aspects of my life. I can be just very cerebral, very intellectual, and in making any decision, except the important ones. The really important decisions I've found in life, you simply can't intellectualize partially because those decisions, the variables and the inputs into them are too complex for your brain to actually synthesize. So whether it's the decision to start a company, whether it's the decision, the decision to meet a partner, whether it's the decision to I don't know whether it's decision to move to a new city, pursue something different, pursue a new passion, you just you're our brains are not capable of that all you're really running off of his gut feelings and emotions thunderstruck versus kickstart my heart. Similar thunderstruck, thunderstruck. That is that is one of my favorite songs. So I appreciate that. They got me very pumped up before coming in here. So we played on the way out.

John Tabis 44:41

I'll try it.

Cousin Bill 44:42

So okay, the ultimate warriors theme music on the way oh

Unknown Speaker 44:44

my gosh, that would be amazing.

John Tabis 44:46

So, so you're in your summer at Stanford, you've decided you found a partner to launch this thing with take us through that journey, you know,

Unknown Speaker 44:56

so now we get to the healthy dose Have humility in knowing nothing about starting a company. So I had to raise the first round of capital for a new business having never worked in technology or venture capital, never really been in the Silicon Valley ecosystem in orbit previously. And I just went around asking people for money, and getting told no. endless amounts of times. There's no everywhere I went, but I persisted. And who were you pitching this to? Like, where are you getting connected? You know, VC? It started with VCs, all of them said, no, then it went to like institutional angel investors. So individuals that are investing in early stage companies and do so professionally, also pretty much all sudden,

John Tabis 45:46

and that was all just through the Stanford network, you're sort of

Unknown Speaker 45:48

Yeah, just through the network, or just through hustle, right, just kind of researching them. cold emailing them talking to them as they leave the driveway in the morning. Exactly. Yeah, it was it was aggressive. But it failed. And it ultimately came down to individuals, people that just believed in me, and believed in me. And yeah, we ended up raising our first round of one and a half million dollars, we hired a team going into our second year of business school. So

John Tabis 46:17

so you raise one and a half million dollars, it was like the average check size

Unknown Speaker 46:20

into that round, probably somewhere between 50 and $100,000.

John Tabis 46:24

And those weren't, weren't professionals, sort of angel investors, just people with enough money where they could say like, yeah, I'll give you a $50,000 check.

Unknown Speaker 46:31

These were really people that just believed in us and believed in, you know, Brandon and Adi, me as people did not believe or even underwrite, or probably know, yet, the the idea was largely irrelevant, it was incidental to to the money we raised.

John Tabis 46:49

And so all of that comes back to the network, right? You have a network of people, because of where you went to school, both times where you worked, you could reach out to them, we're good, I'm sure it me had had people like that, too. You could actually have those conversations those folks and bring them to the table. And they've known you now because they've worked alongside of you. They've battled with you in work or in on lacrosse team or whatever it might be. And so they can support you in that moment. And this is something we've talked about a little before is like the network is everything. And I used to sort of poopoo it used to be like, ah, the network sees this, like marketing thing ever talks about like, this is the network coming to life for you, you have this dream, you want to build this company, everyone with all the money is saying no. So you turn your network, you say, hey, believe in us. And to the tune of 1.5 million, they say yes.

Unknown Speaker 47:33

And your network and your integrity is your currency, right? It's the currency that you're trading for the rest of your life. And actually, as a sidebar connecting, why am I even here? Okay, we're ever going back to a little more? No, we're actually connecting me. So So one of the first investors in identified was the name of the company. One of the first investors was a professor at Stanford Business School, that I'd gotten to know he invested individually into the business. His name is Joel Peterson, you're probably familiar with, and Joel into actually backing this up even further. Can you tell everybody who Joel is? So Joel is a professor in the board of JetBlue. He teaches a class on entrepreneurship at Stanford. And he's been the kind of connective tissue to a lot of the relationships that I've developed over the years, including one that so the way I met Andy Dunn, which is how you and I know each other is before I went to business school, I went on some email newsletter called like, thrillist, where like, you'd get sent interesting stuff every day, and bonobos, like happened to be in at one day. And so I bought a pair of pants, I'm gonna have those. And then I don't know why, I guess I was feeling impulsive that day. I just emailed like the info at. And I said, Oh, I think your company is really cool. And Andy wrote back, and we had a quick phone conversation. And one of the days where he was fulfilling out of his apartment, I think it was, I think it was Business School, even I think it was at business school. And so I just kind of blindly wrote him a check. That was my first angel investment ever. And I've maintained that relationship. And that relationship has become one of the most enduring relationships for me, and has become a linchpin of how I've connected with so many amazing people like yourself. Because once we had both kind of mutually bought into that trust that that kind of that like, harvested trust of having done a lot of work together, when he told me knowing that I know zero about the flower industry. Hey, there's a really cool startup called boots. This guy, john, I know him pretty well. He's starting this company. Do you want to invest? I think I glanced at your deck.

Unknown Speaker 49:43

That was not a long evaluate. Yeah, I

Unknown Speaker 49:45

think I bet you I responded, and I invested probably within 48 hours, more or less.

John Tabis 49:51

Yeah, it was one of the fastest.

Unknown Speaker 49:52

Yeah, so and that's because there was there was trust there and how

Katie Rotolo 49:56

long sorry, how long ago was that?

Unknown Speaker 49:58

That one was that

John Tabis 50:00

I must have been in the seed. seed round probably. Yeah, or the A. So it's 2013 or 2014. So really early stages, we were probably like eight people. Kind of trying to make it make it happen. I remember your house. Yeah. The house. Yeah, my house was doing a lot of the customer service. I didn't I didn't tell Brandon that.

Unknown Speaker 50:19

And look at where we are now.

Katie Rotolo 50:22

But is it your mom? Still?

John Tabis 50:23

Oh, yeah, she still does 10 hours a week. It's up mom's amazing. podcast? Um, yeah, no, but look, the quality of the people is all of it. And Andy is this amazing connector of people in this amazing human being has this ability to do that. And I can't tell you how many amazing things have happened because I happen to start a painting company with him. We haven't become friends, we have become roommates. And, and that connective tissue, as you said, is so strong once that trust is built. And you know, and he's lived on the other side of the country. But it's our band aids is one of the people I'm most in touch with, just because our worlds overlap more than

Unknown Speaker 50:59

with a lot of other folks. And I think what at least my relationship with Andy has shown is that you have to pay into relationships without the expectation of accruing debt. And what I mean by that is, you just need to, like, give things without a full expectation of ever getting anything back. I'll give an example actually. So Andy asked me to be on the board of directors of a company called interior define, which was a direct to consumer custom furniture maker. And the company was going through a transition, the CEO was changing, it was very small, it's probably doing like $30,000 of revenue a month at the time. And I did it not knowing or frankly, being all that interested in the furniture industry. And I did it It worked with Andy we kind of right sighs the team, we hired a CEO, we got it off to the right footing. And ultimately, I stepped off the board after doing that work. Bring it full circle, as I think you know, we've now launched fifth wall, I'm jumping around a lot. But hopefully we'll connect the narrative in reverse like Steve Jobs. So I, we actually invested out of that new retail fund focused on e commerce that fifth wall, my latest company has launched. And everything comes full circle, actually, this week, the two founders that have been there since I got involved, were in my office, a fifth wall. And it was this feeling of like kind of fulfillment that like, wow, this is what happens. These kind of circles start to overlap in this powerful ways. And yeah, I mean, I honestly can't underscore the point you made before, like, relationships are everything, they they truly determine your outcomes in life. And they also determine your happiness. Where was I in my narrative?

John Tabis 52:51

So we went from New York City to meeting clubs. Okay, then we did some private equity. And then we went to Stanford, and we started this company, and now we're growing that company. And he raised, you know, $1.5 million from a bunch of people, including, you know, some really cool individuals like Joel. And and so how'd that company go? How'd that work

Unknown Speaker 53:12

out? So we had a very Silicon Valley story, we literally started in a garage, a loading dock of a med device company, we grew very quickly, we almost went out of business twice, we raised $35 million. And it was very, it was an emotional and financial and strategic rollercoaster, I learned a tremendous amount about it. I didn't know what it was like to be a CEO, I had to learn a lot. And, you know, very real world hard hitting concrete, painful learning kind of ways,

John Tabis 53:49

when I tell. So give us an example of one of those things, what you know, without, you know, talking about anything

Unknown Speaker 53:58

specific this is this is a foolish decision I made. We had two term sheets from venture capital funds, so venture capital funds, you know, big funds that invest in companies of our stage. And one of them was at a very high valuation, but from an investor that was known to be truculent and difficult and not great. The other was from a firm that had a glowing stellar reputation, but was at a much lower valuation. And I am someone that values relationships a lot. But I kind of betrayed that principle in this moment. And I went with the higher priced offer from the worst. And for those of

John Tabis 54:47

you out there who are unfamiliar with, you know, equity financing, the higher the pre money valuation, the less you give up for the same amount of cash, right. So if you're watching Shark Tank, instead of them giving you $50,000 for half the company, they're giving you $50,000 For 10% of the company, just to make it super simple, so you want the higher valuation to retain ownership. And you remember why?

Unknown Speaker 55:11

I imagine it was kind of a mix of, we were very competitive with another company at the time, that was raising far more capital than we were far more money from big investors. And to be totally honest, the company was basically a fraud. I don't want to say who they were, but it was basically a fraud. I knew it was gonna say, and it was basically a fraud. And I had to kind of, I was wrestling with my competitive instincts over I do not want this, it was like justice, almost like they don't deserve that. We deserve that. Because we were actually doing something real, but not getting the credit.

John Tabis 55:56

And it feels like a battle, right when you're in it. And you have a competitor who's doing X, Y, and Z. You know, for us, it was bloom that came out of Y Combinator year after us, right? It's like, oh, Y Combinator, Uber flowers bloom, that books is laying there in LA, and I'm raising as much money. It's one of those things where you get super competitive and you start thinking like, you have to keep up with the Joneses. Right? So I totally get it in that moment saying, like, we got to, we got to battle this backwards, the perception becomes real for other investors, for employees, for the press for, like potential clients. Like you feel like you need to keep up with this other rocket ship. Right?

Unknown Speaker 56:28

Yeah. And I mean, you just hearing you describe it right now, it just reminds you reminds me at least, how lonely that position of being a CEO can be. Because you're you're rarely ever fight or you're rarely ever confronted with choices that are like, clearly right and clearly wrong. There's always Shades of Grey. And so I don't think I'm actually made the decision to take the higher priced venture capital offer that I did, not knowing that it had this trade off. I just didn't weigh that trade off highly enough. That's the learning. Yeah. And it underscores what we were just saying about relationships and people. And without going into too much detail. I basically paid the price for that short sighted decision for a couple years afterwards, and and really on like a weekly basis. And it was my cross to bear, I made the decision, I had to live with the consequences. Those

John Tabis 57:28

are the those are tough, right? Because they they don't go away. And so it it sticks with you. And like you said, it's a lonely journey. But you're owning that every week that it comes up again, it's all on you for that you're you know, and you wish you'd go back and change what you did at the time. But obviously, you can only have to like sort of work through the best you possibly can with that given situation.

Unknown Speaker 57:48

Totally. And there's, you know, not to hark back too much to something we were just talking about. But Andy Dunn has written I think, a blog that every entrepreneur should read. And it's kind of a, it feels depressing, and it's title, but when you actually read it, it's one of the if you've been in that position, it's one of the most liberating things to read. It's called, it's all your fault. And it talks about, it strikes the chord around that loneliness. But it talks about how leaders too often leaders that frankly, we all know, leaders of enormous nations, alleviate responsibility on themselves for decisions that are clearly of their doing. And I think what comes from just more experience is a recognition that it's okay for things to be your fault, as long as you take accountability for them and learn from them. And too often, I think people are scared to do that. And at times in my career as a CEO and a founder, I've been scared to do that. And I've sought to alleviate responsibility on myself. And I think as I've matured human, three humans, natural, natural, it's almost reflexive, right? That is that is what people do, protect yourself, you protect yourself, and it's the world against you. But when you're in a position of leadership, and you're making decisions that have consequences, and we're the choices are usually complex and obtuse and hard to actually distill the right clear, transparent answer from you need to accept that you're going to be wrong, and that there's consequences to being wrong. And those consequences affect not only you, the people that work for you, the investors, you have the world around you, your customers that they everything just kind of cascades through. But if you don't like there's also something quite liberating about accepting that, right, there's an acceptance that comes with that. And so I literally think it's anyone who starts a company should read that one blog and read it and reflect on it for 30 minutes. And make sure you want that. Make sure you want that because there is something there's nothing like starting a company. It is one of the most powerful, exciting Almost transcendent things you can do in aggregate, individually in moments where you are running it, and where you are screwing up, and we're you're forever confronted with like your own shortcomings and your own failed decisions and your own. Just Miss misplaced trust and terrible choices when you're living with that day to day and reflecting on it is painful. Oh,

John Tabis 1:00:27

yeah, talking about the other day and these other posts the dream in the pain cave couple of episodes ago now. Similar thing. Yeah, I was talking to an employee of mine the other day, there was a situation I won't get into details of it. But I was like, Look, look, man, like, you shouldn't be in this situation. And that is my fault. And he's like, No, no, you didn't do it.

Unknown Speaker 1:00:44

I was like, No, no, but that's what greatly I created,

John Tabis 1:00:46

I created this situation such that it could happen to you. And that shouldn't happen that's on me. But a year and a half ago, I would have been like, Oh, yeah, that person behaved terribly. Like, absolutely would have done exactly the reflexive thing that you talked about. And I did it, I did it often. I would just be like, they shouldn't do that. And But yeah, I hired that person, or I hired the person who hired that person. It like the buck has to stop somewhere. But I was very much the same place you were at the time, which is like, you know, I don't want to take that ownership. It's uncomfortable to say it's my fault. But I think I think you're right, I I I'm still honestly struggling with the comfort with the acceptance. Like, I haven't gotten to that place of grace, where you kind of go like, yes, it's my fault. And I feel I feel good about that. I'm still in that reflexive, you know, my, my head, my ego isn't ready yet, all the way. But I'm doing it academically forcing myself to understand it like this is this is this is the reality, right? This, this is your decision leading to this place.

Unknown Speaker 1:01:42

Yep. And there's a there's a mythology around almost the infallibility of leadership, that leaders are supposed to be infallible, the only ones are. And when you look at all leaders, from all different periods in history, really their leadership is littered with failures. But it's actually how they react to the failures that makes them or makes him or her whoever it is an exceptional leader. And that's just like a very hard one lesson. That's why you know, now as an investor, I love it. When I see entrepreneurs that have failed before. I don't necessarily love the failure. But when you ask someone why they failed, or what they would have done differently, or what they learned, and you taste like you genuinely taste, humility and self awareness, just like in those next few sentences, there's no amount of education, no amount of lost money, can never buy you that. And I think any leader, any founder, any CEO, even if you're not at the very top of an organization, anyone that internalizes that, it just makes you better at business and in life. This is

John Tabis 1:02:57

this, you said something a few minutes ago that stuck with me, which is like starting companies, when the greatest thing to do, it's almost transcendent. And it is and I think what you just said there like, it's one of those things that I think about the day to day is brutal, right? You just mentioned like an aggregate it's, it's amazing that you can do but in the day to day it is painful. But you will never in the business for at least I don't know what it's like to be a Navy SEAL or, or anything like that. But in the business world never be tested in the same way anywhere else. And you learn so much about who you are as a person and what you love. This podcast is because I love talking about ideas with really smart people. I like to have fun. That's why it's here. I didn't know that two years ago, three years ago, five years, I wouldn't have known that if I hadn't gone on this journey. And ripping these things apart helps me process makes me better at dealing with in my day to day, which is why we're here. And the self discovery that is inherent in the startup journey. In a lot of ways. You have to be crazy to start a company because it is so painful. The peaks are really high, but the valleys are so low. It's financially on the odds, unlikely to be a really great choice. But what you learn about yourself, even in complete failure, I think makes all the rest worth it

Unknown Speaker 1:04:08

not just professionally to what you learn about yourself personally. And you learn your strengths and your weaknesses. You learn how you make decisions and the flaws in that decision making process. You learn, you learn a lot about letting go of control. One of the hardest inflections, I think, in any company's history is where the founder, the CEO, the visionary needs to pull back and retract their ownership of key functions in the business, which frankly, many founders are never able to successfully do. And that just is like an anchor that you're dragging around because there's only 24 hours in the day. And the inability to delegate can absolutely hamstring a company. It can be a death warrant on the company. But if you even think about life, write it It's also a death warrant on life. Like, if you're in the constant purgatory of you need to do everything, and you need to excel at everything all the time. And you're incapable or unwilling to make choices that have consequences and very real trade offs. Your life every day is a purgatory. And so one of the things that, you know, I've now started my second company, that I've deliberately tried to do is to develop my team, in a way where there's this kind of trade line where I want you to take my job. And you set that trajectory, you set that vision for them, and you actually embrace it, you embrace that you might not be you might have been the one who had the idea. But you might actually not be the best person to run it. And if you continue to be great, and their execution might be totally different than what you would have style and their approach. And, you know, of course, develop an appreciation for like, how different approaches and different styles can lead to the same amazing outcome. And yeah, it you know, it's I think that the education that I received in running identified through to it said, We sold the company to work day in 2013, for how much money? I sold it for just under $100 million.

John Tabis 1:06:21

And how much did you raise for it?

Unknown Speaker 1:06:22

$33 million.

John Tabis 1:06:24

That's so you know, for those of you that aren't super aware, this is like, this is the dream scenario, that pretty much any any entrepreneur, you know, would hope for with their company, you have the you have like the Stitch Fix, you know, whatever. $2 billion IPO type things, but those are, those aren't unicorns, those those never happen. $100 million exit for a company raising $35 million is sort of the quintessential perfect journey, especially for a first time founder. That is an amazing feat. And if you weren't already impressed with what you've heard from Brendan today, which, you know, I've been sitting here with my jaw on the floor the whole time. That is an amazing accomplishment. So I mean, we've talked about this for congratulations on that. So so let's let's sort of, by the way, I love all these asides. This is such amazing stuff. But let's, let's keep the journey going a little bit, because I don't want to keep everybody for four hours. So you build that company, you get it to $100 million exit, you sell the company. What what happens after that, like now, all of a sudden, you're not running this thing that has been your life for how many years? Four years, four years. So so it's a whole nother stretch of college, right? You're, you're running this company, it is who you are. And I know this personally. It becomes who you are. You live and breathe this thing every single day. One day you wake up and you're not responsible for it. What is that

Unknown Speaker 1:07:44

day like? You're not responsible? It's a great point because you're not responsible for it. And you're no longer associated with it. Because it is something else that's different than you. You are no longer synonymous with your company, which is a really weird alienating feeling. And also, you're not responsible to and no one is responsible to you. You're just not responsible for people. That was a really hard time. Right after I sold it. I didn't know drink a lot. Yeah, drank a lot. No, I you know, I traveled I did all the all the kind of things that you do things you do. I I've skied all over the world. I went climbing all over the world. I went kite board. I did like just, I had fun. It

John Tabis 1:08:28

was all the things you do. Yeah. I would like go to one place like drink a cerveza for 30 days straight. There'd be no kiteboarding I wouldn't be bouldering off of a cliff somewhere as a Brenden.

Unknown Speaker 1:08:40

Whatever, whatever floats your boat blows your hair back, you know, you do you have the opportunity to do so. And yeah, I didn't know what I wanted to do. Next, you know, actually, so just a little another side. I started a company while I was running identified. Well, that's a super great idea. Yeah. And that that made my life pretty hard for

John Tabis 1:09:00

like starting a podcast while you're running a startup.

Unknown Speaker 1:09:02

Yeah, exactly. Yeah, this is this is an exercise in psychosis right here. So see, I started a company which classmate ran and he really built it I was just involved in kind of the initial idea and helping fundraise initially for it was a company called cabify, which is today, one of the largest ride sharing services in the world is the depending on the country, either the largest or the second largest ride sharing service in Latin America, and Spain and Portugal.

John Tabis 1:09:29

So like in the world, or is that company like third largest Uber Lyft,

Unknown Speaker 1:09:33

in Latin America, or just, I don't know, just in general Latin America, it's usually either one or two got. It's kind of like sizable $2 billion, privately valued business. Wow. And so I actually was not involved at all in the running of it, but I got to kind of experience it from afar. And one the founder and the guy who really built that company like it is his company. Seeing him go through some of the same things was also edited. For me, and obviously I had a vested stake and in supporting him and making sure that, that it became a success. And so I was deciding what to do next. And I had the idea for fifth wall, in, in kind of looking at venture capital, I think as a non venture capitalists. So venture capital is this business where you raise big sums of money from large institutions, you look very closely to find

John Tabis 1:10:28

large institutions for our listeners, like it's like raising from

Unknown Speaker 1:10:32

a university endowment, or like a public pension plan, or a big family office, you know, writing you 1020 $50 million that you pull together. And then you as a firm, as a venture capital firm, you take that capital, and you invest it to buy stakes by equity, ownership stakes, in very early stage companies, or late stage, it kind of depends on your strategy. But you're buying pieces of companies, and you're doing this many times over, out of the same fund. And I was interested in the space, actually a few venture capital funds approached me about joining them. But one thing I couldn't understand is I was like, what's the edge, there's a whole bunch of other people doing this exact same thing. And connecting this now to my passion from, you know, in my early life in real estate, and my experience in that industry, I saw that real estate had this really interesting dynamic where large corporates, so like the Marriott's, or the CBR, ease of the world, these big incumbents when they adopted a technology, it almost certainly meant that technology was going to succeed. And the inverse was also true. Meaning if they didn't adopt it, it was very unlikely it was going to succeed, you had this almost I call it like a kingmaker dynamic, where very few large corporates, more or less dictated the outcomes and the space. And yet, everyone was still speculating, everyone was investing in companies and hoping and hand wringing over what these large corporates would do. And I think partially because I never worked in venture capital, I had the idea to say, Well, what if we raised a fund, but we raise the fund from the kingmakers themselves. So let's go to these large corporates that have enormous balance sheets, want technology want to innovate, but aren't very good at it. And we will act as their Shepherd, to help them navigate this complex ecosystem of early stage companies and venture capital and disruption. And in being that guide, will glean all this really powerful and useful and valuable information about where we should invest, and to the entrepreneurs that we invest in, will just help them grow. Like, we won't kind of sit there and say, I'm going to help you think about strategy and a bunch of hand wavy, almost like platitudes around what we're going to do for your business, I go to an entrepreneur and say, I'm going to deliver $10 million of revenue to you. Not like I'm going to try, as in my LP, the investor that gave me money is going to buy your product. Very simple, right? So it sounds like a very simple idea. It just hadn't been done. And so I knew, it's freaking brilliant.

John Tabis 1:13:14

I mean, you just looked at where all the incentives were, and use all these inefficiencies and just hoping and guessing and maybe it'll hit and maybe they'll use it, maybe they won't, and just streamlined it, you just shorten the value chain, between the technology is gonna get adopted anyway. But now, it's just a lot faster. And they're also economically incentive to adopt that technology, because they're investors in that technology.

Unknown Speaker 1:13:36

And what if you think about what we represent, at our core, we are a relationship business, we build relationships with large corporates, these are high trust relationships, where they come to depend on us, depend on us, depend on our insight depend on our access. And then we similarly build high trust relationships with the entrepreneurs. And then we are just the conduit, we are just the connector between the two.

John Tabis 1:14:00

Well, what's cool about that, though, is you've lived in both these worlds, so you're genuinely authentically able to do that. Like, hey, look, I worked at Blackstone, my family was a real estate family like we have I have these experiences, just like all you folks, and then you can go over the entrepreneur be like and I built identified from scratch. I raised money I helped build cabify like, I've been in your shoes too. And the number of people in the world that have lived in both those worlds is pretty rare. It's not like a ton of people that have had experience in both of those world. No, any

Unknown Speaker 1:14:28

let me know I want to hire them. So yeah, we, Brad my co founder and I had very similar experiences, and we set out to raise the fund. And, you know, one of the things we realized was that a lot of the value came in the exercise of translation. So corporates speak corporate, and startups speak startup. And oftentimes they just can't communicate and you need a translator you need someone to function as a go, but When to arbitrate conflict to translate what the entrepreneur is trying to convey to the corporate with ultimately what the corporate needs. And we all know, I think in intuitively, the challenges that corporates have, corporates are great, in some respects, they're very good at understanding their own pain points, what they don't like about their business, or where they see opportunities for technology to generate more revenue or cut more costs. They're like acutely aware of that, and they will let you know that. And at the same time, they're terrible at predicting what they're ultimately going to do. The whole history of the corporate world is a history of being terrible at predicting what you're ultimately going to do to solve your pain points and your problems. And so that's where we come in, we serve as that translator. We work with them to diagnose their pain. And then we prescribe what we think is the right solution. And in so doing, we obviously help the entrepreneur. And so we raised our first fund at the time, it was crazy, because, you know, we were going out to large corporates that had never invested in a venture capital fund, explaining to them what venture capital was, and then asking them for $20 million each. And that all Yeah, exactly. And it was

John Tabis 1:16:19

for them. That's kind of like, so for money. Yeah, it was found in the corner, this 85 cents. You know,

Unknown Speaker 1:16:26

it wasn't the money. It was, it was that what they were focused on was our ability to cultivate a high trust relationship with them. That's what they were focused on. That's what they underwrote. That's what led them part with $20 million. And so we raised our first fund. We had eight large corporates, it was CB re the largest commercial brokerage prologis, the largest industrial owner lonar, the largest us home builder, basically, every major asset class, we managed to get either the largest or one of the largest owners to come in. And we invested that we invested or we raised that capital, we invested that fund in 27 companies. And going back to our point about the value of relationships, one of those partners may switch which is the third largest mall owner in the US, they came to us and they said, you know we love working with you. We love your approach. We love the team you've built, we love the just the design of fifth wall. But we want to do something else. We love what you're doing. But we want to do this new strategy. We want to invest in digitally native brands, which is a complex way of saying ecommerce companies that are opening stores, right? This counter intuitive dynamic that's happening in the world today where it's harder than ever to grow online. And so increasingly, if you make a consumer product, from shirts, to shoes to whatever, you can build intimacy with customers by having a physical footprint, a store, the very thing that you know, the press says is dying traditional brick and mortar retail is actually the place more and more entrepreneurs are looking to grow. And he done the novos Warby Parker, Casper, I mean, there, there's a, a just endless list of brands that are doing this. And so we ideated and ultimately launched a separate fund with that same partner for an even larger commitment to invest in these brands and help help guide them and Shepherd them into retail, because entrepreneur who's, you know, making shoes online, they know their supply chain, they know their customer base, they know social media marketing, they know SEO, they know sem, they know, digital, so to speak, and then a product and they know their consumers, but one thing they don't know is how do you build a church, right? If your brand is a religion, what's its church, and the church will never be the website. The website is just not a church. But the kind of relationship you can build with a brand or product by being in a physical space that's curated and branded, and intimate. And when you're interacting with other customers, there is nothing like that, and nothing will ever replace that. And there's no expertise in the venture capital world for that ambition. And that goal of going offline going into brick and mortar. And so we built that. So we've now launched second vehicle focused on just this. And we're doing other stuff that I sadly can't talk about. But again, all embedded in building a high trust relationship. That is really what it all comes down to. And so yeah, now, you know, fifth wall is we might be the largest venture capital fund in Los Angeles. I'm not sure. But what's the

John Tabis 1:19:47

total size of sort of early on I think

Unknown Speaker 1:19:49

I go to jail if I say this, so but it's a lot. It's a lot. And it's it's humbling to it's humbling to have it humbling to have those kinds of commitments like we went from eight strategic LPs in our first fund to a multiple of that in our second. And we were able to create almost like a network effect where the more strategic corporates that we worked with, the better our product, our product of giving them insight and access, the better God, because they had the same pain points. And they were struggling with the same issues, right. And we had pattern recognition over how to help them best and different approaches for different kinds as much

John Tabis 1:20:31

as as much as you're a venture capitalist investor, you're a consultant to an entire category of potential consulting services buyers in your corporate LPs. And it just so happens that they're, they have a vested economic interest in your business as well.

Unknown Speaker 1:20:46

And the flip side of that is you can help entrepreneurs more, I mean, that that is ultimately what we should be in the business of doing. We're here to help the former meas that were out there trying to start a company trying to sell their product, trying to build something from nothing, and suffering in the process, because they can't access those large corporates. And now we have all of them. Right, we have the industry that can open those floodgates. So yeah, it's been it's been a really exciting experience, I think, for me, in terms of learning a new skill set, and then having a very unique, again, I'm so appreciative of the opportunity, the unique opportunity to apply everything I learned as an entrepreneur and do venture capital, I think, the way it ought to be done. And so that's just an amazing experience. But connecting the dots in reverse. I couldn't have predicted this. So going back to when I was at Princeton, and I was graduating, eating, eating at the club, eating a lot.

Unknown Speaker 1:21:56

Yeah, club sounds like a whole other thing.

Unknown Speaker 1:21:59

Yeah.

Unknown Speaker 1:22:01

So yeah, you're good to me. It's

John Tabis 1:22:03

an amazing story. Yeah. A really amazing journey. Thank you for sharing it with everybody. We really appreciate it. So much wisdom in this hour roughly shared and any listeners out there you don't check out Brendan, you can find him on LinkedIn. I don't know if that's a good idea or not. And Brendan Wallace,

Unknown Speaker 1:22:21

not just go to the website, fifth wall. And that's probably the easiest.

John Tabis 1:22:25

It's in. It's spelled out not with a five.

Unknown Speaker 1:22:28

Yeah, FFTHW a LL.

John Tabis 1:22:31

So check out fifth wall. Check out everything that Brendan is doing over there. Thanks for joining want to stick around and play a little game with us.

Cousin Bill 1:22:36

I'd love to Awesome. All right. So we'd like to end our show with a little fun and games. Usually. We're gonna do a little lightning round with you. I'm gonna fire off two choices. Me there'll be like pretty much to two businesses or service or something like that. And just Is there a right answer? Nope. It's yours is your answer. All right.

Katie Rotolo 1:22:57

It's just him right for this.

Cousin Bill 1:22:59

Yes. Okay. Cool. Yeah, this is just Brendan. So like, if I said, you know, McDonald's or Burger King, or McDonald's, there you go.

Unknown Speaker 1:23:05

He knows the game. McNuggets. And he didn't ask that. Sweet and sour sauce.

Cousin Bill 1:23:12

We've talked about this on the show before we spent a lot of time.

Unknown Speaker 1:23:15

I love McDonald's.

Unknown Speaker 1:23:17

When today having me. Oh

Cousin Bill 1:23:20

my God. He's Alright, ready? Here we go.

Unknown Speaker 1:23:26

iPhone or droid? iPhone

Cousin Bill 1:23:27

crypto or VR.

Unknown Speaker 1:23:29

crypto.

Cousin Bill 1:23:30

We'll get Steve Jobs.

Unknown Speaker 1:23:31

Bill Gates, burger line. Again, bird or lime. Lime. Obviously, Uber was an investor and I'm an investor in lime.

Cousin Bill 1:23:40

Uber, Lyft. Uber, Nike, Adidas, Nike, Netflix amazon prime. And another five guys say it again in an hour or five guys in and out. Marvel or DC Marvel Ultimate Warrior the warrior? Yes.

John Tabis 1:24:02

This bond over the Ultimate Warrior is gonna last a lifetime I

Cousin Bill 1:24:05

feel like I don't think we ever heard

Katie Rotolo 1:24:07

did we get the story

John Tabis 1:24:08

we're gonna come back to in a moment is that is that our game

Cousin Bill 1:24:11

builder Katie said again pillar Katie. Oh, that's so me.

Unknown Speaker 1:24:14

I can't do this. I love

John Tabis 1:24:20

if you want the game, we do need to go back to the Ultimate Warrior side that we have a quick story. It was a story before we wrap up.

Unknown Speaker 1:24:26

See, I was obsessed with the Ultimate Warrior. crazily obsessed, which I think makes me normal. Yeah, that

John Tabis 1:24:32

age. So I'm slightly older. So I was a hot guy. Your whole guy? Yeah, I got I got you know, on bill. I probably have a decade. By the way bills. My actual cousin. Cousin bill is actually cousin bill. Yeah. But yeah, I think it's an age thing. But

Unknown Speaker 1:24:49

yeah, he said later in life. He became an artist. And he's since passed away. But later in life, he became an artist and I'm reading about Got it. And so I reached out to him and he had the best email address ever. It was like warrior at warrior dotnet email address. And I asked him to paint me a painting, which you could commission and so yeah, I got a painting

Cousin Bill 1:25:19

from an Ultimate Warrior original.

Unknown Speaker 1:25:22

Original correct. What is it? What did he paint? So it was a just a warrior at warrior. Like it was like an ocean scene. But yeah, he's, he's, you know, I found him to be like one of the most inspirational guys he was the underdog. You know, he was the underdog to Hulk Hogan like Hulk Hogan was just so commercial and now Now that you know Hulk Hogan and like what he's become, you get even better Yeah, even better, like the warrior deserved the championship.

Cousin Bill 1:25:50

So when he won Yeah, it was one of my best like wrestling moments ever. I forget how old I was. But I went nuts.

John Tabis 1:25:59

And with that, everybody want to thank you all for joining us. Give them the biz. Really quick shout out to our our core sponsor the books company, get some flowers in the volcano at BYU que es comm best flowers in the world.

Unknown Speaker 1:26:12

Can I can I can I second that just because I absolutely love the booth.

John Tabis 1:26:16

Brennan has used the books a lot for a long time.

Unknown Speaker 1:26:20

Yeah, I've been a long supporter of the books I think it is the coolest brand. The best product I love the the cards you give now when you when you get flowers that say where they were sustainably sourced from and the supply chain and I think that's like a message that's so resonate with people today.

John Tabis 1:26:39

We, we so appreciate the support. So check out books, Firestone brewing, if you're listening, we are still there still drinking your beer. It'd be cool. If you wanted to sponsor us at some point, just let us

Unknown Speaker 1:26:49

know.

John Tabis 1:26:50

I mean, we like paying for it but it'd be way cooler if you just gave it to us for free guys. So you know, just heads up, you know, check us out on social at given the biz, a at symbol g I ve m the biz, and thanks, everyone for joining Katie, Bill Brennan.

Cousin Bill 1:27:06

Thanks for hanging out. And we'll see you guys next week, y'all. Thanks for listening to give him the business podcasts from the books and podcast one. Be sure to download new episodes every Tuesday right here on podcast one on the podcast one app. We're on Apple podcasts. And don't forget to rate review and share. also find us on Twitter and Instagram under the handle at give them the biz g IV e m th e bi z