Resources for Buying and Selling Online Businesses

Codie Sanchez Talks About “Boring Businesses” and Gaining 1.5M Followers in 24 Months

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Codie SanchezCodie Sanchez is the Founder of Contrarian Thinking, the Co-founder of Unconventional Acquisitions, and the Owner of 26 “boring businesses.” She is also a Board Member at Entourage Effect Capital, The Arcview Group, and the Marijuana Policy Project and a Member of AEI’s Enterprise Club. She invests in women-led startups through Plum Alley, WAVE, and The Vinetta Project and cannabis companies through Cresco Capital Partners.

Codie was awarded the JFK Award for Print Journalism and the Howard G. Buffett Grant. She received her MBA from Georgetown University and her PhD from Fundação Getulio Vargas.

Here’s a glimpse of what you’ll learn:

  • [04:03] Codie Sanchez explains the value of treating social media like a branch of your business
  • [08:03] How “boring businesses” can be catalysts for success and financial freedom
  • [13:42] Why you don’t need to be a millionaire to move up the entrepreneurial ladder
  • [18:44] Codie talks about connecting with others to discuss growing your business
  • [21:46] How an online community can be an excellent tool for education
  • [26:07] Codie shares how she learned from her mistakes and set expectations with her teams
  • [30:43] Why you should look at the value and return a brand can offer before investing

In this episode…

As an entrepreneur, how do you achieve financial freedom? It can be scary taking the first step toward owning a business, but what if it doesn’t have to be?

Whether you’re a first-time owner or a serial entrepreneur, it is possible to stop trading your time for money. Codie Sanchez was working for a paycheck until she changed her perspective and began focusing on the cash flow of her business. When you think like an owner, everything changes. Now, she’s here to share how to succeed as a business owner — and how she’s empowering others through a community of like-minded entrepreneurs.

In this episode of the Quiet Light Podcast, Joe Valley sits down with Codie Sanchez, Founder of Contrarian Thinking and Co-founder of Unconventional Acquisitions, to talk about building equity and scaling your brand. Codie discusses how to view your business as a gateway to passive cash flow, the value of connecting with others to share insights and ideas, and her tips for building sellable assets and value with your brand.

Resources Mentioned in this episode

Sponsor for this episode

This episode is brought to you by Quiet Light, a brokerage firm that wants to help you successfully sell your online business.

There is no wrong reason for selling your business. However, there is a right time and a right way. The team of leading entrepreneurs at Quiet Light wants to help you discover the right time and strategy for selling your business. By providing trustworthy advice, effective strategies, and honest valuations, your Quiet Light advisor isn’t your every-day broker—they’re your partner and friend through every phase of the exit planning process.

If you’re new to the prospect of buying and selling, Quiet Light is here to support you. Their plethora of top-notch resources will provide everything you need to know about when and how to buy or sell an online business. Quiet Light offers high-quality videos, articles, podcasts, and guides to help you make the best decision for your online business.

Not sure what your business is really worth? No worries. Quiet Light offers a free valuation and marketplace-ready assessment on their website. That’s right—this quick, easy, and free valuation has no strings attached. Knowing the true value of your business has never been easier!

What are you waiting for? Quiet Light is offering the best experience, strategies, and advice to make your exit successful. To learn more, go to quietlight.com, email [email protected], or call 800.746.5034 today.

Episode Transcript

Intro  0:07

Hi folks. It’s the Quiet Light Podcast where we share relentlessly honest insights, actionable tips, and entrepreneurial stories that will help founders identify and reach their goals.

Joe Valley  0:18

Hey folks, Joe Valley here, welcome back to another episode of the Quiet Light Podcast. Today we’ve got somebody that really is in the offline space, the social media space, she’s everywhere. She’s got 26 different businesses. Crazy, silly, huge, unbelievable social media numbers, we’re going to ask her about how she pulled that off. Many of you probably heard of her name’s Codie Sanchez. Codie, simple. Welcome to the Quiet Light Podcast.

Codie Sanchez  0:55

Thanks so excited to be here, Joe,

Joe Valley  0:57

you really are like, the boss of social media when it comes to buying boring businesses. How? Alright, look, we’ll back up with like I said, there’s no script, which means I’m going to fumble trip and fall and get back up and stutter and not edit a thing. Just for the record. Alright, so you’ve got actually I should I call you Dr. Codie. Codie, because you have your doctorate, right?

Codie Sanchez  1:26

I do. But it was from be from Brazil. So I always laugh that it was more like Cushaw said drinking than anything.

Joe Valley  1:33

Doesn’t doesn’t count them. Well, I my my father in law has a doctorate in inorganic chemistry, which has got to be the most boring, difficult complicated thing in the world. very black and right here. Yours is in is it in journalism, or what is it in?

Codie Sanchez  1:49

Now it’s actually in international finance. So I was at the time running investments for pensions and sovereign wealth funds. So if you want to read my PhD thesis paper, it’s out there somewhere around about pension fund usage of commingled products.

Joe Valley  2:05

Being an entrepreneur, I do have trouble sleeping. So when I wake up to three in the morning, I’ll grab a copy of the can I download it onto my Kindle?

Codie Sanchez  2:12

Probably not while ago now

Joe Valley  2:15

All right, all right. So you’ve got a background in journalism it’s done did some amazing stuff there won some awards there. Join the business world got your MBA, you have your doctorate you are in the investment banking world, and then you up and left it all and started your own venture contrarianthinking.co and dropped the M there wasn’t available, I assume. Right?

Codie Sanchez  2:40

Exactly. Yeah, exactly. It’s like e-commerce. So pot number one, I just like the name with all the vowels and without the right slug.

Joe Valley  2:46

I, I was so excited when I got exitpreneur.com. But then I realized I spelled it wrong. This is me in remedial English folks. I spelled exit paranoid like I if it was entrepreneur, I would have spelled it wrong. It’s EUR Jo, not you. Er. So I ended up with x printer.io. The guy that owns extitpreneur.com wants a quarter of a million bucks for it. He’s got no business or anything like that. So that’s a no, no, no, you be CO and I’ll be Oh, and we’ll both we’ll both champion our businesses and do well. So cool. So let’s just cut to the chase here in terms of I know, we’re gonna talk about everything you do, which just blows me away. And you’re convincing. You’re getting convincing. What you do on social media is having people that I know that have left the physical brick and mortar world, jumped online, built an online business, I sold one for several million dollars for a client. I talked to him the other day. And he’s like, yeah, man, I listened to Codie all the time. She’s got me doing on one ad and they go back to Brick and mortar world. It’s fascinating. It’s fascinating. But that’s part of, you know, the evolution of of an entrepreneur and maturing and whatnot. But what is it two years now that you’ve been doing Contrarian Thinking? And you have gone from zero to one and a half million followers on social media? How the hell did you do that?

Codie Sanchez  4:14

Simple. Yeah. Simple. Well, we, you know, this was always a hard question to answer, because I wish it was just like, well, you know, you hear that people say, like, well, it just was authentic. And I just put myself out there. And then all of a sudden, you know, everybody found me and that I had millions. So like, are you talking like a valley girl? Because I think it’s fake. You know, I just think I think that is a falsity that a lot of people say when they’ve gotten a lot of users or when they’ve gotten a lot of followers, it’s actually an amalgamation of sweat, blood and tears over a few years. And so, you know, for the first year that I did Contrarian Thinking I was working 60 hours a week, I was still in private equity at the time. I was traveling all over the place, and it was brutal. But I liked writing so I kept doing it anyway. And then I think, you know, the growth really happened for us once I started treating my media company as a business as opposed to a blog. So for a long time, I just wrote once a week, and I posted about it on social and we got up to like, 10 or 20,000 subscribers. And then, you know, on our socials, I don’t know got up to, you know, 20 or 30, or 40,000, or something like that, just that was like sort of organic, not trying too incredibly hard. And then I started thinking, you know, actually, this is this is a business like anything else. It’s just that I don’t have a CapEx and OpEx and hard assets that I do on everything else I do. And so why wouldn’t I treat it that way? And so hiring my first No, I hired a CEO, I think was my first hire, because I didn’t understand your world. You know, the online world was so new to me, I had no idea how to do API plugins, all of these different things and everything that everybody knows is an e-commerce entrepreneur sooner than I. And so I think it actually really TEDx once I added people to the mix, and to this day, I get people reached out to me friends of mine, you know, who have some bigger followings and, and they’ll say like, oh, yeah, who’s your video guy? Can I use them? I’m like, it’s cute, that you think that we have one video guy that does all of this stuff. You know, it’s a team. It’s and so yeah, if you want to actually build a company, the truth of the matter is it’s very seldom a one person show. And there’s usually a lot of people in the mix. And if you want to produce video content, well, even these ridiculous little snarky 30-second tiktoks It takes a little bit of a team.

Joe Valley  6:33

Yeah, you know, it’s funny because I’m doing a little social media now. I’ve got nine followers on Tiktok so I’m I mentioned the other day, I was a micro influencer but I’m actually we went to Adam influencer because that’s even smaller. And it does take time. It does take time and thinking and planning. So it’s impressive that you built the team to do it. While it was kind of a side hustle initially for you. But why why Contrarian Thinking why talking about buying boring businesses? What What led you to that?

Codie Sanchez  7:04

Yeah, well, um, so we started Contrarian Thinking with a two fold mission. It was think critically and cashflow unconventionally is what we talked about. And so I started it with thinking critically, because you all are in the same world I am, I felt like this critical thinking questioning that is so important to free society, but also to be unsuccessful in any way, shape, or form, was under attack a little bit. So I started writing about that. First and foremost, it was more philosophy. And

Joe Valley  7:33

was that in relation to to owning small businesses? Or is it No, not at all? Not at all.

Codie Sanchez  7:39

Not at all. Just here’s what I see happening in the world. And here’s like, some things that I think we should think about. And then what I realize is that people don’t want to change their opinions. And so like all of us, we think we’re right. And we don’t really want to question ourselves, who don’t want to question all the things. So I actually sort of supplanted this trojan horse in there, which is that everybody wants to talk about money. And money is really intriguing to people. And so I said, Okay, we’re not just going to talk about ideas, we’re going to talk about money as sort of the foundation to freedom, I’m still trying to get to freedom. But I’m starting with money, because you know, if you can’t afford your house or to eat, then you don’t have much. And so I started talking about, you know, just different ways to cash flow that I wish I knew, when I was younger, even being in investments for a long, long time. And what I found is that just some of my philosophies that I didn’t realize were weird, were weird, such as, I really think that most money is made on the private side, not on the public side, aka boring small businesses, as opposed to public stocks. That became one of the cornerstones and a lot about access and accreditation. And why don’t most people have access to ownership, because I think wealth equality actually have inequality actually happens from lack of ownership access, as opposed to just salary versus not. And so, so it just became sort of a progression. And I think boring businesses, that one really took off, because my point with all of this was not to talk to the elites. It was I want to talk to the every man who’s having a really hard time during COVID-19. And over these last two years, and I want to tell them that, hey, there’s a lot of ways that you can get ownership in a way that means you didn’t have to go to Harvard. And I used boring businesses as a catalyst for that. And so you know, basically saying, if you’re the landscaper, let’s think about owning that company, and how can we do that without you being a millionaire? And that’s where we got to today. Now there’s lots of different businesses and sectors we dive into.

Joe Valley  9:40

There’s some of the most successful people I know, most of the most successful people I know did not go to an Ivy League school. In fact, some of them didn’t go to college at all. One of them our friend Ramon van Meer, talked about him he’s he was invited to not finish school in the country he’s from, because he got kicked out of school. Yet, he’s a very, very successful entrepreneur. He’s in the online space, I wonder if someday he’ll go to your world, you know, in the online space versus the brick and mortar, boring business, vending machines, ice machines, laundromats. To me, there’s a there’s a, there’s a big difference. And it’s that human connectivity in the online world. The way to get connectivity is through people in your niche through masterminds and events and things of that nature. In the offline world, is there that same thing? I guess you’re building it with Contrarian Thinking. But there’s also that connection with the community that you’re in? Does that matter as much to the type of buyer of an other brick and mortar business versus an online business? Are they still just focused on that? Cash Flow? Because I, I’ve seen your videos I’ve, you know, there’s a at a carwash that I take my car through there’s, you know, an ice vending machine. Now, there’s no human connection there. Right. So maybe I’m answering my own connection, answer my own question. But why don’t you give a shot at it?

Codie Sanchez  11:09

Yeah, I think I like to, again, I guess the Trojan horses consistent. How you snare people in to caring about commerce and caring about ownership is ways that seem quote unquote, easy, in my opinion, buy a nice machine, stick it somewhere, manage it marginally and cash flow. Okay, interesting. But what happens and you know, this, too, when you own a business, is that it’s really hard to just stop there. If you own one ice machine, you want to own a few. And then you’re like, Well, what if we did a website and did like, third party marketing to sell those and like, also, what could happen here? So it’s this, it’s this first step into ownership and this belief that you could be the person in charge, and it could be your assets. And then what happens when you think like an owner, everything changes, right? That’s what we tell our employees think, like an owner don’t spend when you don’t have to. That’s what you know, people have been companies say, Uber used to say, you know, you’re an owner, not a renter. And so this idea of mine is if we get more people into the ownership seat, then community actually becomes really important, then they don’t stop at one machine, they do more than they realize that the vending machine businesses may be too small. So they even still that on to the next, you know, college graduate that’s looking for their first ownership. And then they go to like, tall, I don’t know if you know him, he owns like, a gumball. Machine vending route. And then yeah, yeah. Yeah. So and, you know, his progression, he went from hard assets, gumball machines, to basically being like, wait a second, maybe I just fill them to be like, wait a second, maybe I third party, sell them online as the actual machines. And that’s where the money’s at. And then he’s had many iterations since then. And so I think it’s a Trojan horse. And I think once you get a little taste of ownership, you can’t help but want to go bigger. It’s just that most people don’t think they’re capable of and that’s what we’re trying to change.

Joe Valley  12:55

So how do they start? Right? So I, you know, the average transaction size at Quiet Light in 2020 was $1.8 million, too much for most people. And if they want to do it with an SBA loan, they don’t have the historical qualifications, to be qualified to buy a business with an SBA loan. So the folks that are your audience, they’re buying, I’m sure all sized businesses, because I’ve seen some of the examples that you talked about, how much do you need to start? Is it? Is there a number that somebody got to have or secrets? or ideas or courses or lists? Or what are you doing to help people they’re just out of college, they’ve got debt, or they’re in the daily grind, and they’re trying to buy that first machine that’s just going to cash flow a little bit to maybe pay the mortgage?

Codie Sanchez  13:42

Yeah, I think this is the best part, in my opinion about private enterprise and buying small businesses, and also the part that makes it the least sexy. Like there’s always going to be people with more interest in stock trading than what you and I do, because it’s just like, I could start with 25 bucks and then I click this button and oh my god, it went up and that feels really good. And now I’m an investor and I make money. That is not what we’re talking about here. Whatever I talk about, even if it’s simple, it’s gonna require some work. But that being said, I mean, Ramon’s a perfect example first business he bought was for 500 bucks or 400 bucks I can’t remember and then he staircases way up. And so how I talked about is very similar to real estate. Like you know, first you live with your parents and then you go rent a one bedroom and then maybe you don’t want to pay more for the one bedroom so you go and you buy a studio and then you upgrade to a two bedroom you know condo and then you go to an actual single family and then you go to multifamily and then you own a building and then you want industrial and basically everything looks scary until you take that first little step up. I remember the first time I rented the place was like, Oh my God, all this paperwork. It’s gonna be $2,000 a month this is for millionaires only. And then you realize it’s not that scary and you just keep moving up the ladder from there. So I mean, obviously not Quiet Light, but there are plenty of brokerage sized square. There aren’t vetted deals like There are with yours or deals that have the handhold. And that happens a little bit more at Quiet Light. But you know, they can go to flip on and buy a business that’s doing a couple 100 bucks a month in revenue for 1000 bucks or maybe go to deuce and buy a newsletter that’s not even cash flowing, but has an audience of people for a couple 100 bucks, or buy their first vending machine for a couple 100 bucks and then implemented into a business. And so I don’t believe the people who are like, must be nice. Maybe if I had more money, I’d do it like, wow, actually, I haven’t looked into it enough.

Joe Valley  15:31

I, you know, I talked to somebody last week that bought a content site for $2,000 off of it was 9, 12 months old, and had some traffic and she for the last three years have just stuck with, you know, producing good quality content over time and monetizing the site. She’s earning $35,000 a month now. And like 90% margins. So you’re right, it doesn’t take you know, $180,000 to get your 10% down on an SBA loan or whatever your number might be. She did it with $2,000 I don’t know about Ramon’s very first business, but I would talk in the book, I think the first purchase that he and I talked about in the interview was maybe 7000. Then he sold it for 20. He bought something for 20 Sold it for 200, or whatever it might be, and worked his way up to almost an eight figure exit. And this is a single dad with no formal education, scraping things together working hard and hustling. And you know what’s so impressive about somebody like that is that, you know, they don’t, they don’t know everything. And they’re not afraid to ask dumb questions, or what would somebody would be considered a dumb question. I was in an event with him. And we’re just talking about personalities here, not necessarily this individual. And someone got up and spoke. And she was the newly appointed CEO of a really impressive company in our world. After the event, you know, we have these gatherings with food and drinks and whatnot. And I saw Ramon walk right up to her and start chatting her up. And they were in deep conversation for a half hour or so. And he was talking to her about things he had no idea about, and he wanted to learn. And she was so open to sharing her knowledge and experience with him. It blew me away and it taught me a lesson because I’m I’m very much an introvert Codie. And so I’m not that guy with a walk up to the speaker and start chatting them up. Whereas he wasn’t afraid to more people have to have that courage, I think but I think you give that to them in terms of the connections and relationships that you build within your group. Because not everybody is going to be not everybody’s going to be you are going to be Ramon. Some folks like me gonna hide in the corner a little bit.

Codie Sanchez  17:42

Well in remote about the chattiest I mean, if anybody was to engage with Ramon he, you know, he’s he could be intimidating to I think it’s a big dude, former fighter. But I’m not a

Joe Valley  17:53

badass like your husband. No, I hear your husband’s a former Navy SEAL. Right

Codie Sanchez  17:57

he is but they fight together. And Ramon and Chris would attest that Ramon would would mess him up if he had if Chris couldn’t get him on the ground and do jujitsu on him.

Joe Valley  18:06

That’s interesting, because Ramon told me that he would take us both down and I said, Yeah, he’d take me down first, and you’d be there behind the dead body.

Codie Sanchez  18:16

Maybe they’re all just, they’re all just sandbagging us. You know, nobody wants to tell who the tougher one is. Not my fight, I would be I would be scouting my mouth nonstop. It would be insufferable. But what I was gonna say is I was doing this interesting little study this week for the blog that comes out on Thursday. Well, anyway, a blog comes out every Thursday, depending on when this comes out, and maybe this one or not, but you could search it by then. And it’ll be called the friend flywheel something to that effect, but I was looking at, you know, groups, and to your point about you know, these events and conferences that we go to about the the power of everybody talks about the five people you surround yourself with blah, blah, blah, the Jim Rohn quote, but I actually think it’s much more pervasive than that. Because when you look at like, for instance, the PayPal Mafia, right, I thought there was really only like five members of their of that something like there’s 13 different members of the PayPal Mafia, that basically all runs some of the biggest Silicon Valley tech companies out there. And then you look at like the Federalist Society, which basically was the this is a society that wanted to push forward conservative values, and so now have put on the Supreme Court more members of their society than anybody else or something like 42 members that are that are public, not just for the Supreme Court, many different senatorial positions, etc. And then you look at like, you know, I made up this name, but like the OG podcasters, like Tim Ferriss, Lewis, Howes James Alta church, Jay Shetty, and yeah, yeah. Yeah, and those guys have been on each other’s podcasts. 52 You know, times ah, and so, I do think there is something to this point. It’s not even just about being an introvert. It’s about it’s why I started Contrarian Cash Flow, a away, which is a group where we all sort of come together and talk about different ways to monetize together. Because your personal flywheel can spin kind of quickly, you know, as hard as hard working as you are, and as great as your content enters, or as great as your marketing is. But if you have a bunch of people pushing the wheel at the same time, you ever hit this philosophy, this escape velocity that happens, because there are multiple people all sharing their success with you and others. And so even more than introvert extrovert, I think it’s finding a group of humans that are all growing and are willing to grow alongside each other. And that’s how you 10 acts. And I think a lot of the reason Contrarian Thinking did well, too, is because I tried to do that constantly.

Joe Valley  20:41

And sharing, right, so that goes back to, you know, that human connection and meeting that to grow your business and stay passionate about what you do and get over those really tough days, weeks and months and years that we unfortunately have as entrepreneurs. I couldn’t have gotten to where I am without that. And when I struggled most in life in business, it was because I was alone. It was me and my website and my content. I had a writer and I had a developer and that was it. That was my circle was too small. So you do have to have, I think, a bigger circle. When it comes to the brick and mortar space, you think well, there’s, you know, there’s people around you, it’s more your community in that town. But talk to me about what you’re doing with the community at Contrarian Cash Flow. Because I think it’s important for people to understand that it’s, when you’re buying that ice machine are that laundromat or whatever boring business, it might be that you’re not just, you know, connected with the people in your neighborhood, in your town, in your community, there’s an online community that you’ve built, you can talk to people all over the country with World license.

Codie Sanchez  21:43

Yeah, I mean, I think you’re exactly right. I mean, I joined e-commerce, you’re which is something that we’re both a member of years ago, because I had invested in two or three commerce businesses at the time, and I really didn’t know my best for my elbow on e-commerce. And so I was like, Well, I’m putting capital to work in this space, I gotta go find out where all the smart people that know all about this, so I can just steal their 10,000 hours instead of doing it myself. And so I joined that group. And I’ve stayed in it this whole time. And I’m kind of avoider, I don’t engage that much in it. But I’ve seen it because the connections are amazing when I have an issue with, you know, having like a, I don’t know, maybe I have an issue with, you know, three PL provider and we’re trying to send stuff out and like my provider isn’t very good. Or maybe I’m getting charged too much for shipping or what’s happening with Nexus whatever the issue may be. I can go spend a bunch of time trying to figure it out myself. Or I could probably drop something in a group like e-commerce fuel and get my question answered in 30 seconds. And so the same idea for me was we created two groups. One group is that unconventional acquisitions, and that is for people who are going to spend at least $100,000 buying a business this year. So it’s a one year mastermind. It’s usually for people who are accredited investors who are going to spend at least $100,000. And it’s all about just buying businesses, how do you do it? Let’s look at deals, let’s be really active together. And that’s one group. And that’s run by Ryan snow, who’s the CEO of that business. And then there’s this other group Contrarian Cashflow, which is all about distinct ways to create cash flow, you don’t have to buy a business, you might just want to invest in real estate, and find other people that are going to do that. You might want to figure out how do I get really good at analyzing funds, so that I can do a lot of private deals passively by just investing in other people’s funds. And so that’s Contrarian Cashflow. And each of them meet one time a week to sort of talk about the things that they care about, such as getting cash flow, or doing deals, and I created those because I didn’t, I didn’t have another one like that. And candidly, I want to buy more businesses. So I wanted that business buying group. And I want more cash flow and assets. So I created the cash flow group, because we all bring each other ideas and deals and all that jazz.

Joe Valley  23:55

So from a human capacity standpoint, how do you do all of that? You put people in charge of it like Ryan and somebody else? Do you show up to every single one? Do you plan out what you’re going to talk about? Where you do? Just answer the question, how do you do at all?

Codie Sanchez  24:10

Yeah, no, I don’t do it all. Ryan is in charge of Unconventional Acquisitions. I try to show up for all of those phone calls. But he is the one ultimately that is sort of in charge of that business and running all aspects of it. I help with some of the content. And I help with you know, big strategic partnerships, questions, ideas, but I really don’t run that business. And then Contrarian Thinking is one of the only businesses that I’m super involved in day to day. So that’s like my main business at the moment. But I have a COO that runs a lot of those calls. And I think I’m on two of those four calls a month. And then we create a lot of systems and processes to keep removing myself from the day to day that I don’t think is the most value added. But don’t get me wrong. I mean, I I think we were first talking I owned like 33 businesses that I I had a pretty active stance and and by active, I don’t mean like I’m in the business every day, but I’m doing something with it once a week. Now I’m down to 26 businesses consolidated a few, selling a few others, I think I’ll probably get to a place where I want like 10 or 15, that I’m a majority, you know, large shareholder in. And then I’ll probably have 30 or 40, that I really don’t do much with. And so it’s it’s a dance. And when you own new notice to because you have multiple interests, when you own let’s say, 10 businesses actively, even if I only do three to four hours of work a week on each business, we’re up to a 40 5060 hour work week pretty quickly. And so just depends on what kind of like you want to have. I like to work so I keep doing it.

Joe Valley  25:50

How do you put the right people in charge of those businesses? How do you find the person that’s going to operate it well? And how do you incentivize

Codie Sanchez  25:57

them? Yeah, I mean, I can’t, I’ve made so many mistakes in this over the years. And that’s probably the only way that I can get it through my thick skull how to learn. But let me tell you a couple things that I did wrong that I would never do again, I would never do it. 5050 partnership, again, terrible idea. Nobody’s in charge, because two people are in charge. And I really think that it needs to be a benevolent dictatorship. In most businesses, I don’t have to be in charge. But somebody’s got to be in charge. So I don’t do 5050 partnerships. So that

Joe Valley  26:27

26 that you have left, are you majority a minority?

Codie Sanchez  26:31

I’m usually majority or large minority. Yeah. But I only have one that has a 5050 partnership. And I’m actually okay, over time decreasing my percentage, like, that’s what I’ll continue to do with these companies like, you know, the other person, as the company gets bigger, I can still make as much and decrease my percentage ownership, and they can take over a company overall. In fact, that one company right now, that’s really not very big, but it’s material to the guy who runs it. And, and I think I’ll probably end up like taking a few more distributions, and I’ll transition that business to him like, I don’t need it, it’s a great business. For him, he’s been good to me. I kind of think it’s cool to gift businesses like that, especially if you buy some smaller ones, I don’t have to sell everything. And so one, no 5050 partnerships. Another thing is like, you need to take all the pain upfront, wherever I’ve messed up with founders or people who run the business is basically when I kind of get into it, and we like the idea, and it’s loosey goosey. Now, for all of my businesses, it’s like, they’re gonna take a disc, they’re gonna take some sort of personality assessment, we’re gonna have a contract that’s really prescriptive with a ton of expectation set within it. I’m going to tell them ad nauseum, all the things that I will not be doing for this business. And be very specific on the very few things I will do for the business. I’m going to under promise over deliver, hopefully, but maybe I’m an under promise and only deliver that. And so I think if you don’t set expectations, if your contracts aren’t right, if you don’t take the pain upfront of really getting to know the operator, this could be a nightmare for people. But if you do those things, then it can feel like a Holdco that you cashflow

Joe Valley  28:13

off of. And how are you finding the people?

Codie Sanchez  28:18

Oh, how do I find them?

Joe Valley  28:19

Yeah, what’s the lessons you’ve learned there? And where do you go? I mean, no, you just posting something on LinkedIn, friends, family, military, folks, because you’re connected there? How can you find the right people to partner with or to eventually, you know, be partners within your business?

Codie Sanchez  28:36

Like to collect your friends over time? So most of the times when I meet you, I mean, you’re a perfect example. I’m like, Joe, I like you. I like what you’ve built. What can we do together? You this thing over there? I think I want to part of that, like, what are we gonna do want to do something together? Like it just I kind of know. And then then we’ll get into the nitty gritty afterwards. But I’m almost always with people that I think are competent, trying to figure out some way we could do something together. And so the way that I find them is I have a big reach, I go to like 10 to 30 events a year that I think are interesting. And and I bet you go to as many to you just you don’t realize because you don’t always think of them that way. But I tried to track that. And almost every time for like Contrarian, we had something called Contrarian Uncommon, a conference here in Austin. And there are like three people that I think are perfect operators, one of which I’m talking to about running a business for us as we speak. And so each time and kind of collecting them as we go. I think where you get into trouble and where it’s hard, is you’re like, there’s an opportunity I need somebody and I’m just like, and I don’t have anybody and now I gotta go scour the world for this somebody that’s that I’ve never been very good at.

Joe Valley  29:45

I think that’s been shaquill approach over the years and it’s worked out fairly well for him. Shaquille Praza who I think you know, he’s down there in Austin as well. And he’s done well, but it’s a challenge, right? A lot of people buy these and then try to find the right person to put in place for As opposed to building a network of entrepreneurs, or people that want to be in this world a little bit more, and as you’re buying that business, you’ve already got some people in mind operate it, and maybe you’re talking to them about it before you make the purchase. And sometimes, honestly, sometimes, well, no, this wouldn’t work, I was gonna say sometimes owners want to stay on, but mostly they want to get out of the daily grind when they sell. So buying it, or selling it and continuing to operating it in the same way is not, you know, necessarily what they want to do.

Codie Sanchez  30:29

So no, that hasn’t ever worked out that well, for me, I have one business where we bought it and the guy still runs it. It’s an OK business, but I don’t ever see him taking it to a 10x. And I don’t really think he has like that capability either. Because if you know, I like to business by businesses, that pretty decent valuations and at those valuations, like really great operators are probably not going to exit to me at two to 6x, you know, their profit, below $5 million in revenue. It’s, you know, if they’re crushing it, and they’re going to keep growing it whatever, they’re going to tell me to pound sand, because in two years, it’ll be worth a lot more. And so.

Joe Valley  31:11

On that note, Codie, from an investor standpoint, how do you look at you know, you’ve got you’ve got a higher multiple, but you’ve got pretty tremendous growth, right? 2530 4050 80% year over year growth last two or three years? How much does that annual growth work into your investment calculations?

Codie Sanchez  31:34

For me, almost zero because I don’t buy those types of businesses. I really in unless it’s an unless it’s a plugin to you know, another business I have. So let’s say right now, I’m focused a lot on Contrarian Thinking. We’re rolling like crazy, you know, a couple 100% each year. And let’s say that, then I want to go buy another content business to plug in, I might say, okay, yeah, I’ll pay a premium for this, because the value add that I’m gonna do for it is actually gonna be pretty good. We’ll do a roll up. And this will actually have like the creative return on the upside. That could make sense. But most the time, like, if I see a carwash that’s done like 80%, growth, year over year, and they want to project out future growth to the multiples, like, that’s just not going to work for me. Because a lot of the businesses that I’m buying that are boring businesses are like bonds, you know, I buy them for like this cashflow that they’re going to do. And if they end up doing more, that’s awesome. But I don’t project that into our model. And the only time I do projected is when I have a killer operator that I’m like to take this bond and turn it into equity, right? Make this a rocket ship. But a lot of times, that’s not the goal. It’s like this business has existed for 30 years. And it’s done right about this amount. It’s grown five to 10% a year. And let’s keep doing that, except do it a little bit smarter. And that’s it.

Joe Valley  32:57

It’s such a funny thing, you know, a business been around for 30 years, we haven’t sold, I think the oldest one we’ve ever sold a 17. And that’s like a dinosaur in this world that we’re on. But you’re in a different world a little bit anyways. It’s fascinating. Let’s just talk about Codie Sanchez, the human. Seriously, this has been a crazy, two, two and a half year ride for you with what you’re doing. And I know how exhausting it can be. And I want to know how you’re handling it all. What do you how do you make sure you’re getting your you time, your mental health time, your downtime, your husband time, that kind of stuff?

Codie Sanchez  33:33

Yeah, honestly. And he probably knows when I was in finance, we just worked so much. I mean, back when I was at Goldman Sachs, and, you know, I was doing my MBA for a period and working I was traveling nonstop to Latin America, I don’t even know if I was like 80 hour weeks. And so I sort of laugh. Now, when I look at my schedule, because I’m like, I would fly and Joe on Sunday night, I’d take a read I would leave at like 910 or something like that from DFW and Dallas and get into Chipotle in the morning at like, seven or eight in the morning, something like that. 13 hours and do the math something in there. And then I would go to meetings at 10 dinners until probably 11 That day, I’d have back to back meetings in Chile. When I get up the next day and do the same thing the next day. The same thing that same mixing the same thing. Now I’d take the red eye home Friday night. I’d have Saturday day Sunday and I’d fly out against Sunday night. So like

Joe Valley  34:32

this is easy what you’re doing now compared to

Codie Sanchez  34:34

like playing online maybe that’s like the the thing with e-commerce and online businesses is I’m like oh my god, like this is nothing compared to having to go and travel around the world and do finance but one difference I think is the content business is harder to outsource. So at least for me, so far I could really I could tell you how to create an asset management firm and a finance business like a plumber People and like crazy. And I knew the model that was just like, go. And now that I’m starting this brand new industry and media, I don’t really I mean, what makes a good copywriter versus a not good copywriter? What makes a good videographer versus not. And finance is very easy. It’s like numbers here, numbers there, one’s better than the other. And this is a whole different thing. And so I need to get better at taking myself out of more parts of this business. I’m not there yet, but I’m still liking it all. So it’s okay for now.

Joe Valley  35:29

Yeah, it’s hard. It’s it takes time. And I agree with you 100%. on the content side, it’s hard to find people to write about your expertise, right. And that’s where you started with your own expertise. It’s the hardest challenge we’ve had a Quiet Light is finding people that can, you know, write about what we do every day, I wrote a frickin book about I say, Here, read the book, that’ll tell you, they still can’t. So it’s happening, though. We’ve got we’ve got some talented people. And it’s just like you say, connecting with, you know, the, it’s the people over time. The people that are doing our writing are people we’ve met along the way, they’re not people that we just put an ad out for. So you’re Listen, Codie, I think, I think I could probably talk to you for another couple of hours, and the audience wouldn’t drop off much. But I do want to be respectful of your time. So any last thoughts for people that are out there thinking about jumping into the entrepreneurial world, any little bit, little tidbits that you want to share with that advice that you want to give?

Codie Sanchez  36:28

Well, actually, let’s quote one of your guys who wrote a book that I tell a lot of people to read, which is that I think you should buy them bills. That’s your guy Walker’s book. I really think, you know, I’m torn on this, right? Because I’m not sometimes some of our videos make it all sound too easy. And it’s not, it’s not no work. It’s definitely work. But I think most people waste their time, creating things that people don’t want, playing it too small, not going as big as they should. And there is a lot of risk in that too, as opposed to risk of going bigger, or to actually buy in a company. And I would much rather start with revenue and profits on day one, then work for a year pain with the hope that I eventually get money back, which is what you do when you do a startup. So unless you have a giant, really cool idea that you think has to exist in the world, like for the love of all the totally, you know, stopped doing little startups that are just for profit, that’s a dumb way to do it by business and said, And so anyway, I think I’m on the right podcast for this audience. But But that’s my take.

Joe Valley  37:38

Yeah, no, I agree with you 100%, there’s less risk if you’re buying. Some people are really good at that startup phase, right, and they get the energy and drive from it. And and then when it gets to a certain point, they get bored and have to do other things. And that’s when that acquisition entrepreneur comes into play. Your people that are buying these businesses, whether it’s an online or offline, right, I think there’s no clear distinction, no drawn line between the two, because people like Brian Lijun, who was the one I was talking about earlier, I sold the business for him and his wife, Janine, actually, they’re technically not married. I always have to make that clarification. They were pharmacists in the the very, very well educated people. And then, you know, suntan salons and juice places and things of this nature and then jumped into the online world sold that still own some bought some more. Now in the Airbnb, they’re even renting out their Jeep in Florida by their Airbnb. I forget what the name of that company is Toro, I think now they’re listening to you on a regular basis going and I gotta get into this vending machines difficulty in this ice machine stuff. Tell Codie I said, Hi, that kind of stuff. Yeah, I love it, that those lines are definitely crossing. And it’s exciting. In fact, you’re going to be speaking and I don’t know if this will err by the time. It won’t actually, by the time we go to ECF you’re going to be speaking at ECF this month, right? end of the month.

Codie Sanchez  39:01

Yeah. Yeah, it’ll be cool. Yes, we’ll be speaking there. And you know what, because you and I talked about this earlier. The other thing I think I want to tell people is the flip side of that coin, I can’t tell you how many people have businesses of varying sizes that they could have sold and didn’t. So like I think your books really important for that. Anybody like a wedding videographer, you know, you think you have a job but you actually also have a business and so all of this is sellable in this world that we live in and and I think it’s crazy that people build a quote unquote, you know, house which would be their business owner, the house on the land, and they’re just gonna walk away we’re just gonna like leave it and that’s really what you do when you don’t sell your business and so and it’s a great exercise you know, that’s you like you’ll learn so much about oh, what do you mean I could have milestones or they want to have an asset sale not a, you know, they want to do it not a stock sale that and you’re just going to learn about the stuff that is the real meat of money. And you can do Through m&a

Joe Valley  40:00

Yeah, the answers 10s of 1000s of people who didn’t realize they had a sellable asset and walked away from it and, and unfortunately, that asset that they own and operate could likely be their most valuable asset. But they have no idea what it’s worth and what the value is. And they get emotionally tired, worn out, frustrated, and focus on other things. And I know that from experience because I did it with one of my biggest companies. I got tired of it, Codie. And I eventually just walked away because it’s jVi media, Joe Valley and corporate JVM media. It’s me, I gotta move on. I could have could have sold that in its heyday. Without question, it would have been one of my biggest exits. But I didn’t I didn’t know any better. So I hear you. You’re dead on Codie. How do the audience find you? How do they reach out to you how to connect with you learn more about what you do?

Codie Sanchez  40:50

I think the best thing is probably contrarianthinking.co That’s our website. You have a blog that comes out every single week. It’s about a bunch of stuff like this. And then I’m Codie Sanchez on all the socials. I’m pretty, pretty active on Instagram, Tik Tok and Twitter so you can pick your poison, I promise, you know, no dancing on Tik Tok that I can promise you.

Joe Valley  41:09

I appreciate that. Thank you for I was just talking to somebody last week about tick tock. It was a podcast on tick tock. I was confused because another podcaster, who is a female business owner is dancing. And sometimes she’s got a halter top on and I’m confused. Like, why is she doing that? He explained it to me actually kind of made sense. But I like the fact that you’re not dancing. Thank you for that. Yeah, I

Codie Sanchez  41:31

got to draw a line somewhere. There’s lots of people that are into it. So no, no shame on their game for sure. I’ll just gonna save everybody for watching that from me.

Joe Valley  41:40

There you go. All right. Well, I look forward to seeing you at the end of the month at ECF. And connecting again in the future Codie. Thanks for coming on the Quiet Light Podcast.

Codie Sanchez  41:49

Sounds like a plan man.

Outro  41:52

today’s podcast was produced by Rise25 and the Quiet Light content team. If you have a suggestion for a future podcast, subject or guest, email us at [email protected] Be sure to follow us on YouTube, Facebook, LinkedIn, Twitter and Instagram, and subscribe to the show wherever you get your podcasts. Thanks for listening. We’ll see you next week.

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