WEBVTT 1 00:00:00.000 --> 00:00:07.200 All right. So last week, we talked about making things less dumb. And this was based on Elon Musk's 2 00:00:07.200 --> 00:00:12.960 approach at SpaceX. And it's a five-step approach that's designed to empower your team members to 3 00:00:12.960 --> 00:00:17.920 stop optimizing things that should not even exist in the first place. That's very empowering because 4 00:00:17.920 --> 00:00:22.880 it gives us as team members permission to challenge our assumptions, to reduce complexity, 5 00:00:22.880 --> 00:00:28.240 and to actually just simplify our processes. And so today, this is a fun one. We're going to 6 00:00:28.240 --> 00:00:33.920 talk about black box modeling. And I'm excited for you to hear Dion chat about this. But it's 7 00:00:33.920 --> 00:00:39.600 just a way that we learn how to quickly determine the financial viability of a new product or a 8 00:00:39.600 --> 00:00:43.920 business strategy. So it's going to help cut out some of that emotional thinking that can keep us 9 00:00:43.920 --> 00:00:48.800 stuck. It's going to bring clarity to our process and help us to make well-informed decisions. 10 00:00:48.800 --> 00:00:54.480 And just before we dive in, I do have a pro tip for you all today. And it's about being a change 11 00:00:54.480 --> 00:00:59.360 agent in your business. So I know we've talked about this, but change is inevitable in our lines 12 00:00:59.360 --> 00:01:04.080 of work. But it's really how we respond to change that determines whether or not we're going to 13 00:01:04.080 --> 00:01:09.280 thrive within it. So when change comes, we talked about we can either be a critic, a bystander, 14 00:01:09.280 --> 00:01:14.160 or an advocate. And we want to be advocates in our businesses because we understand that change 15 00:01:14.160 --> 00:01:20.080 is actually essential. So when change comes, instead of getting knocked down by it, we can 16 00:01:20.080 --> 00:01:25.040 actually take a moment to reframe. So we can change the way that we think about change. It's 17 00:01:25.040 --> 00:01:30.480 a little meta there. But it's because great leaders know how to frame change correctly 18 00:01:30.480 --> 00:01:35.440 and make it part of our culture and our team language. So this week, a small challenge is 19 00:01:35.440 --> 00:01:40.160 just to take a moment and ask a really simple question, which is, is there anything in my 20 00:01:40.160 --> 00:01:46.160 workflow that needs to change? Because remember that change is inevitable, but progress is optional. 21 00:01:46.160 --> 00:01:52.400 That's a quote from Dion. All right. So friendly reminder, this time is for you. And we are 22 00:01:52.400 --> 00:01:57.520 nearing the end of our 40 weeks together. So be sure to take advantage of the session and the time 23 00:01:57.520 --> 00:02:03.200 we have. You can engage with emojis, with your reaction buttons, add your questions and comments. 24 00:02:03.200 --> 00:02:07.360 And those of us on Team Brilliant will keep an eye out on the chat to make sure we get to your 25 00:02:07.360 --> 00:02:13.680 questions. And with that, if everyone's ready to dive in, Dion, I will hand it to you. 26 00:02:13.840 --> 00:02:20.640 Excellent, guys. So I don't know how many of you are familiar with the idea of back of the napkin 27 00:02:21.200 --> 00:02:28.880 calculations. This is sort of an expression. Now, one of the things that people who have to invest 28 00:02:28.880 --> 00:02:35.840 money are very good at doing, and they call this sort of the, you know, they can cut to the chase 29 00:02:35.840 --> 00:02:40.400 very quickly and make a decision in under two minutes, whether they want to even take the next 30 00:02:41.360 --> 00:02:46.160 step and listen to your company, you know. So if you ever had to raise capital, 31 00:02:46.720 --> 00:02:52.640 have you ever been through that process? So, as you know, my background, my first, 32 00:02:52.640 --> 00:02:59.520 one of the most intimidating ones was when I had to present to Apex in London. And I was trying to 33 00:02:59.520 --> 00:03:06.720 get to raise $20 million for my business. And I learned so much through that process. And what I 34 00:03:06.720 --> 00:03:12.240 realized is what people were doing over time, you know, I was thinking, how did they make a 35 00:03:12.240 --> 00:03:18.320 decision so quickly, you know, just about my business or whatever. And, and from that, I 36 00:03:18.320 --> 00:03:23.840 developed this very simple idea called black box modeling, like think of a black box. And I thought, 37 00:03:23.840 --> 00:03:30.480 what's the simplest possible way to, to quickly determine if something's useful or viable or 38 00:03:30.480 --> 00:03:35.280 financially, should I invest in this? And if you think about it, you say, well, I'm not a private 39 00:03:35.280 --> 00:03:41.440 investor or private equity fund manager, but in a way you are, because you're investing in you're 40 00:03:41.440 --> 00:03:46.080 giving a piece of your life to something, right? You're exchanging your life for something, 41 00:03:46.080 --> 00:03:52.800 you might as well make it worthwhile. Or maybe you are proposing to, to your, to your boss that 42 00:03:52.800 --> 00:03:57.680 we should invest in X. And it'd be really helpful if you knew what that was. And if you could do a 43 00:03:57.680 --> 00:04:03.120 quick back of the napkin calculation, and get everybody excited about what you're doing. 44 00:04:03.680 --> 00:04:09.280 And of course, you know, people who are that level of finance, you think that 45 00:04:09.280 --> 00:04:14.720 the higher up you go, and people who, you know, who manage billions of dollars, 46 00:04:15.760 --> 00:04:20.160 yes, they deal with complexity, but the things that they use to make decisions on 47 00:04:20.160 --> 00:04:27.440 are actually remarkably simple. They actually use very simple ideas to drive those decisions. And so 48 00:04:28.720 --> 00:04:32.800 what we want to do is we want to cut through the emotion, we don't want to be caught up in 49 00:04:33.040 --> 00:04:39.360 emotional appeal to why we should invest in something. And we want to look very quickly and 50 00:04:40.320 --> 00:04:44.880 say, does this make economic sense? And if it makes economic sense, 51 00:04:45.440 --> 00:04:50.720 what will it cost us in other ways besides financial? What will it cost us in people's 52 00:04:50.720 --> 00:04:56.240 being distracted? Or, you know, you know, maybe we'd be dividing up our, 53 00:04:56.240 --> 00:04:59.920 our customer base, or what are the impacts of doing this? 54 00:05:00.000 --> 00:05:07.280 and it's very interesting because as we go through that process we often find what's the one knob we 55 00:05:07.280 --> 00:05:13.840 need to turn to make it work. So this ties up beautifully with what we did last week, 56 00:05:13.840 --> 00:05:18.800 making things less done. And you remember that step number one, what's step number one in making 57 00:05:18.800 --> 00:05:24.400 things less done? Everybody remember? What's the first thing you should do? Can you remember? 58 00:05:24.400 --> 00:05:29.280 Drop in the chat there. I'll wait until someone does and then I'll keep going. One of you will 59 00:05:29.360 --> 00:05:36.080 remember. Guilbe, we're going to touch on it again in a second, right? Anybody remember step number 60 00:05:36.080 --> 00:05:46.480 one? We eliminate what we don't need. Okay, step number one though. Challenge assumptions. Assume 61 00:05:46.480 --> 00:05:53.120 your requirements are wrong. And the higher up the person's requirements are, the higher up, 62 00:05:53.120 --> 00:05:57.840 more educated they are, more sophisticated, the higher up the old chart they are, you should 63 00:05:57.840 --> 00:06:04.240 question those requirements even more. Remember, first we do is we question and we go through and 64 00:06:04.240 --> 00:06:09.120 we say, how do we make this list? And I'll cover that again because like all these things, they 65 00:06:09.120 --> 00:06:14.880 only can become useful when you find you need them. Any of you right now, let's try to make 66 00:06:14.880 --> 00:06:21.360 this really useful and practical immediately. Are any of you right now thinking about either 67 00:06:21.360 --> 00:06:27.840 personally or in the business, doing some new project and you want to know, is it financially 68 00:06:27.840 --> 00:06:34.800 viable? Maybe you want to get a little, you know, an apartment and you want to do a little Airbnb 69 00:06:34.800 --> 00:06:42.880 with it. Or maybe, you know, you want to make some additions to your home. Or maybe you want to put a 70 00:06:42.880 --> 00:06:46.960 tiny house on the back of your yard. I think I know someone who might be able to help with that. 71 00:06:47.920 --> 00:06:53.920 So whatever you're doing, you know, you're trying, or you're trying to think of, should we 72 00:06:53.920 --> 00:06:59.920 launch this new product in our company? Should we start a subsidiary? Should we invest in something 73 00:06:59.920 --> 00:07:08.480 else? And of course, we're not talking here through investments. What we're looking for is 74 00:07:08.480 --> 00:07:13.200 how to make that quick determination. So here's the concept of black box. A black box, think of 75 00:07:13.200 --> 00:07:21.840 it as a physical box that you might have in front of you. And the box has got a slot on the one side 76 00:07:21.840 --> 00:07:27.680 at the top. And that's where we put cash into the box. And then it's got a slot at the bottom 77 00:07:27.680 --> 00:07:32.880 on the other side. So cash comes in on the one side, goes in on the one side, cash comes out the 78 00:07:32.880 --> 00:07:37.040 other side. And there's this big handle in the middle, like a crank handle. Remember those old 79 00:07:37.040 --> 00:07:41.520 car handles used to crank? Yeah. So think of that. That's it. Those are the three moving parts. 80 00:07:41.520 --> 00:07:46.080 That's all there is. How much cash goes in? Now we don't include debt because that's not your money. 81 00:07:46.880 --> 00:07:56.080 So what actual cash do we have to put in? Right. And that cash would be, and I'm going to give 82 00:07:56.080 --> 00:08:00.000 three examples. We're going to really dig into this. I want to explain the concept really quickly 83 00:08:00.000 --> 00:08:04.000 and then just spend all the time on examples, because I think seeing it may be more useful. 84 00:08:04.800 --> 00:08:09.840 So this is meant to be like a back of a napkin. This isn't trying to work out. It's going to be 85 00:08:09.840 --> 00:08:17.520 $3,914.87. It's going to be, oh, it's going to be 3k. We're just looking for the quick high 86 00:08:17.520 --> 00:08:25.120 level back of napkin number. What's the cash going in? Then the handle, cranking the handle part is 87 00:08:25.120 --> 00:08:31.520 how hard is it to run this business? Can you crank it every day? So if you're doing ads 88 00:08:32.480 --> 00:08:37.440 on Facebook to sell a product, you can crank that every hour. I mean, you can really crank 89 00:08:37.440 --> 00:08:43.200 that thing. Certainly every day you can crank the handle. But if it's something like, you're 90 00:08:43.200 --> 00:08:53.760 selling, you want to rent something, create an apartment rental or real estate rentals, 91 00:08:53.760 --> 00:08:59.280 you're cranking the handle probably once a year if they're short-term rentals. So the time period 92 00:08:59.280 --> 00:09:04.400 it takes to crank that. And then how hard is it to actually crank it? Because the more difficult 93 00:09:04.400 --> 00:09:11.440 and more complex it is, the more you should run away from it. The simpler it is, the more likely 94 00:09:11.440 --> 00:09:16.400 it is to succeed. It's interesting that Warren Buffett, this is his primary way of thinking 95 00:09:16.400 --> 00:09:22.640 about this. As sophisticated as he is, he says, we don't invest in complex businesses. 96 00:09:23.600 --> 00:09:30.000 We only invest in simple businesses. So they buy, you know, Sears candy and so forth, really 97 00:09:30.000 --> 00:09:36.000 straightforward businesses. And he never invested in Microsoft for that reason, because he never 98 00:09:36.000 --> 00:09:41.360 thought he could understand it. But when iPhone became the major thing, he understood a phone, 99 00:09:41.360 --> 00:09:47.040 even though a phone is complex, the business idea is quite simple. And so then he started 100 00:09:47.040 --> 00:09:52.000 investing in Apple, but he didn't invest in Apple for the, it's only recently he started doing that 101 00:09:52.000 --> 00:09:56.480 because his view is, if you don't understand it, don't invest in it. That's a good rule, 102 00:09:56.480 --> 00:10:00.000 a very good rule. Never invest in something you don't understand. 103 00:10:00.000 --> 00:10:01.400 understand that's why you never invest 104 00:10:01.400 --> 00:10:02.560 in your brother-in-law's business 105 00:10:02.560 --> 00:10:04.980 or any family member's business for that matter. 106 00:10:04.980 --> 00:10:07.960 Because the chances of you losing that relationship 107 00:10:07.960 --> 00:10:10.440 because of the two hats issue is going to be, 108 00:10:10.440 --> 00:10:11.940 you know, it's gonna be strained. 109 00:10:11.940 --> 00:10:14.000 So how hard is it to crank the handle? 110 00:10:14.000 --> 00:10:17.080 And then how much cash jumps out the other end? 111 00:10:17.080 --> 00:10:19.900 Now, when we do this back of napkin calculation, 112 00:10:21.400 --> 00:10:23.720 what private equity people or investors 113 00:10:23.720 --> 00:10:26.080 are very good at doing is realizing 114 00:10:26.080 --> 00:10:28.360 what drives those three things, right? 115 00:10:28.360 --> 00:10:30.440 So putting cash in, that's straightforward, 116 00:10:30.440 --> 00:10:33.560 or the actual cash that you have to put in. 117 00:10:33.560 --> 00:10:36.040 So let's say I have to put in $100 118 00:10:36.040 --> 00:10:38.680 and I can crank the handle once a month. 119 00:10:38.680 --> 00:10:40.400 And what comes out the other end, 120 00:10:40.400 --> 00:10:42.920 after I've done all the handle cranking, 121 00:10:42.920 --> 00:10:46.040 I get $50 out at the end of the year. 122 00:10:46.040 --> 00:10:49.680 So I put 100 in, I got 50 out. 123 00:10:49.680 --> 00:10:52.320 Now, so what's the percentage return? 124 00:10:52.320 --> 00:10:54.400 Well, that would just be 50 divided by 100, 125 00:10:54.400 --> 00:10:55.840 so that'll be 50%, right? 126 00:10:55.840 --> 00:10:56.920 It's pretty straightforward. 127 00:10:56.920 --> 00:10:58.400 But if I crank the handle next year 128 00:10:58.400 --> 00:11:00.400 and I don't have to put another 100 in, 129 00:11:00.400 --> 00:11:02.560 I get 50 every year. 130 00:11:02.560 --> 00:11:06.040 Let's say I can put $100 in once into the black box, 131 00:11:06.040 --> 00:11:08.600 crank the handle once a year, 132 00:11:08.600 --> 00:11:10.360 and once a year I get $50, 133 00:11:10.360 --> 00:11:13.920 and I keep getting $50 without putting any more cash in, 134 00:11:13.920 --> 00:11:17.080 then I have a completely different return, right? 135 00:11:17.080 --> 00:11:20.240 So the question is, how often do I have to put money in? 136 00:11:20.240 --> 00:11:21.680 How often can I crank the handle? 137 00:11:21.680 --> 00:11:23.360 How often does the money come out? 138 00:11:23.360 --> 00:11:26.160 So let me decode for you. 139 00:11:26.160 --> 00:11:28.400 Anybody watch Shark Tank? 140 00:11:28.400 --> 00:11:29.240 Yeah? 141 00:11:29.240 --> 00:11:30.680 Anybody seen Shark Tank know what I'm talking about? 142 00:11:30.680 --> 00:11:33.280 Okay, so Shark Tank always, 143 00:11:33.280 --> 00:11:35.360 they always evaluate the business 144 00:11:35.360 --> 00:11:38.320 as five times the revenue. 145 00:11:38.320 --> 00:11:40.720 Well, it should be five times the profit, 146 00:11:40.720 --> 00:11:43.800 which is a very specialized use case, 147 00:11:43.800 --> 00:11:45.360 and those are sophisticated people. 148 00:11:45.360 --> 00:11:46.320 They know that, 149 00:11:46.320 --> 00:11:48.800 but the average person watching Shark Tank doesn't. 150 00:11:48.800 --> 00:11:50.440 So they make this very simple thing. 151 00:11:50.440 --> 00:11:54.600 So if your business makes 100,000 a year, 152 00:11:54.600 --> 00:11:57.680 then they say, okay, it's worth 500,000, right? 153 00:11:57.680 --> 00:11:59.920 So if it's worth 500,000, 154 00:11:59.920 --> 00:12:01.760 and you want me to put in 100,000, 155 00:12:01.760 --> 00:12:03.560 then we can work out what percentage I own. 156 00:12:03.560 --> 00:12:05.280 Okay, we're not digging into that part of it today. 157 00:12:05.280 --> 00:12:06.280 So here's the steps. 158 00:12:06.280 --> 00:12:09.840 You have the three simple steps for breaking that down. 159 00:12:09.840 --> 00:12:12.360 So step one is we want to, 160 00:12:12.360 --> 00:12:15.840 when we work out what's the input, right? 161 00:12:15.840 --> 00:12:18.760 The input is, you know, what's the cash in? 162 00:12:18.760 --> 00:12:21.040 Step one, what's the cash in? 163 00:12:21.040 --> 00:12:24.080 What cash needs to go into the box to make the thing go? 164 00:12:24.480 --> 00:12:26.480 Do not include debt, your actual cash. 165 00:12:26.480 --> 00:12:29.520 Don't include your time and sweat equity 166 00:12:29.520 --> 00:12:30.520 and all these clever things, 167 00:12:30.520 --> 00:12:32.400 just the actual cash in the box. 168 00:12:32.400 --> 00:12:34.600 That's it, just the cash. 169 00:12:34.600 --> 00:12:37.040 Two, crank the handle. 170 00:12:37.040 --> 00:12:39.600 How many hours will this take? 171 00:12:39.600 --> 00:12:41.560 How many people will this take? 172 00:12:41.560 --> 00:12:43.160 How hard is it to turn the handle? 173 00:12:43.160 --> 00:12:44.680 Is it complex business? 174 00:12:44.680 --> 00:12:47.480 You know, if I said, go and create a new cell phone, 175 00:12:47.480 --> 00:12:49.080 that's a complex process. 176 00:12:49.080 --> 00:12:50.760 That's a hard handle to crank. 177 00:12:50.760 --> 00:12:53.680 If I said, start a lawnmower service, 178 00:12:53.680 --> 00:12:54.840 you just need a lawnmower 179 00:12:54.840 --> 00:12:57.680 and know how to push it in this roughly straight line. 180 00:12:57.680 --> 00:13:00.840 So that's an easy handle to crank. 181 00:13:00.840 --> 00:13:03.840 Do we have the expertise to do it? 182 00:13:03.840 --> 00:13:05.080 Have we done it before? 183 00:13:05.080 --> 00:13:07.480 Do we know someone who's done it before? 184 00:13:07.480 --> 00:13:10.400 And, you know, is what we're doing here 185 00:13:10.400 --> 00:13:13.400 been done before or is all this new? 186 00:13:13.400 --> 00:13:14.840 What are we trying to do? 187 00:13:14.840 --> 00:13:17.080 We're trying to find, cranking the handle, 188 00:13:17.080 --> 00:13:20.000 what are the key assumptions that we're making? 189 00:13:20.000 --> 00:13:22.960 Because you remember, we always question our assumptions 190 00:13:22.960 --> 00:13:24.200 because our assumptions, 191 00:13:24.200 --> 00:13:26.680 what do we know about our assumptions? 192 00:13:26.680 --> 00:13:27.520 They're dumb. 193 00:13:29.080 --> 00:13:31.080 What else do we know about the assumptions? 194 00:13:31.080 --> 00:13:32.520 They are wrong. 195 00:13:32.520 --> 00:13:34.000 So they're dumb and they're wrong 196 00:13:34.000 --> 00:13:36.680 and we're trying to make them less dumb and less wrong. 197 00:13:36.680 --> 00:13:38.680 This is a very healthy way 198 00:13:38.680 --> 00:13:40.560 to start looking at a new business 199 00:13:40.560 --> 00:13:43.280 because we make big assumptions. 200 00:13:43.280 --> 00:13:44.680 We launch into it. 201 00:13:44.680 --> 00:13:45.760 And then when it doesn't work, 202 00:13:45.760 --> 00:13:46.600 we look back and go, 203 00:13:46.600 --> 00:13:49.400 oh, we thought that would happen, but it didn't. 204 00:13:49.400 --> 00:13:52.760 We assumed, and we'll go through some of these examples. 205 00:13:53.560 --> 00:13:54.480 And then the third area, 206 00:13:54.480 --> 00:13:57.320 so what's the cash in? 207 00:13:57.320 --> 00:13:59.480 What's the crank effort? 208 00:13:59.480 --> 00:14:01.680 And what's the cash out? 209 00:14:01.680 --> 00:14:03.480 Now the cash out is, what's the revenue? 210 00:14:03.480 --> 00:14:06.080 You remember the rule of three, what's the revenue? 211 00:14:06.080 --> 00:14:07.040 What are the expenses? 212 00:14:07.040 --> 00:14:08.520 What are the profits? 213 00:14:08.520 --> 00:14:10.160 And then we wanna take the profits 214 00:14:10.160 --> 00:14:11.520 and divide it by the cash in 215 00:14:11.520 --> 00:14:13.120 to know what the percentage return is. 216 00:14:13.120 --> 00:14:15.560 Okay, so let's do a couple of quick examples. 217 00:14:15.560 --> 00:14:17.520 So let's assume for a minute, 218 00:14:17.520 --> 00:14:20.280 and I'm gonna switch to actually sharing my screen. 219 00:14:23.600 --> 00:14:28.320 Um, give me one second, get really organized here. 220 00:14:29.240 --> 00:14:30.320 So I'm gonna share my screen 221 00:14:30.320 --> 00:14:31.720 and I'm trying to make it really large. 222 00:14:31.720 --> 00:14:34.160 If you're feeling a little bit lost, 223 00:14:35.760 --> 00:14:38.640 just ask questions, please ask, 224 00:14:38.640 --> 00:14:42.160 because I wanna make this accessible to everybody. 225 00:14:42.160 --> 00:14:43.080 This will help you. 226 00:14:43.080 --> 00:14:45.000 So let's assume, let's start with the super, 227 00:14:45.000 --> 00:14:46.480 does everybody see my screen? 228 00:14:46.480 --> 00:14:49.000 Or do I need to make it even bigger? 229 00:14:49.000 --> 00:14:52.320 Yeah, let's see if I can make this bigger. 230 00:14:52.880 --> 00:14:53.720 Is that better? 231 00:14:55.680 --> 00:14:56.520 Okay. 232 00:14:58.160 --> 00:15:00.280 All right, so let's do this example. 233 00:15:00.000 --> 00:15:04.760 of let's say I want an investment house for Airbnb. 234 00:15:04.760 --> 00:15:09.080 And I found this property for 334,000 235 00:15:09.080 --> 00:15:10.200 for short-term rental. 236 00:15:10.200 --> 00:15:11.580 So that's the project, right? 237 00:15:11.580 --> 00:15:13.600 So step one is figure out the cash in. 238 00:15:13.600 --> 00:15:15.780 Well, of course we have to buy the property, 239 00:15:15.780 --> 00:15:17.920 that's 334,000. 240 00:15:17.920 --> 00:15:19.600 And because it's a rental property, 241 00:15:19.600 --> 00:15:23.040 the bank will probably give me only 70%, right? 242 00:15:23.040 --> 00:15:26.400 Typically you'd actually wanna be, you know, less than 70, 243 00:15:26.400 --> 00:15:28.280 but let's say I can get 70%. 244 00:15:28.280 --> 00:15:30.160 So I picked the number so that we're at a nice 245 00:15:30.160 --> 00:15:32.320 around 100,000 at the end. 246 00:15:32.320 --> 00:15:36.320 So we know roughly that we're gonna have $100,000 of cash 247 00:15:36.320 --> 00:15:39.600 that we're gonna have to put in to this property. 248 00:15:39.600 --> 00:15:42.880 So now the next question, that's step one. 249 00:15:42.880 --> 00:15:45.600 We know what the cash in is gonna be, 100K. 250 00:15:45.600 --> 00:15:46.680 We're not counting the debt 251 00:15:46.680 --> 00:15:48.840 because that's coming from the bank. 252 00:15:48.840 --> 00:15:51.360 Step two, what's the crank effort? 253 00:15:51.360 --> 00:15:54.520 Well, we need to find cleaners, repair people, 254 00:15:54.520 --> 00:15:57.640 we obviously have to close the deal, et cetera. 255 00:15:57.640 --> 00:16:00.560 And we think this will take about four hours a week. 256 00:16:00.560 --> 00:16:02.520 So we're saying, okay, for two days a month, 257 00:16:02.520 --> 00:16:04.960 this could be a great little business. 258 00:16:04.960 --> 00:16:09.000 All right, now the key is to write down your assumptions 259 00:16:09.000 --> 00:16:10.760 so that you can start with the fact 260 00:16:10.760 --> 00:16:14.160 that you know they're wrong and you know they're dumb. 261 00:16:14.160 --> 00:16:15.000 This is a very good. 262 00:16:15.000 --> 00:16:18.200 So how many nights can we rent this out for? 263 00:16:18.200 --> 00:16:20.800 So I'm thinking about what would drive that. 264 00:16:20.800 --> 00:16:24.080 Well, rentals are probably coming from visitors, 265 00:16:24.080 --> 00:16:27.040 not just any visitors, but overnight visitors. 266 00:16:27.560 --> 00:16:32.000 I jumped on ChatGPT and I said, tell me the cities, 267 00:16:33.440 --> 00:16:37.080 and I want you to compare the number of local residents 268 00:16:37.080 --> 00:16:39.840 to overnight visitors and make a ratio out of that. 269 00:16:39.840 --> 00:16:44.840 If you have 100,000 locals and 800,000 overnight visitors, 270 00:16:45.480 --> 00:16:46.880 then the ratio is eight times. 271 00:16:46.880 --> 00:16:50.360 You have eight times more people visiting than live there. 272 00:16:50.360 --> 00:16:52.720 That should be a good rental market, right? 273 00:16:52.720 --> 00:16:54.760 Okay, I'm making this assumption. 274 00:16:54.760 --> 00:16:56.760 So by the way, I ran that. 275 00:16:57.480 --> 00:16:58.320 And two of the top cities, 276 00:16:58.320 --> 00:17:01.040 well, the number one city, where's the best ratio, 277 00:17:01.040 --> 00:17:04.760 number one, if you take overnight visitors, 278 00:17:06.920 --> 00:17:09.319 and then would be Santa Barbara, 279 00:17:10.160 --> 00:17:13.119 because Santa Barbara has about 100,000 people 280 00:17:13.119 --> 00:17:16.280 and it has over 1.3 million visitors. 281 00:17:16.280 --> 00:17:18.520 It has a 13 ratio. 282 00:17:18.520 --> 00:17:23.000 Okay, so that means that we can assume 283 00:17:23.000 --> 00:17:26.000 that we can sell a lot of these nights, right? 284 00:17:26.000 --> 00:17:29.200 So we're gonna assume 85% occupancy. 285 00:17:29.200 --> 00:17:30.480 Maybe it can be higher. 286 00:17:30.480 --> 00:17:32.960 I think Santa Barbara numbers are probably more like 90 287 00:17:32.960 --> 00:17:35.680 or 95, but we'll go with 85. 288 00:17:35.680 --> 00:17:39.000 And then I'll make it, and why am I putting them in blue 289 00:17:39.000 --> 00:17:42.280 is because I wanna nail down my assumptions. 290 00:17:42.280 --> 00:17:44.320 So the little rule of thumb I'm doing here 291 00:17:44.320 --> 00:17:46.600 is I'm writing all my assumptions in blue 292 00:17:46.600 --> 00:17:49.240 and I've made it so that I can change them. 293 00:17:49.240 --> 00:17:53.040 So let's say I'm assuming $175 a night. 294 00:17:53.040 --> 00:17:54.920 I don't know, I'm just guessing. 295 00:17:54.960 --> 00:17:58.600 I asked a couple of friends, I talked to a few people, 296 00:17:58.600 --> 00:18:02.360 seemed like a good number for my town 297 00:18:02.360 --> 00:18:04.440 that I'm buying this in. 298 00:18:04.440 --> 00:18:07.320 So that means how many nights do I have? 299 00:18:07.320 --> 00:18:08.720 So let's look at the cash out. 300 00:18:08.720 --> 00:18:09.920 Let's figure out the revenue. 301 00:18:09.920 --> 00:18:12.360 Remember, revenue, expenses, profit. 302 00:18:12.360 --> 00:18:13.600 What's the revenue? 303 00:18:15.160 --> 00:18:17.480 Again, keep this very high level. 304 00:18:17.480 --> 00:18:20.360 The revenue here is gonna be how many nights do I have? 305 00:18:20.360 --> 00:18:22.600 Well, I said 85%. 306 00:18:22.600 --> 00:18:27.600 So if I look at the formula, 85% times 365 is 310 nights. 307 00:18:28.200 --> 00:18:29.360 How much revenue is that? 308 00:18:29.360 --> 00:18:34.360 Well, 310 nights times $175 is $54,000. 309 00:18:35.440 --> 00:18:36.320 Everybody good? 310 00:18:36.320 --> 00:18:38.440 It's pretty straightforward math so far. 311 00:18:38.440 --> 00:18:39.840 And so the expenses are, 312 00:18:39.840 --> 00:18:44.040 oh, there's a thing called the TOT tax, 313 00:18:44.040 --> 00:18:47.080 which you dig around and each one, 314 00:18:47.080 --> 00:18:51.200 they range from 10 to 15%, it's 15% in California. 315 00:18:51.200 --> 00:18:56.120 And this is for any transitory occupancy tax, TOT. 316 00:18:56.120 --> 00:18:59.360 It's a special tax that if you do Airbnb type, 317 00:18:59.360 --> 00:19:00.200 you have to pay that. 318 00:19:00.200 --> 00:19:03.880 So it's 15%, so that would be $8,000. 319 00:19:03.880 --> 00:19:06.320 That's just 8,000 of the 54. 320 00:19:07.320 --> 00:19:11.680 Cleaning, I'm assuming that we're gonna charge, 321 00:19:11.680 --> 00:19:14.720 get $70 and we have to clean it every time. 322 00:19:14.720 --> 00:19:17.520 Wow, that's a brutal thing, right? 323 00:19:17.600 --> 00:19:21.800 $70 times 310 is $21,000. 324 00:19:21.800 --> 00:19:25.320 Is this starting to look less exciting, this project? 325 00:19:25.320 --> 00:19:28.240 And the debt, well, the debt is, 326 00:19:28.240 --> 00:19:31.240 remember we only put in 100, the bank put in 233. 327 00:19:31.240 --> 00:19:33.440 You've got to pay the bank for the debt. 328 00:19:33.440 --> 00:19:35.400 You can use a little debt calculator for that, 329 00:19:35.400 --> 00:19:37.440 but that's about 20 grand a year. 330 00:19:37.440 --> 00:19:39.160 So we got that. 331 00:19:39.160 --> 00:19:41.760 And then the maintenance, I just threw in 3,000. 332 00:19:41.760 --> 00:19:43.760 I have no idea if that's a good number. 333 00:19:43.760 --> 00:19:46.520 And that ended up at almost exactly what the revenue is. 334 00:19:46.520 --> 00:19:49.040 I'm making $800. 335 00:19:49.040 --> 00:19:51.320 That's a 0.8% return. 336 00:19:51.320 --> 00:19:55.240 And all I did, by the way, is I just took the $832, 337 00:19:55.240 --> 00:19:57.960 divided it by the cash I put in, the 100. 338 00:19:58.960 --> 00:19:59.800 So 800. 339 00:20:00.000 --> 00:20:05.000 and $32 divided by $100,000 is not even 1%. 340 00:20:05.680 --> 00:20:08.760 Okay, let's make it less dumb. 341 00:20:08.760 --> 00:20:12.760 What assumptions are you making that you need to rethink? 342 00:20:12.760 --> 00:20:13.840 What can you delete? 343 00:20:13.840 --> 00:20:15.160 What can you simplify? 344 00:20:15.160 --> 00:20:16.120 Remember the order. 345 00:20:16.120 --> 00:20:18.480 How can we make it go faster? 346 00:20:18.480 --> 00:20:20.120 Can you automate it? 347 00:20:20.120 --> 00:20:23.480 Okay, so Bonnie, I see your hand just went up. 348 00:20:23.480 --> 00:20:28.360 Yeah, this is Robert here. 349 00:20:28.360 --> 00:20:33.360 You know, the whole idea that you... 350 00:20:35.240 --> 00:20:37.480 Bad thing to hear you there, Robert. 351 00:20:37.480 --> 00:20:38.320 Airbnb. 352 00:20:40.520 --> 00:20:41.560 Oh, I'm sorry. 353 00:20:41.560 --> 00:20:43.160 Let me see if I can change this. 354 00:20:44.480 --> 00:20:45.680 Can you hear me now? 355 00:20:45.680 --> 00:20:46.520 Yeah. 356 00:20:49.360 --> 00:20:50.800 Okay. 357 00:20:50.800 --> 00:20:55.360 We do Airbnb and the assumption that you did 358 00:20:55.360 --> 00:20:59.040 that the clean fee, we normally put it on top 359 00:20:59.040 --> 00:21:02.080 of the nightly rent, so that would change your numbers. 360 00:21:03.720 --> 00:21:06.960 Yeah, I still can't hear you there, Robin. 361 00:21:06.960 --> 00:21:09.280 But so I think you're saying something 362 00:21:09.280 --> 00:21:10.600 about the cleaning fee. 363 00:21:12.600 --> 00:21:14.200 Yeah? 364 00:21:14.200 --> 00:21:15.040 Yeah. 365 00:21:15.040 --> 00:21:16.800 Yeah, normally the cleaning fee is added 366 00:21:16.800 --> 00:21:18.040 on top of the nightly. 367 00:21:18.200 --> 00:21:19.680 So yeah. 368 00:21:19.680 --> 00:21:22.600 Right, so you're saying, so exactly. 369 00:21:22.600 --> 00:21:25.200 Well, you're going ahead. 370 00:21:25.200 --> 00:21:27.520 So let me go through. 371 00:21:27.520 --> 00:21:30.600 I made an assumption that it was separate. 372 00:21:30.600 --> 00:21:33.120 And so there's two things I can do to fix it. 373 00:21:33.120 --> 00:21:38.120 One, I can pass that $70 along to this person. 374 00:21:38.480 --> 00:21:42.600 So we'll add the $70 in over here 375 00:21:42.600 --> 00:21:44.920 as part of the nightly rental, 376 00:21:44.920 --> 00:21:46.440 which is I think what you're saying. 377 00:21:46.440 --> 00:21:47.760 I couldn't quite hear you. 378 00:21:48.480 --> 00:21:50.160 In other words, this would go to zero. 379 00:21:50.160 --> 00:21:53.440 Now, suddenly my cash out is $22,000. 380 00:21:53.440 --> 00:21:57.440 Now I'm making a 22% return by making one assumption 381 00:21:57.440 --> 00:21:59.960 because I'm not doing a cleaning fee. 382 00:21:59.960 --> 00:22:02.440 Or another assumption I can make is that 383 00:22:02.440 --> 00:22:05.200 I'll do a two-night minimum rental. 384 00:22:05.200 --> 00:22:08.320 That may cause the occupancy to go down. 385 00:22:08.320 --> 00:22:09.840 Then maybe I don't sell as many 386 00:22:09.840 --> 00:22:13.240 because I insist on two-night minimums, right? 387 00:22:13.240 --> 00:22:16.640 And so that would also, but if I'm passing the fee on 388 00:22:16.680 --> 00:22:21.240 and then the tax issue, if you're still there, Robin, 389 00:22:23.040 --> 00:22:24.840 since you have experience in this, 390 00:22:24.840 --> 00:22:28.440 you already know how to make this less dumb 391 00:22:28.440 --> 00:22:31.600 because you've got an experience in doing this. 392 00:22:31.600 --> 00:22:35.160 So one of the fastest, cheapest, thin slice I can do 393 00:22:35.160 --> 00:22:37.240 is identify my assumptions 394 00:22:37.240 --> 00:22:38.640 and then go and pick up the phone 395 00:22:38.640 --> 00:22:40.800 and call Robin who's done this before 396 00:22:40.800 --> 00:22:43.840 or a friend or somebody who knows what they're doing 397 00:22:43.840 --> 00:22:45.640 and saying, how can I fix this? 398 00:22:45.640 --> 00:22:48.880 Because I can't make 0.8% return. 399 00:22:48.880 --> 00:22:51.360 Well, it can turn out that somebody looks at this 400 00:22:51.360 --> 00:22:55.200 and say, 3000 is too low, you need 5000 here 401 00:22:55.200 --> 00:22:57.680 for your maintenance, et cetera, et cetera. 402 00:22:57.680 --> 00:22:59.640 But now I've got a little plan, 403 00:22:59.640 --> 00:23:03.680 a little model that's quickly shown me 404 00:23:03.680 --> 00:23:07.640 for this to be exciting, how can I make it go faster? 405 00:23:07.640 --> 00:23:12.640 Maybe you speak to two or three people who are doing this 406 00:23:13.440 --> 00:23:17.640 and you find out the best way to promote it. 407 00:23:17.640 --> 00:23:21.400 Maybe you hire a property rental manager, 408 00:23:21.400 --> 00:23:26.400 maybe you do monthly rental slightly longer term, whatever. 409 00:23:27.040 --> 00:23:29.640 And what you need to do, 410 00:23:29.640 --> 00:23:30.880 because what you're doing then 411 00:23:30.880 --> 00:23:33.160 is you're not asking general questions. 412 00:23:33.160 --> 00:23:35.240 As soon as you've got a black box, 413 00:23:35.240 --> 00:23:38.480 you ask very precise, insightful questions. 414 00:23:38.480 --> 00:23:39.320 That's the point. 415 00:23:39.320 --> 00:23:42.480 And you know the impact of those questions 416 00:23:43.120 --> 00:23:44.280 and the answers to those questions, 417 00:23:44.280 --> 00:23:46.000 because immediately when Robin said, 418 00:23:46.000 --> 00:23:50.520 we pass the cleaning fee on to the person renting, 419 00:23:50.520 --> 00:23:54.960 immediately we went from 0.8% return to 20% return. 420 00:23:54.960 --> 00:23:56.000 Does that make sense? 421 00:23:57.080 --> 00:23:58.960 Okay, now I wasn't particularly, 422 00:23:58.960 --> 00:24:00.360 please don't take this as saying, 423 00:24:00.360 --> 00:24:01.600 oh, that's what I should do. 424 00:24:01.600 --> 00:24:03.760 I literally made up those numbers. 425 00:24:05.040 --> 00:24:08.840 I completely made that up as an example to show you 426 00:24:09.800 --> 00:24:11.880 that you figure out your cash, 427 00:24:11.880 --> 00:24:13.040 figure out your assumptions 428 00:24:13.040 --> 00:24:15.320 and what you think the effort is, 429 00:24:15.320 --> 00:24:18.720 take your first guess at what cash out might look like, 430 00:24:18.720 --> 00:24:21.800 and then start applying, making it less down 431 00:24:21.800 --> 00:24:24.320 by applying these five things. 432 00:24:26.160 --> 00:24:28.280 You can't challenge your assumptions 433 00:24:28.280 --> 00:24:30.080 if you don't know what they are. 434 00:24:30.080 --> 00:24:32.080 You can't challenge the requirements 435 00:24:32.080 --> 00:24:34.600 if you haven't got a clear idea of what they are. 436 00:24:34.600 --> 00:24:36.280 Then you ask, what can we delete? 437 00:24:36.280 --> 00:24:37.880 What did we just delete? 438 00:24:39.480 --> 00:24:40.680 The cleaning fee, right? 439 00:24:41.760 --> 00:24:44.600 When we deleted the cleaning fee, what happened? 440 00:24:44.600 --> 00:24:46.440 First, it became a lot simpler. 441 00:24:47.520 --> 00:24:50.640 Maybe I can get a bank to give me more than 70%. 442 00:24:50.640 --> 00:24:53.480 Maybe I can get a bank to give me 75%. 443 00:24:53.480 --> 00:24:55.880 What just happened to my return? 444 00:24:55.880 --> 00:25:00.120 Went way up because I'm using less cash, right? 445 00:25:00.000 --> 00:25:06.680 Now, Robin, I hope we get you back, because I'd love you to weigh in on this. 446 00:25:06.680 --> 00:25:07.680 Do we have you back? 447 00:25:07.680 --> 00:25:08.680 Can you hear me now? 448 00:25:08.680 --> 00:25:09.680 Yeah, let's try. 449 00:25:09.680 --> 00:25:10.680 Okay. 450 00:25:10.680 --> 00:25:11.680 Yeah, you're right on with that type of thinking. 451 00:25:11.680 --> 00:25:30.760 And the only other thing that I would factor into it is the bank loan that you're paying. 452 00:25:30.760 --> 00:25:33.160 That would have to go into the equation too. 453 00:25:33.160 --> 00:25:36.320 Yeah, I've got it there as debt. 454 00:25:36.320 --> 00:25:43.560 If you borrow more money, then the bank loan is going to go up. 455 00:25:43.560 --> 00:25:44.560 Right. 456 00:25:44.560 --> 00:25:45.560 That's true. 457 00:25:45.560 --> 00:25:47.000 I didn't do that in my example. 458 00:25:47.000 --> 00:25:48.000 Exactly. 459 00:25:48.000 --> 00:25:49.000 Right. 460 00:25:49.000 --> 00:25:50.400 Because I'm not actually using a formula. 461 00:25:50.400 --> 00:25:56.720 I did this on a quick back of a napkin calculator and just typed in 20,600. 462 00:25:56.720 --> 00:25:58.360 So you're exactly right. 463 00:25:58.360 --> 00:26:02.560 Again, rule of thumb, you want to know which are the moving parts. 464 00:26:02.560 --> 00:26:05.440 And it's usually surprising, by the way. 465 00:26:05.440 --> 00:26:14.000 It's usually pretty surprising as to what the main knob turning is. 466 00:26:14.000 --> 00:26:20.920 And for instance, what if I got this rental wrong and it's actually 195 on average? 467 00:26:20.920 --> 00:26:23.300 Look what just happened. 468 00:26:23.300 --> 00:26:26.700 My profit just went way up. 469 00:26:26.700 --> 00:26:30.280 So now I know how it all interacts. 470 00:26:30.280 --> 00:26:37.840 And what I learned very quickly is maybe it's not so critical whether I get a 70% or 75% 471 00:26:37.840 --> 00:26:38.840 loan. 472 00:26:38.840 --> 00:26:41.240 Maybe what's more critical, what the percentage loan is. 473 00:26:41.240 --> 00:26:48.640 If the bank's charging me 8% versus 9% or 9.5%, what's the impact of that versus getting 474 00:26:48.640 --> 00:26:54.740 an extra $10 a night versus getting rid of the cleaning fee, et cetera. 475 00:26:54.740 --> 00:26:59.840 So what you're doing is you're creating an interactive little box and you can see how 476 00:27:00.400 --> 00:27:03.560 to crank the handle and you can see what makes it work. 477 00:27:03.560 --> 00:27:06.960 This is a very cheap way to evaluate where something's good. 478 00:27:06.960 --> 00:27:13.060 Now, what makes private equity people very good is their ability to do this in their 479 00:27:13.060 --> 00:27:16.720 heads on the back of a napkin super quickly. 480 00:27:16.720 --> 00:27:19.680 But since you're starting, let me give you another example. 481 00:27:19.680 --> 00:27:25.480 Okay, so another example, I'm just wanting to see. 482 00:27:25.600 --> 00:27:31.600 I will use an actual example from, let's say you decide you want to create a new subscription 483 00:27:31.600 --> 00:27:32.600 product. 484 00:27:32.600 --> 00:27:35.360 So this is a little more in our zone at Brilliant. 485 00:27:35.360 --> 00:27:36.640 So I'll talk about this. 486 00:27:36.640 --> 00:27:40.000 So the project is create a monthly subscription product. 487 00:27:40.000 --> 00:27:41.280 Should we do that? 488 00:27:41.280 --> 00:27:44.040 We're guessing our investment is 60,000. 489 00:27:44.040 --> 00:27:49.760 Notice this time the color is black because all black numbers are calculated. 490 00:27:49.760 --> 00:27:53.120 All blue numbers are the ones I'm entering in manually, right? 491 00:27:53.120 --> 00:27:59.640 So, okay, so I think that, and I'll tell you where the 60,000 comes from in a second. 492 00:27:59.640 --> 00:28:04.640 So the crank effort is, hey, we got to create an app and we got to create content, right? 493 00:28:04.640 --> 00:28:07.120 So we're going to get two people involved. 494 00:28:07.120 --> 00:28:09.840 One is a tech person who runs the app and all that. 495 00:28:09.840 --> 00:28:12.220 And the other person is the content person. 496 00:28:12.220 --> 00:28:16.740 So let's assume, again, we're assuming because we're writing down our assumptions. 497 00:28:16.740 --> 00:28:19.200 This is under our assumptions over here. 498 00:28:19.200 --> 00:28:21.120 That is going to be 10,000 a month. 499 00:28:21.120 --> 00:28:26.720 And we're going to assume that the monthly subscription is $9.95, but I'd just say $10 500 00:28:26.720 --> 00:28:28.280 back of napkin. 501 00:28:28.280 --> 00:28:34.400 And we want to get to 1,000 subscribers and we want to try to do it in six months. 502 00:28:34.400 --> 00:28:41.120 Well, if it's costing us 10 grand a month over six months, assuming that we're not making 503 00:28:41.120 --> 00:28:46.040 very much in the first few months, then six times 10 is 60. 504 00:28:46.040 --> 00:28:51.680 So just back of napkin, I can see that we have to carry it for six months before we 505 00:28:51.680 --> 00:28:55.960 get to this point of making 60,000. 506 00:28:55.960 --> 00:29:01.140 So the idea here is now, well, some of it coming on month two and three, yeah, but I'm 507 00:29:01.140 --> 00:29:04.660 ignoring all this because this is a back of a napkin. 508 00:29:04.660 --> 00:29:06.520 This isn't a full business model. 509 00:29:06.520 --> 00:29:10.920 This is just to help me understand how the black box works for this thing. 510 00:29:10.920 --> 00:29:13.360 Now the revenue is very straightforward, right? 511 00:29:13.360 --> 00:29:18.440 Suppose I have 1,000 people giving me $10 a month, that's 10,000 a month. 512 00:29:18.440 --> 00:29:20.880 The team costs 10,000 a month. 513 00:29:20.880 --> 00:29:22.760 So my cash out is zero. 514 00:29:22.760 --> 00:29:27.320 So what do we call this when the money coming in covers the cost? 515 00:29:27.320 --> 00:29:29.840 Does anyone know what we call this? 516 00:29:29.840 --> 00:29:31.160 Yeah. 517 00:29:31.160 --> 00:29:32.860 Break even. 518 00:29:32.860 --> 00:29:34.600 So we call this our break even. 519 00:29:34.600 --> 00:29:38.320 Break even is when the money you're putting in is going to... 520 00:29:38.320 --> 00:29:40.480 But now here's the interesting thing. 521 00:29:40.480 --> 00:29:44.840 I'm not putting in $60,000 every six months, right? 522 00:29:44.840 --> 00:29:49.560 I'm going to put in $10,000 a month until this thing pays for itself, but then it's 523 00:29:49.560 --> 00:29:52.720 going to carry on giving me $10,000 a month. 524 00:29:52.720 --> 00:29:58.880 So it's not true to say over a six month period, the cash out is zero, but over a 12 month 525 00:29:58.880 --> 00:30:00.000 period, what would it be? 526 00:30:00.000 --> 00:30:09.840 Somebody tell me? Just drop it in the chat. So if it's $10,000 a month coming in, after six months 527 00:30:09.840 --> 00:30:15.600 I've got my $60,000 back that I put in, and then the next six months I get another $60,000. So I'll 528 00:30:15.600 --> 00:30:23.200 have $60,000 return and I will have got my $60,000 back. And then next year I'll have $120,000. 529 00:30:23.200 --> 00:30:30.640 Well, we have to make it, we have to think about, that's pretty good. So again, how do we make this 530 00:30:30.640 --> 00:30:36.720 less dumb? What assumptions are we making that we have to rethink here? So when we look at this, 531 00:30:36.720 --> 00:30:44.640 we say, well, these two people, do they both have to be full-time? Can we get a good tech person for 532 00:30:44.640 --> 00:30:50.400 $5,000 a month? If you can, let me know, I'll hire them. I don't know where you get a tech person for 533 00:30:50.400 --> 00:30:57.760 $5,000 a month. Fantastic if you can, right? So, and then can the tech person be shared amongst 534 00:30:57.760 --> 00:31:03.840 other projects? Does it have to be a full-time person? Can we get a, can we do this as a 535 00:31:03.840 --> 00:31:10.960 contractor? So maybe this tech person, you know, charge up quite a bit in the front end, 536 00:31:10.960 --> 00:31:16.480 right? Maybe the tech person costs a bit to get the app going and then much less to maintain it. 537 00:31:16.480 --> 00:31:24.960 So it may not cost me five times six, $30,000 to get an app because that seems expensive. Hey, 538 00:31:24.960 --> 00:31:30.880 maybe I can go, you know, get the app from someone else. The content person, maybe this can be a 539 00:31:30.880 --> 00:31:38.480 contractor, et cetera. So what I'm doing now is I'm lowering my costs. The monthly subscription 540 00:31:38.480 --> 00:31:44.160 is $10 too little, you know, well, you know, Netflix costs this, this one costs that, et cetera, 541 00:31:44.160 --> 00:31:50.000 et cetera. And you've got to think about the people you're serving and what value you're 542 00:31:50.000 --> 00:31:56.320 producing. And can you get to a thousand subscribers in six months? So what this is 543 00:31:56.320 --> 00:32:01.680 showing me very quickly is what my assumptions are. And I'm already assuming they're dumb. Well, 544 00:32:01.680 --> 00:32:06.960 so far I've gone through all of these and I would bet you that probably every single number in this 545 00:32:06.960 --> 00:32:12.560 highlighted area is probably wrong. Would you agree? All the people at Brilliant are shaking 546 00:32:12.560 --> 00:32:18.640 their heads because they know they're wrong. And so we know they're wrong because there was a time 547 00:32:18.640 --> 00:32:23.920 we thought they were great. Not those exact numbers, but that type of approach. So what 548 00:32:23.920 --> 00:32:29.520 we're doing now is then, then the question is, let's go to point number three. How can I make 549 00:32:29.520 --> 00:32:34.800 this go faster? And this step four year, remember, how can I make it go faster? Well, let me jump 550 00:32:34.800 --> 00:32:43.440 quickly to, well, through ads, right? So what if we put $4,000 of ads in and see where that goes? 551 00:32:44.000 --> 00:32:48.160 We would need somebody to run the ad. You know, I don't know, we don't need two people, but we need 552 00:32:48.160 --> 00:32:54.320 to have somebody run the, the, the ad. We need an ad person, right? Who we assume we can get for 553 00:32:54.320 --> 00:33:00.080 5,000 or pay an external firm or whatever it is. And we're going to assume that to get a new 554 00:33:00.080 --> 00:33:06.160 subscriber is going to cost us $30. So if it costs us $30, that's what we're going to spend 555 00:33:06.160 --> 00:33:13.600 on ads to get one person to sign up, right? Now we know our numbers very precisely at Brilliant 556 00:33:13.600 --> 00:33:20.320 around all this, but if we were spending $30, then $4,000 would give us 133 new people. 557 00:33:21.520 --> 00:33:26.240 And let's assume those subscribers will stay for 12 months. Subscribers don't stay forever. 558 00:33:27.120 --> 00:33:31.520 They drop off after a while. Some will stay for four months, some will stay for two years, 559 00:33:31.520 --> 00:33:37.120 but let's say on average, they stay for 12 months. So then the revenue is going to be 12 months 560 00:33:37.120 --> 00:33:45.520 times the 133. So I'm actually over a one year period, I'm buying a block of $16,000 of revenue 561 00:33:46.240 --> 00:33:53.360 by spending $4,000. Does that sound like a good business? That sounds like an amazing business, 562 00:33:53.360 --> 00:33:59.040 right? Here are the expenses. There's the person who runs the ads. He has the ad cost total of 563 00:33:59.040 --> 00:34:08.000 9,000. So I'm making 11,000 out. So that return is 275% return. But in this business, we call it 564 00:34:08.000 --> 00:34:15.840 return on ad spend. That's what R-O-A-S spell means, return on ad spend. And what it means is 565 00:34:15.840 --> 00:34:26.159 for every $1 we spend in ads, we make $2.75 in profit. Okay, that sounds amazing, except 566 00:34:26.880 --> 00:34:34.480 we know that our assumptions are dumb. And we know we have to challenge them. What can we delete? 567 00:34:35.840 --> 00:34:42.480 Well, there are several things we can delete. This is an area we've spent four years really 568 00:34:42.560 --> 00:34:48.400 perfecting. So it's something we know something about. But I threw in the obvious way somebody 569 00:34:48.400 --> 00:34:55.199 might tackle this the first time round. And so I might say, what can I delete? Do I have to hire 570 00:34:55.199 --> 00:34:59.840 an ad person? Can I hire an ad agency? Is there something else I can do? 571 00:35:00.000 --> 00:35:05.040 externally, most ad agencies will charge you a percentage, 572 00:35:05.040 --> 00:35:08.480 usually about 15% of the total ad spend, which seems about as 573 00:35:08.480 --> 00:35:11.400 dumb as I can imagine. But anyways, what they do, so we 574 00:35:11.400 --> 00:35:14.400 won't do that anymore. We've tried five, eight ad agencies, 575 00:35:14.400 --> 00:35:18.240 and not one of them worked at our level. Secondly, you know, 576 00:35:18.240 --> 00:35:24.040 how can we simplify optimize this? Well, if I made 4000, if I 577 00:35:24.040 --> 00:35:31.480 put 4000 in, and I got 11,000 out, why don't I just use 4000 578 00:35:31.480 --> 00:35:35.560 from the money I took out and pay for next month's one. So 579 00:35:35.560 --> 00:35:41.800 it's a one time investment of 4000. And then I make 11, and I 580 00:35:41.800 --> 00:35:44.640 put four back into the next month and four after that and 581 00:35:44.640 --> 00:35:47.480 four after that. So I don't ever put in more money. So the 582 00:35:47.480 --> 00:35:53.280 return is not 275, but one time 4000. And then it perpetuates 583 00:35:53.280 --> 00:35:59.040 itself. But when it sounds too good to be true, there's usually 584 00:35:59.040 --> 00:36:05.040 some dumb requirement. Okay, guys, I'm sure you get by now 585 00:36:05.040 --> 00:36:11.600 the point, right? It's a lot of fun. But the exercise is to make 586 00:36:11.960 --> 00:36:17.000 you fully aware of the cash you got to put in. What are the 587 00:36:17.000 --> 00:36:20.400 assumptions you're making to crank the handle, get them 588 00:36:20.400 --> 00:36:23.640 documented, become aware what they are and how they affect the 589 00:36:23.640 --> 00:36:27.880 machinery. Make little formulas like I just did quick back of a 590 00:36:27.880 --> 00:36:30.920 napkin. I literally just threw that together. You know, a few 591 00:36:30.920 --> 00:36:34.680 minutes before we we did the training. I just wanted you to 592 00:36:34.680 --> 00:36:39.080 see what it was. And then the last one is the cash out. And 593 00:36:39.080 --> 00:36:41.720 then you've got your assumptions. And then you start 594 00:36:41.720 --> 00:36:45.280 with Okay, I know my assumptions are dumb. And I want to make it 595 00:36:45.280 --> 00:36:48.840 less dumb. So what do you do? You talk to people who know. So 596 00:36:48.840 --> 00:36:53.280 when I first started in online ads, I went to the best person 597 00:36:53.280 --> 00:36:57.600 I knew in the game, who is just starting out in this space. And 598 00:36:57.600 --> 00:37:01.600 that was Pedro Hideo. So I went to Pedro. And I don't you know, 599 00:37:01.600 --> 00:37:03.840 and I signed an agreement with him where he became the 600 00:37:03.840 --> 00:37:07.600 marketing manager for brilliant, technically still is, I think. I 601 00:37:07.600 --> 00:37:12.080 think we've never canceled that agreement. But anyway, he was he 602 00:37:12.080 --> 00:37:15.080 was there. And so we learned so much. I don't even know what a 603 00:37:15.080 --> 00:37:18.600 row as was, you know, I thought was something you row. I don't 604 00:37:18.600 --> 00:37:23.720 know. I had no idea. So but now I know so much more. Why I went 605 00:37:23.720 --> 00:37:29.640 to people to help me make my assumptions less dumb. Okay, 606 00:37:30.200 --> 00:37:33.640 very healthy to start with. We know we're wrong. We just want 607 00:37:33.640 --> 00:37:37.200 to try and be less strong, and next month be less strong and so 608 00:37:37.200 --> 00:37:43.800 forth. Questions. Yeah, thanks, Francis. I see you're getting 609 00:37:43.800 --> 00:37:51.640 that's very good. Yeah, very good. Oh, well, hey, where is 610 00:37:51.640 --> 00:37:56.160 Francis? You guys build apps, right? Where's Francis? He was 611 00:37:56.160 --> 00:37:59.400 there a second ago. I got to find him on the thing here. 612 00:37:59.400 --> 00:38:03.720 Francis, are you there? I know. It's probably late at night in 613 00:38:03.720 --> 00:38:08.640 Dubai. But you guys do this, right? I see you said yes. Yeah, 614 00:38:08.640 --> 00:38:15.080 you guys do this. So you know, we would call you and ask you 615 00:38:15.120 --> 00:38:18.440 all of these things. But when you first started, I'm sure you 616 00:38:18.440 --> 00:38:21.120 made a bunch of really dumb assumptions. Oh, I see, Matt, we 617 00:38:21.120 --> 00:38:24.680 got you there. Hey, Matt, you you do this for a living. We 618 00:38:24.680 --> 00:38:29.360 built a model, we have a model. Tell us a minute, just comment 619 00:38:29.400 --> 00:38:33.160 on how, what were some of the dumb assumptions we made in the 620 00:38:33.160 --> 00:38:36.520 beginning? And well, how do we learn some of that? Since you're 621 00:38:36.520 --> 00:38:40.000 now the expert on this model? I think honestly, primarily that 622 00:38:40.040 --> 00:38:43.960 other people would know our business better than we do. That 623 00:38:43.960 --> 00:38:47.800 was a that was an important one for us was was recognizing that 624 00:38:47.840 --> 00:38:50.600 bringing a stranger into your business because they have the 625 00:38:50.600 --> 00:38:55.480 word consultant before their title would would immediately 626 00:38:55.760 --> 00:39:00.280 like result in a positive return on ad spend. And it just didn't 627 00:39:00.320 --> 00:39:03.760 it didn't happen. Oh, my mic is a little bit you know, because 628 00:39:03.760 --> 00:39:06.200 it's the other side of the desk from me. There we go. Fantastic. 629 00:39:06.200 --> 00:39:10.880 There we go. Also, that again, I think for us, it was actually 630 00:39:12.000 --> 00:39:15.680 assuming that somebody else knew our model better than we did, or 631 00:39:15.680 --> 00:39:18.520 knew our world and space better than we did knew our customers 632 00:39:18.520 --> 00:39:23.560 better than we did. And as we went through this, listening to 633 00:39:23.560 --> 00:39:27.600 somebody who was outside of our business, because they had a 634 00:39:27.640 --> 00:39:30.440 consultant title or something like that would actually be a 635 00:39:30.440 --> 00:39:33.560 better way for us to do this rather than trusting on what we 636 00:39:33.560 --> 00:39:34.320 knew ourselves. 637 00:39:36.520 --> 00:39:42.040 Yeah, I think that's exactly right. I think the most dumb 638 00:39:42.040 --> 00:39:45.240 thing we ever did, I used the phrase earlier that Brilliant 639 00:39:45.240 --> 00:39:49.560 has used five marketing agents of digital agencies, ad 640 00:39:49.560 --> 00:39:53.880 purchasing agencies. And you'd think we would have learned after 641 00:39:53.880 --> 00:39:56.520 the first one, they don't know our business, what Matt just 642 00:39:56.520 --> 00:39:59.440 said. But it took us five to realize. 643 00:40:00.000 --> 00:40:02.880 even wrote a new business model for one of them, 644 00:40:02.880 --> 00:40:05.280 where I said, okay, I'll pay you on the actual profit 645 00:40:05.280 --> 00:40:07.700 and I'll pay you very handsomely. 646 00:40:07.700 --> 00:40:10.200 And then I tried it again, even this year, 647 00:40:10.200 --> 00:40:12.160 Matt, you were part of that. 648 00:40:12.160 --> 00:40:15.680 And we put together a very aggressive for an external group 649 00:40:15.680 --> 00:40:20.400 who could have made 100,000 a month off of us easily, 650 00:40:20.400 --> 00:40:21.680 but they failed miserably 651 00:40:21.680 --> 00:40:23.640 because they don't know our business. 652 00:40:23.640 --> 00:40:24.480 Didn't matter. 653 00:40:24.480 --> 00:40:26.320 So it didn't matter whether they were charging this 654 00:40:26.320 --> 00:40:29.320 or that, we thought that getting the cost down 655 00:40:29.320 --> 00:40:30.960 on percentages and all that work, 656 00:40:30.960 --> 00:40:33.460 there was a completely the wrong assumption. 657 00:40:34.420 --> 00:40:36.160 We just didn't, we were so wrong. 658 00:40:36.160 --> 00:40:37.660 We just didn't know how wrong. 659 00:40:39.120 --> 00:40:40.600 So that's a good thing. 660 00:40:40.600 --> 00:40:42.440 I know I'm hammering this. 661 00:40:42.440 --> 00:40:44.800 It's a very healthy thing to know 662 00:40:44.800 --> 00:40:46.960 that you're probably being dumb. 663 00:40:46.960 --> 00:40:48.000 You're just trying to fit that. 664 00:40:48.000 --> 00:40:49.840 By the way, it doesn't mean you shouldn't do it. 665 00:40:49.840 --> 00:40:53.520 It just means you're gonna go, you mitigating the risk 666 00:40:53.520 --> 00:40:56.200 and each step you're trying to do thin slices 667 00:40:56.200 --> 00:40:58.520 to figure those assumptions out quicker. 668 00:40:58.520 --> 00:40:59.800 That's all you're doing. 669 00:40:59.800 --> 00:41:02.860 We're not saying don't do it because it's dumb. 670 00:41:02.860 --> 00:41:05.200 Because if based on that, you wouldn't do anything 671 00:41:05.200 --> 00:41:07.240 because anything would be done when you first start. 672 00:41:07.240 --> 00:41:09.680 So that's not a reason not to do it. 673 00:41:09.680 --> 00:41:12.280 Just means you just got to take some courage, 674 00:41:12.280 --> 00:41:15.180 thin slice it, push it. 675 00:41:15.180 --> 00:41:16.280 We do have, 676 00:41:22.240 --> 00:41:23.520 we do have some, 677 00:41:23.520 --> 00:41:26.520 some of you are asking for this little worksheet, 678 00:41:26.520 --> 00:41:27.920 this little black box example. 679 00:41:28.320 --> 00:41:29.160 I'm happy to give that. 680 00:41:29.160 --> 00:41:30.320 Let me get that to you. 681 00:41:35.840 --> 00:41:38.860 I'm gonna just drop that in for you, Dalyn, 682 00:41:38.860 --> 00:41:42.080 and then I'll just drop it in. 683 00:41:44.120 --> 00:41:45.020 Slack. 684 00:41:47.400 --> 00:41:49.320 Any questions? 685 00:41:49.320 --> 00:41:51.480 I know normally we give you time to go off, 686 00:41:51.480 --> 00:41:53.080 but this is one you may wanna go 687 00:41:53.080 --> 00:41:55.600 and spend a little more time on, right? 688 00:41:58.760 --> 00:42:03.760 Dalyn, I just dropped in the Edge Slack 689 00:42:04.160 --> 00:42:08.160 where you can get that and just hand the spreadsheet. 690 00:42:08.160 --> 00:42:09.740 I don't know if we can give them the spreadsheet 691 00:42:09.740 --> 00:42:10.580 in that format. 692 00:42:10.580 --> 00:42:13.380 We can try, but you'll get the point. 693 00:42:20.120 --> 00:42:22.340 Bonnie, is your hands raised there again? 694 00:42:23.520 --> 00:42:24.360 Yeah? 695 00:42:24.360 --> 00:42:25.200 Yeah. 696 00:42:25.200 --> 00:42:30.200 Yes, we tried this with Pennsylvania, 697 00:42:31.000 --> 00:42:32.200 getting to do the inspections 698 00:42:32.200 --> 00:42:34.000 for the boroughs and townships. 699 00:42:34.000 --> 00:42:37.400 Then we made assumptions that it spent a lot of time 700 00:42:37.400 --> 00:42:41.040 building websites and didn't get any business out of it. 701 00:42:41.040 --> 00:42:42.560 Then we did the same thing 702 00:42:42.560 --> 00:42:44.400 with a thing called rental guard 703 00:42:44.400 --> 00:42:46.600 that we were gonna do inspections on rentals 704 00:42:46.600 --> 00:42:48.760 when they get in and out. 705 00:42:48.760 --> 00:42:50.040 That didn't get any traction. 706 00:42:50.040 --> 00:42:52.640 Then we were gonna do inspections in Florida 707 00:42:52.640 --> 00:42:55.880 on air conditioning change-outs and free roofs, 708 00:42:55.880 --> 00:42:57.880 and that didn't get any traction. 709 00:42:57.880 --> 00:43:00.720 But right now, we are sitting here 710 00:43:00.720 --> 00:43:03.200 doing what they call a request for bids 711 00:43:03.200 --> 00:43:06.880 because we've hired somebody who requests for proposals 712 00:43:06.880 --> 00:43:09.560 who does know the business, 713 00:43:09.560 --> 00:43:12.400 and he does know how these jurisdictions 714 00:43:12.400 --> 00:43:15.120 hire third-party providers. 715 00:43:15.120 --> 00:43:16.440 So that was a smart move, 716 00:43:16.440 --> 00:43:19.080 and we figured we'd have a runway of six months. 717 00:43:19.080 --> 00:43:21.760 So we took his salary and we said, 718 00:43:21.800 --> 00:43:23.720 okay, we got six months worth of that. 719 00:43:23.720 --> 00:43:25.960 And then while I was at conference, 720 00:43:25.960 --> 00:43:27.160 we were thinking thin slicing, 721 00:43:27.160 --> 00:43:32.080 and then when we did our thing last Wednesday, 722 00:43:32.080 --> 00:43:34.960 so I went to Ben and I went to James 723 00:43:34.960 --> 00:43:38.640 who have contracting businesses in Kansas, 724 00:43:38.640 --> 00:43:40.840 and I said, could we do your inspections? 725 00:43:40.840 --> 00:43:43.320 And they said, sure, if it's allowed. 726 00:43:43.320 --> 00:43:46.120 So I'm in the process of trying to find out 727 00:43:46.120 --> 00:43:51.120 if Kansas could allow third parties to do their inspections. 728 00:43:51.240 --> 00:43:53.640 And I've made a couple of phone calls already, 729 00:43:53.640 --> 00:43:56.880 and it looks like they do on commercial, at least. 730 00:43:56.880 --> 00:44:00.080 And so what we've done is we've taken 731 00:44:00.080 --> 00:44:02.080 what we've learned here on the edge, 732 00:44:02.080 --> 00:44:06.160 and we've applied it to the mistakes 733 00:44:06.160 --> 00:44:08.840 and all the errors that we did in the past, 734 00:44:08.840 --> 00:44:10.960 and we created something now 735 00:44:10.960 --> 00:44:12.400 that didn't slice it enough 736 00:44:12.400 --> 00:44:15.080 that it looks like we're gonna possibly 737 00:44:15.080 --> 00:44:18.520 be able to not take six months, 738 00:44:18.560 --> 00:44:20.560 but maybe a week from now, 739 00:44:20.560 --> 00:44:23.520 we could be doing inspections for Ben and for James. 740 00:44:23.520 --> 00:44:26.160 So just wanted to let you guys know 741 00:44:26.160 --> 00:44:29.760 that we are applying this stuff that we're learning 742 00:44:29.760 --> 00:44:30.680 and it is working. 743 00:44:31.640 --> 00:44:33.800 Great, I really appreciate that, Robin. 744 00:44:33.800 --> 00:44:35.920 So interesting points. 745 00:44:35.920 --> 00:44:40.280 Let's decode some of the stuff Robin just said, right? 746 00:44:40.280 --> 00:44:44.400 So if you have a little model like we just had, 747 00:44:44.400 --> 00:44:46.400 and he made some assumptions, 748 00:44:46.400 --> 00:44:47.760 the minute something changed, 749 00:44:47.800 --> 00:44:49.400 he was able to immediately see 750 00:44:49.400 --> 00:44:50.920 he could lower his investment, 751 00:44:50.920 --> 00:44:53.680 which means his return is gonna come back much quicker. 752 00:44:53.680 --> 00:44:56.640 Number two, he said something really important. 753 00:44:56.640 --> 00:44:58.160 If you don't have the skill, 754 00:44:58.160 --> 00:45:00.080 go and hire the skill you need. 755 00:45:00.000 --> 00:45:02.640 right? Because if you can go and find somebody who already has 756 00:45:02.640 --> 00:45:06.760 that skill, you just cut out so much cost. But you also bring in 757 00:45:06.760 --> 00:45:09.880 their network, you bring in their experience, you bring in 758 00:45:09.880 --> 00:45:13.040 the, they often bring a block of business with them if you hire 759 00:45:13.040 --> 00:45:16.760 well. And when you've got an amazing culture, you can hire 760 00:45:16.760 --> 00:45:21.000 two grades ahead of where you are as a business. Many times 761 00:45:21.000 --> 00:45:23.560 people would love just to be in your environment. Don't don't 762 00:45:23.560 --> 00:45:28.880 miss what how powerful that is. Thirdly, he used step number 763 00:45:28.880 --> 00:45:33.080 four in making things done. How do I make this go faster? Right? 764 00:45:33.200 --> 00:45:38.560 He found a way to make it go faster. So he got an idea. And 765 00:45:38.560 --> 00:45:41.840 notice how he was using thin slicing thinking all the way 766 00:45:41.840 --> 00:45:46.800 through. He kept thin slicing ways to find and to go to 767 00:45:46.800 --> 00:45:50.080 people because you're starting with the end in mind. So you 768 00:45:50.080 --> 00:45:54.200 probably Robin used about eight or nine different ideas from the 769 00:45:54.200 --> 00:45:57.640 edge. Now because now you've got a whole toolbox, you can pull 770 00:45:57.640 --> 00:46:01.960 from all these different elements. So yeah, see, I see 771 00:46:01.960 --> 00:46:05.400 that Jalen already flipped into an Excel spreadsheet for you. 772 00:46:05.400 --> 00:46:11.040 Thanks for doing that Jalen. And you can play with that. So don't 773 00:46:11.040 --> 00:46:13.920 go making investments in real estate because of that little 774 00:46:13.920 --> 00:46:22.360 model. But I have it on record. So, but I do want you to be 775 00:46:22.360 --> 00:46:25.960 super smart. And if the average person could think like this, 776 00:46:26.000 --> 00:46:31.440 can you imagine? Can you imagine how quickly you can evaluate new 777 00:46:31.440 --> 00:46:39.840 products, new initiatives, new markets? You know, you know, in 778 00:46:39.840 --> 00:46:43.680 the in Dan's book, on buying back your time, you know, he 779 00:46:43.680 --> 00:46:47.440 made this very dramatic statement, he said, don't hire 780 00:46:47.440 --> 00:46:53.440 people to perform a function in your business. Hire people to 781 00:46:53.440 --> 00:46:57.720 buy back some of your time. If they're not buying back some of 782 00:46:57.720 --> 00:47:02.800 your time, I would extend that idea to hire someone who can add 783 00:47:02.800 --> 00:47:08.120 a capability that will save you trying to learn it and therefore 784 00:47:08.120 --> 00:47:11.560 buy back your time. A lot of times as entrepreneurs, we're 785 00:47:11.560 --> 00:47:14.840 very capable of learning things, you know, we're very good, we'll 786 00:47:14.840 --> 00:47:18.960 go and learn whatever it takes, like how hard can it be? The 787 00:47:19.000 --> 00:47:22.680 the reality is, if we can hire someone who brings that 788 00:47:22.680 --> 00:47:28.080 expertise, that makes all the difference. And by the way, get 789 00:47:28.080 --> 00:47:32.960 super creative with how you hire people. You don't always, it 790 00:47:33.000 --> 00:47:38.320 often takes no money to solve these problems. Right? And so 791 00:47:38.320 --> 00:47:42.400 what I didn't say in all of this is the relentless focus on 792 00:47:42.400 --> 00:47:48.760 keeping costs down. It's find a way find a way find a way. It's 793 00:47:48.760 --> 00:47:54.040 incredible. I was just listening a few days ago, Tesla did their 794 00:47:54.840 --> 00:48:01.720 quarterly analyst report. And one of the, I've forgotten who 795 00:48:01.720 --> 00:48:04.560 it was, one of the senior people who drive all the costs and 796 00:48:04.560 --> 00:48:08.920 production at Tesla was saying, oh, we took off this one sticker 797 00:48:09.000 --> 00:48:14.760 because it saved us one cent per car. And you go, well, how does 798 00:48:14.760 --> 00:48:19.520 that help? Well, it's the mindset that helps. Because that 799 00:48:19.520 --> 00:48:22.200 one cent, they were putting stickers and nobody ever saw 800 00:48:22.200 --> 00:48:25.800 them. Why are we doing this? Well, it turns out that we're 801 00:48:25.800 --> 00:48:28.640 doing other things that we saved on this, and we saved $1 there 802 00:48:28.640 --> 00:48:32.560 and $3 there. And all these things compound, because of the 803 00:48:32.560 --> 00:48:39.160 relentless, nonstop focus on keeping costs low. We sometimes 804 00:48:39.160 --> 00:48:41.560 do it at that level. But we don't always do it when we're 805 00:48:41.560 --> 00:48:45.680 thinking about how do we keep costs to zero? Can I launch this 806 00:48:45.680 --> 00:48:49.480 with no money? I want to do this new business. Can I do it with 807 00:48:49.480 --> 00:48:59.480 no money? So it's amazing if you can. Any thoughts? Yeah, that's 808 00:48:59.480 --> 00:49:04.480 the book. Buy back your time. I see Francis, you dropped it 809 00:49:04.480 --> 00:49:10.360 there. Yep, that's exactly right. That's the book. Anything 810 00:49:10.760 --> 00:49:15.680 else? We've got a few minutes. Let's drop the, we won't have 811 00:49:15.680 --> 00:49:18.080 breakouts. Obviously, we're going to give you the little 812 00:49:18.080 --> 00:49:20.640 worksheet and the worksheet tries to get you to go and find 813 00:49:20.640 --> 00:49:25.040 a project. Did we drop that already? Thank you. Yeah, we 814 00:49:25.040 --> 00:49:30.840 just did. So look at the little worksheet there. And try to do 815 00:49:30.840 --> 00:49:36.680 this by yourself. I'll be very happy next week to take 816 00:49:36.680 --> 00:49:40.520 questions on this. If you do this and you fail, or you maybe 817 00:49:40.520 --> 00:49:46.120 I made it look easier than it is. I really think it's easy, 818 00:49:46.120 --> 00:49:50.200 but maybe I've been doing it a long time. But you try and then 819 00:49:50.200 --> 00:49:53.520 come back. Anything, a personal project, you want to re 820 00:49:53.520 --> 00:49:58.080 landscape your back garden, whatever your project is. Try 821 00:49:58.080 --> 00:50:00.000 it. Because there's something 822 00:50:00.000 --> 00:50:03.640 in your life right now that needs an evaluation? 823 00:50:06.600 --> 00:50:09.400 So who could use, just by the show of hands, 824 00:50:09.400 --> 00:50:10.860 who could use this right now? 825 00:50:12.000 --> 00:50:12.840 Let me see. 826 00:50:12.840 --> 00:50:14.420 Okay, I see Tyler, Ben, yeah. 827 00:50:15.320 --> 00:50:17.560 Okay, quite a few can use it right now. 828 00:50:17.560 --> 00:50:19.120 Good. 829 00:50:19.120 --> 00:50:20.160 Excellent. 830 00:50:20.160 --> 00:50:23.160 Well, I will give you back your time 831 00:50:23.160 --> 00:50:24.000 and we'll end it there. 832 00:50:24.000 --> 00:50:25.600 I'm gonna hand it back to Jaylen. 833 00:50:26.760 --> 00:50:27.600 All right. 834 00:50:27.600 --> 00:50:28.760 Well, this was a fun conversation. 835 00:50:28.760 --> 00:50:31.200 I can tell from the dialogue, from the chat, 836 00:50:31.200 --> 00:50:33.160 that all of your wheels are turning. 837 00:50:33.160 --> 00:50:36.540 So definitely take this worksheet, the Excel sheet. 838 00:50:36.540 --> 00:50:38.200 You can save that from the chat 839 00:50:38.200 --> 00:50:39.720 and get some projects going 840 00:50:39.720 --> 00:50:42.040 and come back with some questions next week. 841 00:50:42.040 --> 00:50:43.860 And that'll be all for today. 842 00:50:43.860 --> 00:50:46.400 Don't forget, when you hop out of the Zoom call 843 00:50:46.400 --> 00:50:48.440 to fill out the end of call survey. 844 00:50:48.440 --> 00:50:50.320 That'll be so helpful for us. 845 00:50:50.320 --> 00:50:51.920 We'll see you next week. 846 00:50:51.920 --> 00:50:52.760 Bye, everyone.