David speaks with Brandon Pindulic, President of Spacebar Ventures, a digital business incubator and investment firm. He also previously founded OpGen Media.

They talked about:

πŸ” Reviewing business decisions

🀝 The role of trust in business operations

πŸ’Ό Building a personal holding company

πŸ’° Business success on personal finances

🚫 Avoiding mistakes in decision-making

🌟 Challenges and potential costs of success

🀝 Surrounding yourself with successful people

This is just one part of a longer conversation, and it's the second part. You can listen to the earlier episode here:

Part 1: πŸŽ™οΈBuilding, Buying, and Scaling Businesses with Brandon Pindulic (Episode 75)

πŸŽ™ Listen in your favourite podcast player

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Podcast App smart link to listen, download, and subscribe to The Knowledge with David Elikwu. Click to listen! The Knowledge with David Elikwu by David Elikwu has 29 episodes listed in the Self-Improvement category. Podcast links by Plink.

πŸ“Ή Watch on Youtube

πŸ‘€ Connect with Brandon:

Twitter: @bpindulic | https://twitter.com/BPindulic

Website: Spacebar Ventures | http://spacebarventures.com/

Subscribed | https://www.subscribed.net/

πŸ“„ Show notes:

0:00 | Intro

02:27 | Reviewing business decisions

05:44 | The role of trust in business operations

11:12 | Building a personal holding company

14:29 | Business success on personal finances

20:03 | Avoiding mistakes in decision-making

23:10 | Challenges and potential costs of success

28:10 | Surrounding yourself with successful people

πŸ—£ Mentioned in the show:

Subscribed | https://www.subscribed.net/

Hot hand fallacy | https://en.wikipedia.org/wiki/Hot_hand

Pardon | https://www.pardon.com/

Optimism | https://www.optimism.com/

Hermes Robotics | http://hermes-robotics.com/

Rick Guerin | https://en.wikipedia.org/wiki/Richie_Guerin

Warren Buffet | https://en.wikipedia.org/wiki/Warren_Buffett

Charlie Munger | https://en.wikipedia.org/wiki/Charlie_Munger

The cost of being King | https://www.theknowledge.io/the-cost-of-being-king-why-all-the-tech-bros-are-single/

Jeff Bezos | https://en.wikipedia.org/wiki/Jeff_Bezos

Elon Musk | https://en.wikipedia.org/wiki/Elon_Musk

Proof HQ | https://business.adobe.com/products/workfront/proofhq.html

Full episode transcript below

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David Elikwu FRSA is a serial entrepreneur, strategist, and writer. David is the founder of The Knowledge, a platform helping people think deeper and work smarter.

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πŸ“œFull transcript:

[00:00:00] Brandon Pindulic: even just a lot of people that I know socially in my group who've done really well like, you know, $50 million plus exit, something like that. A lot of them are divorced or didn't get married like the Elon Musk or Jeff Bezos examples. Like I would not consider myself having outsized successes in those, especially not in those senses.

[00:00:16] Brandon Pindulic: I mean, you could see by running OpGen, like I was totally, I love the lifestyle businesses. I love the idea of cash flow. I've never been interested in running startup ever. I don't find it interesting for me to work on one idea for five to 10 years, pay myself nothing for a couple of years, then go to a modest salary and then have a big exit.

[00:00:32] Brandon Pindulic: And you know, I think the mindset I have is a lot different than that. And I think for sure, like I'll be upfront never gonna be a billionaire. Like, I just don't think I have anything like that in me. But I do think I can get to like, 10, 20, $30 million doing this without having to sacrifice, like your personal life and what, what you wanna do.

[00:00:53] David Elikwu: This week, I'm sharing part of my conversation with Brandon Pindulic. Now, Brandon is the president of Spacebar Ventures, which is a digital business incubator that Brandon uses to buy, build, and scale internet businesses, and he was previously the founder of OpGen Media.

[00:01:10] David Elikwu: Now in this part, you're going to hear Brandon and I talking about the role of trust in hiring general managers and CEOs of portfolio companies.

[00:01:19] David Elikwu: We talk about some of the nuances of building a holding company and how Brandon was able to adapt to having to manage both business and personal finances after experiencing a big win. So obviously once you come into a lot of money, it creates a lot of changes in your life.

[00:01:34] David Elikwu: Then we talk about some of the mistakes that Brandon has seen and experienced running businesses across the board from hiring, to making certain decisions, to buying, to selling, to some of the investments that he's made in some of the portfolio companies. So you're going to learn a lot from his experiences there.

[00:01:50] David Elikwu: And then finally we talked about how to surround yourself with successful people and build a network, a circle of people around you that can boost you to further success.

[00:02:00] David Elikwu: So, you can get the full show notes, the transcript, and read my newsletter at theknowledge.io. And you can find Brandon online on Twitter @bpindulic and on his website spacebarventures.com.

[00:02:13] David Elikwu: So if you love this episode, please do share it with a friend. And don't forget to leave a review wherever you listen to podcasts because it helps us tremendously to find other listeners just like you.

[00:02:27] David Elikwu: Do you have any process of reviewing either the decisions that you make personally as the person running this entire operation or some of the more granular decisions that happen within the businesses that you operate?

[00:02:38] David Elikwu: Because I think Part of the reason I ask is something I was thinking about recently is just this idea of the hot hand fallacy.

[00:02:44] David Elikwu: And I think you've escaped this partly because you've had some, some mistakes early on or some things that didn't pan out exactly the way that you wanted on, which is actually a really good thing because it helps you to avoid, you know, this idea that, okay, so for example, you have a basketball player that has made five shots in a row.

[00:02:59] David Elikwu: He's likely to shoot a sixth because he's got a hot hand, right? That is functionally extremely different from someone flips a coin five times in a row and they think they've got a hot hand. They're excited and that's what makes people double down, right on their next go. Because you've built this track record of, Hey, I flipped this coin four times. I got heads every time I, I made the right call. I'm gonna do it one more time, I'm gonna double down. And that is suddenly what blows people up sometimes.

[00:03:24] David Elikwu: And sometimes when you have consecutive successes or you don't necessarily get upfront failures or upfront feedback from the decisions that you make, it makes it hard to, to quantify the quality of the decision that you're making. Like, was this a good decision or was it not? Because a lot of the time, people just base it on the outcome, right? So if it ended up okay, that means it was a good decision. If it ended up badly, that means it was a bad decision, and it's hard to get more granular feedback beyond that.

[00:03:50] Brandon Pindulic: Yeah, I think it's a great question. I definitely to use your basketball analogy that a heat checkin didn't work, right. Pretty much right away. So I think, I think I learned that quickly, very quickly, that it's a lot more involved because OpGen was such a success right outta the gate, that it's good to have those failures early on.

[00:04:07] Brandon Pindulic: I think we're learning this right now. So I think I don't have a great answer on how it's gonna exactly work out, but the example I gave with the you know, kind of incubating a business and doing the market research ahead of time and testing the waters and building the partnerships ahead of time is what is ultimately needed.

[00:04:23] Brandon Pindulic: So I think there's potentially up to six months of work ahead of time to vet these ideas and potentially vet these operators, which I'm kind of doing naturally as well. Like, you just kind of meet people now that I'm sort of in the market doing this, people come to you with ideas or you meet them. So I think that stuff's really important and if you can kind of do many tests along the way.

[00:04:42] Brandon Pindulic: Another example actually is not on the incubation or acquisition side, but I hired an operating partner. His name's George. He's based in Milwaukee and I hired him in full-time, October of this year. So October 1st was his second, whatever it was his first date. But we had worked together part-time for probably three or four months up until that point. And that was a great way to test it. I had a, you know, a hunch that he would work out. We worked together really well and it did work out. And we had certain goals that we hit. He was driving part of the process. I was driving part of the process. The day after I brought him on part-time, I went to Ireland on a, for a family trip. So I was like totally checked out for two weeks and he ran things really well. So that was probably not the best way to onboard somebody, but it was a good, like, just test it and see if it works.

[00:05:27] Brandon Pindulic: That to me, I think is important on how to do that stuff because it's like, it, there's, you know, you're never gonna get this right a hundred percent of the time, but doing that is a lot. I think we've already seen it, but I think we'll definitely improve our success rate quite a bit from where I was doing it before, which is just, Hey, met this person. They sound cool, they got an idea, let's run with it.

[00:05:44] David Elikwu: Yeah. Okay. So going right off the back of that, what function does trust play? I know that I think you've mentioned you found partners on operators online, on Twitter and perhaps friends of friends or through various spaces.

[00:05:56] David Elikwu: What function or what role does trust play in these decisions? Both in terms bringing someone on, but then also in delegating and allowing them to, run a business?

[00:06:05] Brandon Pindulic: So every a hundred percent, everything. And I'm still, like, sometimes I'll probably jump in things where I shouldn't. But if you cannot trust someone a hundred percent or allow them to go a week or two weeks without any intervention and you don't have the right person, especially on the operation side of things.

[00:06:20] Brandon Pindulic: So it means everything. Now, we'll track KPIs, both leading metrics and certain sales goals and things like that. And we do review them weekly. I imagine we're gonna get to a point where we do it monthly. But that kind of, you know, constant checking and just sort of measuring and helping each other along way is critical.

[00:06:37] Brandon Pindulic: I think, hit the head. The trust part is, without it, I just don't think we could do what we do.

[00:06:41] David Elikwu: So, in building Spacebar ventures. I think, you know, we talked earlier about how there's a lot of people that talk about building personal holding companies and different types of things like that, and you hear people say, oh, we're gonna be the Berkshire Hathaway of this, or Berkshire Hathaway of that. I was wondering what your strategy is overall, not just for the business, I guess, but personally in your ambitions or aspirations. Like what exactly are you trying to build? How do you think this develops and, and where do you want it to go? I think, you know, there's probably two paradigms that you think of.

[00:07:13] David Elikwu: One is, okay, people that look for big wins, right? You mentioned looking for bigger businesses to acquire things that are already at a further more advanced stage. You think of a lot of people that may be just investing companies that do angel investments and actually what they want is a 10x, a hundred x return. They are trying to find the business that they can get in early on that suddenly it's gonna be a rocket ship and it's gonna go to the moon. And then on the other side, maybe you have maybe a bit more of a Warren Buffet type approach where it's like slow accumulation. You buy a business, you grow it over time. Something that you know, or you have like a strong thesis behind the decisions that you make, that you're gonna hold things perhaps forever, and that is going to be, you know, a long term decision.

[00:07:54] Brandon Pindulic: So the way I think about it is just from a compounding standpoint, I don't, I mean, I've done angel investing and some VC investing and things like that. It's just not really my interest. I actually haven't done any of that at all this year. Not because the markets are bad, I just don't have the interest in it.

[00:08:09] Brandon Pindulic: But it's from a compounding standpoint of a collection of small businesses. I don't take the hold forever approach, and I also don't take the, I need to sell this in a certain period of time, PE approach. It's kind of more of like, I think John Ballone said it like, everything's got a price there at some point. Like, I'm willing to deal with somebody and, and make a sale. I'm willing to hold. But it's a compounding approach. We can buy a business at sub three x earnings or a good business at four x, you know, whatever. And we can grow it, and there's multiple expansion in there and things like that. I think it's a great way to live your life and, and make a good bit of money. And I'm absolutely focused on autonomy.

[00:08:47] Brandon Pindulic: So I think that's really important for me. So that's why, you know, never say never, but, I don't see myself, especially with my background, so I don't see myself raising a fund. I'll syndicate a deal and I'll do deals with debt. I don't think I'm gonna take a fund approach. So I like the holding company model. I think that I'm gonna get, and this is a big part of what we're getting into in the new year, doing it in a much more structured way. So the way we're dealing it now is two incubations and two acquisitions.

[00:09:12] Brandon Pindulic: It could obviously switch a little bit from there, but everything rolls up into that million dollar a year cash flow target which is after debt, after profit sharing, after reinvestment. So that would be like true cash flow out money out of the businesses.

[00:09:27] Brandon Pindulic: If there's something that I don't think will get us at least 10% there in one move, I just don't think I would do that. So that's kind of, I say kind of the North Star metric because if we sell a business and it technically puts us down from a cashflow standpoint, but you get what I'm saying? So.

[00:09:41] David Elikwu: Yeah. Okay. Maybe a different version of that question is like, what does success look like for you, both for the business and also personally?

[00:09:49] Brandon Pindulic: Well, I think it's, I like the idea of de-risking entrepreneurship for others. I think it's people who start companies take it for granted that, you know, they could just start a company. So for me, luck was on my side. I was able to work remotely. I mean, my job was remote in 2014. So I was working remotely, I could start on the side and I had some niche skillset that I was able to monetize on. And I was working in tech where there's, you know, the whole from, from the time I started up until like, even now, I mean, people say it's a recession, it's really not that bad out there in tech. So we've been riding a wave and I think that's important.

[00:10:20] Brandon Pindulic: So de-risking entrepreneurship from the side of incubating a company with somebody. And taking care of their living expenses and risk, but sharing in the upside with them is important and fun for me and I, and I think it's very economical. And then same deal with buying a business. You can buy a business you know, I'm not scared of putting in money or PG debt. And then have someone run that business and then now all of a sudden they can put themselves in a different position. So that's, that's very important to me and then the autonomy piece of it. But I'm also money motivated too, so it's like, how do we make sure that this is cash flowing at an above average rate and we're growing at an above average rate, and then it could turn into something big, but I don't want to do that at the expense of raising a fund. And then now all of a sudden I have a bunch of LPs and compliance additional compliance things that I'm dealing with that I otherwise wouldn't have.

[00:11:07] Brandon Pindulic: So as long as those two things remain constant then we're gonna be in a good spot and that's my main goal.

[00:11:12] David Elikwu: Sure. That makes sense. So when you think about the difference between what you're doing now, running and owning this holding company, and when you were running just one business, does this feel like the thing, or does this feel like the thing you get to do after doing the thing, right? Like if you had to start again, would you try and speed run to get to this point where you could do something similar to what you're doing now? Or would you still focus on trying to get the initial big win?

[00:11:36] Brandon Pindulic: No, a hundred percent that one. I would, I'd focus on the big win first. And I wouldn't even say mine was like a massive win. It was more of like a get comfortable then, then go for something bigger. I don't see how you can, I definitely would not have been able to do this at 22 when I was starting OpGen or 21. 'cause you need the money, you need the experience to do it. So I don't see how that's, that would make sense.

[00:11:54] Brandon Pindulic: And you could argue that I'm doing it too soon now. Like maybe I could have done another business, you know, got it to five or 10 times larger than I got to OpGen and then did something. But I did this really just, just out of a, a desire to do it.

[00:12:06] Brandon Pindulic: If someone told me, make the most amount of money you possibly can in three years, I would start a single company, not a holding company. I do think overall, based on my skillset and personality and what I know for myself, I'll make more money in the holding company model. Eventually, well, I'll definitely have more fun doing it, the single company thing, I think I'm just not a good manager, so I can get us to a certain point and I would've to replace myself, and then that just gets you back at the same point. Then I would just do that again and again in 10, 15 years time, I'll have three or four businesses with different managers.

[00:12:35] Brandon Pindulic: So I think I was just realistic about what I'm good at and what I'm not good at.

[00:12:39] David Elikwu: So I mean, you mentioned it's not really a big win. How, how much did you end up with ballpark, roughly from, from the sale of OpGen?

[00:12:46] Brandon Pindulic: Well, so I had, I had the sale, but it also, it cash flowed really well. So I was, I paid myself a salary and then it would cashflow probably four or 500K a year after expenses. And then when I sold it, I didn't get a lump sum. Well, I did get a lump sum, but I didn't get all of the money upfront. I had an earnout.

[00:13:02] Brandon Pindulic: But overall, probably just from the sale, maybe 1, 1 2 or 1.3 million. And then you know, for a, I don't know, I'd have to look back at some of the numbers from a three or four year period. It had that cashflow there. And then I was investing along the way, so I've invested the pretty much the best.

[00:13:19] Brandon Pindulic: I would actually say too much. I think people talk about investing as a good thing. I think I invested too much of my money. 'cause I would, I would love to have some of that e-liquid K or stuff that's a liquid now back in my portfolio to start things or buy things.

[00:13:31] Brandon Pindulic: But, it adds up like over time. I didn't need to make a salary right away. And then I also, I'm still, time of this recording, what is it, November, 2023, I'm still getting an earnout check from that business. So I get my, like my final earnout check on November, or I'm sorry, not November. think it's like April of 2024. So I have another like, I don't know, five, six months, whatever it is to get that. And then there's a smaller one after that. But by then you know, these businesses already are, are cash flowing pretty decently well. So that allowed me to not take any money at all out of the businesses we started this year. I mean, I've taken money out of planet compliance, but that's pretty much it. And then I can put it back in and that was a, that was definitely a cheat code.

[00:14:12] Brandon Pindulic: So I don't know if that answers your question directly, but the other thing is like, I'm pretty pro seller financing and earn out for some of those reasons, so you don't get the lump sum right away and just stick it in whatever, because I sold this thing in, I sold that in 2021, so you can imagine what I would've been investing in, you know, crypto and startups and stuff like that.

[00:14:29] David Elikwu: Yeah, exactly. I think you've also partly answered, you know, there's that famous question of, you know, would you rather have X amount upfront or X amount over time? And it's interesting that, I mean, first of all, it seems like you are already pretty disciplined if you are investing in mortgage companies back in 08, and you've overinvested now, it seems like you already had some discipline to invest.

[00:14:46] David Elikwu: But maybe a difference between if you'd gotten all of it as a big lump sum versus being able to spread it over time.

[00:14:52] Brandon Pindulic: Yeah. No, it was definitely conservative. Even running OpGen to a fault. We probably, you know, we would keep like whatever, six or 12 months expenses in the bank at any one point, which is people say to do that and it's not bad advice, it's just not great advice for growth. So I didn't really, you know, spend a crazy amount on that side.

[00:15:09] Brandon Pindulic: And then even then, this is sort of an aside. We didn't talk about it, but I talked a little bit about the consulting thing I did. So I had a business where that was no expenses, that was just my time. So I did that consulting for a while, which was great because again, that was more capital I was able to save up and things.

[00:15:25] Brandon Pindulic: But even to this day, I took on a couple small consulting deals in 2022. 'cause Spacebar Ventures really wasn't anything. So just kind of trying to figure out what I would make it into. But I did a deal with this family office called Pardon. So in this month I did a deal where in addition to running Spacebar ventures, so I have this other thing going on now. Where we built website and AM and a vehicle called Subscribed, so it's subscribed.net. And we're literally just going out and looking to buy digital media companies. So the deal I structured with them is I get paid them a monthly consulting fee and then we're gonna use their capital. I'm gonna invest in some of the deals, and then you know, we're gonna do an SPV as well, and then we'll buy these media businesses. And then I get a percentage of the profits, either distribution or when we sell.

[00:16:10] Brandon Pindulic: So I did that as another way to further A, keep myself busy to not do something dumb and then B, get some cash out to where again, like I, I just didn't have to take money out of these businesses while they're, you know, in their infancy in the first 12 months.

[00:16:25] Brandon Pindulic: So that's exciting, that's great, I mean, those types of deals are consulting's like really tough to get the right client, but like, you know, Pardon and companies they own called Optimism and it's like one-on-one. I mean, they're, they're great to work with, so.

[00:16:35] David Elikwu: Are there any bad decisions you've made with money? I feel like most of the ones

[00:16:38] David Elikwu: so far apart

[00:16:39] Brandon Pindulic: Yeah,

[00:16:39] David Elikwu: from the

[00:16:40] David Elikwu: one or two investments that didn't work out, they're a bit like those interview questions where they asked what's your weakness? And you say, oh, I work too hard. I invest too much.

[00:16:48] Brandon Pindulic: No, I got, I'll pull them up. I keep a list. So I invested in Bolt, Do you remember that company? It was like,

[00:16:54] David Elikwu: Yes. Oh, this is something I wanted to ask you actually but yeah, tell, tell me about it.

[00:16:58] Brandon Pindulic: Yeah. I don't even know what to tell you about. I invested in Bolt, that's a dog of a company I invested in. I've invested in companies. There's one I'm looking here, it's called Hermes Robotics. I couldn't tell you what this company did. I don't know why or when I invested in it, but I looked back actually recently.

[00:17:13] Brandon Pindulic: So I'm like, all right, let me look through, because I, a lot of these deals you had done on a Carta or AngelList, it's like a crypto staking company, but when I invested in it, initially they were doing like autonomous train driving or something. I have no idea. So, I mean, yeah, I know I got some serious losers in the portfolio from 2020 to 2021.

[00:17:34] Brandon Pindulic: Now there are some good ones like where I knew the company or where I stayed in my lane of enterprise B2B software at the seed A area. Like, I mean you're still gonna have more failures than that, but I, I can figure that out.

[00:17:45] Brandon Pindulic: Anything outside of that was terrible. I think every stock I've ever picked went down, and I'm not kidding, it's not a joke. I don't think I've ever made money off of a stock. So that's why I was like, all right, I'm only going to invest in small businesses and then B2B enterprise software and everything else I don't care about, you know, I mean, I have index funds, it's like one of my good friends is my financial advisor, so I give him money to do that.

[00:18:06] Brandon Pindulic: But other than that, I am totally out on investing in anything outside of these areas.

[00:19:00] David Elikwu: Okay. Fair. I guess in that case, maybe it's a good thing that you didn't get all the money up front, right?

[00:19:04] Brandon Pindulic: No, that's a great thing. I didn't get the money up front. I did have crypto. I'm not really into that stuff, but I don't think I definitely missed the point to sell, but I don't think I did terrible on that one. But relative, right, you could've had some bad losers. So those are mistakes.

[00:19:17] Brandon Pindulic: Hiring, I'm pretty bad at hiring. I've gotten everyone that I've worked with currently and employees that I had an option and stuff. I mean, I had some like, absolute home runs, but if you look at my spectrum, it's like either someone worked out amazingly well or just like, I had one guy who just like stopped showing up to work for a month and I was like, I mean do I fire him? What do I do?

[00:19:36] Brandon Pindulic: So, I've had some really bad hires as well that just didn't work out because I'm too trusting in the beginning. Like I take everything at face value. I'm just like, all right, this person's great, they look like they work hard, they're smart. I like them. Let's just hire. I've never done a reference check, all that stuff. So I'm trying to build this into my process now where I'm like, not everything is gonna work out. Here are some ways that I can do stuff that, you know, will at least save me, like just low hanging fruit will just save me some headaches down the line.

[00:20:02] Brandon Pindulic: So, that stuff, yeah, I can talk, I read the whole podcast on the stuff I've, I've lost them.

[00:20:03] David Elikwu: Yeah, I mean, okay. Well tell me more about that in terms of like lesson learned or what you are changing as a result. So you mentioned hiring as an example like, is there anything that you now know that you could have done differently in terms of hiring? Aside from just like reference checks or maybe that's part of it. And then maybe from some of those other mistakes as well.

[00:20:20] Brandon Pindulic: Well, I'm, I'm still trying to figure that one out. So on the hiring side it's always gonna be difficult for a, a co-founder operator. So I think that's you know, that there's a lot of sort of inherent trust that has to be built up initially.

[00:20:31] Brandon Pindulic: So, if they come from your network or you organically meet them and you can kind of build things over time, that's great. I'm very, I mean, I've hired a lot of people on contract work, so I love to do that before bringing someone in full-time. In fact, probably if I look at all of the hires that have worked out, I think all of them actually started that way. When you have that to your advantage, you can do that well. And then the way to do that is really simply, if you have someone that's working remote or someone who, who has the ability to do like a night or weekend or something like that, just pay them above, significantly above market rate for whatever project they're doing to make it fair, to work out great. If not, no harm, no foul. So that's an important one.

[00:21:10] Brandon Pindulic: I suppose, I mean, I haven't worked with recruiters or anything like that, but I suppose that's a decent way to do it.

[00:21:14] Brandon Pindulic: Those are, those are some of the, I think, just like important things. If you can kind of test the relationship first, then that's always ideal.

[00:21:21] David Elikwu: Okay. Yeah. Have you ever heard of Rick Guerin?

[00:21:24] Brandon Pindulic: I don't think so.

[00:21:25] David Elikwu: Okay. It just reminded me of what you were saying. So he was actually, speaking of co-founders, he was effectively like the third partner of Warren Buffet and Charlie Munger, except almost one side of him now because, I mean, the irony is he was a great stock picker. Like he was actually, it's not like he was bad, he was great. That's why he worked with Warren buffet and Charlie Munger early on. But he used leverage and so he ended up getting margin cord.

[00:21:49] David Elikwu: And I think this goes to what Charlie Munger talks about often, which is this, idea of avoiding unforced errors. Like not trying to be smart, but just avoiding being dumb.

[00:21:58] David Elikwu: And I think, you know, it goes to what you were saying in terms of some of the decisions you make or some of the mistakes that you make. A lot of it can just be about avoiding some of the, the really simple stuff or actually, sorry,

[00:22:06] David Elikwu: getting the simple stuff right and avoiding some of these other mistakes, right? Like not just jumping on the latest hot trend, not just investing in the latest hot company, but actually taking a step back and thinking about things slightly longer term as well.

[00:22:19] Brandon Pindulic: I think that's spot on. I think I heard them say, he wanted to get rich quickly and they wanted to get rich slowly. I think those are important distinctions there from that. Plus another thing too from I think it was Charlie Munger said this, but somebody had asked them at one point, how does he do the deal?

[00:22:33] Brandon Pindulic: So they'll go in, they'll buy a business and they'll keep, you know, their whole thing is the day after the deal closes, they want the business to run as if they never acquired them, right? They like to keep management intact and all of that. So they've asked him about how he's done deals and how he thinks about incentives and things like that for management.

[00:22:50] Brandon Pindulic: And someone who's, you know, the kingdom doing this even said that it's different on a deal by deal basis. So that's why when I think through hiring or deal structuring for a co-founder, an operator or something. I think there's almost no perfect way to do it where it's one size fits all. I think ultimately you, you just have to assess the situation and see what makes sense in that, in that area.

[00:23:10] David Elikwu: Yeah. So I know that you've never had like one incredible windfall, at least relative to the fact that you've always been able to pay yourself relatively well, but I'm still interested in, are there any constraints that you found just from being able to make like a pretty decent income? And the best example I can think of this being, not that you are married, and I don't think you have been previously, but one that has been on my mind has just been this idea of like the, the cost of being King.

[00:23:35] David Elikwu: And I've seen some people talking about it, but I've been writing about it just for a little while. And you just think of this idea that, okay, in fact, some of the very people that we were talking about, Warren Buffet, you think of some of the richest people in the world. I think almost every single one of them, Jeff Bezos Warren Buffet, Elon Musk, all of these people, what do they all have in common? It's divorce, right?

[00:23:53] David Elikwu: So it's almost like Yeah. Like there is an inherent cost of becoming incredibly successful, incredibly wealthy. And I was trying to think of, okay, like, why does that happen? Why is that the case? Nobody goes out to be successful thinking, oh yeah, this is gonna blow up my life and my family and everything that I think that I love. And also simultaneously, nobody gets married hoping that they'll get divorced.

[00:24:17] David Elikwu: I think maybe there's three factors that I have in my mind, like one is that some of these things, so, and, and you can expand this beyond marriage, obviously for the purposes of this conversation, but like one of them is maybe these things are just negative externalities, right? So this is just the cost of doing business. You make a lot of money, you have a lot of great success and a lot of just negative stuff happens as a side effect. The other is maybe it's just a self-selecting cohort, right? So the type of person that is likely to be extremely successful in business, maybe they're very disagreeable, maybe they drive hard bargain, like they have some traits that also might make them difficult to maintain friends or difficult to maintain a partner, things like that. And then the third type is perhaps just like poison fruit. Like maybe there is something inherent in the act of becoming extremely successful that either changes you as a person or changes the other people around you in a way that. You know, like you are now different as a result of having that success and the people around you are also different as a result of you having that success.

[00:25:20] David Elikwu: I wonder if any of those ideas resonate with you and the journey that you've had and yeah, just like how that lands for you.

[00:25:27] Brandon Pindulic: Yeah, I mean, it's a pattern I've recognized, right? So I even just a lot of people that I know socially in my group who've done really well and what I mean really well, like, you know, $50 million plus exit, something like that. A lot of them are divorced or didn't get married or something like that.

[00:25:41] Brandon Pindulic: So I have a girlfriend, we live together and we have two dogs. And it's something we've talked about too, because like we're both career oriented people and we just like have these conversations to where, you know, it'll work and obviously the plan is to get married and things like that.

[00:25:54] Brandon Pindulic: But I notice it, you just see it either in like the examples you gave, like the Elon Musk or Jeff Bezos examples. Down to people I just kind of know personally that's, you know, have done well but aren't in the media. So I think that's like I would not consider myself having outsized successes in those, especially not in those senses.

[00:26:10] Brandon Pindulic: So I think that's actually probably something that's held me back. I do like to work and if, if it were up to me, I'd work pretty much most of the day. But at the same time, like, I mean, you could see by running OpGen, like I was totally, I, I like, I love the lifestyle businesses. I love the idea of cash flow and I've never, I mean, I've never been interested in running startup ever. It's just not, I don't find it interesting for me to work on one idea for five to 10 years, pay myself nothing for a couple of years, then go to a modest salary and then have a big exit. And the irony is, that's kind of like literally what I'm doing with Spacebar Ventures, but I see the cash flow come in and then I just don't distribute it to myself and I can put it to, to work to do stuff.

[00:26:46] Brandon Pindulic: So that resonates a lot more with me than, oh, our MAUs are going up, or our ARRs up, or our burn is 100K a month and you know, I gotta raise my X around next around at any point that can just kind of implode on you.

[00:26:59] Brandon Pindulic: You know, I think the mindset I have is, is a lot different than that. And I think for sure, like I'll be upfront never gonna be a billionaire. Like, I just don't think I have anything like that in me. But I do think I can get to like. 10, 20, $30 million doing this without having to sacrifice, like your personal life and what, what you wanna do.

[00:27:16] Brandon Pindulic: Now that does come at the expense. Like there are times where you gotta like miss something or whatnot. But to be honest, like I kind of think that narrative is overplayed a little bit in small business too, because I work remotely and because I've had the benefit of being in B2B. Like our clients are working nine to five, generally speaking Monday through Friday. So if I need to get something done on the weekend, which happens a lot, I can kind of get it done on my own time. Where if you're in E-commerce, if you're in hospitality, something like that, you usually don't have those luxuries built into your business. So I do think that's helpful too.

[00:27:46] Brandon Pindulic: And then now obviously as you're building a team, I view teams as leverage. So you have people that are working with you, the ideas can get bigger, you can do more. Like just two weeks ago, we have a small team and we had two people out. One was sick, one was on vacation, so then I'm like jumping in and doing the work and that's fine. But you know, I gotta like catch myself up, up to speed on like what they're doing, how we're doing that, and then that ends up kind of slowing you down a little bit further.

[00:28:08] Brandon Pindulic: So there's a lot of truth to that.

[00:28:10] David Elikwu: Yeah, that makes a lot of sense to me. I think perhaps one of the last questions that I would ask very much on the track of what we were just mentioning. So first of all, you just mentioned you have friends that are doing similarly well, or even better, you know, they're running great businesses, they've sold great businesses.

[00:28:24] David Elikwu: And we've talked a bit in the past as well, I, I guess about, you know, people in your network, et cetera. And I think this is, it's actually a really important point and perhaps an underrated one, right? About the people that you run with and the people that are around you and how that shapes and can either constrain or expand your idea of normal.

[00:28:42] David Elikwu: And actually, I, I think I've written about this as well. I forget the name of the post but, just this idea that, If you are driving at, okay, I'm gonna use miles per hour just because I, oh yeah, you guys use miles per hour.

[00:28:52] Brandon Pindulic: Yeah. Yeah.

[00:28:54] David Elikwu: So here, like in a normal suburban area, the speed limits might be about 30 miles an hour, right? And if you are driving at 30 miles an hour in the suburbs, everything is fine. Everything is dandy, you get along with everyone, everything is fine. If you start driving at 40 miles an hour in the suburbs in a 30 mile per hour zone, suddenly people are looking at you like a maniac, like you are driving too fast. It's unsafe for children. Like, what? What are you doing? You are a crazy person, right? But that same person driving at 40 miles an hour, if you went onto the motorway or a highway. Everyone there is driving at 70 miles an hour and suddenly you are now so slow that you are also gonna kill people like you are a health hazard, in the same way that you would've been a health hazard in a zone where everyone's driving at 30, now you're a health hazard 'cause you're driving too slow.

[00:29:38] David Elikwu: And I think that is a very similar to the way that, the friends that we have and the people that we keep around us can either like constrain or expand our idea of what normal is. And if you have people around you that are driving at a really high speed, that is just what you're used to.

[00:29:51] David Elikwu: So I'm interested to know like both early on from your early twenties, 'cause I remember actually even that business you started when you were 15, that was a business, you started with a friend, right? And even now as you run this business, you have friends that are running 50 million plus businesses. So I'd love to know what you think the impact has been of the people that you've kept around you and how you think that has impacted your level of success as well.

[00:30:13] Brandon Pindulic: Yeah, totally. So I think that's you know, even going further back, that's kind of like when people talk about the value of education and you kinda ask about my thoughts on college and whatnot, that's why parents will put their kid in private school if they can or something or whatever. They go to the, the school district with the good whatever.

[00:30:27] Brandon Pindulic: I always went to public school and I did one year in college, so it was like different for me. But think people do that for their, like to get around other people that are in that area and they try and like morph their children to think that way.

[00:30:36] Brandon Pindulic: I don't know. So I, I have a kind of a unique sense on it. 'cause all of my friends that run businesses, I mean, I think, they all do better than I do, honestly. Like, I kind of joke that I feel like I'm in, like, baseball may not be as big in the UK, but I'm in like the minor leagues and they're I know like, I'm friends with the professionals. But I'm still kinda like, I'm good but you know, not there.

[00:30:55] Brandon Pindulic: But at the same time I see what they're doing and I can kind of like get inside, you know, what, what they got going on and we can trade. And I've definitely benefited from that. But all of these people I've met just through like random stuff, like through work or I reached out to them, or they reached out to me, it's, it's, it hasn't been like through one cohesive thing like a school or, you know, growing up in the same area or whatnot.

[00:31:16] Brandon Pindulic: I've taken the approach of I'll invest in the people that I identify as, oh yeah, they got it. Like at the expense of whatever this person has that thing. And that's, that's done well for me. And there's people that I'm friends with that haven't, you know, had that big exit or haven't started that company yet, but I know for a fact. They have the ability to have an outsized return on something and I'm just gonna invest in whatever they're gonna do.

[00:31:38] Brandon Pindulic: So, that's it. And my whole thing is how do I make a bunch of cash flow to where I can do that and then invest in it and then, you know, not care if it fails. But if it does succeed, it'll be pretty massive win.

[00:31:47] Brandon Pindulic: And I've done this before too. I mean even the company I'm invested in, it's based in London actually. It's called XI Flow. I invested in them because the founders that founded Proof HQ and I saw Matt and that what they did at Proof Hq and I'm like, these guys are absolutely operating at a different level from what I've seen.

[00:32:04] Brandon Pindulic: So whatever their next thing is, like I just put money in. And whenever they weren't raising money for a while, 'cause they made money on the previous exit, but finally went that route. And I did that and that's going to be like you know it's not gonna be like a hundred x but it's going to be a really good one when they eventually exit. So, that's the approach I've taken where I can kind of like get that upside but not necessarily having to do it at the expense of running that business and sacrificing everything else.

[00:32:26] David Elikwu: Yeah, that makes sense. I mean, maybe the last question I'll ask you is, is there anything that you have done in particular or that you would recommend to cultivate those kinds of friends? Because it seems like throughout your journey, you've always had friends like that.

[00:32:40] Brandon Pindulic: Yeah, it is kind of random. People have asked me that before. I don't know what the answer to that is.

[00:32:45] Brandon Pindulic: I mean I've always lived in cities. I've lived in like New York, Boston, Austin, so I'll go, I've met people just like going to random dinners or events I've put on dinners and events, which is helpful and that's been a good way.

[00:32:56] Brandon Pindulic: I've actually met a lot of people on Twitter, even though I've only kind of recently become active on Twitter. So that's a great, I mean, that's actually how we met. So, that's a great way to do it. But I take calls and meetings with a lot of people. So in 2022 I think this is an interesting example.

[00:33:09] Brandon Pindulic: I set up this investment network called Pantera, and we were just look at alternative investments. We'd source them, we would do SPVs. I was initially gonna make it a paid group that people were paying for, and I just refunded. like, I don't wanna do this full-time anymore, but I would meet with professional investors and I'd meet with high net worth people or people. I just wanted to invest in things and I made a lot of friends and interesting connections that way, but I didn't make a dime off of it. I did raise money for deals, so, you know, in theory I can make money off the carry of those things. But that was like a very intentional way for me to build out a group of people that I thought were interesting.

[00:33:41] Brandon Pindulic: And then I would take probably 10 calls a day, and then I'd go and meet people. I was just I went to whatever city or country or whatever, I would just set up meetings and meet and we'd hang, hang out and have fun and like just kind of friendships became, you know, turned into that, that thing. 'cause I'm really interested in like what people are doing.

[00:33:57] Brandon Pindulic: So I think it's cool, like if someone's got a business they're running or an investment fund, a podcast, they're writing a book, whatever. I'm interested in like, kind of like seeing how they're doing it and what they're doing and then naturally I think when you're good, I guess when you're naturally interested in what other people are doing, they kind of just, you just sort of become friends that way.

[00:34:12] David Elikwu: Thank you so much for tuning in. Please do stay tuned for more. Don't forget to rate, review and subscribe. It really helps the podcast and follow me on Twitter feel free to shoot me any thoughts. See you next time.

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