Ambition Today Episode Transcript

Michael Loeb - Episode 52

Michael Loeb's New Approach To Launching Billion Dollar Companies

[00:00:00] This is Ambition Today today. We are joined by none other than Michael Loeb he is the founder and CEO of Loeb NYC. This is Ambition Today. These are the entrepreneurs creators investors and Builders to ambitiously change to the world explore the hardships and heroism so of everyday life while we revealed the key moments to leave behind a lasting Legacy, this is Ambition Today with Kevin Siskar.

[00:00:28] What's up world? I am. Kevin Siskar and you are listening to Ambition Today. The ambition list is now alive and growing after every episode. We've been going longer with each guest and asking them one question. What is the single greatest piece of advice you have ever received and tells the story of how you learned it.

[00:00:46] This question has given some amazingly deep and Powerful insights from the guests can now join its this card at Coast a list. Make sure you subscribe to the Pod everywhere podcasts are found and in case you missed it last episode we talked to Brian McCullough. He is the [00:01:00] host of the techmeme ride home podcast and is also the author of how the internet happened.

[00:01:05] But today I'm really excited. We have someone who is probably mentioned in that book Michael. Oh, he's the founder and CEO of Loeb NYC a private Venture investor startup incubator and operator of consumer marketing businesses, Michael. Welcome to the podcast. Thank you, Kevin. I'm excited to have you today.

[00:01:23] We're here on Fifth Avenue New York City and in Midtown. We're at the Loeb offices. You want to set the scene for those listening? Yeah, so we have. We're right across from the Trump building and that's because I can never be very far from the Donald. No, that's not true. Actually, we we got here and it just happened to be that he was across the street that was about 9 years ago.

[00:01:55] It is a very convenient location to where I live. I'm on [00:02:00] 72nd Street and this is 56 so in a nice day. Today is not one of them. You can actually walk here and it takes about 15 minutes so that commute is a great commune. It is a very dangerous place right around here. Yeah, not for you. But for your wallet, right?

[00:02:18] Yeah because we got like, you know, Tiffany we've got. Like Mary Mecca. Oh and we've got and ferns are sound of coffees. Yeah, something like okay, how'd you get that discount? Coupon? Okay. Awesome. Well, I'm excited that. We're here. We're going to take it back to the beginning like we do with all the guests try to find the steps along the journey.

[00:02:38] So tell us a little bit about where and how you grew up and at what age do you think you were first exposed to entrepreneurship if you were at all, so I think of myself as a queen's boy. Okay, right and I. Grew up, you know in a [00:03:00] two-bedroom apartment. I shared a bedroom with my sister and it was a big day that we moved from a two bedroom apartment with three bedroom apartment.

[00:03:08] I have my own bedroom, but we still only had one bathroom and Whitestone Queens. It's a little more gentrified than it was but it was very shall we say mixed and but I am the product of a journalist. And my dad is Jewish and grew up in Chicago. My mom is Catholic and grew up in Germany. A lot of people say they're German, but that means they were born in Wisconsin, right and on a farm, but no they were married in Berlin.

[00:03:40] My dad as a journalist was stationed over in Berlin and married a. Perky young Pan Am stewardess is what the appropriate term of the day was and if you couldn't become a movie star, you became a stewardess and they actually after they got married went on what amounted to a one-year [00:04:00] honeymoon and the deal was as long as my dad mentioned Pan Am in the article that he filed with 400 syndicated papers around the United States, they would fly for phrase.

[00:04:11] So they did that an entire year and he brought his little brownie camera and he took a picture of. Little tiny Peggy. That was my mom's her real name was Army guard, but she went by Peggy because who can pronounce ermengarde right and a little tiny begging in front of the giant pyramids. And I said Dad this is so hokey.

[00:04:29] And he said, you know back then not everybody knew about the beermen. So that was a big deal. So that's what they did. I was almost born in Tokyo. But they made it as far as st. Louis Missouri and I kind of came out then and it wasn't my fault but I was born in st. Louis but as quickly as I could persuade my parents when I was one year old we moved to New York where my dad got a job at timing and where he was a journalist there for about 40 years.

[00:04:59] His [00:05:00] last job was managing editor of Fortune Magazine, which he did for about 10 years or so writer books gave a lot of speeches. Is was a on radio for about forty years CBS Radio. I am told that I have a face for radio that's you have a voice for radio. Well of face for radio, that's like Groucho Marx line that I have a face for radio.

[00:05:22] But anyway, but maybe I inherit that part for my dad, but he was. Credited with almost inventing the category of personal finance. So he was also the managing editor Money magazine's so that was my upbringing. Well, that sounds like an incredible upbringing. Yeah, you know, we're there any lessons on there where you feel I mean, obviously there was entrepreneurship and their Fortune money, but where you feel like they apply to you.

[00:05:47] Yeah, you start your first business or you watch your uncle your dad do something that they clicked for you or you did it made me realize that you're older right now. It was I was always that kid. I was always. The lemonade stand [00:06:00] kid the paper route kid. Do all the loans in the neighborhood Jed. I was kind of that kid and I think my dad kind of fostered that because you know, we would here I mean Money Magazine, right?

[00:06:12] What was that about? Right that was about how do you make more money and Fortune Magazine? You know, this was the captain of Industries and how they did it and those stories. You know, I came home. I was probably say just like this podcast just like this podcast. I was probably eight where I knew what a sans-serif font was.

[00:06:32] I was the only kid in Queens who knew what a sans-serif font was but, you know, the whole idea of Journalism at friends and Discovery and knowledge and free exchange of information and curiosity was something that I grew up with and frankly has always served me pretty well, and I was always curious about.

[00:06:51] You know how things started and and I think the whole story of thing is so cool. I mean, it's like making a baby you wanna have a baby you [00:07:00] make one if you want a business. You just make a business. I mean, how cool is that? What I think that then that's where we're I think we try to isolate here is a lot of people have that seed of this like intellectual curiosity, but how do they get it?

[00:07:12] Right and so, you know, it sounds like your father and your parents did a good job in and instilling that so you then go on to start a corporate life work. Time, correct. How were you as an employee? Right so we just talked about how entrepreneurs a kid we know where you end up. So, you know, how are you as an employee?

[00:07:30] I was Dreadful. I actually know what I mean. And here's that I was Dreadful only in one way which is timing at the time and I can talk about it now because there is no more time ink boohoo, right? It's what by it really is sad. And by the way, such an illustration of the time's right. It was only about ten years ago that I have 1.3 billion dollars in free cash flow to like zero and what by Meredith the detritus bought by Meredith, but I my problem was [00:08:00] I didn't care right and what I didn't care about was.

[00:08:05] I just wanted to win okay and time Inc was known as a congeal collegial place. And by the way, it was not a typical for the Sons and Daughters of timing the good Sons and Daughters of diming to join time Hank and my dad was you know, it was 8,000 people. He was on the journalism side and I was on the business side if I had more Talent, maybe I'd be on the journalism side, but I was assigned for example to Sports Illustrated and kind.

[00:08:34] I'm showing a Sports Illustrated mature property. Maybe it can grow three four five percent a year and not for me. You know, I wanted 30% a year. Why not? Why not but that was you can't make an omelet without breaking a few eggs and. We broke a whole lot of rules that Sports Illustrated did some really cool stuff.

[00:08:57] I bet you didn't know this you're looking at [00:09:00] the Inventor and the patent holder of the sneaker phone and the football phone. Wow. Yeah that I invented as premiums for Sports Illustrated. Also the bloopers of it was like something you would get when you say yeah, man. Yeah, that's what a premium is called.

[00:09:13] Got it. Okay, but yes, and so that was you know, the notion of kind of flipping the selling. And so that the accent is on the free gift and none of the product was not a very popular thing and that was only one of a number of not so terribly property of thing. But again, I didn't care. I just wanted to get that 30 percent growth and when I was assigned a Sports Illustrated the prophets were about 40 million a year in about three years.

[00:09:42] I had a hundred million a year and that was through a bunch of really I think kind of cool marketing techniques. The evolution of revolution of the swimsuit issue also had something to do with that which for a long time in Sports Illustrated was just a few pages on the inside of [00:10:00] a February magazine as opposed to separate videos separate calendars and you know right in Tire February magazine, so and from there and you asked how I became an entrepreneur in the answer is.

[00:10:14] Artificially because I art from there to launching Entertainment Weekly, I got the reputation of launch boy at time Inc. Which I say in the land of the blind. The one-eyed man is king So now they were good as worst nicknames to have that's not a bad lunch boy, right? I wanted to be launched man, right if I had a few of maybe I'll get lunch man, but I was younger then the launch white but launched a Sports Illustrated for kids and you know the video.

[00:10:44] Division a lot of things and so they said Michael take a look at this concept floating around the building without a sponsor Entertainment Weekly, which for me was the big three Sports for the big three forms of entertainment and I [00:11:00] was paired up with an editor who. Wanted to rewrite the Atlantic right which is fine.

[00:11:06] But if you talk about parent, you know poetry the last name is weekly and you're not going to get over the fixed variable divided which in a Weekly Magazine is about a million in circulation if you're talking about poetry, right so that was the formula for. A disaster which in the very beginning it was not so great and we are both relieved of our jobs.

[00:11:29] Right? So I was shown the door and so were it not for that. So as probably an intrapreneur and didn't understand that I was an introvert or an exactly. Yeah, and I was shown the door and what I didn't mean to get rKevinge but I started the company outside of timing that I was trying to start inside a timing.

[00:11:48] Do you think that I've been fired? Yeah. The getting fired was regulations with some sort of well, I think at the time I was very shocked right right, but in hindsight I alright grateful. You're fired. [00:12:00] No, I see the shock registering in your face right now, but I think of wakes people up essentially right at a certain extent.

[00:12:07] So did you feel that it kind of shook you and you're like, oh there's there's more to this world than just this glass. You know, what it for me? It wasn't a surprise right? Because I knew that too. I knew that if the magazine. Didn't hit a certain amount of circulation by year-end they would close it.

[00:12:27] So that was my goal. Yeah, and I had a break mourn a few eggs to make that omelet and I knew that we catch up with me and then and it finally did so it wasn't totally surprised because I was committed to the product I wanted. To win right? I wanted that to work and so I was not entirely surprised.

[00:12:44] I did not know exactly what I wanted to do, but it made sense for me and I really was working on this concept that a magazine should be sold as a service not a product. Okay now back in the day. When you bought a magazine you [00:13:00] bought a year-long subscription and an issue at a time would be dribbled out and then you'd be peppered by renewal notices and bills and I said, that's silly.

[00:13:11] We're working really hard to get a subscriber and we finally get them and then we got. A prescribed death date right? Well days 366 that relationship is torn asunder, right and you can only revive it by responding to a renewal motifs and you would check the box say bill me later. And then after the wash cycle you had the rinse cycle the so there was you know, two ways to fail and instead it should be replaced by different architecture, which is you should sign up give me your credit card and it should go on and infinitum until you say stop so inertia went from.

[00:13:45] Your mortal enemy is your best friend right now people in the outside looking in said oh so smart. You'll save on renewal notices and bills, but what you really did was Triple lifetime. Inertia, is that powerful force, right? And if [00:14:00] you triple lifetime value and we had some enormous competitors in the space, but we won the war the same way Grant won the war.

[00:14:11] Yeah, I'd because Grant had two and a half times the North had two and a half times the troops of the South so as Grant as long as Brandt was. Not two and a half times is dumb, right? He could be two point four nine nine nine nine times some at the end. He that one the other guy had zero and he went it mean it's pretty it's pretty impressive because you think about it.

[00:14:31] I mean everyone Birchbox other subscription direct to Consumer businesses today basically live on this Council and its really interesting to hear that really nobody was doing it and it was kind of you know, when I was I was funny Kevin because way back when you know the concept of a subscription or a membership that for a Time.

[00:14:49] Was a dirty word and then all of a sudden it got back in Vogue. Yeah, and we actually see that all the time. I mean what is old is new again and but you know [00:15:00] those of us those gray hairs above us kind of look at what's going on right now, for example, Google and Google and Google is a tech lash right now.

[00:15:09] Yeah. Well Tech lash, but essentially what is available in Google as what we've been doing in direct mail, right except that it's on super duper. Rights, right. So instead of measuring things and weeks and months. It's a nanoseconds but the principles all apply. You know it like what is your acquisition costs?

[00:15:28] What is your lifetime value? What are the customer segments? What is your messaging? I mean, you know, these are very similar. Principles it's just, you know, instead of driving at one mile an hour. It's a billion miles an hour, but it's you can repurpose, you know the same kind of mechanic. Yeah and be successful.

[00:15:49] I want to move on to synapse group in a minute. But while we're on that one of the consequences I've seen of that is I'm born and raised kid from Buffalo right suburbs my areolas. [00:16:00] Yeah. Thank you the girl go bills also. But a lot of small businesses don't want to even mess with anything Tech related.

[00:16:10] How do you see that Trend going they're going to have my opinions are going to have to run. Right well adapter died. I mean, you know, I'm pretty sure that there was a whole bunch of people who said you know that horse. It's so much better in the car. Yeah. Let's just keep that for a while. So this is not new right?

[00:16:30] I mean basically there have been waves of innovation and it's been adopt or die for a long time and I think what we are what we are seeing is something rather dramatic right now. And what has changed and what I look at is the Mad Men era right 1960 if you go back 30 years and you go forward.

[00:16:55] Thirty years from 1960 not much happened, right [00:17:00] and then all of a sudden, oh my God, like totally transform and what has changed and this is a very important change is that the c-suite used to have a preservation mentality. So any executive in the Fortune 500 would say. No, nothing new. Let's stay the same because that's the right path.

[00:17:21] But now I think they're can persuaded that if they're doing things today like they were yesterday. They're doing it wrong. So that mindset has changed and that adapt ability has changed. There's a whole lot of people who still don't know the difference between a telegram and Instagram. Yeah, and they run some of the biggest companies in America for sure.

[00:17:41] Well, let's keep it moving here. So we were talking about your guy being slow. Was that the problem? No, okay fine. No, you're good. You're good. Okay, I just want to make sure we get through everything. So you were leaving time and now leaving is nice. I got you got fire got time it down right you have this idea.

[00:17:56] And what happens next? Is that synapse? Yeah, that is [00:18:00] synapse. What is that synapse was this concept that instead of again sending out renewal notices and bills you get a credit card up front and you just automatically build the magazine on the credit card on a you know, annualized basis. So what happens the synapse does well, then apps becomes as though there's no yeah important middle piece in there, which was meeting Jay Walker, but I'll come back to that.

[00:18:27] It does grow it grows into. Enormous company larges and it stays and was bringing a public in 2000. Most people say, you know what happened next but we were the ugly duckling that was turning into a swan because everybody else who was going public before March of 2000 was an internet company and the bankers kept on saying Michael.

[00:18:52] You're an internet company right like episode 3 of Star Wars, right? You don't want these drones. We weren't an internet company now. [00:19:00] A big internet piece. We were one of the very first things Amazon sold besides books was our magazines or through us, but we work with AOL, but you know for the most part, you know, we're paper and ink.

[00:19:14] Yeah, and but after. March of 2000 thank God you're not an earring company. So we were going to go public because growing really quickly for castable revenues very very profitable. And then when you know timing gave me a call and said would you like to bury the hatchet and I said a very good idea where but no that's not true.

[00:19:36] We were their biggest source of subscriptions and readers and they were our biggest clients. So it made a good deal of sense and they said we'd like to buy you. And I said not your stinky sock because they were just merging with AOL and they said no no all cash deal and I said terrific turned out to be an 800 million-dollar deal which was pretty good.

[00:19:58] But today [00:20:00] the rub was I had a five-year earn-out so they make me work for it and as they usually do as I usually do and after five years, I started Loeb Enterprises, which is I think a different take on startups, but. Go backwards a little bit to say that very early in the curve. I met this guy Jay Walker.

[00:20:20] Okay, who is Jay Walker Shay is associated with rightfully for the founder of priceline.com. And we work together intensively for about five year period of time and in the very beginning we worked intensively just on synapse and Jay is kind of one of these Relentless intellects came up with many many ideas and one of them.

[00:20:46] Turned out to be priceline.com which was incubated inside of synapse for about the first two years of its life. So we took the money that we would normally take home and put it into Priceline and it turned [00:21:00] out about to be about 12 and a half million dollars each which was where it got its start and even in the second shot of capital for Priceline that was done when this was back in around 95.

[00:21:14] There was no. Internet we didn't call it that we called the www something or other information superhighway kind of like that. And in those days there really wasn't, you know, a capital well that you can draw upon because nobody knew what the heck this was. So we wound up selling a piece of synapse to finance Priceline.

[00:21:39] That was largely Jays. And that was what bridge does into the IPO which was brought to you by Golden my friends at Goldman Sachs and 1999. So and the rest is history. It's now a hundred billion dollar plus, you know company. Yeah, that's amazing. [00:22:00] So two hits under the belt at this point you leave synapse and after they are now, And then you start little bit messy.

[00:22:08] Yes, cool. What happens next? Well what happens next? My partner in the business is a guy that I've worked with for over 30 years Rich Vogel followed me from time Inc in the synapse and Priceline and then Loeb Enterprises. He is the yin to my yang. I'm the bright shiny object guy, and he's the guys saying not so fast.

[00:22:28] It may be illegal. I say really how could it be illegal damaging is a lot but so very good. He keeps me anchored a very good relation with each other. Well, yeah we do and what we wanted to do was something a little bit different we don't want to use the word broken. I just want to talk about point of views, but if you look at how startups happening right now, everything is very compartmentalised you got the idea and that's in one bucket you've.

[00:22:58] Management team and that's another one. Then [00:23:00] you got a capital and another one and there's stages, right? So a couple of you know guys are girls in a garage will come up with something research it get a little traction and maybe if they're lucky they get some Angel money and then if they're lucky they get into an incubator incubator you're in and out in 90 days and then if you're lucky there's an a round and then all along the way you got to get more talent know-how and each of these stages and pieces are points of failure.

[00:23:26] Right and it all adds up to a fail Ray of what these these admit to being 80% If not 90% Yeah, if you get him drunk, they'll tell you 90% Yeah, so think about that 90% fail, right 90% fail and what if we attack the reasons for the failure, right and we put those reasons into three large buckets bucket.

[00:23:51] Number one is bad. That was any Capital bad and the answer is well sometimes, you know weird crafts. Kpi's, you [00:24:00] know, a co-pilot that is always given you a chafed but. What I'm really referring to is that a business cycle on average is about eight years in length and that gets followed by a recession which is two or three years in length and during recession.

[00:24:16] You can get zero money none zero so your company and you're growing and you got Capital needs and what happens if you're five years on Boom a recession you can get any money at all zero. And that is the worst reason to like crap out is that you're successful and you're doing everything you should be doing and you run out of rocket fuel right?

[00:24:39] No more oxygen your debt. So that's bad Capital. Then there's bad ideas. Right and we've kind of assigned 30% to each one of these three buckets adding up to 90 bad ideas and you would say well. Theses they've got good judgment and indeed they do they're really smart people. Although I will do that you spray and pray a lot [00:25:00] to they do and there's nothing replacing being an operator.

[00:25:05] There's something about looking at it from 35,000 feet. But also from three feet like or three inches off the ground and this is a point of contention and VC world is there's the analysts who say you don't need to be an operator. They opt. Oh my God. Yeah, so. I'm of the operator Camp because I've seen you can lean over someone's desk me like hey, I can help this.

[00:25:25] Look. I know what it is. It's the blink response. Right? And if you done it long enough you look at it you say this is not going to work right or this is going to work and they'll say how do you know and it's like, I don't know how I know. I just know it's gonna work right? It's an eye-opening.

[00:25:38] Holy shit movie where you're like, this is gonna be amazing. I thought you're not a lot of swear. You told me that we could for the goose is not good for the gander. What's going on here Kevin? We'll see lateral. I think Market is explicit Ernest figured out huh? Okay, fine. Alright, so 2nd is you're getting me excited.

[00:25:56] I am that's you being excited what [00:26:00] we're getting. I'm getting bit exactly where you are. Don't get any closer. Alright, so idea stage second bucket, right bad idea. All right now, The interesting thing about funds right is that funds PCS Venture and is an asset class, right and a money manager will tell you that asset allocation is again the most important thing 80% of returns from asset allocation.

[00:26:24] So the interesting thing about Venture it is on one side of the asset allocation Spectrum, right? It is in the highly risky. Highly inflexible highly illiquid and it's either High returning or no returning right, but when you commit Capital to a fund when you commit Capital to fund, you don't commit a million dollars right away.

[00:26:53] What you do is you say to them. I will send you a check when you find a deal which means that you got a part the [00:27:00] money into something highly liquid and highly sure and by definition. We're turning it is the opposite side of right? Yeah, just extra weight on the ass waiting for a capital costs.

[00:27:11] Right? So it's the opposite side of the asset class Spectrum. So what you find is that Venture guys are in such a rush to find a deal that they wind up. Putting money into things that they know that dog is probably not going to hunt and the way they think about things is you know, what I got a couple of winners in the fund.

[00:27:36] Anyway that's going to carry the day so I got a couple of losers fine, but I got my clients right who I told him. I had all the deal flow in the world and they're calling me up every day saying when are you gonna put that money to work and when he going to find those deals and I finally had to tell him I found one send your money.

[00:27:54] Right. So there's a real urgency to doing that and so institutionally the way it's structured [00:28:00] is you often find that VC. We'll put money into that deals, right so bad Capital bad deals. And the last is that execution which is really kind of no execution and the fact of the matter is if you're a young startup you've got to find.

[00:28:17] Incredibly skilled people and Incredibly different fields and that's really hard to do. You got to find tech people and marketing people and back office people and legal people and patenting people and design people in UI ux people and all these people and the problem is you got a failure rate.

[00:28:38] That's 8 or 9 out of 10. Right and how do you persuade somebody when it's that rate of failure to join your company and how do you find all these people super high quality people fast? And the problem is it's a real Challenge and you probably can't do it what we have here at Loeb myc is the complement the [00:29:00] 20 companies that were building is a shared services layer, which I think of as all the tools that a start-up needs to start up.

[00:29:09] Right. So if you need a thought I got a saw you need a hammer. I got a hammer and what are those sound like that sounds like Tech back Office Accounting in-house Agency for collateral UI ux and it sounds like every form of Market at the Swiss army knife of everything right underneath everything of founder needs and all the marketing channels from new schools.

[00:29:31] So that's all the digital sem SEO programmatic social yada yada to things like old school things like. Direct Mail, which is you pointed out as being rediscovered to Field Force. We got one of those to telemarketing the TV radio you name it and that is because we have found that a multi-channel attack is the most successful Different Strokes for different folks some people.

[00:29:58] Want to buy on TV and some people [00:30:00] only on the internet and some people like to wreck mail and sometimes you lead generate with one channel and close on the phone. So we've got that Swiss army knife to all those services are free to those companies. And the reason why they're free is one. We have a very large stake in them about half.

[00:30:19] The companies are genuinely hours front to back. And the other hand on the others range from there's a spectrum just the threat of an idea that comes in and we said this is pretty cool to a company that's very very early in the curve a million in sales couple million in sales and we bring them in and we don't think of it as incubation.

[00:30:39] We think of it as curation and we will instead of 90 days will be at something for nine years. I will just grow and grow and grow it so that I really like I do love the model and it's really just saying that I think it's innovating in an industry that traditionally does not innovate. I talked to most venture capitalist and I asked them what their Tech stack is and [00:31:00] it's an Excel spreadsheet with the Gmail client like the there is no thought beyond what you said earlier.

[00:31:06] I just need to fill these deals at the bank account, right? They don't build a business around their funds and I think that's a missed out huge missed opportunity and the people that do that in the next few years. Are going to win in Venture Capital Kevin. Here's another dirty little secret about the industry.

[00:31:20] So shoot a venture firm will raise a fund every two or three years right front the back the truth doesn't come out right on the fund for 7 to 10 years, right? Because you put all those money to work and it takes a long time right those that money has to got to marinate that money is going to be in those companies and they're going to get other funding and Bubba and.

[00:31:44] The disposition of those companies of those Investments are not going to be known for as long as the decade if you look at front the back that's how long those funds last. Okay, so they're raising money every two to three years and the truth doesn't come out for 10 years, right? [00:32:00] So then it becomes how do you value the performance?

[00:32:04] You got this thing called Mark to Market. How do I determine mark-to-market? Well, Mark the market is based on value the last race. Right value the last Rays or a comp. Well, you know you can drive a truck through both those things. Right so somebody was really dumb and had the exaggerated value in your company and it was just a tiny little round.

[00:32:27] You see this all the time that these companies put in, you know, I'll put in a million in yours. If you put in a million of mine at these exaggerated valuations because I want to say on a mark to Market basis that we're up 53% Yeah, they want to sell the mark-up back to their limited partners Bingo.

[00:32:42] Yeah, and because their Bonds in the next race, right, so. It's kind of and they don't really own the outcome per se because you know, they got the two and 20 and they can live very nicely just on the two so, [00:33:00] you know for us it's very real we put the work, you know, every year somewhere in the neighborhood of 40 million dollars.

[00:33:06] It's our money and you know it becomes. Pretty serious pretty quickly and we have a community the people who work here. It's very interesting. It's hard to be an entrepreneur in your 30s, right if you didn't have a big win in your 20s. And the reason for that is that the fail rate if it's really 80 or 90 percent and you got kids and you got a mortgage and you got a house and if you don't have a lot of bank right maybe at a victory, maybe you made five million bucks.

[00:33:41] That sounds like forever. But if you're putting a lot of money into your next thing and you got to make the car payment that the same time if he's happy I'm gonna do that. Right, but the people here can write so this is there on the high wire, but they got a net right [00:34:00] and I call my our people Pirates which is we pay for room and board but you make money in the plundering.

[00:34:07] Right and I was wondering is when there's an event now. I talked about shared service the shared services people have pieces of equity in like all the companies and of course the CEOs of the companies have equity in their own and sometimes in adjacent companies as well. The community here likes everybody else to win because they know it's the victory win for everybody.

[00:34:32] It's a win-win for everybody and I think. It's different than an incubator because the incubator sort You by type your fintech restaurant Tech. You know, what the heck tack? Yeah, and you are at least a little bit competitive with everybody else and you're competitive in a lot of different ways including the competition for talent the competition for Capital when you exit so, but here there is no competition.

[00:34:58] Everybody wants [00:35:00] to be part of this community. Everybody wants to make it work and they know. That if the more things that work the bigger we can get the more things that we can do. The other things are that we will take our entrepreneurs our CEOs and we'll put them on Project after project. So a project will have an outcome.

[00:35:19] It's either a good outcome or a not so good outcome, but there will be a disposition on how come and as long as it was a quality at-bat, right? We'll find him up for the next thing and the interesting thing is in the world of VC. When you hand a 26 year old 5 million bucks, you've never seen one penny come back right that 26 year old can say wait a minute.

[00:35:43] This dog is not hunting but to hand the money back saying the dogs not hunting. Okay, you preserve your Capital right use them in something else because I'm just going to burn it up. All right. This is like not working that'll never happen because then what you're doing is you're admitting [00:36:00] failure, right?

[00:36:00] I mean you would never do that you are going to spend that money no matter. What but someone you already have a relationship with who's had a hand bads. We never assigned Capital that way. We just pay bills. So every month is another look at the business and another you give people Freedom really?

[00:36:17] Yeah affects your freedom for people which is that's them and by the way, we treat them like adults. Yeah, we kind of say look we're in it together. Right? So the shared services that I described a do not bill out to the companies. There's no billing out everybody works yet. Why don't you build stuff at well one.

[00:36:35] We own a very big stake in all the stuff either all or a very big snake, but it's not a good use of time. I don't want to have some CEO running down to some guy in the art Department saying, You know, Joe what it took you six hours to make my logo. How could it take to fix that? Will you know it sometime a lot of companies pay $100,000 together?

[00:36:54] Yeah, right. I mean it took you six not a productive discussion. It was [00:37:00] like that's how much you either trust me that I'm thinking about it the right way and working as hard as I can or you die. And but for me to put something on a timesheet and for you to pay for that and for us to have a debate about this stuff is just not productive.

[00:37:16] So we're not going to do it. So it's meant to be big and collaborative and one big happy family. Does it always work? Of course, not our but I think we minimize the water cooler. You know talk and I think that for the most part, you know people really try to do the best for one another and they're rooting for everybody success.

[00:37:40] Well, I love the model. I've been I've been hanging out a little bit with Brian genese Co and grow and from what I've seen everybody here is incredibly nice. Excellent. It's been it's been really good to experience as well. Not just hear about so on that note. We're going to take a quick break.

[00:37:57] We're here with Michael. Oh. Talking about Loeb in my [00:38:00] seat and be right back with more. This is Ambition Today. Thanks for listening to this episode of Ambition Today. Remember to join the A-list back channel to get the single greatest piece of advice. Our CEO guests have ever received price a super founder finally starting only $3.00 visit sis card dot Co a list to join the show's back Channel today.

[00:38:22] An official says happy to partner with audible because inaudible trial.com Ambition Today to download keep any audio book for free. I'm currently reading 21 lessons for the 21st century by who your vow Harari. It's great. Definitely check it out. If you want to grab a copy audible trial.com Ambition Today to download and listen for free.

[00:38:41] Enjoying the show. Don't forget to leave us a review in the store wherever you listen, and we are back to this amazing episode of ambition today visit ambition today online at swisco.com and follow the show on social media at ambition today. Welcome back. We are here with Michael open. We were talking about Loeb [00:39:00] NYC before the break, so I want to ask you a few things about about Loeb.

[00:39:06] So you're based in New York City. You're playing in venture capital. Is notoriously Silicon Valley Endeavor. I'm going to lead the witness here because I also operate and work in New York City, but I want to hear your theories on New York what you think of the city and what are the pros and cons of being in startups and Venture Capital here in New York?

[00:39:27] So, you know, I find that one of the great things about New York is how compressed it is and within a. You know three-minute walk of this building is a trillion dollars in capital and a whole lot of brains and you know, the other thing is it's now such a great magnet for young people young and talented people.

[00:39:53] It used to be, you know in days of yore. What you would do is [00:40:00] you graduate college spend two or three years and New York get. Get married and then you move to the suburbs you do time. You did your done. Yeah, but it was dirty and it was dangerous and the city was tamed by a series of you know, very good administrators and I'm referring to Giuliani before he went crazy and Bloomberg who seriously not crazy.

[00:40:24] I'd love to have the guy president and replaced by the blah blah Blasio who had not so much a fan of but in any event, but. The city is much more civil. I've actually raised a bunch of kids here and it's a great place to raise kids and you know, Wonderful restaurants run ROFL community and it's becoming more and more vibrant and interesting as illustrated by you know, Amazon's moving in Google spent 2.4 billion dollars, you know buying some real estate here.

[00:40:55] You've got either by 1 L 2. Yeah my more you got Cornell [00:41:00] Tech moving in so it's fast becoming. A tech Hub they say that Queen's new home of Amazon to a two or hq2 is most diverse places on the planet that like a hundred languages are spoken there and wow, but and if you seen the development going on in that, you know Borough, it's really kind of amazing.

[00:41:22] So I think the urban experience and the city, you know, the super concentration of talent and people and culture is very attractive to young people in. And very interesting young people so we find we have some wonderful Talent here. We're not we're committed to New York, but we're not New York exclusive.

[00:41:44] I've got a number of companies outside of New York. Those decisions are generally related to where does the talent want to reside but there's you know some great advantage in your the disadvantage is the prices here are not well. True [00:42:00] for people or not low, but. Having said that you know, I find it very interesting and I find that it's a great place to build companies.

[00:42:12] Yeah, it's funny. I was actually at a I was at an event earlier today. It was International Event and another country brought their startups in to do a demo day in New York. And I said I said, oh like, you know where so, you know where some of the companies and he goes he goes. Well, they're the ones, you know talking to people all the New Yorkers are looking at the laptops working non-stop.

[00:42:34] Yeah, yeah, so there's there's a there's a lot of hustle in there. There's obviously so I'm well, that's great. I want to Pivot here to mediate a little bit. You've spent your whole life watching the BDS space and it seems that you know, the problem in the future is going to be sorting through the right information in an abundance of it versus in the past when it was just to get the information get the magazines delivered.

[00:42:55] So how do you see the media space evolving BuzzFeed has layoffs this [00:43:00] week people are causing it's the end of times but I don't think it is. Obviously, I mean so how do you see the space evolving? Yeah, it's really fascinating to see what is going on and I'll give you a kind of a story personal story, which is my dad was at my house in Southampton this.

[00:43:19] Might have been seven eight years ago and art Buchwald had passed away and I got that in my newsfeed and I went to my dad and I said dad, you know your friend art Buchwald passed away and he right away. He said I want to file a story right? Because that's what he did. That's where the journals did he tell stories.

[00:43:38] And so I said well before you do that, Let me do a little research and I'll print some out for you which is how we continue to read things. Right it wouldn't be on a screen and he had to get it printed out. So I printed out about. You know 15 or 20 articles. This is minutes after buckwald died.

[00:43:57] And again, my dad was intent on [00:44:00] filing a story and his answer was I've known him for 50 years. I know things about them that nobody else knows colorful things wonderful things and then when I hand them the pile of Articles he spent about 20 minutes and then he threw up his hands and said there's nothing more to write about.

[00:44:16] So it's an illustration of what used to be and what used to be is it was not news unless it was in the pages of Time magazine or the Wall Street Journal or the LA Times the New York Times and they had essentially a monopoly on the news. It was not qualified for real news. And now with the democratization of all this anything's news.

[00:44:45] And the problem is not just the fake news for the problem is all the news had to be has to be so shrilled right? So we're dumb belt and this has been articulated in politics and everything else. I mean where [00:45:00] has statesmanship gone and by the way, I when I was appalled like most Americans when we saw the presidential quote-unquote debates.

[00:45:10] Yeah brutal brutal and you know people prancing around saying I'm gonna put you in jail. I mean what the heck is that all days? So anyway, After the first one which pass for today I went and I took a look at a Ron Reagan Mondale debate from you know, you know three and a half decades earlier. And what was amazing is.

[00:45:36] You know, we had two men they stood at the Diaz. They didn't move from the Diaz No One taught over one another no one interrupted everybody when they had a minute they stuck to a minute right when they were interrupted by the moderator forfend. They went over they stopped right away and every response started with.

[00:45:58] In contrast to my [00:46:00] esteemed opponent, I believe X y&z. It was so civil right and you know, whatever happened to that and now I think I think it's all connected. I think that there's so much news and so much noise that it's only the screams and the Yelps they get noticed at all, correct? And so we got to be so crazy on the left and so crazy on the right and it's gotten.

[00:46:23] So impassioned and ridiculous. I mean the latest is Elizabeth Warren you probably read about this now 50 million dollars a lot of money, but she wants to tax write your net worth. She wants two percent a year for every dollar above a 50 million dollar net worth. Yeah. So when pointed out that if in New York City, she won't increase that like 8% it comes to.

[00:46:50] Something like that, right, but the imagine that I mean and by the way, that's all your assets that your house that your business how many values your business? Somebody says? Oh my God, [00:47:00] you're paying 50 million. I admit as a lot but the notion that every year for every dollar above that you open your wallet way wide every single year and you give to the government I mean, So I'm the media note.

[00:47:15] I want to you know, we were done you no word on the historical street is we had a similar problem in newspapers came out with fake news. And then what happened over the next 50 years is Brands established credibility and legitimacy and had to be in time and unfortunately to be news and so I'm hoping that we see the pendulum starts to swing back to trusted Brands and that's sort of what cures this but I don't know.

[00:47:41] That would be a great help. Yeah. There we great hope I mean what is different is there's so much of it and then there is the influencer phenomenon, right? And you know, we're 20 million people watch somebody else put on makeup, which is really kind of an amazing thing to me. But and [00:48:00] you if you spend time with younger people, I have three younger brothers.

[00:48:03] It's and they put on makeup now, they don't that make okay you'd be amazed at the ticked at you know about Tic Tac. I do Chinese company. Yeah, but have you. A time getting side of not brutal spend hours of it. All right. Well, let's keep moving. So I heard you say an interview with onam by number that you wish you had bet on yourself earlier in life.

[00:48:26] Yep. So I wanted to ask how old were you when you quit or fired from timing and what advice would you have to other people to bet on themselves earlier in there? Yeah, so. Thank you for bringing that up. I I was fired when I was 36 years old it took me about a year to get organized vis-à-vis synapse.

[00:48:46] So I'm not alone Bloomberg was fired when he was like 38, so I'm using his that is a good thing. This is important because there's articles in the New York Times the about Millennial burnout and all this net and there's people that are 21 years old and having panic [00:49:00] attacks because they haven't made something of themselves.

[00:49:01] I think to say that you didn't even start until even entrepreneur Journey until thirty six or seven that. The empowering to a lot of people so you don't know what and if you can start later, but it's interesting about entrepreneurs. I think that entrepreneurs know that they're entrepreneurs. I think that they know they're entrepreneurs because they are the lemonade stand guys.

[00:49:22] They are the guys who are always thinking I mean one way to tell is when you walk in a room, right and you see something and you say I can improve that and it's just automatic, right? Yeah I can. That and an entrepreneur will look at the state of play and say you know what? It's suboptimal. Here's how you make it better and it just happens automatically.

[00:49:46] And so you need that you need a lot of other things you need courage you need opportunity and but I do think I do personally wish I started earlier because I think I [00:50:00] had you know that Jean that you ne sais quoi. I don't know what that was, but I. That kid not everybody has that and by the way, if everybody did it'd be chaos.

[00:50:08] So thank God right that because what I say about entrepreneurs is that like a red light is optional right? It's like somebody else's idea right in there that that red light. I'm going through it. No other cars when they're right, so no, it'd be chaos and you know when you build a company. You can't have you know a thousand cats that you got a heard you got to have one decision one quarterback and then everybody else is assignments and they got to follow assignments.

[00:50:35] And if they don't, you know, it's going to be chaos, so you always need a mix but I do wish for me that I did start earlier and thank goodness. I was fired because I wasn't I probably need to go over started. I wouldn't go into the Force retirement right now because Meredith. I would have said Michael we don't have any room for you anymore.

[00:50:58] So anyway, but yeah, [00:51:00] you're right. That's an amazing scenario to think about what if you were never fired, right? It could have been it I could have never been fired. Thank God. I was just bad enough to get fired. Yeah, right. But anyhow, so that's excellent. So I want to flip to the other side less about early life more about later in life.

[00:51:16] I want to know how you think about Legacy. Well, there is a line and I attributed to Keats, but I know I'm wrong about that and I notice I can't remember who the PO was but on his Tombstone, right which is made out of granite. He says our names are written on water. Our names are written water.

[00:51:43] And of course the irony is here. It is in granite or names are written water and what that kind of says Kevin is that life is so ephemeral right? I mean, you know as you drag your finger through the water it goes away right away. What I want is my legacy is I want to have some things [00:52:00] that endure.

[00:52:00] I want to build some companies that people in say Michael O build that and the other thing I'd like is I had a lunch with one of my mentors a guy named Nicholas. Nick was the co-ceo of Time Warner at one time and at lunch. She said Michael even the greats. And only one good idea and I said Bill Gates and he said one good idea Ted Turner One good idea.

[00:52:28] Then Steve Jobs. He said got me there. Got me there. So you look at the Steve Jobs jobs' and the Elon Musk and you know again the book on him is not been completely written, but you got to give him credit for this Aude. Yes. I should yeah bill. I mean this automobile. I mean it's not but. To be able to do it multiple times in multiple field of play and have that make a difference and to be enduring and to enrich [00:53:00] people both inside the company and outside the company.

[00:53:03] So it's something that does good that you know is a great new product a great new convenience a great new whatever but also the stakeholders in the company that they have been been able to buy college education's and pay down mortgages and all that stuff. That is a wonderful Legacy. And to be able to be an agent of that change is something that I aspired to not once or twice but multiple times.

[00:53:27] Yeah. Well, I love that. Well, thank you. This has been it's been an amazing episode as always for those listening to show notes, which could everything we talked about will be up on the website. So this episode with a friend leave us a review. We truly appreciate it Michael. We're going to take it over to the back channel to hear the greatest piece of advice you've ever received, but thank you for coming on the podcast today.

[00:53:49] Two people go find out more about you or is there anything else you want people to check out? You can go on our website. So low Banner prizes or low bandwidth is a or have one of those things [00:54:00] and find out more about. All right. Awesome. Let's take this over to the Alias back channel for those members and everyone else stay curious.

[00:54:06] I will see you on the next episode of ambition today. Thanks for listening to ambition today. Be sure to visit sis car.com to get all the information from this episode and more great content until next time stay curious. Everyone.