· Peter Rahal
[00:00:00] S1: Reading, conversations, best books on it. And then where my time was spent was on where I had the best advantage, which was in consumer packaged good investing, or just privates, so early startups. In stage agnostic, seed to growth, didn't matter. And started doing that and quickly realized that the most important skill sets is charisma, or with whale hunting. It's like finding the deal that is quite obvious and then trying to get an allocation. That's really the game, and that's quite gay. Chasing men for allocations is something I didn't want to do. My previous experience was like, I'm going to sit back, I'm going to spend my time building a product, and my product's going to do the talking. Like, my product's going to do the work. Where in investing, you're taking capital and then you're trying to allocate it into the thing that's going to grow, behind the leader that you're going to bet behind. And that's just too hands-off for me. I'm used to fighting, being in knife fights, and it's just too passive. So, investing is very tempting because you can make a decision and not have to do anything, and it works. It grows. The big problem I had with it is the feedback loop's super long. In building and operating a business, you make a decision, whether it's a hire, whether it's a product decision, marketing, and you get the feedback right away. The feedback loop's immediate. Where in investing, it's like, you can develop a thesis, develop this, underwrite this founder as really great, and then you make the decision and, all right, five years go by, did it work or not?
· David Senra, Peter Rahal
[00:00:00] S0: So, you're living where when you sell RXBAR? [00:00:00] S1: Chicago. [00:00:00] S0: Okay. You have this huge acquisition, you have a bunch of cash. This is when you moved to Miami? [00:00:00] S1: Yes. [00:00:00] S0: You moved to Miami before? [00:00:00] S1: No, after. [00:00:00] S0: Okay, after. So now you have the money and now you're like, "Okay, I have a bunch of money." You had this ridiculous idea. This is your own words, because when we were hanging out a few weeks ago, you said, "I had the ridiculous idea of starting a family office." [00:00:00] S1: Yes. [00:00:00] S0: So you moved to Miami and you're like, "I'm going to start a family office." [00:00:00] S1: Yes. [00:00:00] S0: Okay, explain that part. [00:00:00] S1: So, I was in Chicago and I just needed a change. I needed a change environment. RX was my identity. I just got divorced. So I looked at the United States and I was like, "Where's the best place to go?" [00:00:00] S0: Wait, the divorce part. The divorce happened after the acquisition? [00:00:00] S1: Yeah. [00:00:00] S0: Was it anything related there? Were you under a lot of stress? [00:00:00] S1: No, just hubris. [00:00:00] S0: Say more about that. [00:00:00] S1: I had success bias where everything I'd done has been successful, and so there's blurred lines between your personal and professional, and I just moved too fast. Thought it was going to be easy. Yeah, because my goal was to have a family, so career success, accomplished, next thing is family. [00:00:00] S0: And you tried to speed run?
· David Senra, Peter Rahal
[00:00:00] S0: And you tried to speed run? [00:00:00] S1: Yeah, went way too fast. And thinking I'm really good. [00:00:00] S0: So this is, if I remember correctly, meet, marry, divorce, all in nine months? [00:00:00] S1: Yeah. [00:00:00] S0: Okay. [00:00:00] S1: I beat Kim Kardashian. [00:00:00] S0: Okay, so you move to Miami. "I'm going to invest." And then what I really want to get into is the fact that you are uniquely unsuited to invest. All the other founders I know that I ask about you is like, "This guy's just a relentless animal operator." The idea that he could think that he could sit and be the guy behind the guy. Why do you think you made that mistake? This is very interesting to me, because you did what you did to start, scale, sell, right? Which is very celebrated. But I talked to a bunch of founders that did that, and then they're fucking miserable. You're one of them. [00:00:00] S1: Yeah. [00:00:00] S0: So, I really want to hone in on what you were feeling and why you were so miserable in this situation.
· David Senra, Peter Rahal
[00:00:00] S0: So, I really want to hone in on what you were feeling and why you were so miserable in this situation. [00:00:00] S1: My plan was to get out of Chicago, change environments, and then I just looked at a map like, "All right, where's the best place to go to reset a bit and invest, build my family office, get that right?" And then my ultimate goal was to relocate where it's in the best interest to start my next thing. So I chose Miami as a place to reset and invest, and this is before COVID. Got there, started formalizing a family office. And then I think what I underestimated with investing in different entrepreneurs, particularly in food and beverage, is that I just assumed they all had the same tenacity as me. I just thought that's what you did. And I didn't really know anyone else who were founders at the time. And then I quickly realized, I'm probably actually a miserable investor because I'm handcuffed sitting in the back seat while someone else is driving and they don't know where they're going. And that's a torturous position to someone who knows where to go. [00:00:00] S0: So you didn't know how rare you were? [00:00:00] S1: Yes. [00:00:00] S0: Okay. [00:00:00] S1: As not humble as that is, but yeah. [00:00:00] S0: I was just sitting upstairs right before this, and I was with my friend Patrick, who does the best podcast. He's one of my closest friends, and we just happened to run into Adam Foroughi from AppLovin. [00:00:00] S1: Yeah.
· Peter Rahal, David Senra
[00:00:00] S1: Yeah. [00:00:00] S0: Which again, there's a lot of overlap between you and Adam. And we were talking about, essentially, Adam's running this cash printing machine with very few employees. He hates entrepreneurs that optimize for vanity metrics, where he said you should just focus on cash generation. It's very straightforward to him. It's obvious to him. And we were talking about the different hires he had and different other founders he knows. And then through a story that he was telling, Patrick had a great line. He goes, "Man, it's crazy. In any domain, it's only two or three guys that are actually good." [00:00:00] S1: Yeah. [00:00:00] S0: Just pick any category. There's a sea of shit and two or three, maybe four people that are actually excellent. [00:00:00] S1: Yeah. And I just assumed that anyone who was getting into entrepreneurship- They're willing to die before their company fails. They are willing to sacrifice comfort to win. They want to win, and I realize, like, no, that's actually not what a lot of people do or prioritize. [00:00:00] S0: When you run into other entrepreneurs like this that you made the mistake of investing in because they weren't like you, when you have conversations with them, what is their response to your extreme approach?
· David Senra, Peter Rahal
[00:00:00] S0: When you run into other entrepreneurs like this that you made the mistake of investing in because they weren't like you, when you have conversations with them, what is their response to your extreme approach? [00:00:00] S1: If I'm the one giving criticisms to the company, that's a problem. The CEO should be the most critical. I shouldn't be like, "Hey, man, the car's on fire." That relationship, if I'm the one spotting out problems or saying go faster, that's usually not a good sign. And I kept falling into that pattern, and I don't want to be in a position to be like, "It's your company at the end of the day." I'm not an advisor. I'm just here to try to facilitate stuff, but- [00:00:00] S0: What I'm really trying to get at is, what is going on inside of you? What is your inner monologue? You're like, "Oh, I fucked up?" What is actually happening? [00:00:00] S1: This is frustrating. I need to get back in the game. This sucks. [00:00:00] S0: How long did it take for you to figure this out? [00:00:00] S1: Probably a year. Yeah, 20 to 21. [00:00:00] S0: Okay, so then what's the next step after that? You're like, "Okay, this sucks. I don't want to be an investor. I need to be an operator. I want to get my own company. I'm way too young to be retired, by the way."