Nathan Latka dropped out of college at the age of 19 with $119 in his bank account. Five years later, he sold his first software company for $10.5 million dollars. He’s since launched The Top, a podcast with over 10 million downloads that helps entrepreneurs get what they want, founded a private equity company, and earns over $100,000 a month in passive income.
However, Nathan doesn’t consider himself to be especially brilliant. In his new book, How To Be a Capitalist Without Any Capital: The Four Rules You Must Break To Get Rich, he explains why you don’t need lots of money or an original idea to “get rich.” He challenges the old-school business rules most entrepreneurs take for gospel and teaches—with pictures as proof—how he used a totally different set of rules to build a fortune. If you’re an entrepreneur (or a wantrepreneur) today’s episode is a must-listen.
Today, Nathan joins the podcast to share the story of how he launched and sold his first business after walking away from college, how he generates significant monthly passive income, and what’s holding you back from achieving massive success.
Systems are more important than goals. Goals are one-time, systems are forever. Focus on the goose, not the golden egg.Tweet It
It’s time to forget your grandfather’s advice. Nathan will teach you how to be a modern opportunist—investor, entrepreneur, or side hustler—by breaking these four golden rules of the old guard:
- Be unique: Wrong. The way to get rich is not by launching a new idea but by aggressively copying others and then adding your own twist.
- Focus on one skill: Wrong. Don’t cultivate one great skill to get ahead. In today’s business world, success goes to the multitaskers.
- Focus on one goal: Wrong. Focus instead on creating a system to produce the outcome you want, not just once, but over and over again.
- Appeal to the masses: Wrong. The masses are broke ($4k average net worth in America?). Let others cut a trail through the jungle so you can peacefully walk in and capitalize on their hard work.
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Hal: All right. Goal achievers, you’re here. I’m here. We’re all here. This is Hal Elrod. Welcome to the Achieve Your Goals Podcast. Today is for those of us who are entrepreneurs or who are aspiring to be entrepreneurs. My audience, our community is made up of about 80%. From our surveys, we found about 80% of us identify ourselves as entrepreneurs or wantrepreneurs so either we are running a business, we are starting a business, or we aspire to have the freedom of running our own business and that sort of thing. So, with that, I bring on guests sometimes that are very entrepreneurial focused. I’m also very sensitive to about 20% to 30% of our audience are a mix of college students and stay-at-home moms and stay-at-home dads and retirees and grandmas and grandpas and just the whole gamut. And so, if you have no interest in entrepreneurship, today’s episode might not be for you. However, I would imagine that the brilliant gentleman I am going to introduce you to I kind of have no doubt that you can’t not get value from our conversation today.
So, who I am bringing on today, Nathan Latka, dropped out of college, he launched a software company, sold said company for $10.5 million I believe, launched the Top Entrepreneurs Podcast which hit 10 million downloads. He got a book deal and now he’s focused on helping founders and entrepreneurs get what they want. That’s the short version and if I go in a little more depth, it was 19 years old when Nathan dropped out of college to found a software company, get $119 in his bank account. So, let that sink in, 19 years old, $119 in his bank account. Five years later, from $0 or $119 to $10.5 million is what his company was valued at and I know Nathan doesn’t consider himself to be exceptionally brilliant. He just says that he realized something that few people know and here it is. You don’t need lots of money or an original idea to, as Nathan says, get really rich. And now he makes more than $100,000 in passive income every single month while also running his own private equity firm and hosting The Top Entrepreneurs Podcast which has more than again 10 million downloads and his new book that just came out is called How To Be A Capitalist Without Any Capital: The Four Rules You Must Break To Get Rich. And in today’s episode, we are going to dive into those four rules. I’m going to suck them out of Nathan. I’m going to make him share all of them with us and hopefully, you’ll learn so much that you go, “Man, I still I want to buy the book too to get even more.”
Hal: So, Nathan Latka, my friend, welcome.
Nathan: Hal, thank you for having me on. I have to tell you, you mentioned college students. I mean, this book is basically 36 like screenshots of weird ways I’d figured out how to make some money because I realize my college architecture degree was not going to getting me very far and so I love that you’ve got potentially your audience that are college students.
Hal: That’s awesome, man. Yeah. So, which means they’re still figuring out if they’re going to be entrepreneurs or architects or somewhere in between. So, Nathan who are you?
Nathan: Yeah. You hit the nail on the head. I mean, here’s the caveat. I don’t cringe, but I always pull back a little bit when people introduce me or do press for the book because you mentioned all the numbers you bring up which are great. $100,000 a month in passive income, online, sold his first software company for $10.5 million dollars, blah, blah, blah. I just want our score. We don’t put that in kind of the violent stuff for me to brag. I guess, what I would say is since I dropped out of school call it eight, nine years ago today where I’m 29 today, I’ve read so many business books and how you’re in the book world as well so I know you read a lot and there’s a lot of books that are written by really smart kind of professor-like academic folks where they study a lot. They don’t do themselves. Mine is extremely opposite. I am very unacademic. I haven’t really thought of good frameworks to put my stuff around and the publisher which is Random House in my case, I was a little frustrated by that but I told them this and I want to put screenshots and email templates and on page 6 using my tax returns some of the company you mentioned when I was 21 we hit $960,000 in sales that year. I bring up those numbers again because I want to understand this book is not one in theory, but those documents are actually in the thing and there are documents in the book that back up all those numbers and I hope that helps people go, “Hey, maybe I can learn from this guy.”
Hal: That’s awesome and I’m a very visual learner so I love the idea that you’ve got and your book is on order right now. I’ve not read it but I’m looking forward to seeing your tax returns. I’m looking forward to seeing it all, man. That’s great. So, when you were 19, similar story, at 19 I dropped out of college to pursue direct sales. Now, I wasn’t valued at $10.5 million five years later but I went on that similar journey of realizing that we could take control of our destiny and not respond or reliant on someone else to employ us but we kind of be in charge of what we created and the value that we added to the world. So, give me a little bit of background on when you were 19, what was your plan? I am guessing was the plan to start a software company or how did that come about?
Nathan: No. The plan was definitely all in architecture. I mean, I love Lincoln Logs and K’NEX. As a little guy when I was growing up, I go in my basement for hours and build like roller coasters with K’NEX and stuff. I want to be an architect. And then I remember I think it was 2009 or 2010 when I was sitting there at Virginia Tech in Southwest Virginia, they mixed the architectural classes so that freshman sit with seniors and there were seniors that overhear talking late at night, pulling all nighters, saying like they couldn’t get a job. And, Hal, this is ’09 albeit so nobody was building in ’09 so nobody, the engineers or architects, but they couldn’t get a job and I forget where it was ranked but I believe, I mean, tech was ranked number one many years when I was actually in the program so I was going wow if people are graduating from the number one architectural firm in the country and not getting jobs, why on earth would I put myself through five years of this, potentially have debt and potentially have no job at the end of it? It didn’t sound like a good path to success and so, I said, “I got to figure out something to sell.” It sounds like you do the same thing. Now, were you Cutco knives or one of those kinds of stuff?
Hal: Right. Cutco knives. Yeah.
Nathan: You were Cutco. I bet you sold a lot of knives.
Hal: I did. I sold a few. I did, yeah.
Nathan: So, my version of the Cutco knife were Facebook fan pages. In fact, on page 34 in the book, you see a screenshot. October 5, 2010, 11:23 PM. I got my first order of PayPal receipt that came in. I was selling Facebook fan page customization at $700 apiece.
Hal: Oh wow.
Nathan: Yeah. And that was the first sale. Now, the way I got that sale was a woman named Audra Foran who runs a mechanic shop and she had a fan page with the word executive in it. Basically, one that looked very professional and I called Audra on Facebook page after I searched on Facebook for the word “executive”. I just went down the list and I said, “Hey, Audra, you don’t know me, but you have executive in your fan page,” and my first question to get her to stay on the call was, “Are you truly an executive?” So, like some people that turns off. Some people will go, “Yeah. I’m an executive,” and eventually I basically belong 20, 30 sales call about them to say, “Well, yes, I need your executive Facebook fan page. I’m an executive.” And so, that was the first sale and then from there I presold about 100 of those at $700 apiece, so I had a nice cash fish in the bank and…
Hal: Tell me how much. 400 apiece?
Nathan: 700 apiece.
Hal: 700 apiece so that was the cost to hire you to customize their fan page?
Nathan: You got it. Yup. One-time fee. And now my thinking there, Hal, and a lot of people will say, “Nathan, this is like not ethical, but I’ll let you and your audience be the judge. There’s a lot of people in life that study, study, study, study, study stuff. They teach themselves stuff and then figure out if they can sell that to the market, of market value. What I did is I want to sell the idea, actually, collect the cash and then tell everyone, “Hey, guys, I need six months to deliver this. If I can’t deliver, I’ll refund you.” Well, in that six months that gives me a buffer to see if I can sell it and then also to learn it if I get enough sales where actually I want to build it for everyone instead of refund everybody. And so, because I got 70,000 on presales, I said, “Yes, it’s worth to me to take the time, to take with the online courses to learn what’s called Facebook markup language.” It’s what I needed to know to actually build these pages and sure enough, everyone was happy. I delivered 100 of Facebook fan pages. I kept all the money, but I could’ve if I didn’t get enough presale now, I could’ve returned everyone’s money and I would not have lost all the time studying FBML and I think that presale aspect is a really important thing on starting your own side hustle today.
Hal: No, I love that idea. My business partner and I kind of a similar thing where in general we just always announce things and we announce them before we know how to do it. Like, for example, my first live event that I ever ran in 2014 I think, 2013, we announced it. I sold tickets. Well, I never put on a live event but I announced the date and then basically once the date was announced it was, “Okay. I now have to figure out how to put on a live event by this date.” because of these people. And so, I sold 200 tickets to a live event and then it ended up bringing my business partner, Jon Berghoff, who had done these events around the world already and it turned out great. But no, I love that idea. I think that putting yourself on the hook I think there’s value in that for sure.
Nathan: Hal, what buffer did you give yourself? Like, when you create or when you said, “Hey, the event’s going to be six months from now or two months from now or a year from now?”
Hal: There was no buffer. There was no plan B. It was just I have to figure out how to put on an event. And the thing is for me, there’s a slide difference than that. You had to learn a new skill. I essentially learned new skills but the most part I was a keynote speaker so I thought, “Well, as long as I rent a hotel room and I show up there and I got enough content for two-and-a-half days like I can’t really fail.”
Nathan: So, you did put a day of the conference like on the checkout page and you free soul. You just left it to via…
Hal: No, no, no. I did. I’m sorry. We announced today. Yeah.
Nathan: So, that was I was asking is a lot of people especially when they went to launch conferences is like what buffer to give yourself? If you launch today and you’re testing in the announcement how many tickets are going to drive, do you say on the sale page, “Hey, it’s going to be two months from now or six months from now or a year from now?” How much buffer do you build yourself to “figure it out?”
Hal: Got it. I mean, it depends on the endeavor but for me it was like six months I think, having six months to figure out.
Nathan: That’s great. So, I experienced about that. That’s fantastic.
Hal: Great question. So, alright, you went down. So, the first business was selling Facebook pages, customizing fan pages. How long did you do that for?
Nathan: Well, a lot of them is along the way out. I’ll start off quickly answering your question and filling in the details where you want. We sold the company in 2016, but it wasn’t like an amazing story and I’ll tell you why. On page 243 in the book, you see what’s called an LOI. It’s the first step of going down the road to selling your company and this is an LOI to me and I’m reading about halfway down and it says part 1B, making the purchase price would be up to 6.5 million and it will be hit in the following manner. Now, this was sent to me on October 20, 2011. I’m 29 today so I was 21 and a $6.5 million acquisition offer and, Hal, I turned it down which was the biggest mistake I ever made. I underestimated the power of momentum. When you get an excess offer like that at that age, no matter what age you are, you have to kind of have your own barometer, you take that deal even if you think you’re building $100 million company because the momentum from that exit story, the life story you’re building is way more valuable than the actual dollar figure of the LOI, the idea to say I had an exit at 21 is way more powerful, but I walked away from it.
And then revenues slowly dropped over time to the point where on page 6 you see my tax return two years later, revenues have dropped to about $1 million a year. I ended up actually flash selling the company for about $1.6 million, which is not impressive because I raised $2.5 million. So, I essentially shut the company down, gave investors back about $0.78 on the dollar, but the way I built wealth while doing that, free raising capital as I was essentially controlling my own paycheck as the CEO and that’s actually truly how I built wealth in that company besides the learning. I mean, I learned a ton over that four or five years.
Hal: You’re kind of a Doogie Howser of business. You’re a little bit of a Doogie Howser.
Nathan: I have no idea, Hal, what that is.
Hal: Oh, is that before your time?
Nathan: I was ’89.
Hal: Dude, the show Doogie Howser was about a teenager who became a doctor like at age 13 or 14 or 12 so, yeah, he was this like little prodigy.
Nathan: That’s funny. Doogie Howser. I like that.
Hal: That’s funny. You know you’re old when you start referencing s**t and stuff and people are like… but no, my wife’s six years younger than me so I get that a little bit with her.
Nathan: That’s funny. So, it wasn’t a massive win, but I eventually sold and I learned a bunch. And then that’s when I jumped in and launched a podcast in 2015 and that’s a whole another story.
Hal: Now, wait, so you sold. All right. So, I want to make sure I’m tracking here. The Facebook fan page customization, that was the company that sold service and product that you offer the 6.1 million for or was this the software company that was next? I don’t know if I missed something.
Hal: Yeah. So, the $6.5 million and the transition was I was selling one-off pages $700 apiece. I quickly realized I was very lazy and then when I actually code every page manually myself like created the Entrepreneur Club at Virginia Tech specifically to find a technical co-founder. So, on the first meeting, I said, “Here’s my PayPal bank account. I have $70,000 on presales. The first engineer to raise their hand will get 40% of the company and we’re going to build a platform that allows to drag and drop their own pages together like Weebly or Squarespace today for websites. You build a platform for Facebook apps. And so, that’s how I found my technical co-founder. So, my point in saying is I went from a services business selling $700 apiece one-off that I make new sales every month.
Hal: And you were doing the work.
Nathan: Yeah. We’re recurring the revenue platform where people pay me between $30 and $300 a month to use the tool themselves and we have to really help the economics churn within 5% a month lifetime customers of anywhere 20 and 40 months and then again ARPU is ranged between $30 a month to $300 a month.
Hal: And what was the software called?
Nathan: It was called Le Jour, then it was called Heyo.com. In fact, it’s still up. The company we sold it to is making a lot of money from it.
Hal: Really? That’s fantastic.
Nathan: Yeah. I pride myself on that.
Hal: Say that again. You pride yourself on what?
Nathan: I just like the fact that if you ever sell your baby and the baby didn’t get killed.
Hal: Yeah. I mean, that’s my fear of some people will talk about like, “You should build the Miracle Morning so that you can walk away and be with your family and I’m like, “Ah, it’s your baby. It’s so hard like I don’t want.” It’s like my left arm, right? Like getting rid of my left arm but yeah that need being able to see that your child, it’s like you gave it up for adoption and it’s thriving. It’s in a better home now because you weren’t ready or whatever. So, you sold the company for 6.1 million in 2000. I’m sorry for 1 million. You got there for 6.1, sold it for one and that was in 2015?
Nathan: Yeah. I got the offer for 6.5 in 2011, revenues continue to decline to about $1 million in sales a couple of years after that and then ended up selling it for about 1.6 million total in 2015.
Hal: And that was a loss because you had borrowed 2 million to get it?
Nathan: Well, thankfully it wasn’t debt. It was actual equity but, yes, basically was not a good – it was better than going to zero. Most investors expecting it like nothing backed or they expect it to be $1 billion company. So, it was a nice surprise to get some money back but, yeah, effectively it was not a win in the venture community.
Hal: So, what was the journey to the $100,000 a month in passive income? Let’s go from where from your $1 million sale of your software company to $100,000 in passive income.
Nathan: Yeah. So, when I was building a software company, I mentioned I was able to generate wealth for myself before we raised capital because I was paying myself a paycheck. So, one of the things I did is I kept my expenses like very, very low. I think this is something that a lot of people don’t think about business. It’s actually easier to decrease I think your expenses than it is to try and figure out how to make new sales. And so, you should always start with decreasing your expenses before you figure out how to go make new sales in my opinion. Some people argue that are…
Hal: That might be my biggest takeaway from this, I spend way too freely.
Nathan: Well, yeah, but like if you’re confident with like the returns, you should do it. That’s how I operate. I like the game of figuring out how to decrease expenses that most people think are fixed. Though my expenses and here’s an example of that. On page 154 in the book, you will see how I was living in a $3,000 a month apartment in Blacksburg. It was literally the nicest apartment in Blacksburg. I love the theatre downtown of my college town and I rented a small corner of it to one of my friends who desperately need a spot for $3,000 a month. So, essentially living free right through college renting out a small corner. And, by the way, like I broke some rules. I didn’t actually own the place like I had no jurisdiction to actually rent out a corner but I just kind of did anyway of something have to be figured out. So, like my rule I’m kind of pushing the rules, I’m pushing limit that way. If you’re not lying and you’re not hurting anybody, you can do it. In case you guys are listening going, “What if I like this guy or he’s a little too crazy for me,” that’s fine. That is my guidebook. I’m not out to hurt anyone and I can’t lie to anybody.
Hal: Like it.
Nathan: I need the rules to break from. And so, anyways, building the passive income, I was reinvesting all the money I was saving during this period. So, you see on page 144 there’s a picture of the first six-bedroom, four-bathroom duplex that I bought when I was 21 for about $215,000. And the rental income and expense on that was actually positive from day one so it was making $12,000, $13,000 annually back then. Today that’s a little bit higher, and so I have a lot of income now coming from real estate. I bought about one or two properties per year since then, all college towns. Cash flows are good. No luxury properties but all cash flow positive. So, that was nice. And then I did some things like that that are true passive income. And then when I sold the company in 2015 or in that range, I then launched my podcast, The Top Entrepreneurs, in 2015 and, Hal, you’ve probably seen this with your show. I was shocked with just general consumer’s willingness and aggression towards podcast consumption. People wanted it.
The numbers that I saw instantly were very staggering and so I started doing more and more of them and I struggled to find my way but eventually I’ve been on a daily 15-minute show where I interview B2B so business to business software entrepreneurs and I hit them very, very aggressively so I ask questions like what was your company worth? The last time it was valued? What do you pay yourself? How much revenue does the company do? How many customers, yeah, what equity do you give your employees? And so because of that, of all podcasters I believe I’m probably the most, the podcaster that have received the most cease-and-desist letters because you do the interview and then the board hears the interview and the board sends you a cease-and-desist but the CEO loves you because he respects how hard you hit them anyone on the show. The weirdest mechanics, but that encapsulates my podcast in a nutshell.
Hal: Got it. Okay. That makes sense.
Nathan: So, I was going to say that’s going to start the passive income so I’m going to go deeper there if you want.
Hal: Let’s do this. Why don’t you weave it through but you mentioned breaking the rules earlier that you’ve got kind of to your moral compass in businesses, don’t hurt anyone, don’t lie to anyone, right? And that everywhere else you could kind of break the rules and I think that most founders, most entrepreneurs have broken a lot of rules, you know, within the context of a guiding moral compass so I love that you shared that. So, I’d love to do this. Your book is about breaking four golden rules of what you call the old guard. It’s not your grandfather’s advice. This is kind of outside the box. So, I’d love to dive into these four rules that you talk about in the book breaking and just teach those to our audience over the next 10 minutes.
Nathan: Yeah. I’m happy to do that. So, the first question I ask myself like as I reflect on all my stories of kind of building wealth like just to put a tap on the sort of disgusting. My first podcast sponsorship that came in I put on page 45 in the book and it was $108,000 sponsorship where they’re on for 12 months of the year, paid upfront. I made more than that one deal for my podcast and I did in five years from equity building Heyo. And so, that was the start to really making my podcast and achieve for passive income. And so, as I was having all these kinds of different successes and kind of business and life and building passive income, I said, “Why aren’t more people doing this?” And I started looking around. Once people, Hal, and you see this in politics a lot, I’m not going to get political here but it’s a good example, where people get power, they climb the ladder of success, they have a natural incentive to obfuscate or complicate that ladder, remove a few runs. They don’t want other people climbing the same ladder and compete with them and take their wealth and power. So, the best way to do that is that they have a system where you essentially brainwash the masses with rules that you’re trying to get them to believe that you hope will prevent them from competing with your wealth and success and your power.
And so, what I did is I crafted this book around four rules that that audience, the wealthy, the powerful have sold mainstream called mainstream America, mainstream world, that you have to realize are wrong and break quickly to build success. And so, the first thing and you’re getting I’ll go rule by rule here and hopefully good examples I’m going to go deep for the two, but the first thing is everyone says you can’t talk to your competitors. Don’t talk to your competitors. And what I say is you have to copy your competitors quickly, aggressively, effectively, and then add your own twist on the end to make it your own. And the reason I bring this up is, look, you see people like Facebook, literally ripping off in Instagram Snapshot’s UI like Stories is a Snapchat idea of Facebook ripped it off. You see people copying that are very wealthy and powerful all the time and they don’t even try and cover it up. It’s an exact replica.
And so, for us, starting a company, if you go and you’re walking down, a stay-at-home mom is walking down her street tomorrow morning and stop by at a local soap shop and you see a soap there that you really like but you think it needs one twist to make it the best, you should start your own soap company, build the exact same soap and then add that twist that you think would make it better. And you have now your soap company. There’s nothing wrong with that and how I think there are a lot of people do is they struggle with that idea because they seem to go, “Oh, I don’t want to copy my friend, Jack, who runs the soap shop so I’m not going to do my own idea ever.” So, copy your competitors. That’s rule number one.
Hal: I love that and then I will say and I didn’t really – I don’t know that I was thinking that when I was going into it but when I wrote The Miracle Morning, I didn’t invent waking up early but I just gave this authentic organic from my own experience and created a framework which also was my wife’s idea like thank God because my brain doesn’t work around frameworks either and then The Miracle Morning has become this global hit with millions of copies sold and millions of lives changed and again, it wasn’t taking some new idea that didn’t exist. It was taking an idea that did exist, that I felt compelled to really emphasize for people to realize that, hey, waking up early isn’t just like a thing that you might consider that could maybe sort of help you, but there’s a zillion other options. Now, how you start your day is arguably the single most important decision that you make. You want to upgrade it near your life to upgrade how you start your day so you can put yourself in peak physical, mental, emotional, and spiritual state to crush your day. So, I love what you said there and for people.
It’s like, yeah, don’t sit there looking at a blank page going, “What should I do?” Pay attention to everything around you and look at what’s working and then go, “Oh, how can I put a spin on something that adds value to my life so that I can share it in my own unique voice in a way that would be valuable some other place?” so I love that.
Nathan: Yes. Give yourself permission to do that. So, that’s rule number one. The second goal that’s kind of wealthy and powerful have sold us that most of us believe that you must break to build wealth is focusing on one thing. By the way, you and I share a mutual friend in Jay and Gary.
Hal: Jay Papasan. I was going to say, “Wait. Jay…”
Nathan: He and I had breakfast the other day. They’re in Austin and he’s obviously hopefully recovering nicely from back surgery but like we chat and I say, “Jay, like what do you mean?” and he’s like, “No, like you’re right. You’re right,” and we find common ground but the point in here is this. A lot of people as we were driving and about to go over a bridge together let’s say all your listeners and you and I were in a car going over a bridge and there’s a big sign on the bridge that said, “Hey, just so you know, if the winds ever hit 20 miles per hour, this bridge has a single point of failure, it might collapse.” Well, it feels a little breezy that day. We might second guess driving over that bridge, right? So, engineers when they build a bridge, they build by 8 from 9 points of failure into that thing. Well, meaning, like all eight or nine things have to go wrong at the same time for anything to actually fall, break, or fail.
So, with that in mind, why do most people build their life around a single focus, a single paycheck, a single job, a single one thing? This becomes your biggest liability. And so, by the way, we sold this early on starting in college where your force to like pick a major when you’re like a freshman before you even get to the school. It’s ridiculous. So, people should not focus on one thing. You should always be doing multiple things, launching an announcement that you don’t know how to execute yet to see if you drive sales and if the sales come in, figure out and put on that live event in six months. You want to be doing more than one thing to de-risk your life.
Hal: So, it’s kind of like it’s kind of throwing the S-H-I-T at the wall and seeing what sticks kind of thing?
Nathan: Yes. I mean, that’s a good example. That for me when I look at all of the different things, I’m doing whether it’s real estate for my podcast or I’m now doing a data play based on my podcast or investing in SaaS companies, yeah, you want to throw us up against the wall. What’s going to happen is you’re going to see two trends. Something just turned you on. You’re going to do them anyway whether they stick or not. You’re just going to do them because you love them. Second, things are going to stick because you have a unique experience already in that space. Hal, you have a unique program around having to have a great morning. So, any kind of morning-ish products whether it’s a book or physical products, you’re going to naturally kind of align with because you see yourself as a distribution channel for our product already so you have a natural advantage. The trick is that you want to not focus on one thing meaning you find a beach and build things around that but don’t do just one thing on a single point of failure.
Hal: Yeah. I’m with you and I would attribute that or like my connection to that and I have spoken on this more and more and more the last few years which is the importance of setting yourself up with multiple streams of income and it has a bad rap like just the idea of, “Oh, multiple streams of income, blah, blah, blah,” like there’s a negative rap for that but I learned especially when I had cancer, we had money coming in from not just the book but the book in 34 different languages. That’s 34 streams of income and then I have 13 books so then there’s those books and there’s those books in Kindle and audio and then my speaking. And so, the point is having where like especially in the economy when it crashes, which the next crashes is coming it’s inevitable we go through cycles, but the idea that if you’re reliant on a single source of income, then you are, yeah, it’s like that bridge. One thing falls, you’re done. You’re trouble. What do you do? So, yeah, I love that. I love not just focusing on one but having… It can be one at a time but keep building, keep throwing more kindle on the fire, keep creating more opportunities because you never know.
I didn’t know Miracle Morning was going to be the thing and that wasn’t the only thing. It’s not like it was the only thing I hinged everything on. I had launched a program called Your Best Life Coaching. Me and my buddy out launched a program called Global Empowerment Coaching, and so there’s like all these different things and then, “Oh, miracle morning is the one that’s stuck. I didn’t know. I couldn’t predict.” You can’t predict it but I love what you’re saying because the more things you create, the more opportunities that you put yourself in front of, the more opportunity you have to find that one thing that is going to win for you.
Nathan: Yeah. And you say you’re still going to be lucky. I find my velocity. I can kind of do an air quotes like six things projects kind of at once whether it’s like a live event, planning or launching a new podcast series or writing a book or whatever, buying real estate, but my velocity is typically like launch one new thing per month and like delete one thing per month. I always kind of end up with five-ish at one time. That’s just me though. Everyone else can be different.
Hal: That’s a brilliant strategy, delete the ones that’s worked, the lowest hanging or the one that’s working the least and then add a new one. I love that. I love that.
Nathan: You have to delete them. Most people are better adding and deleting. That’s part of the issue here is you have to delete.
Hal: You’re overcommitted if you keep adding, right?
Nathan: Yes. You have to delete. So, don’t focus on one thing. Do multiple things and that’s number two. Number three and four quickly, the first is a lot of people like, listen, corporate America spends trillions of dollars on ad budgets annually. Why do they do that? Well, Rolex puts a watch on Federer at Wimbledon because he wants all the viewers or they want all the viewers to crave that watch. They want to save up paycheck after paycheck to save $30,000 to get a new Rolex. That’s the goal. Or you guys listening might have goals to go on like a big vacation or like finally buy that house or that car or that dress or that suit. What I argue and this is hard but systems are more important than goals. Goals are one time. Systems are forever. And so, what I like to do is instead of focusing on again the golden egg, the Rolex watch, I focus on the goose and then getting enough energy every morning. Is it getting enough sleep every night? Am I getting it the right kinds of foods because if you keep the goose healthy, you increase its kind of egg making velocity and before you know it, that system you invest in you’ve kind of layer stock over time would be pumping out Rolex watches at the rate of not like one a year as you’re saying but like one a day or one a week or one a month even. So, you want to focus on the goose, not the golden egg.
Hal: And you are the goose, right? We are the goose if I’m understanding correctly.
Nathan: Yeah. But you actually don’t want to be the goose unless you are your brand.
Hal: You want to take a business, that’s the goose?
Nathan: Yes, exactly. Literally, the business systems you’re stacking and you see a bit of this on page 29 of the book where I break down my podcast publishing process including my cost and how I took it from like $300 an episode to produce and $29 an episode to produce and like those systems. That is the golden goose you have to nurture, always think like how do I make the system stronger, that is the goose.
Hal: Awesome. All right. We got time for the last one and then I’m going to go take my kids to see the movie Aladdin so hit us hard, Nathan.
Nathan: All right. Last one here is don’t go after the hot trend. So, right now there’s a lot of people going after, say cannabis or cannabis companies or maybe in your local neighborhood, all the moms or dads or high school grads are all talking about one thing. You don’t want to build that thing. What you want to do is sell the pickaxe to the goldminer and the story here is making 53. Mr. Levi’s resist the urge to mine for gold in California because he looked around and saw people bleeding and sweating and dying in the mines and instead, realized everyone was wearing jeans so I’m going to sell jeans to gold miners. And today, Levi’s is still around. Gold mining in California to that extent is not. So, … around the gold miner and the wealth is not. So, you want to resist selling of the hot trend. Focus on what the hot trend relies on and sell that thing.
Hal: Give me an example. You gave the Levis example but if today if somebody’s listening like what’s relevant, I’m not fully grasping?
Nathan: Yeah. Here’s a great example. Flowhub. Flowhub was an accounting company for cannabis companies. Why? Because cannabis companies right now is a hot trend, but they can’t bank traditional banks because the laws and regulations haven’t caught up so Flowhub got itself together to be essentially an accounting software for cannabis. They don’t have the risk of actually being a cannabis company, but they still support cannabis companies to be their accounting firm. If cannabis ever crashes they can then go into just an accounting firm for anybody, like a software accounting for anybody like FreshBooks or QuickBooks. So, that’s the idea is you want to build one level under the hot trend. It de-risks the business that way.
Hal: I like that. I have a buddy who owns a merchant processing company and they just got approved to serve cannabis companies and he said their business is just exploding. To your point, if cannabis becomes illegal or if the trend goes away or whatever, he’s got a merchant account, merchant processing company or any business out there.
Nathan: The PCI compliance already and all that. There’s another example on the bitcoin stuff like instead of going like crazy on bitcoin like build Coinbase which is a way to track bitcoin transaction and then Coinbase is now worth over a billion dollars. There’s all kinds of examples like this. Those are the rules. Copy your competitors, don’t focus on one thing, build again systems not goals, and then sell pickaxes to gold miners.
Hal: I love it. Counterintuitive thinking that makes all the common sense in the world. Nathan, you’re like I said, you’re my little Doogie Howser buddy.
Nathan: I love it. Yeah. These are common sense.
Hal: You have to go to YouTube and type in Doogie Howser.
Nathan: I have to look it up. I’m going to do that right now.
Hal: Watch a trailer or something.
Nathan: You nailed it, man. These are common sense but not common practice so I’m … on the book and I appreciate you making time to have me on.
Hal: It has been a pleasure. You and I need to get more time here in Austin, grab dinner or a drink or a lunch or something. We should do something together.
Nathan: Everything except I will not play basketball with you. I hear you’re very aggressive.
Hal: Yeah. Right, dude. I’m the nail. My buddy, Jon Vroman, is the hammer. And if you’re listening, wondering what that reference is, by the way, go to my social media. I got everybody Jon playing basketball today and Jon Vroman we headbutted and my eye just I just started it cut open above my eyebrow leaking blood. Six stitches later like my eyes all swollen shut.
Nathan: It’s like a big cut by the way. It’s not like a baby cut. It’s a big cut …
Hal: And my 40th birthday is like in three days and it’s funny. As soon as this is how I responded adversity. My eyes bleeding down my face. My face, my kids everyone’s freaking out and going, “You guys this is great.” I’m a fan of UFC and I never really knew what it was like to have your face cut open and bleeding but I watch it when I see fighters. I like – I feel more connected to one of my favorite sports.
Nathan: The always empathetic, Hal Elrod, everybody.
Hal: That’s right. You guys, the book How to Be a Capitalist Without Any Capital: The Four Rules You Must Break to Get Rich by my friend Nathan Latka. Nathan, you’re a good man. Goal achievers, I love you. I appreciate you very much. I am going to go and I’m going to take my wife and our two kids to go see the new Aladdin movie. I heard it’s great. So, let me know what you think in the comments below and I love you and I will talk to you all next week. Take care, everybody.