[00:03:01] Robert Leonard: What has been going on with your real estate portfolio since we last talked, and where are you at right now? 

[00:03:06] Connor Gross: I don’t know where we were when we last talked about it, so I’ll just give you like the full breakdown here. Basically, we buy self-storage facilities. We buy really mismanaged mom-and-pop self-storage facilities.

[00:03:16] Connor Gross: Places where they’re either run down, the owner hasn’t invested a lot of time into like fixing up the property. They do no marketing, things like that, and we basically go in and don’t do anything that special. We make it look prettier. We set up a Google listing, we set up a call center. We stop taking cash, we start taking credit cards, and we basically just run it the way that a business.

[00:03:37] Connor Gross: I don’t know where we’re at when we last spoke, but right now I, I guess I’ll take it from the beginning. We have now officially bought four properties. We have two additional properties that are under contract, one of which is supposed to close on Monday. The other one’s going to close sometime next month, which would take us then to six properties total bought.

[00:03:56] Connor Gross: Of those six, we have sold one. And so that one we bought for 590,000. Bought it over Midland, Texas, ended up selling it for 1.15 million about 13 months later, and that was after, putting in $50,000 into this, like new paint, new lights, new cameras, new gate. And then also just leasing it up a little bit, raising rates up to market rate.

[00:04:15] Connor Gross: So, All in all the, the strategy so far has basically been buy mismanaged, go for aggressive value add and try to get these crazy returns. It’s a tough game because I think there’s like, there’s kind of a few ways to go and play the game. The ways are either one, raise a bunch of money from outside the investors, go co-invest your own capital, play that GP role and try to go and scale up our portfolio that way.

[00:04:37] Connor Gross: I think neither myself nor my partner, we might raise on some outside deals. It’s not something we’re against, but we just like the idea of just having a hundred percent ownership and upside on it. And right now there haven’t been a ton of capital constraints that have prohibited us from doing that.

[00:04:49] Connor Gross: We’re trying to avoid that as long as we can. Like you do the underwriting and like the deals we do, just like their home runs equity, but like we just see less of the upside when we, after the.

[00:05:06] Connor Gross: Cash flow and businesses and just park all the profits into real estate that every single year. I like that method the best, and that’s something that we are actively trying to pursue. Just build up more cash flow, park all that cash into self-storage facilities and grow that way. Still can take a while, but overall, like it’s probably in my mind, the easiest blueprint in terms of building up a portfolio and just staying consistent year over year.

[00:05:27] Connor Gross: And then the hybrid that we’re playing with that right now is let’s go and make our entire business buying these facilities, making them nice and flipping them, realizing the equity return, right? Like that Midland one that I just told you about, we put in somewhere along the lines of like $150,000 into the actual property to buy it.

[00:05:46] Connor Gross: And we realized $649,000 in equity when we sold it. So like now we’re taking that 6 49 and we’re parking that into the two new properties we’re buying. And then, those ones we’re buying for 6 75 and eight 50 and they should be worth 1.6 and one point, I honestly 1.6 or 1.8 for the second one as well.

[00:06:05] Connor Gross: So just keep that snowball going. This is a slow game. Real estate’s a slow game, but trying to go and realize as much equity as possible and just build up that portfolio. 

[00:06:12] Robert Leonard: One of the loudest kind of voices in real estate Twitter and specifically self-storage on Twitter is Nick Huber. And he’s been pretty vocal about having some issues with being able to find the real estate deals right now, specifically self-storage.

[00:06:24] Robert Leonard: He’s just says he is not able to get them to pencil. Are you struggling finding deals? Like how are you, how’d you find two deals that you’re willing to buy? 

[00:06:31] Connor Gross: Him and I, we buy different deals. He wants to buy a deal that’s like minimum a million dollars and that’s like the probably bottom of the barrel.

[00:06:39] Connor Gross: There has to be, I would imagine a lot of upside there for him. The two deals we’re closing and on are 6 75 and eight 50. And like they’re mismanages that come one’s 18,000 square feet. The other one is 14,000 square feet. So, I think he wants that 20, $30,000, sorry, 20, 30,000 square feet minimum.

[00:06:56] Connor Gross: And because he has access to a lot of investors, they just play a different game. They’re playing the, can. We deploy as much capital as possible, get above market returns, and they give the 15 to 20% IRR model because we’re raising outside capital. And then can we take a slice of that really big pie?

[00:07:11] Connor Gross: We’re playing the, we have a small pie. We own 100% of the pie, but we have a small pie and 15 to 20% returns. Truthfully is just not what we’re gunning for right now. But like I like, I think if you’re a real estate investor and you’re listening to this right now, you’re probably going to think I’m psycho.

[00:07:27] Connor Gross: But like we want like triple digit IRR returns at least until we have enough money to the point where we need to just deploy more and we can settle for lower returns. But it’s honestly just been a ton of cold calling, ton of underwriting. If it’s not penciling with at least a 10% unlevered yield on cost, we’re not buying it.

[00:07:47] Connor Gross: And so I think that’s kind of like the difference between the two. It’s like we’re just going for like the crappy ones and we’re making them less crappy, and then we’re selling them to them, to guys like Huber or we’ve sold them to a couple like bigger groups later on once they’re stabilized, like.

[00:07:58] Connor Gross: With some of these bigger groups, you gotta recognize that they have different people who their only job is, is to go and make sure that they don’t lose money on a deal. Right? And in order to go and make sure that they don’t lose money on the deal, they basically want to show, hey, well when we were underwriting 1, 2, 3 Main Street, they had QuickBooks and there was a professional broker involved and like it all looked good on paper, right?

[00:08:20] Connor Gross: The deals we’re buying a lot of the times, like we are buying like napkin math, accounting systems. We’re buying like, oh no, Chuck owes me $245. Like I’ll collect from him before closing. Like guys that are relying on pen and paper and their memory on how to go and run their business. By us going in and systemizing a little bit more, it makes it way more attractive for a bigger buyer.

[00:08:40] Connor Gross: I think that’s kind of like the biggest difference. We’re just doing that dirty work to kind of get it to a point where somebody who’s a little bit more institutionalized can come in, want to buy it from us, and we are kind of like their smallest deal that they would buy basically. 

[00:08:53] Robert Leonard: How are you finding those deals? Are you like, I know you said you’re cold calling, but like how do you even find the ones to cold call? 

[00:08:59] Connor Gross: Lot of lead gen off of like five or Upwork, all of that kinda stuff. And then we’ll build out those systems, we’ll have guys that are scraping Google Maps for hours and hours and hours at a time, just trying to go and find different facilities.

[00:09:11] Connor Gross: We’ll skip trace all the information, get property mailing address, and then we have a different 10 99 contractors that we work with. We’ll just do the, 300 calls a week, try to get 10 opportunities a week. We underwrite each 10, make offers on two, maybe like if we make 30 offers, one gets accepted kind of in the playbook.

[00:09:27] Robert Leonard: Are you buying any lists and then mailing out to those? 

[00:09:31] Connor Gross: We haven’t bought lists. We’re trying to just do, I guess like a different path. The reason that we haven’t gone after a lot of lists per se, of like buying predefined ones is like that’s who everyone’s hitting up. I think I would rather try to go and do like a system where someone on five or Upwork is just.

[00:09:47] Connor Gross: Absolutely scrolling for hours and trying to find stuff, and it’s more expensive and more time consuming, but we can find a few extra properties that aren’t on those lists that everyone’s already reaching out to. 

[00:09:57] Robert Leonard: You also mentioned unlevered yield on cost. That’s probably something a lot of people listening aren’t familiar with. Break that down for us. 

[00:10:04] Connor Gross: This super simple metric. A lot of people like to go and like juice up their real estate returns by adding debt into the mix. Obviously, pros and cons to that. Pros being the fact that you put in less money and so the overall amount of money that you receive back and percentage terms is higher, right?

[00:10:18] Connor Gross: So like, like easy math here. Buy a million dollar property, put $300,000 down, sell it for 1.3. One year later. I set sold for, because I put $300,000 down and that we sold it for $300,000 higher. Let’s ignore all fees and all that stuff. I got a hundred percent return. Let’s use that same exact situation, but let’s say that I put a million dollars down.

[00:10:38] Connor Gross: It didn’t take any debt out at all. I put a million dollars down, I sold it for 1.3. Now I got a 30% return. I still realize the same amount of money, but obviously there’s more cash in place, so therefore the percentage is down. Unlevered yield on cost is a pretty simple metric. Basically says when we stabilize this property in year two and it’s cash flowing $100,000 per year, the yield, what is the, the yield of return?

[00:11:03] Connor Gross: What percentage is that relative to the overall purchase price, not factoring in debt. We buy the property for a million, it’s make it a hundred thousand dollars in year two on an n o i basis. Fantastic. It is a 10% unlevered yield on cost. We have no debt. We are still getting a 10% return. That is kind of like the, the north star metric that we typically go and aim for because it, I think you can mess around with the numbers.

[00:11:24] Connor Gross: You can make as many lies as you want in a spreadsheet. And, going up and down the down payment to kind of juice those returns, you can’t really fake that other one. At the end of the day, it’s purchase price and how much you’re profiting in year two. 

[00:11:35] Robert Leonard: How has your experience been with interest rates and refinancing?

[00:11:39] Robert Leonard: I know last time we talked and, and when you got started in real estate, it was a very different environment than it is today. Interest rates are a lot higher. Refinancing cash outs are a little bit more difficult to come by. So how, how has that experience been? 

[00:11:50] Connor Gross: The two that we have under contract right now, the one we have with a bank at 8.75 five year fix 20 year am And then the other one is a seller finance note.

[00:12:00] Connor Gross: So we have that for seven and a quarter. 

[00:12:02] Robert Leonard: Have you had any troubles doing cashout, refis? 

[00:12:05] Connor Gross: We have not done a new one. We did that one like six months ago. I can see what we actually pulled out. I know the numbers we pulled out. So we bought the one property for cash. We bought that for 400,000 cash. It reappraised for 1.25.

[00:12:20] Connor Gross: We pulled out, I’m pull up the spreadsheet here. We pulled out 504,000 and that was at the 1.25 valuation. And the interest rate we have on that is, I wonder if this is right, is 5.83%. I don’t know why it’s eight 3%, but it’s 5.83% for that one. 

[00:12:36] Robert Leonard: So it sounds like it hasn’t really been too big of a deal yet. 

[00:12:39] Connor Gross: It hasn’t yet honestly, I think we, we keep talking about it internally. I think that we just are seeing a lot of people start to kind of shake up now in the last month or two where people don’t want the moon, people don’t want the valuation that they got back in 2020 with, the basically zero interest rates.

[00:12:56] Connor Gross: So we’re starting to see the price drop, which makes the, the deals pencil a little bit nicer. But it’s just a constant never ending game of call underwrite, make an offer. And I think the tough part too is like a very fun balancing act of what is the offer that gets the deal done and what’s the offer to make that we are happy with, right?

[00:13:15] Connor Gross: Like I said earlier in this conversation, like we’re not in that business of having to deploy $50 million, like every dollar 50 cents of it’s coming from me, 50 cents of it’s coming from my partner geo. And so I don’t want to do a deal if the returns aren’t going to be there and it’s gotta be worth the time, right?

[00:13:29] Connor Gross: There’s only so many deals that we are able to do if we don’t try to go and raise a ton of money. And so I think from my point of view, I just want to go and make sure that like we’re doing deals that are smart at the price points that make sense to us and have a fixed CapEx budget and like run the playbook and realize the equity and keep that snowball going.

[00:13:45] Connor Gross: That’s kind of been our our thought process so far. 

[00:13:48] Connor Gross: So the other side of your, your business world, you have the real estate stuff. Then the other side is, is e-comm. A big part of it is e-comm, and I want to get into a big discussion about that. I’ve been getting into new sites, content sites lately, but with the rise of AI, I’ve become a lot more interested in, in e-comm.

[00:14:05] Robert Leonard: So for those listening who have heard of e-comm, they’ve heard that word, they’ve heard of what it like, that it’s a, it’s a thing, but they might not know exactly what it is. Explain what e-comm is and just generally how the business model works. 

[00:14:18] Connor Gross: How e-commerce, the e-commerce business model works? You sell stuff online. 

[00:14:23] Robert Leonard: And that’s it? Anything, it could be cars, it could be houses, it could be anything. 

[00:14:27] Connor Gross: Yeah. So I mean, there’s a lot of ways to take that, this answer. So I think like, okay, in its simplest form, you set up a website, somebody’s able to go on, they find the product that they’re looking for similar, they’re walking into a Walmart.

[00:14:41] Connor Gross: The difference is they’re scrolling on pages and it can be 2:00 AM in their underwear and they can be drunk, whatever. They can go on and scroll around your site without a judgment and find the product that they want added to their cart, enter in their card information and theoretically, there is enough trust built up between you and this consumer, even if they’ve never heard your brand before, where they believe that now by having their card transacted for the values of anything from $1 to a million dollars or whatever, that they are going to at some point in a not too long feature, receive a product that you are going to ship to them.

[00:15:11] Connor Gross: Now, everything I just described there, everything from the trust to the transaction process to, how you’re fulfilling it and whatever like that. There’s, those are all podcast episodes in and other selves, but I’m down to kind of like, take it any direction you want in terms of maybe where I see e-commerce heading.

[00:15:24] Connor Gross: And maybe in terms of what would be a good site to start these days, like however you want to kind of slice and dice that. I’m, I’m down to chat about it. 

[00:15:31] Robert Leonard: Yeah, let’s start where people would need to pick their product. They might not like they want to do e-comm, they heard what you just said, or they’ve heard about the business model before and they’re interested in it like me.

[00:15:40] Robert Leonard: They don’t know necessarily like how to pick a product. You and I have talked about this a bit offline. What’s the first step they should take and how do they pick products to sell? Like what should they be looking for? 

[00:15:50] Connor Gross: There are a couple of criteria that would make a really good product. The number one is can you have a high gross margin?

[00:15:59] Connor Gross: So gross margins, essentially just what are you selling it for, minus your cost of goods sold. If you are selling a product where it costs 20 or you’re selling it for $20 and it costs you 10, $15 to go manufacture it, you are not going to make any money in e-commerce. Now, I would say, especially in this, in this market where competition’s crazy ad costs are going up, like no one’s business, you should probably try to never sell anything with less than an 80% gross margin.

[00:16:27] Connor Gross: So same example there. You’re selling something for $20. If it costs you any more than $4 to sell it, I wouldn’t get into that business. Maybe $5 is like, is the absolute selling, but like be very, very careful with that. Does that include ad cost? No, it is your cogs. C cogs. Cost of good sold. Yep.

[00:16:46] Connor Gross: Exactly. So I’m telling all, this water bottle over here, like 20 bucks. If it costs me $6 to make it, do not sell it. Like it’s, you are going to absolutely just drive yourself crazy trying to reach profitability because there’s so many variables that go into play. That’s the first and foremost thing.

[00:17:01] Connor Gross: Second thing that a lot not a lot of people consider, I got a text from a buddy the other day who’s like, I want to build the Lamborghini of Rucksacks and like, sell these super high-end rucksacks and I think it’s going to be growing market and all of that kind of stuff. And like, I want to like build an e-commerce brand around that could work.

[00:17:16] Connor Gross: People make big businesses off of gym equipment all the time. The first thing that went through my mind is, wow, that’s going to cost a lot to ship. Imagine shipping a hundred dollars, right? Like people love Amazon Prime these days because it’s free shipping, right? And so like you go, you’re buying a, 200 ruck stack, 300 R stack, I don’t know how much these things cost.

[00:17:33] Connor Gross: And then you get to shipping and you’re like, wait $50 to ship it to me. So the other thing I would say then is as you’re designing your product, as you’re thinking through that kind of stuff, factor in shipping costs, right? The difference between selling on Walmart or selling, or like a brick and mortar versus selling online is like you have to go and deal with those at checkout cost, which is shipping cost, and so factor that in as well as you’re kind of like thinking through the product mix.

[00:17:55] Connor Gross: The third thing, and this is kind of like this is the ultimate lever here in terms of how you want to go and think about the product, is the two metrics that matter a lot in e-commerce are CAC and LTV. CAC stands for cost to acquire a customer and LTV stands for that lifetime value. So basically fancy way of saying, I’m going to sell to Robert, I’m going to sell him, shampoo, how much of that shampoo is going to, is he going to buy from me over a lifetime?

[00:18:21] Connor Gross: And like, what is the average customer that I’m selling to buying from me over a lifetime? Both of those metrics are super important because what you have to kind of calculate from a funnel perspective is I spend a million dollars in Facebook advertising, I get a hundred thousand customers, great. My CAC.

[00:18:36] Connor Gross: Is $10, right? So it cost me $10 to acquire somebody. So now it’s using my same shampoo example, cost me $10 to acquire somebody. I’m selling the shampoo for $20 and it costs me $5 to manufacture the shampoo. You’re thinking like, okay, you made $5 wrong because you also have overhead costs. You have to pay your agencies, your employees, you have three pls to go and ship and pick it.

[00:18:55] Connor Gross: You have to go and pay any r and d if you’re doing more designing stuff. And all of this on top of the idea that you had to go and buy a thousand of these bottles put so much cash out to go and just even build up inventory. And then now you’re getting paid one by one by one. And so what you’ll frequently see is that people who are building it and scaling up an e-commerce brand very frequently need like different financing and lines of credits just to go and even go and keep their inventory in stock.

[00:19:22] Connor Gross: And so, I remember when we were running our cellphone accessory brand, we were scaling it up doing, we did a couple million in sales and then right before we sold it, like I had this realization of, wow, we would do over a. The bank account never reflected that ever because it’s, we were, we were like cell phone, accessory rich.

[00:19:38] Connor Gross: We had so much products in inventory and it wasn’t until we sold that business that actually like, got that check that we’re like, oh, the bank account looks full now. Like, this is, this is the business that we were running before. I’ll add in one more thing too here then it’s to summarize quickly so far it is, you want to high gross margin.

[00:19:54] Connor Gross: You want to factor in overall shipping and, and stuff like that. Things that are unique to e-commerce, that’s important. Like you’re selling couches on the internet can be very lucrative, can be very logistically difficult. CAC to LTV is your north star metric that you want to go and figure out, right?

[00:20:08] Connor Gross: Because using that same shampoo example, Robert buys a $20 bottle of shampoo, cost me $10 and ad spend to even get them to buy it in the first place. Cost me $5 to get the shampoo, cost me another five in, all of my marketing mix, whatever. But Robert buys that at shampoo every two months for the next 20 years.

[00:20:24] Connor Gross: Well now we’ve got a pretty good business, right? Because now I know I don’t care if it costs me $10 to go into acquire a customer here because Robert’s going to go and spend $2,000 on my shampoo over the next, dozens of years. That’s an important factor and like way to go and think about it. And then the very last thing to go and consider here is when you are going and you are selling all of this stuff, if you are selling a stock and generic product that any 17 year old kid can go onto Ali Express or Alibaba and easily find the same product instead of a website.

[00:20:58] Connor Gross: It has never been easier to compete in e-commerce, which means you need some kind of logistical or brand or partnership moat to truly be competitive today, right? And so, like for example, if you want to go and turnaround and like what would be a good example here? Like, I’ve been training jiujitsu a lot lately.

[00:21:14] Connor Gross: So like, if you want to go and turn around and like create a jiujitsu gee business, right? And you’re selling $250 gee, or high end and good design wear and whatever like that. Can you go and turn around and just like launch this? You can have a 17 year old kid in his mom’s basement who doesn’t have rent or expenses or food costs.

[00:21:28] Connor Gross: Be very okay, taking a 5% net margin to compete against you. That sucks. Sucks a lot. And so like don’t launch things if you don’t think you have a competitive advantage in the e-commerce world from day one. Competitive advantage for something like that would include how can you go and customize it, right?

[00:21:45] Connor Gross: Like it’s logistically difficult to go and embroider people’s names on two different things, right? So can you go and customize it easier? Can you go and make it such that you launch with a day one partnership with John Danaher and Gordon Ryan and Nikki Rodriguez and like all the big jiu-jitsu guys from day one.

[00:22:01] Connor Gross: Can that be a competitive advantage? So that way like brand partnership, you have a good moat there. Can you have a competitive advantage? Just simply be like having the most world insane servicing, right? Like you have a company like Zappos who’s renowned for their customer service and like they invested in it so aggressively from day one.

[00:22:16] Connor Gross: Like are you just refilling this product better than anyone else can on the planet? I’m going to pause there. I’m sure you probably have some follow up questions, but I would say that overall is like kinda the world of e-commerce today. 

[00:22:27] Robert Leonard: Yeah. I have so many questions, so many things I want to, I want to dive into.

[00:22:30] Robert Leonard: So first thing, consumable sounds like it’s good. So a shampoo maybe is better than a a backpack per se. because people probably aren’t going to buy a ton of backpacks. Not that frequently, right? Maybe. Maybe once a year. Maybe once every couple years maybe. But shampoo or soap or something like that. We talked about cleaning products in the past.

[00:22:47] Robert Leonard: Those are going to be highly consumable. 

[00:22:50] Connor Gross: But like bringing it back to what I was just describing, why are consumables good? 

[00:22:53] Robert Leonard: because people are going to high LTV, so people are going to buy from you a lot. 

[00:22:57] Connor Gross: That’s the reason. High L T, V and oh, shipping costs probably. Shipping costs and like, like honestly the Mecca for e-commerce brands, its supplements and its beauty products.

[00:23:08] Connor Gross: Both have stupid high gross margins, right? Like that $45 tub of whey protein that you’re buying costs like $4 to put together, right? $5 to put together. So super high gross margins. The LTVs are insane. They don’t cost a lot to ship. And yeah, that’s kinda what it comes down to. 

[00:23:26] Robert Leonard: So then the other thing, you were talking about CAC to LTV, do you have a specific percentage that you look for?

[00:23:32] Robert Leonard: Like does CAC have to be half of LTV 75%? Like what, what do you think is generally like a winner there? 

[00:23:39] Connor Gross: I don’t have a metric off the top of my head. I it some guys who in the e-commerce world have have better targets. I can tell you at least what we do right now, we have pretty much our LTV on one of our brands right now is about 2 79.

[00:23:52] Connor Gross: A little bit like roughly in that ballpark. And our CAC is 65. I don’t know what the math is on that. It’s like 20, 25%, something like that. Yeah. I would say like that’s, that’s where we’re at today for what it’s worth. And this is why like you have to spend have you ever read, I think I’ve recommended it to you before, dotcom Secrets.

[00:24:08] Connor Gross: Yeah. Yep. This to me is like the golden rule in e-commerce. Whoever can spend the most amount of money to acquire a customer is going to win. And so that’s important because if you and I are competing in the same niche and we are both selling, I don’t know, candles or something like that, and I can spend a hundred dollars to acquire a customer because I know that they’re going to spend a thousand dollars me over my lifetime, and you can only spend $10 to acquire a customer.

[00:24:34] Connor Gross: I’m going to have such a bigger business than you are, right? And so if you’re able to, whether it’s build up an entire value ladder of I can get somebody in the door cheaply for $15 for a trial pack, but then I know that, like, this this one guy, Dan, he runs this whole like, creatine gummy business, right?

[00:24:51] Connor Gross: And like his whole pitch and his whole shtick is like, he’ll get somebody in the door, he’ll break even on that first purchase, and he’ll go and acquire a customer and like get them onto the pre-teen gummy product. And then people, he knows that people take creatine all the time. And so like, they’re going to go, the second order is going to be profitable and the third order is going to be really profitable.

[00:25:07] Connor Gross: And then you start having this subscription based revenue system that you can rely on and have this idea of what your free cash cash flow looks like on a monthly basis. So it makes inventory planning easier and it makes forecasting easier and all of that kind of stuff. So I would definitely say like it’s important to kind of have a pretty high LTV if you can push that.

[00:25:24] Connor Gross: And LTV 

[00:25:25] Robert Leonard: is based on the revenue, right? So if a customer, it’s how much a customer spends, not how much you make off of them. That was something that I’ve always kind of wondered and I wasn’t able, like I googled it quite a bit and I could never really get, find a good answer, but yeah. Okay. Revenue. And so you mentioned the competitive advantage.

[00:25:39] Robert Leonard: I want to talk about this. This is something I we haven’t had a chance to talk about yet, but I’m always looking at the marketplaces that sell and buy and sell online businesses. And I saw an econ business the other day for sale, didn’t have a great multiple. Like there was not a lot of brand or equity value there.

[00:25:54] Robert Leonard: Like it just wasn’t worth a lot of money. But it was, we talked earlier too about your passion project for a podcast and this e-comm brand was like actually pretty relatable to me. It was like something I was like kind of passionate about and I was like, okay, this seems interesting. And so because they were publicly listed, like on this marketplace, I was able to get their financials and I had their full financials.

[00:26:14] Robert Leonard: I was able to see how much they’re spending on ads, how much they were making, et cetera. But they had no competitive advantage, like you said. So I was like, okay, well I think I could try to compete with these guys and they’re just a drop shipping company. And I tried for like a couple weeks and I just.

[00:26:29] Robert Leonard: Wasn’t able to do it. But to your point, it’s like I tried to compete with them or I was able to compete with them like so fast because they had no competitive advantage. Like nobody cared about their brand. I was able to use the same supplier as them and we just drop ship right away. So it was an interesting lesson in, in brand and logistics and competitive advantages for sure.

[00:26:49] Connor Gross: You want to hear a story of how, like, I learned this lesson the hard way. So after we sold our business then the cellphone accessory space, there was like a couple months where I was like, I don’t know what I want to do. I’m just going to like do a bunch of random stuff. And so like bought like a tiny house blog.

[00:27:02] Connor Gross: I thought. I was like, oh, maybe I’ll do like a marketplace or tiny houses or something. Bought this Lightroom preset business. It’s called like hashtag presets. I don’t know if it’s even so, but we might’ve shut it down. Basically found this guy on a Facebook group, bought it from him, paid him like 26 grand.

[00:27:16] Connor Gross: The business itself had been like in business for three months or whatever, but it was like, it was the last two months he was making five grand a month in profit and like I verified that to Shopify and the PNLs and all this stuff. I was like, oh, all right, little fire sale. The guy’s just bored of it, like five months, he in five months at the maximum, and this is what I’m thinking in my head, I was like, five months in the maximum and I’ll get all my money back and like, let’s be honest, like I can probably crush this even better.

[00:27:40] Connor Gross: Like I bet the payback’s going to be 90 days of the full 26 G back in my pocket and I’ll have this easy cash flowing digital product business. Bought it from him, did the escrow, signed it, whatever, transferred all the assets month one of owning the business. We did three grand in profit. I was like, ah, okay.

[00:27:55] Connor Gross: The ads aren’t converting as much. Like, let’s make better new ads. Made a ton of new ads, had a bunch of like videographers and guys and all that kinda stuff. Like we’re selling a like $29 product, I think just a bundle of Lightroom presets. I was like, let’s set up email marketing. The guy was doing no email marketing and I quickly realized, like from owning this business, you know that feeling of like, when you get an idea and you’re like, wow, why has nobody thought about this?

[00:28:18] Connor Gross: And like, why is nobody doing this today? And you’re like, this is such a good idea. I’m going to spend all this time doing it. And you start doing it for like a month and start doing it for, oh, there’s a lot of competition. Like, a lot of people are doing this actually. So a lot of people were running these Lightroom preset businesses as well.

[00:28:34] Connor Gross: And so I was like, all right, like, ours aren’t better for sure. Like, but maybe we can just do better advertising. I was like, like they’re, their advertising’s pretty good too. Like they’re running pretty good ad sets. And so what I realized that I bought after like two to three months is I realized I bought just a really good ad.

[00:28:51] Connor Gross: And if you know anything about advertising, especially on like social ads, fatigue, meaning like they target the right, the same audience after enough time and like eventually the effectiveness of the ad doesn’t work anymore. And so you just need to keep on recycling new ad creative. So we try like 50 new ad sets over the next two, three months or whatever.

[00:29:09] Connor Gross: And we did like the first month, three grand of profit, second month, three grand of profit, third month, $2,000 in profit, fourth month, like $1,500 in profit. And this whole time I’m like, dude, I’m, I’m busted out here to like be making $3,000 in profit a month. I was like, this is not worth it at all. What am I doing here?

[00:29:24] Connor Gross: Ended up, I don’t know if we spent 26,000 on the business, ended up spending more time than I should have been, probably made back like $16,000 or something. But then ultimately I was like, ah, this is just a bad idea. I’m going to stop this. There’s no competitive advantage here. We bought a really good ad set in hindsight, but the products aren’t better.

[00:29:40] Connor Gross: The marketing’s not even that much better that I’m producing competitors. Like, I need something more here. And I think like in hindsight, if I partnered with like famous photographers and got them to like do like limited edition collabs, and if I were able to go into like, I don’t know, do some kind of guarantee or like if there was a more competitive moat, there might’ve been a better opportunity to go and compete.

[00:30:01] Connor Gross: But in my mind I was like, this is just a bad idea. I gotta, I gotta get out of this business and do something else. 

Do 

[00:30:06] Robert Leonard: you think something like that could work if there 

[00:30:08] Connor Gross: isn’t a lot of competition? Oh yeah. I think the reason that there’s a lot of competition is because it was working. So 

[00:30:14] Robert Leonard: that’s why I was really interested in this.

[00:30:16] Robert Leonard: I was like, okay, I can see that they’re doing half a million dollars a year. So they have a real business, they have product market fit. People want this, but there’s nobody else doing it. It’s just this one company. So I was like, okay, yeah, there’s no real competitive advantage here, but like, I’m literally using the same supplier as them, but there’s no competition.

[00:30:38] Robert Leonard: Like it’s just them and me. So I was like, I think there might be an opportunity here. And I, I just put it on pause for now because it’s in the middle of the summer and it’s like, it’s definitely a product that will do better from like septa, eh, probably like October to right after Valentine’s Day.

[00:30:51] Robert Leonard: It’s like a, relationship type gift. So like basically October to February 15th, I think it’ll crush it. And then the summers probably going to be nothing. So I’ll probably probably try to work on it again, come the fall. But I don’t know, I’m a little bit concerned because of the competitive advantage, but then I’m like, there’s no real competition.

[00:31:07] Robert Leonard: So work and margins are 

[00:31:09] Connor Gross: really good. So I think like, okay, the other thing to consider is it’s just that like people hate this answer or they love it and swear that it’s the only way to go about it. But like the brand is a really big play here, right? Like the reason you’re buying your, I don’t know what you’re wearing on your feet right now.

[00:31:22] Connor Gross: Probably Nike’s, if I had to like just pull out of a hat, but like the reason people wear Nike’s, it’s not because like they’re the best shoe in the world, let’s be honest. Like there’s better shoes out there. But it’s a good brand. It’s a really good brand. But the truth is, is like if you want to go and do something in a space that you’re passionate about, you can recognize that like, hey, if I just chip away, make really good content, get people to really like, make, make sure the product quality is truly the best.

[00:31:48] Connor Gross: And like I’m partnering with like all of the right people here. Like look at like Nick Bear with Bear Performance Nutrition, right? Like the dude spent over a decade filming like lifting and endurance videos and all of that kind of stuff just to promote a supplement brand. And now that brand, I think it does like close to a hundred million a year or something.

[00:32:04] Connor Gross: Something really high like that. I think like if you were to launch a supplement business today and try to scale it up entirely through Facebook acquisition, you’d have a really tough time. But if you started a supplement brand today, maybe focused on like more of a niche things that we’re not competing with just like head on of like on nutrition and all those guys and you say, okay, I’m going to go after supplement brand, but I’m going to specifically go and target like moms who like wants to go and like work out with kids or something like that.

[00:32:30] Connor Gross: And then for the next 10 years all you did was like partner with moms and influencers and make content for workouts for moms and all of that kinda stuff. Like I swear to God it would work if you were to go and target moms for like a supplement brand and just focus on really good branding product quality service and like content for the next 10 years.

[00:32:49] Connor Gross: The issue is, the reason that people don’t do that is because it won’t work for the first three years, but you just have to keep on doing it. Have you 

[00:32:57] Robert Leonard: done anything with supplements? Do you know anything about supplement suppliers? Like do you know how you’d 

[00:33:00] Connor Gross: go about getting one? There’s a lot of consignment stuff out there, so there’s a lot of like co-packing.

[00:33:06] Connor Gross: To answer your question first off, no, I have not. I have a lot of friends who have, but I know that there are a lot of manufacturers out there that will like work with you on your own specific formula and then just go and go back it all for you. This 

[00:33:18] Robert Leonard: conversation gave me an idea for another e-comm thing that I might be interested in trying.

[00:33:24] Robert Leonard: So yeah, it’s good to have this conversation. What do you think is, has been the most challenging part of running an e-com 

[00:33:29] Connor Gross: business? I think like people get into e-commerce because it’s sexy and I think that there’s some kind of like inherent love and joy for like building a physical product, especially in such a digital driven world.

[00:33:41] Connor Gross: I think the hardest part is just kind of remembering that it is a blue collar business despite the flashy, sexy marketing that people try to preach. Like the reality is on Black Friday, cyber Monday, we have to figure out how. Seasonally more warehouse workers in order to go and ship out more production than we normally do for the rest of the year.

[00:34:01] Connor Gross: We also have to now go and deliver focus on all entire supply chain stuff, with ordering inventory, with also going and like dealing with shipping and fulfillment times with dealing with customer service and also going, dealing with product quality issues. Like the marketing is easy and I like the marketing side, and that’s the part I do, right?

[00:34:17] Connor Gross: So it’s like, I’ll make the ads, we’ll send the emails, we’ll send the texts, we’ll do the retargeting, whatever. We’ll build out a really sexy, pretty website with pastel colors that everyone loves to dream about. But the reality is I think that the tough part is like, yeah, you’re also like manufacturing products and shipping and distributing those products.

[00:34:35] Connor Gross: And when somebody says, Hey, my shipper, or like my, my shipping carrier lost my product and need you to do something about it, that’s something out of your bottom line. Because like FedEx isn’t going to fix that, they’re not going to replace that. So I’d say, I’d say it’s a combination of just like managing expectations with the blue collar side of things and also just constant relentless focus on like the p and l on the bottom line.

[00:34:59] Robert Leonard: Earlier you mentioned high gross margins, factor in shipping costs. Focus on shipping costs lot lower on as much as you can. Customer acquisition costs a lifetime value and needing some sort of competitive advantage. And you also mentioned the book.com secrets. I’ve read all those, all the secret books, expert secrets, traffic secrets.

[00:35:16] Robert Leonard: I’ve read a bunch of other marketing books like you. I’ve been really interested in marketing lately, and some of those books talk about customers and who you should sell to. Do you think like a fourth or fifth maybe bullet point to those you already listed would be, if you can like a cherry on top maybe is to like find the right type of customers.

[00:35:32] Robert Leonard: Like have you found selling to like high school, selling to high school kids is probably way worse than selling to a middle-aged mom with kids or something like that. Like who have you found works really well? 

[00:35:42] Connor Gross: Oh my God. Settle people with money. Please settle people with money. Like, like not even question.

[00:35:46] Connor Gross: Is that like age or what? I think the thing that I think makes a lot of sense is sell to people who have specific like passion projects and they’re willing to spend a lot on it. Right? So like, If so, like okay, like two niches come to mind right off the bat. It’s like skiing. Like if you’re, if you’re buying $200 lift passes, you’ve got cash, right?

[00:36:05] Connor Gross: And if you really like skiing, you’re going to go and spend a lot of money on the skis, right? Like just bought new skis last two seasons ago. Spend $800, just pull new boots, spend $500, right? I’m going to be buying new gear this year in terms of like probably a jacket and pants. So like my LTV is already in the thousands of dollars, right?

[00:36:21] Connor Gross: For some of these different brands. And obviously it’s not going to all the same brands, so maybe you can’t quantify it that way, but like I spend a lot of money on it because I really enjoy it. And it’s something that like if you are struggling paycheck to paycheck, you’re not going to be spending a lot of money on skiing.

[00:36:33] Connor Gross: So like you’re already self-selecting based on that hobby, right? Like another one could be like gardening, like high-end gardening where like people just really care about getting like the best plants and like they want like actually I take that a step back. I don’t think gardening would be good when I had a friend who ran a succulent business and like shipping plants sucks.

[00:36:50] Connor Gross: So maybe I take that one back a little bit. But I would say that overall, if you can find something where people like really love the thing and they, by loving the thing, it means that they are in a higher demographic already. Then I think that you would do better, like positioning something as not a Walmart brand can do really good for you.

[00:37:10] Robert Leonard: Yeah. Motocross, we talked about that. Like you’re into skiing. Motocross for me, like my bikes are tens of thousands of dollars. Gear’s expensive. Like it’s the same idea. So that’s one of the one of the reasons I was interested in that niche. But for someone who doesn’t have a social media following and doesn’t want their them to be like the pers the face of the brand and they don’t want to sell to their friends or family, how should somebody get their first customers with their e-com business?

[00:37:36] Connor Gross: Just Facebook ads. Like, I think realistically, this goes back to the whole brand versus performance side of things. And there’s like, a lot of different opinions on this in e-commerce. But realistically, if you can’t scale up with Facebook ads and there’s, there’s exceptions to this rule for sure, but by and far most e-commerce companies are also performance marketing companies.

[00:37:54] Connor Gross: If you cannot scale with Facebook ads profitably, I don’t think you have a real business. And there’s people who are like, I have a 5 million business and all we do is word of mouth and influencers and we do events and whatever. Yes, those exist. I’m not saying that they don’t, I’m just saying that they are way more rare than companies who are able to turn to meta, put a thousand dollars a day spend on and acquire, $4,000 worth of revenue.

[00:38:16] Connor Gross: Like that’s really the playbook that you should be going for. 

[00:38:18] Robert Leonard: How do you get started with Facebook ads? Like what is the very first step? Do you start with a thousand dollars a day? Do you start at $20 a day? Like how do you get started? 

[00:38:27] Connor Gross: I think it depends on like who you are and like what your thing is.

[00:38:29] Connor Gross: Like if you’re a college student, like, yeah, you probably can’t spend a thousand dollars a day plus like a week passes and you’re like, there goes to my bank account. But if you have like, I don’t know, a couple hundred bucks, like the reality is the cool part about e-commerce versus real estate. If it’s working really quickly, like you are not going to spend a hundred dollars a day on Facebook ads and like mind you, there is a ramping up area and stuff like that.

[00:38:47] Connor Gross: Like maybe give it like three or four days and you’ll know. But like if you spend a hundred dollars a day and four days passes and you haven’t made any sales, like it’s not working, change something. And so I would say our goal overall, and this goes back to like the, whoever can spend the most on the customer wins.

[00:39:02] Connor Gross: We have a specific target cost per acquisition that we try to go target. And we try to spend as much money as humanly possible, so long as it does not pass that. That’s kind of how we think about it. And so when you’re first starting off, you don’t know what a good C is. Realistically, you’re just trying to go and do some rough and napkin math.

[00:39:20] Connor Gross: You’ll learn it over time as the business grows. But I would say try to go and identify some kind of number that you’re comfortable acquiring customers for, and then spend and then start doing the math in your head of, great, I just spent $90 and I got three customers. I have $30. CAC is a $30 cac good relative to my products price point and my margins.

[00:39:36] Connor Gross: And if I think that they’re going to go and come back and purchase again. So it’s just, it’s not, not crazy math, but it’s just like simple nap math to No. A funnel’s working. 

[00:39:45] Robert Leonard: That’s one of the reasons why I like that business that I, I saw, because I had their whole p and l, I saw how much they spent on Facebook ads.

[00:39:52] Robert Leonard: I saw their revenue. I could estimate based on their product cost or how much it cost to buy their product. I could estimate what their LTV was and how many customers they had, roughly. And then I could come to a CAC and I was like, okay, 40, $50 is probably their cac. And so I spent like 400 maybe on ads, didn’t get a single sale.

[00:40:13] Robert Leonard: So I was like, okay, well that’s.

[00:40:14] Connor Gross: Yeah, it’s, I don’t know, it’s, it’s a weird world like, like sometimes it’s also just the ad set too. I’m like, we’ve run ads before and it’s so weird. because like I think we got lucky with one of our brands where like the first ad worked and then we probably launched like 20 more ads after that and they didn’t work as well.

[00:40:27] Connor Gross: And then we launched, some more after that and those ones worked better. So it’s like you just really need to test the positioning and like the message that you’re delivering to the audience over the ads. But what’s tough about it too is like the first ad we launched work, so we are lucky next 20 didn’t work.

[00:40:42] Connor Gross: Like they just weren’t that profitable. But what would’ve happened if we launched those other 20 before we launched that one, we probably would’ve not pursued the business truthfully. I don’t know, like that’s why part of it’s scale, part of it’s just being willing to test a lot. Part of it’s having deep pockets that way you can afford to test a lot without having to go and give up.

[00:40:58] Connor Gross: because lifestyle reasons. But I think the other side of it too is just like there’s luck involved for sure. And like knowing ahead of time if somebody’s going to want a product or not is a little bit more helpful. It’s that way. Oftentimes, if you’re selling. If you’re selling lampshades, right? Like, and your Facebook, Facebook acquisition is not working, the reality is, that people want to buy lampshades.

[00:41:18] Connor Gross: Maybe they just don’t want to buy your lampshade. Maybe they don’t want to buy it because of something you said in the ad copy. If you’re selling something that’s never existed before, that’s a different story. 

[00:41:26] Robert Leonard: Yeah. My situation, I also thought it was potentially timing. Like, yeah, I probably could have improved the ads probably could have improved the site, but like what I was doing was like, very typical of like a, it’s a relationship type gift.

[00:41:37] Robert Leonard: And so Christmas, new Year’s and Valentine’s Day are probably going to be like the biggest, biggest sales. So trying to do this in the middle of June is probably not, like, probably not going to be the best results. 

[00:41:51] Connor Gross: Yeah, that’s fair. 

[00:41:52] Robert Leonard: Do you do any SEO for your e-comm stuff? Like do you do blog posts?

[00:41:56] Robert Leonard: Anything like, like obviously you probably optimize your product pages, but do you do anything else SEO wise for e-comm? 

[00:42:02] Connor Gross: We have, I don’t know, 50 blog posts that we probably put up, like last year. I haven’t really done one in the past couple of months, and they’re just kind of targeting specific keywords.

[00:42:09] Connor Gross: I kind of just wanted to go get them out there just to do them. I think they rank decently well. Honestly, I don’t really track it that much right now. We do like backlink building and so just getting our site featured in a couple different related sites, especially for like, specific gift giving holiday times.

[00:42:23] Connor Gross: Like, hey, here’s the 13 best gifts for, the mom in your life who loves this. Like getting a feature on that is helpful because I think it just like increases the overall relevancy of the domain, but it’s not a huge driver for us Today. 

[00:42:35] Robert Leonard: I want to get into two different things you’ve tweeted.

[00:42:39] Robert Leonard: The first one really resonated with me. You said the biggest returns come from compounding efforts. If you switch the business, you run every two to three years, you’re constantly playing the game in hard mode. Pick the right project and commit for a decade. First, I want you to expand on this message for us, and then second, I actually responded to your tweet and said this, but how do you pick the right project? 

[00:43:01] Connor Gross: To expand on it? Right now, the two businesses that I run, one E-commerce business and the self-storage portfolio, both of those businesses have now been operating for just about two years at this point. And both of those businesses, I would say, I can look at them confidently and know what levers to pull, how to grow the business, how to run the business.

[00:43:20] Connor Gross: Oftentimes the issue with like entrepreneurship is like, You become friends with other entrepreneurs and then you see all the ways that they’re making money and then your brain inevitably doesn’t turn off and you’re like, wow, should I be doing this instead? Should I be starting an agency? Should I be starting a software business?

[00:43:34] Connor Gross: Like somebody was just talking about the, the benefits of RV parks instead of going doing self-storage and how their contract just came by and built them a 60,000 fence. Like, oh, should I be getting the fencing business? What do I know about the fencing business? Like your mind is racist and you get so many ideas, like it’s infuriating.

[00:43:49] Connor Gross: And so the never ending battle is essentially going and figuring out like how to stay focused on your thing, keep the main thing, the main thing. And obviously I have two main things right now, so it’s kind of contradictory to that piece of advice, but like the, the, the, it’s the business that produces a lot of cash flow and then the asset to go and park all that cash into and try to have that appreciate through aggressive value add real estate.

[00:44:10] Connor Gross: Right? That’s been my bread and butter, that’s my strategy. And what I’m just noticing now is that we have a lot of opportunities that are popping up as a result of us being in business for two years. So like we’ll have sellers we haven’t talked to in 12 months come back to us because they’re like, Hey, you guys made me an offer 12 months ago.

[00:44:28] Connor Gross: Wasn’t the right time Then let’s go and talk again. Now that’s a huge benefit of a long tail interest. Same thing on the e-commerce side. We’ve had people who gave us their email 15 months ago and now they’re buying. And so I think that’s just comes down to like there are huge long tail benefits, longtail benefits.

[00:44:48] Connor Gross: I think that’s how, how I would say like just long-term benefits of doing the same thing. Getting a little bit better at it every single day and just doing it for a decade, if you like. The first one to two years of any business should intentionally be very, very hard. You are figuring out a lot of new things.

[00:45:06] Connor Gross: You’re convincing people to trust you, right? Like if somebody from Nike, sorry, if somebody goes to Nike’s website, this was like the e-commerce conversation about trust earlier. If somebody goes to Nike’s website and wants to go and buy a pairs shoes, never in the back of their mind are they thinking, will I get these shoes?

[00:45:22] Connor Gross: I just bought a t-shirt on Instagram two weeks ago, and I like, dude, it’s this dumbest t-shirt. I’m literally holding in my like lap right now, like this, this t-shirt. It’s literally just a joke with some friends. It’s like a, a mad dog, like 40 ounce bottle basically. But I bought her on Instagram for like $32 and like the thought it’s a’s definitely a drop ship store.

[00:45:41] Connor Gross: The thought in my mind for sure went through of, I might not get this t-shirt. I don’t trust this shop. I’ve never heard of this brand ever. Like why should I trust it? Right? So the difference between that and Nike is I can go and buy a new pair of Jordans on Nike tomorrow, and I, there’s, there’s zero hesitation in my mind that I’m going to go and get those.

[00:45:58] Connor Gross: Therefore, I’m willing to go and spend more and pay more whatever for it. I think that the longer that you’re in business, the more trust that you have with a consumer, with partners, players in the space, you can realize that not all of your efforts are coming from performance driven stuff. A lot of it can come from brand and reputation, which just takes a really long time to go and build up.

[00:46:19] Connor Gross: And so if you’re still in the space and like you know it better than anyone else in real, real estate too, it’s not the right time for every seller to go and sell. The next thing you know there’s a death in the family. There’s a divorce. Oh, you know something. Revenue drops and I’m struggling to keep up with my debt.

[00:46:32] Connor Gross: Payments opportunity presents itself and if you can be that person that has sent them a couple gift cards, it’s been in contact with them on the phone or over email, every few months, you’re going to be top of mind for them when it comes time to go and sell and you can find opportunities. The people who are just entering that space for the first time and they are day one in their journey, do not have, that’s kind of what I meant by that.

[00:46:52] Robert Leonard: I meant to mention earlier when you mentioned brand is Nike. You mentioned the shoes, and that’s actually a really relevant example for me because I’ve never really been a huge fan of any brand for shoes really. I’ve always just kind of bought, like gone to the store and bought whatever I thought look cool.

[00:47:09] Robert Leonard: And then I read Shoe Dog, which is Phil Knight’s memoir. And then the Air documentary, like movie documentary thing came out about Nike. And I wa I read, so I read the book, watched the movie, and I was like, wow. Like I love this brand now. Like just both of those things. Like I have such a affinity for Nike now and I’ve bought like three or four pairs of shoes recently and they’re all Nikes.

[00:47:31] Robert Leonard: So you could just build brand in so many different ways and I, I’ve like seen firsthand how powerful it can be. 

[00:47:37] Connor Gross: But it’s hard because like the same conversation that we had around e-commerce earlier where I’m like telling you how metrics driven you have to be and tact and LTV, like the tough part about brand is you just have to trust it and you just have to trust that by spending and doing the right thing for a long enough time horizon, you’ll build brand, which is ultimately the reason why people spend, why, why Apple’s customers have, the highest LTV of every customer, right?

[00:48:01] Connor Gross: It’s because like they trust Apple. And how are you supposed to go and quantify the investment that you’re making into marketing to build brand better? It’s virtually impossible, especially at a small scale. So it’s, it’s something that I don’t think I do super well, but I think something that can sometimes happen just by doing the right thing for a long enough time. Horizon. 

[00:48:19] Robert Leonard: Man, I would love to know my LTV with Apple. I’ve had so many phones, computers, TVs, watches, iPads, man, I would love to know my LTV is very, very high with Apple. 

[00:48:31] Connor Gross: I was going to say on AirPods alone, I think I go through like three sets of AirPods a year. Honestly, at this point, like every few months I’m like lost another case.

[00:48:38] Connor Gross: Like I always list the cases, never the pods, which is the weirdest part. And like the replacement case basically cost as much as a new set of AirPods and you have to go into the store to do it. So it’s just horrible. It’s a horrible experience. So I just buy the new set of AirPods. But they say that like every, I think the rough thought process is you should get a new iPhone every three years.

[00:48:58] Connor Gross: You should get a new MacBook Pro every five years. Well, I think the weird part for me is I think I’m coming up on this point where like, it’s going to be like a 15 year period, which means that I think I’m overdue for a new iPhone and Mac in the same year. So yeah, I think Tim Apple might be getting a, a nice, $5,000 paycheck from me in the, in the coming months.

[00:49:18] Robert Leonard: Yeah, they’ve, they’ve got that from me a couple times. So you explain, you expanded on that, on that tweet, but how do you pick the right project? We, we want to find something to commit to, but how do we find that right thing? And when do you know to quit? How do you know when to quit too? Because that’s the hard piece.

[00:49:32] Robert Leonard: Like you can be committed to something, but you also have to be like, have enough humility to be like, all right, you know what? I committed to this for 10 years. I wanted to do this for 10 years, but it’s just not working. Like I have to go on to something else. Like how do you find that balance? How do you find the right thing?

[00:49:46] Connor Gross: The right thing probably comes down to, and it depends on what you’re trying to optimize for. You’re trying to optimize for lifestyle, right? If you’re trying to optimize for lifestyle, probably don’t go be a doctor if that’s your goal is you want to be home by five every single day and like take care of your kids or whatever.

[00:49:58] Connor Gross: Like I don’t think being a doctor makes a ton of sense. Like you’re going to be on call, you’re going to be like getting up in the middle of the night, especially if you’re doing like surgery work. Like figure out what you’re trying to optimize for. And so then like the flip side, right? Is.

[00:50:12] Connor Gross: Where are people making the most money? People make the most money by owning their own businesses. They make the most money by like selling very expensive things typically, right? You look at somebody like Warren Buffet. Warren Buffet sells bus, like buys and sells businesses, right? You look at somebody like Elon Musk, you look at acquires and builds massive brands.

[00:50:29] Connor Gross: You look at the Stephen Arnold guy, I think that’s the guy who runs LVMH, right? No. Is it Bernard Arnold? Either way, getting the name wrong. But like, he sells things to like really expensive things. And so like I think if you are trying to play a game where you are looking around and there are very few millionaires and billionaires and you’re trying to go make a lot of money in it, you’re probably playing the wrong game.

[00:50:51] Connor Gross: First figure out what you’re trying to optimize for. If it’s some, if it’s time, if it’s probably some kind of hybrid of making a good amount of money and having a good amount of free time, your answer is probably go and start a small business. That’s probably like the highest likelihood of success. And then I would say just do things at scale.

[00:51:07] Connor Gross: Like I have a friend who works a couple months out of the year and his main job is he helps companies raise money and then takes a percentage of the money that he raises for them because he’s super tapped in from his investment banking world and he recognizes that like he works like an absolute dog for like three months out of the year’s, a 500,000 paycheck and then stops.

[00:51:25] Connor Gross: I don’t have a good, super good answer because I think it’s such a case by case basis, but figure out what you’re trying to optimize for. Find people that you believe are currently doing well in that and study their field and then just do the same thing. 

[00:51:37] Robert Leonard: Do you think somebody can make 300 to 500k a year and not work that much?

[00:51:42] Robert Leonard: Like not more than a full-time job or, or maybe even a little less than a full-time job with e-comm? 

[00:51:47] Connor Gross: Oh yeah, definitely a hundred percent not even a question. Yes. The tough thing I would say is that it’s not going to be like that for the first couple years. Once you build out your team and you have people who are under you who can like, kind of help you run the show, then yes, absolutely.

[00:51:59] Connor Gross: But for the first couple years, no, probably not. 

[00:52:02] Robert Leonard: Somebody listening, they’re really interested in e-comm, they want to get started. Where did they go to learn? Like what resources have you used books? I know you mentioned.com secrets, but like specific e-comm stuff, like how to run Facebook ads, how to run good Facebook ads, how to set up a Shopify site appropriately.

[00:52:18] Robert Leonard: How to, I don’t know, logistics, like so many of like the specific e-comm stuff, not just like general broad business stuff. Like what are you looking at to learn when you were getting started? 

[00:52:27] Connor Gross: Another quote like, if people just needed more information, everyone would be a millionaire with six pack abs.

[00:52:33] Robert Leonard: Yeah, absolutely. I always think that about Audible book readers, like the, the voices behind that. 

[00:52:39] Connor Gross: They should just start a Shopify store and start going through the process. Like build out the store, find a product supplier, go and start setting up your email marketing. Like you’ll just learn so much more by doing over trying to like find the right stuff.

[00:52:53] Connor Gross: Like, let’s be honest, you can go in the Shopify blog and read everything that you need to know about e-commerce, start to finish everything from, here’s how to go and set up my homepage, which is like the most basic to like, here’s how to go and set up retargeting campaigns using like these specific UTM parameters that funnel people into an attentive flow and then drips them out like emails and SMS for the next three months until they buy.

[00:53:15] Connor Gross: It’s all there. Just start doing something and recognize that maybe you’ll put up a little bit of an upfront investment, right? Shopify, on a monthly basis, subscription wise, I think it’s like $39 for the starter plan. Maybe you’ll buy like a couple tens of dollars in monthly recurring revenue on some of the apps that you need to set up your store, but like, just mess around with it and test it and see if you can sell anything to anyone.

[00:53:36] Connor Gross: That’s, that’s the best way. Honestly, I don’t have a course or blog post that’s going to be better than anything else. I think the Dotcom Secrets book honestly gives you a good framework of like how to market and how to like, build out those funnels. But like, otherwise, it’s, it’s the same as what you’re going to read everywhere else.

[00:53:50] Robert Leonard: The second tweet that you had recently that really resonated with me was you said, if someone in their twenties talks about the need to sacrifice everything, going out, dating, drinking, having fun, et cetera, to build a company, ignore them. I can’t stress enough how possible it is to make really good money and have a ton of fun along the way.

[00:54:10] Robert Leonard: And I’ve often felt like I had sacrifice, like this is, this is me now. I’ve often felt like I had to sacrifice everything to build a side hustle or a business. So when I read this, like it really, really hit me. 

[00:54:22] Connor Gross: Why do you feel that way? 

[00:54:24] Robert Leonard: I’m glad you asked that because I spent a lot of time thinking about that the last two weeks or so.

[00:54:30] Robert Leonard: And the reason for it is because coming up in middle school is probably, I know that’s a long time ago, but like that’s when I realized like if you asked me in like sixth grade or fifth grade, people used to ask me like, what do you want to be when you get older? I used to say CEO, like I’m like a 10 year old kid and I’m like, I want to be a CEO.

[00:54:48] Robert Leonard: And I don’t know why, but like I wanted to be the CEO of Sprint I think, if I remember correctly. But I dit, I didn’t really care. Like I just wanted to be the CEO O of You’re fast. A big, 

[00:54:57] Connor Gross: yeah. Maybe fast and liked the name Sprint. 

[00:54:59] Robert Leonard: Yeah, I think it was my phone provider at the time or something. I don’t know.

[00:55:02] Robert Leonard: But I just wanted to be the CEO of a big company. I. And so, because I wanted that at such a young age, I was looking up to those guys, and back then, again, I’m not that old. I mean, I’m only 28, but this is still 18, almost 20 years ago. The world was a lot different then. Like all these guys, like the successful people, quote unquote successful people, they all wore suits.

[00:55:20] Robert Leonard: They were all very polished. They all spoke perfectly. You didn’t see anything about their personal lives. You didn’t see, like, you didn’t ever see them having fun. Like all you saw was business and them being like, perfect. And I realized that recently, like, like I said, the last couple weeks I realized that like today you see successful people having fun.

[00:55:39] Robert Leonard: Like you, you see stuff with like Elon Musk and Jeff Bezos and like all these guys doing all this like normal life stuff that I’m sure these people did a long time ago, but I just didn’t see it. So to me, like it’s still ingrained in my head that like I have to be perfect and I have to like sacrifice and I have to put everything, business and everything in front of having fun.

[00:55:58] Robert Leonard: And so like this has literally been a realization for me over the last couple weeks. So when I read your tweet, it was like literally perfect timing. 

[00:56:05] Connor Gross: Yep, exactly. I think I’m kind of in the same exact boat there. From my point of view, it’s the idea that I only like consumed content pretty much like my entire life growing up, where it’s like you have to sacrifice all of this stuff in order to go and win.

[00:56:19] Connor Gross: And I think I had that belief because I was like, I don’t have other examples to prove me wrong. I like the best example growing up I would say would probably be like Richard Branson, right? Like that guy seems like he was having a fun time and building big companies too. But I was like, he’s the anomaly.

[00:56:32] Connor Gross: He’s not the rule. The rule is you have to be miserable and and do this stuff. And it sounds crazy, but it’s like, I don’t know, like I like to clarify really like Gary Vaynerchuk personally, but I think growing up I could see how like his contents misconstrued and whatever. So I would say that was what I thought was the rule at the time.

[00:56:50] Connor Gross: Turns out it’s not the rule. I’m now at this point where I’m 26, I’m like, I have so many friends who like go to music festivals, can take like a month off skiing. They can go like travel the world, they can like do like all of this fun, crazy, really cool stuff and literally run million dollar businesses.

[00:57:04] Connor Gross: I was like, why was I thinking that this was not possible before? And so I think now the message I’m trying to get across to a lot of people is like, you can do both. Like there’s so many people out there saying like, wow, date, like, and to clarify, I’m not judging anyone’s decisions on whatever they want to do, right?

[00:57:18] Connor Gross: Work hundred hours a week if you want to. Don’t work at all. If you don’t want, do what makes you happy. I just want to dispel the rule that you do not have to be like, they’re, they’re not tradeoffs. And I think like you’ll have people who are saying like, I’m day 400 sober, and like, my business has never been bigger.

[00:57:33] Connor Gross: That’s awesome. It’s like not drinking and building a big business have nothing to do with one another. Maybe it can make you more productive in the morning if you’re not groggy, but like, maybe I don’t get groggy after I drink. Right? Everyone’s so unique and different and so my only, my only takeaway is like, don’t subscribe to the narratives of what work to other people’s lives.

[00:57:55] Connor Gross: Let everyone be happy to do their thing and just recognize that making a lot of money, building big companies and having fun, those are not trade-offs. It’s not one or the other. You can do both. So that’s, that’s kinda just the message I want to preach. 

[00:58:07] Robert Leonard: Have you read Sam Zell’s book? “Am I being Subtle”, or something like that?

[00:58:11] Connor Gross: No, I haven’t. Is I, I think I’ve heard of it. Is it good? 

[00:58:14] Robert Leonard: Yeah, you should. It’s pretty good. So I read that recently and I think that’s like what kickstarted my thoughts because in that book he was like, wore a motorcycle outfit to like these big billion dollar real estate deal meetings and like, and this was back in like the eighties and nineties, so it’s, he was like, but like again, you didn’t see that back like in the early two thousands.

[00:58:35] Robert Leonard: Like, I didn’t know he was doing that. Everybody just looks so buttoned up and perfect. So it’s it’s been really, it’s kind of been hard for me to like kind of accept that because I mean, I’m only 28, so it’s not like it’s been, I’m that old, but like I feel like I’ve operated kind of under the wrong assumptions for 10 years and now I’m like finally turning that page and I can like start having fun as well as like succeeding in business.

[00:58:53] Robert Leonard: So it’s a little bit humbling, but I’m also like really excited for the future for sure. 

[00:58:58] Connor Gross: I think it’s one of those things where like you start reading some more of these business books and like the biographies and you get it right. You’ve talked about Shoe dog. Phil Knight traveled the world when he was 26.

[00:59:06] Connor Gross: Like he wasn’t focused on his business at all. Like go read the book The Gambler, realize how this dude like basically developed and built all of Las Vegas and like could do whatever he wanted to do. Read the the classic like How To Get Rich Felix Dennis book, like the dude was a degenerate, like would just drink all the time.

[00:59:20] Connor Gross: Read a Winston Churchill book. The guy basically won a war while hammered. You keep on going down the rabbit hole of all of these like prolific leaders and entrepreneurs and just people who are really good at what they do. And you’ll have, you’ll have the weirdos, you’ll have the John Rockefellers who like wouldn’t, had one scoop of ice cream every like 25 years or whatever like that and like, was like really maniacal about his health.

[00:59:40] Connor Gross: And you’ll have the guys who are like the I think it’s Samuel Murray like it’s this Banana King guy who would like stand on his head for like hours a day to like, I don’t know, meditate. There’s weirdos for sure. This is my point though, like it different things, work for different people. Find out what works for you and like make, make your career out of it.

[00:59:57] Connor Gross: Make your life out of it. 

[00:59:58] Robert Leonard: I love it. It’s something I’m spending a lot of time thinking about and, and working on myself. We’re a bit out of time here, so I want to be, I want to be conscious of your time before we go. Tell everyone listening where they can go to find out more about what you have going on.

[01:00:11] Robert Leonard: I know you have a cool course going right now called “How to Quit your Job”. We didn’t get a chance to talk about it, but tell people where they can go to find that. Maybe give a quick overview of what it is and, and just overall where you want people to find you. 

[01:00:22] Connor Gross: Cool. Yeah. I’m @c_gro on Instagram, Twitter, anywhere that you want, like pretty much the same handle throughout in terms of the actual course,

[01:00:31] Connor Gross: yeah, I like, to be honest, I never really thought I was going to come out with something like this, but I started just doing consulting calls because I love having calls with people all the time, just like figuring out what they’re working on and whatnot. And I quickly realized like every call that somebody would jump on with me was like, Hey man, I want to quit my job.

[01:00:45] Connor Gross: I don’t know what business to start. Like how do I think about this, whatever. And I just had like 20 of those calls and I was like, oh wow. Like people are really lost here. because like there’s so many resources out there on like how to go and get a job and how to like switch jobs and how to negotiate your salary.

[01:01:00] Connor Gross: There’s nothing that talks about like going from, Hey, I’m employed. How do I keep on making money to live but not be employed anymore? So I just made something it’s like 81 slides, a hundred. It’s like an hour plus of me just talking through how I think about it. A framework, ways that you can make money afterwards.

[01:01:15] Connor Gross: And it’s just how to quit your job.co.co. It’s hundred bucks. And if you like it, let me know we can shoot the shit up at it afterwards over email. But yeah, I think it’s just a good framework of like you’re employed right now, how can you set yourself up for the highest likelihood of success after your job?

[01:01:30] Connor Gross: Really? because like really the reason people work for jobs right now is that it’s like, it is probably the most like risk adjusted way to go and earn. Right? And I think the point that I’m trying to go and sell on in this book and, and then the, the course of the program, whatever, is like, entrepreneurship doesn’t have to be very risky.

[01:01:46] Connor Gross: How can you de-risk the idea of not working at a job as much as humanly possible? So that’s what I’m talking about there. 

[01:01:53] Robert Leonard: Awesome. I’ll put a link to your social and the course in the show notes below for anybody that’s interested in checking that out and connecting with you. Connor, thanks again for joining me.

[01:02:00] Robert Leonard: Appreciate it. 

[01:02:01] Connor Gross: Yeah, man. Thanks for having me on.

[01:02:03] Robert Leonard: Alright guys. That’s all I had for this week’s episode of Millennial Investing. I’ll see you again next week. 

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