Syed Balkhi: How He Went From $0 To +$100M Before Age 30

Yes, in the early days I saved everything. I mean, I did not buy a bed until I got married, dude. Just to put in perspective.

Even when you were dating?

No, there was no bed. I feel like I could rule the world. I know I could be what I want to. I put my all in it like no days off. On the road, let's travel.

What up, dude? This is a long time in the making episode here. I think we've been talking about you for like 2 years. I think you told us, you were like, hey, hey guys, don't put me on blast like this. We were like, you got to come on the show. You're like, nah, you're just going to ask me how much money's in my pocket right now, and I don't know if I want to do that. But somehow, some way, we convinced you to come on. Saeed Balki, you're here. First, why did you just change your mind? How did you decide to come on?

I was talking with Sam over Twitter DM, and that's how it happened.

Well, what I told you, a lot of people think that Sean and I are like really aggressive about questions, but what they don't realize is like we'll ask an aggressive question, but if you say, I don't want to talk about that, we just go, all right, cool, we'll, we'll move on. Like, we don't— we're not like digging that hard. Uh, so hopefully that changed your opinion.

That did. That did.

So, Saad, you're kind of an amazing guy. So let me just set the table here for people. Let me just give you a little— let me just tease everybody with the appetizer. So I think you are one, you've done something that I don't even know 5 other people on earth who have done what you've done, which is that you've basically bootstrapped a unicorn. You've bootstrapped a billion-dollar company. You've done it. You're only 32 years old. So you did this by 32. You also didn't like invent the next big thing. It's not like you did this because you're super genius. You know, you're not, you didn't, you're not like, oh, you know, Vitalik, you know, creating Ethereum on the blockchain or something crazy like that. Like you just did a very specific set of like prudent, smart actions and it just added up in an amazing way. We're gonna talk about it. But also, I didn't know shit about you. Sam's known you for a little while. He brought you up on the pod a while back. He goes, I know this guy, or I met this guy. He's really interesting. He does this WordPress stuff. Have you seen him? And I was like, no. We went to your personal website. I don't know if you ever got this clip, but like way back in the day, We went to your personal website, we were talking about you, but we didn't know too much. Then we do Camp MFM, which was my basketball fantasy camp where we invited like 25 other founders and we had an NBA guy come basically treat us like we were, you know, pretend we're a pro for the weekend. And when we were there, there was so many people to get to know. Again, I didn't really get to know everybody at the same time, but then MrBeast did something amazing. So one night we were all in the kitchen, basically we're all hungry after basketball. And MrBeast just sets a chair in the middle of the, middle of the room and he goes, I don't know who any of you guys are because he's like, we've just been playing basketball all day and now I'm curious, like, who the hell are you guys? You tech nerds, basically. And he's like, sit down in this chair, you sit down. And then he would just interrogate that person, be like, all right, what do you do? Who are you? All right, how does that work? Is that big? What's your dream? Okay, cool. And then he would like go to the next person. And I think you were maybe the third or fourth person in the hot seat.

And I was like, oh, this is great.

I actually don't know too much of Saeed's story, and then you just blew us away. You blew us away. Your story was so good. MrBeast was, while he was interrogating you, I thought, um, it was just like the perfect interview. If we had just recorded that podcast, I would have been happy. So we're just going to try to recreate that moment right now.

Oh, I did not know that. Okay.

Wow. So just to paint the picture here, you have. Uh, WP Engine, and we'll talk about how, or sorry, WPBeginner. So WPBeginner, and we'll talk about how you got to that, but that's the content site. That's just providing free help, you know, content to other people like you who are trying to make sites in the WordPress ecosystem. That's the, the mainstay. And so I'll draw an analogy here because, uh, we've had Andrew Wilkinson on the pod, I don't know, a dozen times or something. He's probably one of the most famous guests and most, uh, favorite guests of the audience, uh, of of our community. So you have a business that's a lot like his. He's got a portfolio of companies. You've got a portfolio of companies. He had MetaLab, which was kind of his like core business cash cow thing that allowed him to buy these others. You had your WordPress site, that was the content site that was your core engine. But I think you've actually done, I think your model actually might be a little bit better. That's no knock on Andrew. It's just to get people excited here. So basically you, I think, have a more like one ecosystem. You're like, okay, I'm going to like dominate this WordPress ecosystem. And the good thing is that WordPress, I think, powers like 30 or 40% of all websites. So it's, you know, it's huge. It's basically like, you know, a huge chunk of the internet. And then all your stuff fits together. So you, you know, you have one customer, they're trying to, you know, make a successful website and grow and solve all their problems. You're like, great, I have I have the content that will help you, then I have the tools that'll help you, and you either buy them or you build them. And you've created this portfolio that now does, you know, 9 figures of revenue, probably worth a billion dollars. You own the whole thing yourself with no outside investors. You're only 32 years old. You know, you've built kind of an amazing thing. So that's the, just to sketch out like the blueprint here for what you've done. Sam, does that, would you add anything to that description?

Well, then there's all his side hobby stuff, which like I read his annual report and he's like, I bought a gas station or I bought like 8 or 10 gas stations. So that's like a whole nother conversation. But yeah, that, that's, that's a lot.

Let's do a quick thing on the, on the origin story so that people, people have it. You told me once on the phone, you said, I think you were doing consulting or something. You had like an agency. You were like, oh, I was helping people make websites and I was building like CRMs or whatever for them. And then WordPress came out and I was like, oh, this is way better. They should use, they should be using WordPress. You started helping, you just were a service agency, right? And then you started, then WordPress became your, your core service. And then you were like, okay, I'm just going to help people make WordPress sites for their business. Is that right?

Pretty much. So remember, uh, the very first websites that I built were online proxies because I wanted to play games in school. Um, and I was making ad revenue on proxies and some arcade turnkey sites. And I was helping small other, you know, local businesses. Set up their websites. I tried making my own CMS with PHP. By the way, I can code. I'm not the best at it. I would say now I probably suck at it.

And what age, what age was this?

13, 14. So I would build these websites super cheap, call it like $250, $300. I will make you a website back in the day. And but what happened is that these clients would always rely on me to make changes to it. Changes to the websites. And as I started doing consulting at a bigger scale, I didn't want to do these, the small end, small end things. So, and I discovered WordPress around this time. This was 2006. And I said, WordPress was only in inception for 3 years. So WordPress started in 2003. So I discovered it in 2006. To put it in perspective, I've been, I'm 32 now. I've been in WordPress half of my life. You know, this is the result is compounding in one thing for half of my life.

By the way, you're 13, 14 doing this. Are you like at the dinner table at night being like, ah, my clients are pain in the ass right now, mom? Like, you know, what are you saying at home? And also, how are these people finding you? Are they coming to your middle school and you're handing out flyers? What's going on?

No, no, no. So we moved from Pakistan to US when I was 12. Okay. My dad had a mechanical engineering degree. But it did not validate when he came to US. So he was working 16 hours a day as a gas station clerk attendant, you know, just swiping things 16 hours a day. Kid you not, every day, Monday to Friday. And on the weekend he had his third job. So I didn't really see my dad. My mom was busy because there's 3 of us and the 4th one on the way, right? So my youngest brother was born in US. So there was not many dinner conversations happening. I wanted to figure out a way to have some chunk of change in my pocket so I can buy junk food like Mountain Dew and Kit Kat and Snickers and all the shit that you buy when you're in high school.

Dude, your dad was at the gas station, man. You had the hookup. You just, uh, you just needed to ask. He was not cutting you any breaks there.

He's like, no way, no way. My dad would never do that.

By the way, you went to high school at age 12 also, right?

Yeah, I started. So I moved here. I had just finished 7th grade in Pakistan.. And I came here in March, so there's this 2-month gap. The school system is like, well, we can put you in 8th grade. Worst case scenario, you'll repeat 8th grade because that's where you're supposed to be in anyways. But our education system in Pakistan is far better than the one we have here in US. So they're like, you can go to high school. So I'm like 12 in high school, the youngest person in the school. I did not speak English that well. I would say probably very little English. I knew how to read English because we were taught alphabets and such, but my communication skills were not there. So yeah, that was a pretty challenging time for me. And I spent most of the time in the library. During lunchtime, I was in the library and I wanted to play games because I'm like, I can't talk to humans. So I would just play on the computer and those game sites were blocked. I'm like, how do you unblock this thing? And that drove me down in terms of how I was getting clients. It was through these forums online, right? So you had forums like DN Forum, Digital Point, NamePros, bunch of these, you know, OG communities online where you can get, you know, business. And my cousin got me into one of those.

They don't know you're 13, you're just a guy in a forum.

No. Yeah. Well, like, so we had like a family friend who needed a website and you know, they had a local business. They knew how old I was and they're like, oh, you can do it and I'll pay you $300 to build my website. I'm like, okay, sounds good. And then, you know, that's how that funnel started.

So you're doing sites, you're trying to make your own CMS, you discover WordPress, you're like, oh, this is way better. Here's a CMS out of the box. What becomes the aha moment and when do you create the blog?

So had discovered WordPress, moved these clients over. I had affiliate sites. I was doing affiliate promos at the time. I was discovering this. I had directories that I was telling you about earlier that So I wanted to get more traffic. So I had these, I created these MySpace profiles, they were fake profiles and got hundreds of thousands of followers and I would send bulk, you know, DMs equivalent, which were called bulletins on MySpace, right? So I just wanted more traffic and I went down the rabbit hole of SEO, which brought me to WordPress and then, 'cause WordPress was dynamic content. So I added the blogs to the directories, started using WordPress for the clients. And I had these social media profiles on Digg and StumbleUpon that were super power users and such. And essentially when I wanted to get rid of this business, the consulting business, I wanted to figure out how do you do this? I asked other agency owners and they're like, well, you know, we just have these PDFs that we give to our clients. And I'm like, but WordPress updates all the time. How do you keep those PDFs updated? And they're like, oh no, we update the PDFs. I'm like, that's dumb. You should use WordPress to update those documentation. So essentially WPBeginners started that way. It was the unofficial documentation for WordPress. Now WordPress had documentation, but it was, it was written for developers by developers. Nothing was for business owners and beginners.

And what year was this?

2009.

Well, one good point here is that that's now 6 years after WordPress started and you're making the beginner site and there really wasn't a great one. Most people, I think, uh, there's a lesson I've seen many, many times as we talk to different guests, which is. Sometimes you feel like you're late, but you're rarely ever actually late to the wave. And Kevin Van Trump told us this one time, he goes, for all the best things, you always get a, always a second turn to get on the train. Like you feel like you're late, you feel like you missed it, but often you're not, you're not that late actually. Don't talk yourself out of it. There's almost always another, another, another chance to hop on it.

Look, according to SimilarWeb right now, you get like 2 or 3 million visits a month. The early website shockingly doesn't look significantly different than how it looks now. No, you kind of nailed it right out the gate. It's like it was a simple website where you just have articles about picking the right name, how to install WordPress, selecting the right theme, picking the right web hosting. But were you writing this stuff? Because I know you're an English as a second language person. So were you, are, are you actually writing these articles? Because a lot of them are long, like, look. 55 of the most wanted WordPress tips, tricks, and hacks. Yeah. Like these are like pretty like in-depth articles as well as you're playing the game of SEO and like you clearly understand like English.

And what tools do you use to figure out— well, because I imagine most of these articles are— you're writing them based off of what people are searching for, is that right?

Yes, it's a combination of that and what they're asking us through our contact form, what they're asking us in our Facebook group, I think our Facebook group has probably over 90,000 members and support requests are coming. So yes, we have our own keyword generator. If you go on WPBeginners, kind of hidden on the free tools page is a keyword generator and you can put in anything in there like WordPress and it will tell you what people are searching for.

And you have a lot of comments early on, June in 2010, a year or two after starting, you already had 26 responses on just, I just clicked on a random article. So you're like getting traction.

Yeah. So a couple of things happened that that worked out for me. One, you, do you guys remember dig.com? Yeah, it was, it was really popular. So I had a power user profile there. So what I, like, if one outta two articles that I would submit would hit the front page. So of course I used that to my benefit and I used that network to my benefit.

So how did you get a power user profile? Because, uh, there was, there was legitimate ways and illegitimate ways to do that. I'm curious, what, how did you end up having that?

It, it, it's just a social circle, right? So there, there's these engagement pods. That you go on and back in the day was on MSN Messenger and well, AIM. So we just had the engagement pods. So if I submit something like, you know, it was a group chat and everybody would dump their items in there and you would upload it. So yeah, it was the engagement pod.

And what year did this, did WPBeginner cross a million in revenue, in annual revenue? How long did that take?

Maybe a year and a half or so.

Oh damn, you crushed it right away.

Yeah. So, you know, we had a good revenue stream. So let's, let me take a step back. So there was this business and the Listicle business. So collectively passed a million in a year and a half. So about 2011, 12.

And so your early 20s, basically at that stage, you're a millionaire.

That was my first million.

How does that feel? You said you grew up, your parent, you know, your dad worked I, you told me you were like, yeah, my dad worked at a gas station. And I thought Pakistani guy says gas station. You, I know you own gas stations. I was like, oh, so your family owned gas stations. You go, no, no, no. He sat in the gas station. He swiped the cards in the gas station. Uh, and you were like, everybody in my family I knew, you were either, you worked at a gas station or you're like, oh, you're, you're real smart. Like you're, you get to be a bank teller and that's all you knew in your bubble. So tell me two things. How did you get, because you got to kind of see the possibility of being a business person or being wealthy before you're going to even do it. So how did that happen and how did it feel when, like the name of the podcast, My First Million, I'm curious, how did it feel when that first happened? What was, do you remember your reaction?

Yeah, so I'll tell you how it, how I knew it was possible. So I used to play cricket, which if you have a lot of listeners in Pakistan and India, you know, they love cricket. We love, I love cricket. So I was playing cricket and there are many leagues in US, in South Florida there was one.— and there's many now too. I met this Pakistani gentleman and he was the sponsor for our team. He's a crazy cricket fanatic and he became my mentor and now he's a family friend. But back then I just see this Pakistani guy driving an S-Class and just super humble, super nice. And I'm like, what do you do? Are you like born into money or what's your spiel? I was pretty blunt as a kid. So he's like, no, I have real estate. I came to the US with like $500 in my pocket or $100 in my pocket. You know, those typical immigrant story. And then he, you know, after we would win the games, he would take us out to eat. Sometimes he'll invite us all to his house, which is like, you know, big mega mansion, right? You know, 15,000, 18,000 square foot house. And his kids were my age. So we'll just kind of go over to his house, hang out. Sometimes we would go over to his house. To watch cricket games because they're happening on the other side of the world. So time zones are different. And in between breaks, I was the one who took interest in his business and his kids were all roaming around. But I'm like, tell me how this works. Tell me how this works. Right? So he would tell me stories like, oh, this is how I took over Burger King for free, or this is how I did this and this is how I started. So I absorbed a lot of the earlier lessons on business, finance, just hustle. From him, right? And he was always super encouraging. He'll ask me, how's this going? And I felt like I could talk to him about it. So that was the early stage of me knowing, oh, this is possible, because nobody in my family had any wealth. They were just working at gas stations, all my uncles, everybody. And if you were really smart, you were working at the teller at the bank. So that was the motivation part in terms of how it felt when I hit my first million, you know, you would think it would be like the joyous moment of, oh my God, look at this. I was more scared than anything because I was, is this going to last? That's the question that you have, you know, in your 20s. You're like, you come from nothing and you have this thing. You're like, is this going to last forever? Like, what am I supposed to be doing? I have no guidance. So there was like this inherent fear. So I always lived below my means, like way, way, way below my means. So when I was in college, I did not buy any furniture. I just slept on a floor on a blanket because I mean, that's how I grew up in Pakistan. So I'm just like, I'm not going to buy any furniture. Why waste time and money with this? So in my apartment, I had a blanket and I got a desk from Goodwill. So that's what I worked on.

And I mean, what's amazing is You said, I would've thought the first million came sooner than 2012, but because in 10 years you've grown that from 1 to 100+ or whatever it is, when were the inflection points where you were like, all right, blogging is cool and it's working. Yes. Let's get beyond.

Yeah. So I launched OptinMonster in 2013, List25 in 2011. These things started really cranking. I had some really sweetheart affiliate deals with certain companies that worked out really, really well for me. And so that was good. In that time, you know, we were coming out of the economy, the recession. So real, there's still like some real estate deals to be had. So I bought my gas station, the first one, primarily because I wanted to offset, offset expenses. With an appreciating asset, which was the lesson I learned from my mentor, right?

Yeah.

Let's, let's, let's talk about that one real quick. So just do a quick, quick little monologue on why did you buy a gas station when you found out you were having a kid?

70 for the, for WPBeginner.

No, no, no. I had OptinMonster at the time and I had the gallery solution at the time and I had, I had WPForms, I had analytics.

So were you close to taking it and how did you decide not to?

Yeah, I definitely thought about it, but then I was like, what would I do afterwards? Like my son is going to grow up seeing me not work. Because I'm like, I'll be set with that money, right? Like, I would not, I would not go do anything if you— I mean, if you have $10 million, $20 million, you put it in the bank and you're like, okay, this, this is it.

I want to—

you were going to have a lot more than—

yeah, I was going to have a lot more than that. That's, that's what I'm saying. Even after paying taxes, I would have a lot more than— I would be set. So the, the, the, the factor that my wife and I talked about was what instilled my work ethic was watching my dad work. And I wanted my son to at least see that, right?

What was the multiple on that to get to $70 million? Is it as high as 10x multiple?

At that time? No, it was lower than that.

So you turned that down and—

I turned that down.

You turned it down. Was it really— you turned it down because you were like, I want my son to see me work?

Yeah. And also I wasn't ready to give up my baby.

Okay. And, uh, okay, so fair enough.

Most people take the money they make and then they're like, all right, that's what I have to spend. And they spend it. What you do from your mentor is you take the money you make, that has to now go to buy an appreciating asset that will spit off cash flow. You, and then you could spend whatever that one makes. So it's kind of like a savings program basically. So you spend what the, you go by the gas station, the gas station's going to pay you and you're like, that will pay for this child. You know, like I'm going to provide my, I'm not going to provide my, for my family. This gas station is going to provide for my family. I'm going to put food on the table.

Dude, it allows me to one, sleep better at night and two, be more bullish in the deals that I'm doing.

How many gas stations do you own now?

10.

And you own a bank too.

I bought a bank. Yes. Wells Fargo.

Wells Fargo. Because I, you have a cool blog post where you're like, uh, I used to go to this bank all the time and I decided to buy it this year.

Yeah. I used to ride my bicycle around it. I couldn't even go to the bank. I didn't have a bank account at the time. I used to ride my bicycle around that bank because there was a Sports Authority there and Office Depot there. I would just like ride my bike into that. And then I bought that building.

What amazes me is, is how Like, I don't know if your SimilarWeb estimates are right, but do you say what your monthly traffic is on WPBeginner?

No, but you know, it's in the millions.

Oh, okay. So let's just, let's just assume that SimilarWeb is roughly correct. 2 to 5 million. We'll give it a huge range a month. That's a lot. That's not that much. Like what's crazy to me is that, I mean, that's high intent traffic. It's likely people who are coming for. To buy something like they want an email software, so they're coming for a review. It's just amazing to me that that much traffic has created so much value.

I think when you start your online business, most people think about maybe a CPM model of monetization or a CPC model of monetization. There is far— there are other and better models of monetization, right? You can have CPLs, you can have CPA, you can have a combination of CPL, CPA, you can have recurring, you know, uh, commissions.

So you're talking about, uh, uh, CPM, meaning just, uh, $10 per 1,000 visitors for a display ad versus cost per lead or cost per acquisition, which is someone buys something, they give you $100 per month. If it's a Mailchimp and it's someone's paying $500 a month, they'll say, all right, you get $100 per month while they're a customer.

Correct. And there are verticals that are not available on WPBeginner because remember I was telling you I did a lot of affiliate marketing as well. There are verticals that will pay you on a lead basis and hundreds of dollars just for a lead, not for, not for a commission like as an affiliate, not like you made a sale, just a lead will get you hundreds of dollars. And so, so I did a lot of those and I still do. So that's, that's a good cash cow. Um, so those verticals are available where you can go and promote something and get over $100 in a lead.

Has the WPBeginner revenue grown like the rest of the business, or is that just like, you're like, I'm, I'm perfectly fine with it just being a steady $10 or $15 million a year thing. And I use, I bet you it's super profitable. I'm looking at your team page. I would bet you make 50% profit or something crazy. And you're like, I'm just going to take that profit and buy more stuff. And I'm okay with that being steady.

100%. 100%. So this was one of the lessons I learned from my mentor, right? And who had the real estate background. So the philosophy is very much derivative of real estate. You make money on the buy. You have to be. Otherwise, if you're paying a high multiple thinking based on future, I mean, yeah, that might work out, but it has a bigger risk. So from my perspective, I want to have heads I win, tails I don't lose much. And I got that formula from reading Mohnish Pabrai's book. I was a huge fan of his. Now we're friends. But yeah, so that's very much finding margin of safety.

Explain that more. Heads I win, tails I don't lose much. What does that mean and what's an example?

You sort of had this, you sort of have this like, pay attention to the cents and the dollars will follow type of vibe where like, you're really not, you're not, I guess I'm surprised at how maybe, I don't know if it's still the same way. I'm surprised at how small some of the things that you do and yet because you own 30 or 40 of them, they're really accumulating.

Exactly. So dude, when you come from nothing, you have to have a good sense of where the money's going to go, right? And you have to be very conservative to not lose it all because I came from nothing. I don't want to go back to that. So I'm very, very cautious. The funny thing about compounding is that if you compound at a healthy rate, and I have a very, very good compounding track record.

What is it?

I've been compounding it in double digits for the past 7, 8 years.

What's that mean?

20%? Like, what would be considered good? Like, you know, like for you, you're like, all right, 30% or 40%. That's like, I mean, that's amazing. You can't get that in any normal investment, right?

You had a tailwind, which was WordPress was just going to keep getting more and more and more popular, right? That's a huge tailwind. That's like a generational tailwind. That's huge. This is already, it's going to grow faster than like an average growth rate because of that. Then you can do things smart operationally. But I got to ask you a question. So our buddy Moise has this phrase, he goes, the two sexiest words in the English language are distressed asset. And you just said mismanaged gems as a catchphrase of something you look for. I like that idea, but also I'm kind of a lazy motherfucker and When I hear distressed asset or mismanaged gem, I think work. Oh, I gotta go clean up. I gotta manage this better. Isn't that going to take a bunch of work and a bunch of mindshare to turn things around versus, it's kind of like the Buffett cigarette butt companies versus like just buying a beautiful business that's already working and letting it grow for a long period of time. Am I wrong? I must be wrong about the amount of effort that goes into fixing a mismanaged gem or a distressed asset. What do you think about that?

So I think distressed asset from a real estate perspective, I would say slightly different than what a mismanaged gem is. My real estate buys, Shawn, that I did in the early days were distressed assets. Okay. But it was just the banks needed to get this off their books, right? And I was a cash buyer. I'm not looking to finance anything. I'm a cash buyer. I had the right contacts, so I was able to buy Some of those gas station properties, they were already leased out to, uh, triple net leased out to like Couche-Tard, the Canadian multi-billion dollar company that owns Circle K. All I had to do was just give cash to the bank and take, take the, you know, deed over. So those are distressed assets and I, I got lucky. I mean, I bought a gas station, um, when it was all said and done, I paid 90 grand for it. And you're like, holy crap, how'd you do that? Uh, that was a distressed asset because you had to do environmental cleanup on that thing. Okay, that was work. So, so those are distressed assets. When you're thinking about a mismanaged gem, this is a property where somebody, maybe due to the lack of effort or lack of experience, have not fully understand the potential that is there.

What are the commonalities of not realizing potential or common mistakes?

So, you know, you might, you might be a creator and you have a lot of user base and you just haven't think about monetization from, you know, all the different potential monetizations that can be had in that one business.

That's a good barometer. The other thing that, that worked in our favor was the ecosystem effect. So if I buy an analytics software, I can cross-sell OptinMonster and vice versa. You know, if I buy MemberPress, then I know that all the people who are creating a course will need to buy OptinMonster to have lead generation, or it will need analytics to track all the things. So the synergy effect compounds, and that was a big up for us.

And I read somewhere that you said something like, I don't buy whole stakes anymore. I don't buy 100% of the company anymore. I try to buy 49% because I can't, I have too many things. I can't run all of them. And then in the pre-call that you did with Shawn, you have this really cool line. It's in quotes. It says, "How I manage a billion-dollar portfolio without stressing out." And that's my quote, by the way.

He didn't say that.

That was Shawn who wrote that.

Oh really? Well, when I met him, he was like, he said something like, you were like, I travel. I was like, what are the, you know, what do you do with your time? Like, how are you spending your time? And you were like, oh, I love to travel. My family, we go travel. And I was like, I thought you meant like, you know, like, I don't know, LA or, you know, like we go to see the Grand Canyon and you were like, we're going to Egypt and then we're going to like the Serengeti and we're going to like, I was like, oh, okay. This guy's like doing like exotic travel every month. That's cool. He, you said something like, I don't know if this is exactly right, but my brain heard you basically stack a bunch of calls with your kind of operators in the last week of the month. And like, that's your only time to like stress out or think about like, those calls and then the rest of the month you're not thinking about those things. You're reading, you're playing basketball, you're doing other things. And so A, is that accurate? And B, like I interpreted that as, wow, this guy's managing a billion-dollar portfolio and he's not stressed out.

That's awesome.

Yes, that is fairly accurate. Now it didn't start that way. I want to emphasize that it didn't start that way. I didn't figure this out up until maybe 2 years ago. Okay, so just, just to put in perspective, uh, in, in terms of like me being as chill, what was like—

what were you doing before that?

You know, I would have to go in, sometimes clean the business, and you know, like, oh, this, this is not doing right. I would get, get involved too much.

Were you a hard-ass?

Yeah, depending on who you ask. Yeah, sure.

According to me, no. According to everyone I ever worked with, Hell yeah.

Like, you, you seem like you have a ruthless side to you, even though you're polite and kind. You seem like you could be ruthless.

I, I would say I could be very disciplined. Ruthless might not be the right word.

Did that sound so ruthless the way you said that? That was awesome.

Yeah, that's a ruthless thing to say.

That was a fucking ruthless thing to say.

That's cool. So you, I wanna talk a little bit about ideas. So you've built this amazing thing and you've been basically kind of like building cool stuff, making money since 12 to 32. So you've had this run. I'm curious, you know, one of the questions we always get is, all right, well, you know, now it's easy for you, it's easy for you to just keep doing what you're doing, but like, I'm not you. So that's, you know, it's inspiring, but it's not entirely helpful. What would be more helpful is like, what ideas or opportunities do you see that like somebody else could do? You're too busy to do them or they're too small for you now. What ideas or opportunities do you see that other people could do?

And so, uh, then you would, uh, would you buy versus build from there? And talk about that distinction, because you started off as a builder. You've now bought like, I don't know, 30 companies or something like that along the way. And I think you studied not just Charlie Munger and Warren Buffett, but also Mark Leonard at Constellation. And you had told me something like you read all his annual letters and there was one thing in there that really stood out to you about building versus buying. What was that?

One thing that I imagine Sean is a little bit like this, but I'm definitely like this where Creating products and new businesses is part self-expression where it's just exciting. It's fun to do that shit. And I'm not the most disciplined person when, like, the reason I don't like real estate is I'm like, dude, I'm not very great at just looking at this Excel sheet and unlocking value. Like, that's not what I'm skilled at. And I don't know if I even particularly like that. Where did you learn how to find value that you could unlock? And what are some of the like common themes that you see, uh, with that? I don't know, Sean, are you like that too?

Yeah, I am. Uh, but then I'm also a short, uh, a natural shortcutter. I like to find the simplest path to the solution and that, so like while creating, like you, you had this thing you said on the pod that was hilarious where you're like, I'm an artist, bro. I'm just an artist. I gotta create. And I definitely feel that I have a creative itch to me. But I also have a path of least resistance itch to me where I'm like, oh, there's some beauty in just finding a simpler way to win.

I agree with that. I also think it's fearful or it's fear to outlay, to pay. Like with the internet, you could start with nothing and spend time and you can get something.

Yeah, but I think that's the point. He's like, you could build something new, high chance it's just not going to work. It's a zero. It's also going to take a long time. If you're buying something that's already working, yes, you outlay cash, but are you actually taking more risk? There's a difference between putting out cash and putting out risk. And I think what he's saying is that—

but that's what I'm asking is the difference. I'm asking the difference between putting out cash, like how do you make that gap small?

So I'll say this. So when I started, Sam, I was very much an artist like you. I enjoyed my creation. I enjoyed putting my, you know, fingerprint, footprint, whatever you want to call it, on those. So when, if you were looking at the early days of OptinMonster or those products, you would have my footprint on them.

And you had like a $20,000 bill to the Serengeti with your family of 5.

No, they're like, I, I was not doing Serengeti when I was building the business. You know, I'm not doing Serengeti when I was building the business. I was very, very much involved. Um, but a big mindset shift that happened in my career which has led to, I would say, tremendous growth for Awesome Motive is the mindset of going from a creator and operator to a capital allocator, right? And this happened when I was studying Buffett, Munger, Mohnish, et cetera. Buffett says, I'm a better investor because I'm a businessman and I'm a better businessman because I'm an investor. Now you, you read that and you're like, okay, sounds good, cute, right? But when you think about that from a first principles point of view, What's the commonality between the two is that both investors and the businessmen are resource allocators or capital allocators. So when you tie that together, that was the aha moment for me when I think about, okay, if I start this new thing, yes, I'll make X, but if I buy something, if I shortcut it and let's say I buy something that's doing $2 million in revenue, I, you know, 20% or 30% of $2 million is always gonna be better than, you know, 10% or 30% of $100,000 or 100% of $100,000 for that matter. You see what I'm saying?

What's the biggest deal that you've bought?

You don't have to say which one, but like, uh, what checks out? What check made you sweat?

What check made me sweat? None of them, because I'm not buying, like, I'm not putting 80% of my net worth or my cash in any one of those deals.

But have you bought things for tens of millions?

No, no, I have not bought anything in the tens of million dollar range.

But these are so single-digit millions and then—

single-digit millions, single-digit.

That is fucking insane that you've built that much value with like these little small, like what's that, whatever Sean said, the cigarette butts, like you've made the cigar with it. But, um, and are you doing all cash up front or I, there's no way you do that. You're, you're, you're way too sophisticated.

Mostly, mostly all cash up front. You do do that. There might be some pieces of like seller financing. But one of the advantages that we have compared to somebody offering like a higher valuation is that we can make the process really seamless for the seller. That also allows us to have, get a better and a more attractive valuation. But you know, if you try to ever sell to like a private equity or VC, mostly private equity, you'll be on the hook for like 6 months. They'll be dragging you, asking you for all sorts of nonsensical stuff. And by the time the entrepreneur is just burned out and it's just a shitty feeling. With us, you know, you send me a message over the website, my assistant sorts through it, I'll look at it and say, okay, yeah, this is good. We'll like look at it and ask you for the P&Ls. Within like a week or so time, we'll give you an LOI and then we can close in 30, 40 days after that.

Holy shit. Are you the only decision maker?

Yes.

That's insane.

I like to think that I'm the chief risk officer of the company.

And you told me a story about risk. You, 'cause I, I was like, okay, you buy all this stuff. Um, like how much debt do you have? You're like, no debt. And you're buying, you know, with a margin of safety.

And you were like, even with his mortgages, he says no mortgages, no mortgages.

And, and look, like there's gonna be a lot of financially savvy listeners here, and I have many, many financially savvy friends who are billionaires. Uh, and they disagree with me on this, you know, but, but the way I was raised in, and in Pakistani culture, that is considered bad, it's considered taboo. And sure, leverage can help you grow faster, especially when used in a smart way, but it also takes away the margin of safety, which in troubled times can really destroy your autonomy if you're not being careful. So, you know, I'm okay with getting rich slowly, um, and I think I've done all right for where I am. I see myself as a turtle in a rabbit race, bro.

You're a 32-year-old, like, pretty much billionaire, dude. Yeah, you didn't go that slow.

You know, in 60 years, I think I'll be okay. It helps me sleep better at night, be more bullish. I don't know, Sean, Sam, do you know about Charlie and Warren's third business partner?

No, no.

Tell the story. See, nobody knows about the third business partner. So they did have a third business partner. His name was Rick, right? Rick Warren or something like this. And was just as smart as them but was in a hurry to get rich. And Mohnish asked Warren about what happened to Rick at one of the lunches that he had. And this is public, I'm not sharing with you anything.

Warren's like, Rick's a bitch.

I'm going to get a framed picture of this guy Rick on my wall and it's just going to be a reminder every day. Don't be in a hurry to get rich. It'll happen. Don't be in a hurry. That's going on my wall.

Sean, I cut you off. What were you gonna ask him?

Oh, I wanted him to tell that story, but also wanted to go back to ideas. So you had given us the first move. If I needed cash flow right away, I would do service agency, maybe something around creating content for brands using and use AI for leverage or generating leads for brands and create a lead agency using AI for leverage. Okay. That's the get started plan., but you don't want to be in the service business forever and you want to, you want to get out. That's just the get, you know, the escape from broke jail plan. Okay. Now you've done that. What are, what's kind of like level 2 type of ideas or opportunities you see?

No.

What is that?

Okay, so basically in the United States, this works only if you're in the United States, we have such thing called a Freedom of Information Act that allows you to request any kind of data from any government-run authority.

So usually journalists use it. So we used to use it at The Hustle all the time. So like when big stories break, oftentimes it's because a journalist did that and they like uncovered some, you know, controversial fact.

What were some fun creative cash flow things you were doing at the time?

I'm not going to talk about this.

There's got to be one prolific one that is.

I've heard a bunch through friends of friends. I'm not going to mention any of them, but I've heard some of your things. I mean, like the space that you're in, everyone starts sometimes black hat, gray hat. And then as you like start making real money, you're like, all right, I got to go legit. But I've heard some crazy stories about what you used to do.

That's good. Yeah. Justin Mares had a good phrase. He goes, uh, do whatever you gotta do to make your nut and then go on your noble mission. And, um, and I was like, I don't know if I agree with that, but I like the way you said it. Um, let me put it that way. And I know several people who have done that where it's like, okay, what were you doing before this? Oh, I was running, um, you know, this dating, uh, dating site affiliate, you know, affiliate ad network. It's like, oh, okay, cool. Plenty of Fish. Like, you know, this is not really where you wanna hang out for too long. Or like these poker poker arbitrages, poker affiliates. There's one guy—

or selling ringtones with subscriptions.

There's a guy who emailed me that was like, I think he said you could say this on the pod. He's like, yeah, like I go on sportsbook. Every sportsbook has a welcome offer. So he's like, I go on Sportsbook A and they have a welcome offer of like they'll match up to 20% of your deposit up to whatever, $1,000. And B has the same welcome offer and I go max out both welcome offers and I bet on the same game for Team A, Team B. I lose the small rake, but I take the whole welcome offer and I just do that again and again and again. I was like, love it. This is so simple and so funny that you do this.

What are you— have you ever had liquidity from selling a business or is the majority of your liquid wealth come through annual cash flows? And are you pulling out a significant chunk from the business?

Yes. I'm pulling out massive chunks from the business. Um, in terms of liquidity event, yes, I sold, uh, two, two businesses, relatively small, you know, seven-figure exits on both of those. One was the YouTube channel business and another was a, was a software, photography software business. Um, in terms of the cash flow, you know, we, we operate with a very healthy cash flow, so I moved that out to the, to the holdco level and then used that cash to invest, you know, in private businesses as well as in real estate and public markets.

If you had a pie— a good question Sean always asks is, what do you do with your money? If you had a pie of your net worth, what's that allocation looking like?

Pie chart, not just a pie.

A pie chart or a pie.

Yeah, or pie.

It's so heavily skewed towards my business, the online business portfolio. Extremely, extremely heavily skewed. I would say then a good chunk is in the public stock market. And then I have cash.

Do you actively manage your portfolio or are you, are you just doing boring shit?

Big chunk of it is boring. You know, dollar cost average index. I have begun to play with, you know, a little bit of money to, uh, to see what I can do with it. And I've, I've, I've done all right.

Like stocks or other stuff?

No, no, stocks. Stocks. This is only, I'm only talking about public investments 'cause real estate is separate.

You, um, you talked about like kind of coming from nothing, literally sleeping on the floor, uh, because you're like, why would I buy furniture? I should not buy furniture. Even when you had money. Um, yeah. But I believe two things. A, money is a tool. It's not the like end goal. It's a tool to, to enable you to do something with it. And B, there's no point to money except for to enhance your lifestyle, other people's lifestyle, improve lives in some way, right? It would be a shame to just have the money and never use it. Have you, and spending money is as much of a skill as making money. You just start it later in life. Have you learned how to spend money and what have you learned? What can you teach us?

Yeah, uh, yes, in the early days I saved everything. I mean, I did not buy a bed until I got married, dude, just to put in perspective.

Even when you were dating?

No, there was no bed.

Ladies, find you a man, find you a man with no bed.

So, so, you know, I, I met my wife in high school, um, so, so she's known me since I was broke, and, you know, her, her parents weren't that well off either, so, um, So yeah, in terms of learning how to spend the money, yes, now I have, right? For me and the culture and how I was raised, we take care of family first. And my first thing was to ensure my parents are retired because my dad worked really, really hard when I, you know, when we moved to US. So my parents are retired. I mean, they go to Pakistan maybe like 4 times a year. They're in Pakistan, you know, like right now, for example. So let's say, yeah, so that was first thing first in terms of making that impact. In terms of traveling, I realize that I get a lot of creativity and joy out of just going and seeing new places and I spend the money on those things.

Are you giving equity to your people? Like, is the structure where, is there like a holdco that you fully own and then the holdco owns 80% of this company, 70% of this company?

Yes, in the early days, that's what I did. Now I don't do that.

Now you don't give equity to the operators? Do you regret giving equity?

No, I, I enjoy working with those co-founders, and I, I don't think I would be able to do what I did without them.

What now? You're only 32. Like, what are you gonna— like, how do you get up in the morning and feel motivated? You know, what do you— what's, what's driving you now?

I want to build a generational company.

Sounds like you're there, though.

No, I think it's generational. When my kids are older and grandkids are around, I'm probably going to be doing this till I'm dead. I enjoy the game. I enjoy the fun of it. I know Sam doesn't get excited about buying a business and fixing it up and growing it. I get a thrill out of it because for me, that's the opportunity. That's the hustle, like finding the edge. Getting that deal, you can say in some sense, just getting an unfair advantage, but knowing those tricks, knowing those tactics, giving me a head, like, you know, like if you play basketball, I mean, we all play basketball and I sucked at it, right? But there were some people like Alex was amazing, right? Because Alex had been doing this for a long time and he had tactics. He could just cross you over or whatnot. Um, I like having those tactics in, in the business.

Okay. What's crazy is you might be like probably in the top 50 richest, maybe, maybe top 100, top 200 richest under 40-year-olds in America.

I've kept a very, very low profile, and the only way this would be validated is if I was ever to raise a round or if I was to exit, right? Um, so right now what I can see in looking at our numbers and what similar companies trade at and exit at. My assumptions are based on that, but it actually doesn't matter to me one way or another. I'm pretty, I'm comfortable.

This model of buy, don't build and of becoming a holdco and having a portfolio, like there's a whole bunch of people who I know that are trying to do this right now. I'm sure you get a bunch of questions. I think I've called you asking you a bunch of questions about this. What do you think they get wrong? What's the common mistake or trap you think smart people can fall into trying to do this path? Or what's a misconception that smart people have when they come into this?

One thing that I've noticed, noticed several things, but this is the primary thing, is that the excitement takes them away. So they will overpay on a deal and then regret it later on when they find out because Oftentimes they have taken investors' money. They are on a timeline. You know, most of them are trying to raise a fund, you know, your typical 10-year plus 2 years, whatever. So they have— they're not disciplined enough to wait. And I have no rush. Like, you know, if I don't buy a company this year, no, doesn't make a difference. But, you know, so it allows me to be more measured and disciplined in the deals that we do. And that's probably the biggest thing. And/or underestimating the problems that exist in a business.

The first interview that I saw with you was, it looks like it was on Mixergy, our friend Andrew Warner. It looks like it might've been 2014, but I think it was even before that. And Andrew was like, how much revenue do you do? And you go, Andrew, I told you, I'm not going to tell you this. And, uh, it was pretty funny. And then I asked you to come on here and you're like, I'm not telling you these numbers.

You've told us a lot of shit.

Like, it seems like you're, you're, you're in a different, uh, sphere than you were before where you don't mind talking about some cool stuff. And I think that that's neat because you're like maturing from like this hacker, probably gray hat hacker from, you know, 20 years ago, 15 years ago to like kind of a tycoon?

I think, you know, when I was younger, I was afraid, you know, just from taboo things, but also I didn't— I want to fly under the radar and I still do, but I wasn't very vulnerable. I struggled with vulnerability and that changed as my network changed, as I continued leveling up. You know, with, I mean, now my forum is amazing and with YPO, but it's not a YPO forum, but everybody's in YPO. And those kind of, you know, groups really, really help you mature and find your blind spots and things like that. So I'm, you know, definitely appreciative of the friends that I have who call me out on those things and, They have helped me become better.

I'm going to have to use that little clip for my new company as an ad.

Thanks.

We use AI to replace what the company you said with Hampton. Exactly.

Hampton there.

No, man, I think, by the way, if your goal is to have a low profile, I have a feeling that's going to change when the headline of this podcast comes out because I don't think honestly that he's trying to keep a low profile.

I just feel like you care about being humble and you came across a lot of humility, you know, and not false humility. You know, false humility is basically like, I'm going to downplay everything and not tell you anything. And that's actually like a different form of sort of, you know, I don't know, arrogance or narcissism.

The non-flex flex. Yeah.

The not flex flex. Right. Or the— it's sort of this close the door. Behind me on the way in. So, you know, I'm in, but you can't get in because I'm not going to really do anything. Like, you know, I think the best people are the ones who sort of become the person they needed when they were younger. And I think that like, you know, the younger version of you, if you heard something like this, it's like, all right, this guy came from nothing, moved here from Pakistan, didn't speak English, was like sitting in the library because he didn't know how to make friends in the school, was like, all right, I want to play video games. The library had a firewall. So his first business was creating a proxy to get around the firewall. And then he started giving that to other kids as a both a way to like make friends and make a little bit of money. And then he took the money and like, he was like, okay, how do we get more customers? And it's not like he's some business savant. He just kept asking, how do we get more customers? Oh, what if a directory posted about me? How do I get them to do that? What's in it for them? And like, you know, you just one foot after another. So I think you, yeah, I think you did a good job of basically like without putting yourself in a position where you said something you're uncomfortable with, you know, you, you did share stuff that I think is You know, for me at least, pretty, uh, pretty inspiring. You're somebody that, uh, you know, I gave Ben a list of like 5 people. I was like, you know, who are the 5 people that we've met? Because we met a lot of people the last 2 years. I said, in the last 2 years, who are the people that we've met that were kind of the most inspiring? They seem to have a blueprint for life, not just business that was working for them. So like their business part of their life was working, but they were also like content and they weren't, you know, like in the first 5 minutes of meeting them, like weirdly bragging about stuff or like saying something that revealed some like weird insecurity that's driving them still and they haven't gotten over it. It's like, I don't know, those people are, they're characters, they're fun to be around, but like, I'm not trying to be them. You know, like somebody who's, you know, has a family life that they actually care about. So we put you on that list. And I'm glad you came on because for sure, I don't think most people even know your story and that's a shame. You know, like I think more people are going to know your story now after this. Where should people like follow you or where do you want to send them to go from here?

Really quick, Sean, before we wrap up, I want to tell you something. So he has this website. So Google Syed's, so it's, I want the listener to Google this. So S-Y-E-D and then his last name B-A-L-K-H-I, and then Google that and then the word net worth. He's got this hilarious blog post.

Oh, this is yours? Sam told me about this.

Yeah. Yes.

Where?

It says, what's Syed's net worth? The first line, you're probably thinking, and so his website comes up first and it's a blog post. You're probably thinking that I'm some sort of narcissist writing about my own net worth in third person. It's quite the contrary. I was looking through search traffic for my blog and I noticed that I have a lot of type-in traffic for users simply searching my name and then the term net worth. And then he goes on to explain that it's like, it's always changing, but knowing someone's net worth is not going to help you succeed. He's got those hilarious posts that he—

and he—

and it was really funny. And, uh, then you also— I want to give a shout out, we talked a lot about money and shit. You've got, uh, amazing posts where you do an annual wrap-up. I've been reading that for years. I think you started in 2017.

'15. 2015.

2015. You put a big emphasis on philanthropy. So like, you have a school. I, I think you're big on schools, right? You build schools. I forget where, Pakistan, I think. And you like are giving away, uh, you put a lot of emphasis on philanthropy and then it's you and your wife and your kid and a lot of these stuff and you have your own foundation, you're giving away a lot of stuff. And so I think it's awesome. I think that to reiterate what Sean said about being like a, you know, he has this joke about being a total man about, and in a way that's kind of like what you are is like, you're like a holistic person and your personal website does a really good job of explaining that.

Yeah. You know, I started doing those write-ups when my son— when we found out we're going to be, you know, we're going to have our son. I was like, okay, I should start recapping this. Well, we start trying to have a kid. I'm like, I should start recapping what's happening in my life so that way, because I'm going to forget it. And at some point, you know, I may want to tell him, oh, check this out, check this out. And that's how those year-end reviews came about. And I enjoy writing them. A lot of people love reading him, including you. Thank you, Sam, for reading it. And in terms of education, I do believe that levels the playing field, and that's why we're, you know, we do what we do.

Well, I was going to say Sam gave you a compliment. I'm going to make fun of you. The homepage needs a revamp. You go entrepreneur, investor, and marketing extraordinaire, with extraordinaire in italics, and then there's a photo of you with the headset. The Bono mic.

The Ted Talk. The Madonna mic.

You got the clicker and you're doing the hand gesture talking about, you know, you gotta start with why. And you're above that now, bro. You've elevated to tycoon status. Now you gotta have the super minimalist thing where it's like, yeah, all white. And it's like, you know, we buy companies of all sizes. Please inquire.

That's what it should say.

Yeah. If you have a company for sale, I'd like to buy it.

If you go to Awesome Motive website, I really want people to know about Awesome Motive instead of me, right? Um, if you go on my website, I barely spend any time. I write once a year. That's the year-end review. And that's really more for me than for anybody else. But if you go to awesomotive.com or am.co, um, that website, hopefully you should, uh, it says helping small businesses grow and compete with the big guys.

Now that's what we're talking about. That's a good one. And it has all the companies that you, you've, that, that are in under the umbrella.

Dude, this is awesome. Hey, do you want to come, do you want to keep coming back? You gotta keep coming back on. You're, you're fun to talk to.

That's Sam's, that was pretty good for me. Was that good for you? Question.

Yeah. No, you're fun to talk to. I enjoyed it. I enjoyed it. And happy to come back.

I told you we're not, we're not, we're not assholes.

No, I loved it.

More importantly, are you in for Camp MFM Part 2? Uh, that we're about to host in a few months.

I'm in. All right.

And that's the pod.

Yeah. I feel like I could rule the world. I know I could be what I want to. I put my all in it like no days off. On the road, let's travel, never looking back.