Tai Lopez

Tai Lopez's 3-part hiring system: IQ test, paid trials, scripted questions

Sam relays Tai Lopez's executive-hiring playbook: (1) an IQ test for certain roles, (2) paid consulting trials where he hires multiple candidates and works with them before committing, and (3) asking the exact same scripted questions in every interview rather than improvising.

“there's 3 things that he likes to do. One, he does an IQ test. So he like, he wants for certain roles, you have to be of a certain IQ. Two, he does trial. Yeah. Two, he does trials. Like everyone gets a trial. Like he pays them as a consultant and he'll hire multiple people and just throw them in. And so he wants to work with them before he hires them. And three, what's the third one? I wrote it down. Uh, trials, consultants. Um, oh, when he interviews for the one role, he makes sure he asks the exact same questions every single time and it's a very planned set of questions.”

Steal thisRun paid trial projects with multiple candidates and ask every one the identical scripted question set so you can compare apples to apples.

Tall poppy syndrome: why men resent conspicuous status

Citing evolutionary psychologist David Buss, Tai Lopez argues men are wired to resent visible displays of status by other men, a pattern with names across cultures. He uses it to explain the hatred his Lamborghini videos drew.

“Dr. David Buss, an evolutionary psychology professor, one of my mentors, he told me, Tai, men have always been bothered by conspicuous status of other men. It's a classic. In Australia, they call it tall poppy. In Sweden, They call it fjanteloven in Scandinavia. You're not supposed to show, yet Sweden has the most billionaires per capita.”

Pier 1 did $1.5B in revenue the year before Tai bought it

Tai Lopez frames the scale of the distressed brands he acquires. Pier 1 generated $1.5 billion in revenue the prior year with an 8-figure customer base, undone by too many stores and leases.

“Pier 1, last year, $1.5 billion in revenue. Um, too many stores, too many leases got them in trouble, but tremendous amount of cash flow, huge customer base, 8-figure significant 8-figure customer base. I own Pier 1.”

Tai Lopez bought Pier 1 for $31 million

Shaan presses on the gap: Pier 1 did over a billion dollars in revenue, has a known brand, data, and IP, yet Tai acquired it for $31 million. The disconnect between brand value and purchase price is the episode's central puzzle.

“Explain to a listener who's like, wait, how are you buying this business for $31 million? So, what is the hair on the business? Why is a business that's a well-known brand, that has all this data, that has this IP, that has this brand, that did a billion dollars in revenue last year, why is it selling for $31 million?”

How Tai stole Pier 1: stalking horse bid when everyone fled COVID

Tai recounts the deal mechanics: Pier 1 entered Chapter 11 pre-COVID, then collapsed; all other bidders vanished. He became the stalking horse bidder, negotiated down with banker Guggenheim, and structured a crafty asset purchase agreement.

“Post-COVID, it collapsed. The auction disappeared. The bankruptcy court in Delaware no longer existed. All other bidders disappeared. They began to do a liquidation. There was plenty of inventory. The liquidators was Gordon Brothers, was doing well. I came into the banker Guggenheim. I don't know if you know Guggenheim, whatever, $8 billion fund bank in New York. I negotiated way down from the original price, got it all the way down, was declared— became the stalking horse bidder, negotiated a crafty APA, asset purchase agreement”

Buy distressed brands with debt and warrants, keep the equity

Tai explains he and his partner fund acquisitions with their own money plus an accredited-investor pool built since 2015, using debt and warrants rather than equity. The goal is to own almost all of every deal, unlike VC-funded founders left with tiny stakes.

“All these deals I've done, fuck 2 and 20 funds. Me and Alex own almost all of these deals. Why? Because we build an investor base that trusted us. That's not institutional. All these guys raising in Silicon Valley, look at the founders of Lyft. These dudes have sub-4% of their business left. So yeah, I mean, maybe Silicon Valley is full of brilliant people, but you also have to maintain equity in what you own.”

Steal thisFund acquisitions with debt and warrants so you keep most of the equity instead of diluting to investors.

The Forbes list says brand acquisition beats real estate and funds

Tai argues that studying the Forbes list reveals where wealth concentrates: the first real-estate name is #102, fund managers cluster at the bottom, and brand acquisition or founding is the most correlated activity. He cites Zuckerberg's Instagram and WhatsApp buys.

“nobody makes money on the top of the Forbes list from real estate. Number one, the first American that shows up on the Forbes list from real estate is number 102. Number 102. In fact, the most correlated activity with building wealth is brand acquisition or brand founding. But brand acquisition is massive if you look at the Zuckerberg's really been an acquirer, and without Instagram, he would— and WhatsApp, Facebook would be worth a third at best.”

Steal thisStudy the Forbes list for what actually correlates with wealth instead of trusting your intuition about real estate or funds.

Tai's first money: a $300 course, Google AdWords, and 15-cent life insurance clicks

Sleeping on a couch with under $50, Tai bought Corey Rudl's $300 internet-marketing course, learned about Google AdWords, and built a 'life insurance' landing page buying clicks at 15 cents. His commissions rocketed to $60k-$80k a week, prompting GE's CEO to ask if he was doing something illegal.

“I see an ad of a picture of a guy laying on a couch, on a chair in Hawaii, and he said, I made $28,000 click here and I'll tell you how I did that laying on the beach in Hawaii. And I clicked it and there was a guy named Corey Rudl and he sold courses. He died tragically. I always wanted to thank the guy. He died in like 2008 in a car crash.”

The 'Here in My Garage' ad was take 4 after a $30k flop

Tai's first Lamborghini ad in December 2014 spent $30,000 and made $1,000 back. He iterated, shot in his garage (where overflow books happened to be shelved), and the fourth take went viral within 24 hours.

“And I spent like $30,000 and made like $1,000 back on that first December ad. You have to iterate. So to answer your question, our first attempt was not amazing.”

Steal thisDon't kill a marketing concept after one flop; iterate the execution before judging the idea.

75% of US men 18-35 recognized Tai Lopez by name

Tai says Google reps told him a poll found 75% of American men aged 18-35 recognized his name from his picture, two years after the 'Here in My Garage' ad went viral. He attributes the reach to deliberately stoking controversy.

“we did a poll for you. We have inner mechanism, and, uh, 75% of men in America between 18 and 35, if we show your picture they know your name.”

Munger: if 10% of people don't complain about your price, you're too cheap

Tai defends charging for value, invoking a Charlie Munger heuristic on pricing. He argues there is so much harmful product sold cheaply that creators shouldn't fear charging for genuine value.

“people, if you bring value, charge money. There's so much stupid stuff. McDonald's makes $25 billion selling diabetes to people, and Coca-Cola. So it's like, hey man, one thing my mentor told me, if you have value, never be afraid to charge. And the people who get— Charlie Munger says if 10% of people don't complain about your prices, you're too cheap.”

Steal thisRaise prices until at least 10% of buyers complain; if nobody complains, you're leaving money on the table.

Start a social media / e-com agency: 4-5 clients at $1k-$10k/mo = six figures

Asked what he'd do as a 22-year-old, Tai recommends a service business, specifically an e-commerce agency helping mom-and-pop shops and restaurants move to Shopify. Charge $1,000 to $10,000 a month, land four or five clients, and clear six figures.

“you can pivot into, for example, e-com agency where you manage people, get help all these restaurants, help all these brands, mom and pop transition to a Shopify store and so on. And you can charge them $1,000 to $10,000 a month based on what you do for them. And You have 4 or 5 clients and you're in 6 figures. That's a no-brainer for most people.”

Steal thisHelp local shops move to Shopify, charge $1k-$10k/month, and land 4-5 clients to hit six figures.

Build for what people need when stuck at home: food, shelter, basics

Tai advises building businesses around fundamental needs rather than crushed categories. He points to his COVID-era brand buys (Dress Barn, Modell's) and to launching simple food products like grass-fed beef jerky and hemp protein riding paleo and vegan demand.

“So you really got to think, if people are trapped in home for prolonged periods of time, what do they want? They want food, they want home improvement, and they want those basics. I would stay away from a lot of the things that people envision— hospitality business, rest. These are crushed businesses that have a permanent shift on the curve.”

Steal thisBuild around fundamental needs (food, shelter, basics) and avoid categories with a permanent demand shift.

Find your superpower: be 'smart in spots' like Tom Watson

Tai cites IBM founder Tom Watson on being 'smart in spots' and spending time there. His advice to his younger self: identify the one tangible superpower where you have Titan potential and concentrate on it rather than spreading evenly.

“Tom Watson, the founder of IBM, used to say, I'm smart in spots and I like to spend a lot of time in those spots. So I think another thing my 22-year-old self would say, Ty, on certain things you're a moron and other things You have Titan potential. Stick more around the Titan potential type, you know? And I think that's for everybody. What's that damn superpower you have?”

Steal thisIdentify the few spots where you have Titan potential and spend most of your time there.

Why healthy brands sell cheap: leases plus US bankruptcy law

Pressed on why profitable brands sell for a fraction of revenue, Tai explains the mechanism: brick-and-mortar firms signed 5-10 year leases, then Amazon and COVID hit. US bankruptcy law lets a company shed those leases only by surrendering the brand to a buyer, sometimes via a 363 sale.

“Long-term leases that brick-and-mortar companies have have 10-year horizons, 5 to 10 years. So they signed these leases in 2015, '17, '18. All of a sudden, Amazon had slowly been eating away, plus COVID. It's so all of a sudden now the way the U.S. bankruptcy law, which is very sophisticated, the best bankruptcy law in America, I— in the world is the American bankruptcy, really. And it says, no problem, Ascena, you're a publicly traded company, you own Dressbarn, Ann Taylor, Loft, all these brands. We'll let you— can get out of those leases with Dressbarn, but you'll have to declare bankruptcy and somebody else gets your brand.”

If your neighbor isn't suspicious of your idea, you're too late

Tai shares a heuristic from mentor Alan Nation: a genuinely good, early idea will make smart people suspicious. He treats Shaan's skepticism about Dress Barn as confirmation the opportunity is real, and signs off with 'be quick, see around corners.'

“my mentor Alan Nation said, Ty, if you have a good idea and you tell your neighbor about it, and they're not suspicious, it's too late. So the fact you're a smart guy and you're kind of suspicious of Dress Barn, it's beautiful.”

Steal thisTreat smart people's suspicion of your idea as a signal you're early, not wrong.

Tai Lopez spends $30M buying Pier 1's brand and database

Sam explains that get-rich-quick course seller Tai Lopez, via Retail Ecommerce Ventures, is spending $30M to acquire the IP of bankrupt Pier 1 (after earlier buying Dress Barn) to relaunch it as an e-commerce-only store.

“And so he's spending $30 million to buy Pier 1 along with other stuff. And we got ahold of his deck. I didn't even read it, but I read it. I've talked a lot and I've set the stage.”