December 17, 2024 • 46 mins
Ankur Nagpal shares his entrepreneurial journey, from making his first million through Facebook applications to founding Teachable. He discusses the evolution of Teachable, scaling its revenue, and navigating its acquisition. Ankur offers advice for college students on networking and for founders feeling stuck. Post-acquisition, he delves into his new ventures, Ocho and Carry, and running a venture fund. The episode explores key tax strategies for founders, including Peter Thiel's Roth IRA strategy, and balancing CEO responsibilities with personal values. Ankur reflects on the best advice received, the importance of family connections, and offers wisdom to his 18-year-old self.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
By the time I graduated, I had $1,000,000 justto these Facebook applications.
(00:04):
Ankar Nagpal, he's an entrepreneur who became amillionaire at just 21 years old before
founding Teachable and selling it for250,000,000.
He's now sharing his secrets on buildingmultimillion dollar companies and how to save
tens of 1,000 of dollars in taxes to the world.
Walk me through the steps that you ended uptaking to go from 10 k to eventually $1,000,000
(00:25):
a month.
We realized that we were selling the software,but in reality what we had to do was sell the
solution.
Peter Thiel, he'll have access to$5,000,000,000 in untaxed dollars.
How did he do that?
So what Peter Thiel did, he bought some of hisfounder shares in PayPal from his Roth IRA.
When PayPal sold that was worth tens of1,000,000 of dollars on which you want to pay a
single dollar in taxes.
(00:46):
And the more I looked into the tax code, yourealize there's so many things that no one
knows.
Ankur, before we get into Teachable, I want tounderstand what you did to become a millionaire
at just 23 years old.
You started building a couple Facebookapplications as a freshman in college.
Can you give me the full context?
What was going on behind the scenes, and howdid those applications go viral?
(01:09):
The summer after my freshman year, I wasinterning at Amazon as a software engineer, and
I realized I didn't quite like what I wasdoing.
I was a little bit in over my head, but thatcoincided with the launch of the Facebook
platform, which well, it was probably beforeyou were born.
But you could build applications on Facebook.
And the cool thing is you could tap into thedistribution network of Facebook, so you could
(01:30):
grow from 0 to tens of thousands of usersreally, really fast.
So I did that over the course of the summer.
By the end of the summer, I got to the point ofmaking 15, $20 a day, which was life changing
as an 18 year old.
I went back to college, kept running thatbusiness.
And by the time I graduated, I hit $1,000,000just to these Facebook applications, which
(01:53):
included like games, personality quizzes, allthese like really, really very viral apps that
didn't have a ton of utility but grew reallyfast.
You were getting a bunch of attention fromthese Facebook applications.
How are you able to monetize that attention?
So there were 2 business models.
1 was just ads.
At its peak, we had about, I wanna say, 2 to3000000 daily active users, which I don't know
(02:17):
how accurate Alexa traffic rankings are, butthere was a time where it showed we had more
traffic than the New York Times, LinkedIn,like, just like raw, like, user numbers.
So that was some ads was a big part of it.
Then there was a big virtual currency economy.
So we created an in game currency, and youcould either earn it by answering questions
(02:38):
about your friends or you could sign up forNetflix and earn a bunch of it.
And we got paid in that as well.
So at scale, it was roughly half and halfbetween both those channels.
There are probably college students right nowlistening to this thinking, like, how the heck
did he even do that?
I wanna do something similar.
If you could give one piece of advice to astudent in college right now who might wanna go
on a similar trajectory to you, what would youtell them?
(03:01):
If you have the technical or business chops, Ithink it's a case of just, like, running reps.
Right?
I got I was fortunate that the Facebook appidea worked.
It was right place and right time, but I havefriends who in the years after that did that
with iOS apps.
I mean, today, I know for instance, there's alot of people who built GPT wrappers that get
to a fair amount of revenue pretty fast.
(03:23):
So the actual technology keeps evolving, But ifyou're always looking for opportunities,
there's stuff to be found.
Even find even founding Teachable was me firsttrying to hustle and get people who had courses
on Udemy their own website and, you know, onething leads to another.
So, honestly, just trying to make $100 in theside, few $100 leads to bigger opportunities.
(03:44):
Yeah.
And a lot of people know you were building alot of these applications, but you were also
networking with a lot of really high levelindividuals.
At 19, you've met with some of the world'sgreatest thinkers like Marc Andreessen and and
Naval Ravikant.
What's one or two things that you learned fromthem that you took with you throughout the rest
of your career?
(04:05):
It was fascinating how willing and maybe you'venoticed this, how much people are willing to
meet with you when you're younger.
Like, there's a certain advantage you have, andI think it fades pretty early.
Like, I think it fades literally by the timeyou're even 21 or 22 years old.
You're no longer considered that young.
But living in Silicon Valley, I was amazed athow open people were to meet me just because I
(04:27):
was young and I had done cool stuff at the timeof the Facebook applications, which is another
important part.
Right?
Just being young is not sufficient.
I think people still did it because you'redoing cool things and doing interesting things
and you let your body of work speak for you.
But I remember even early on, like Navalspecifically, was very inspiring when I first
(04:48):
met him.
He right from the outset, I think trying tothink of his exact analogy, but we were at a
coffee shop and he made the analogy that theperson running the coffee shop probably is
working as hard as the CEO of Starbucks.
So why wouldn't you be the CEO of Starbucks?
Even then, like, leverage was a big, big thingthat he talked about a lot.
(05:09):
And I was just it was something that,especially considering where I grew up, the
fact that people in America were willing totake you seriously at such a young age,
especially in Silicon Valley is super rare.
I remember trying to go, to a business meetingin India and people were asking me where my dad
was, which was, you know, sort ofdisrespectful.
(05:29):
You were pretty successful with the apps thatyou were running.
When did you decide that you wanted to closeout building those and and start focusing on
your next endeavor?
We were at the mercy of the Facebook algorithmconstantly.
So we'd go from a business making 20, 30, atits peak, $50,000 a day to $20 the next day
because they changed how they do the feedrankings or they deplatformed you.
(05:51):
And this had happened repeatedly.
I think after it happened, maybe the 7th or 8thtime, I'm like, look, I made money here.
Nothing I'm working on is giving me, like, I'mnot proud of anything I'm building.
I'm not not proud of it, but, you know, there'snothing of lasting value.
Let me go and try starting a real techbusiness.
And I spent about 2 years trying differentideas with nothing quite hitting escape
(06:14):
velocity until stumbling upon Teachable.
I wanna say this point when I was just about 23years old, moved to New York City and then dove
into that.
And I really wanna understand, how is your dadinfluential in you wanting to continue to
pursue the entrepreneurship route?
Initially, things were great.
My parents were like so proud.
(06:35):
They're like, you're making money online.
That's awesome.
The 2 years of me trying a lot of ideas andthem going nowhere was tough.
They couldn't tell, especially my mom, if I wasactually doing anything because I talked about
it.
I was like, yeah, you know, working on theseideas.
And she's like, are you actually, are youactually working?
And it reached a point where, which is a verynormal thing to say, but it felt insulting to
(06:58):
me where she's like, why don't you just go workfor Facebook or something?
And, but even through that whole thing, my dadconstantly wanted me to be an entrepreneur.
He wanted me to start a business.
So he was very supportive and is like, nah,just give it some time.
You don't have to you don't have to jump into ajob.
We, you know, he always felt that he grew upmiddle class, lower middle class.
(07:23):
So it was hard for him to take a risk ofstarting a company because he had family to
raise and all of that.
But it was almost his wish that his childrenwould have the opportunity to kind of do that
to make up for what he couldn't do.
And you had this period of 2 years where you'rethinking of all these ideas.
Most of them you said on on Grace Beverly'sshow just sucked.
(07:45):
How did you come across the idea for forteachable?
And when did you realize that this wassomething that could be really big?
The idea for Teachable, and this is a patternI've seen with other startups as well, you
almost never come to the idea initially.
It always starts a little bit of side hustlethat keeps evolving into a bigger and better
version of what it is.
(08:06):
So teachable, for instance, we first started bythere are all these creators on YouTube, and I
was like, can we arbitrage it by taking thisYouTube content, posting on Udemy, and making a
little bit of money?
That was step 1.
Step 2 is like, do we actually need theseYouTube creators?
Why don't we create our own content and put iton Udemy?
Step 3 was like, why do we need Udemy at all?
(08:27):
Let me take our own content, put it on our ownwebsite, and then we're like, why don't we
offer the the same tool set to other people?
So it was like this series of ideas, each oneslightly better than the last one before which
we stumbled upon what became teachable.
And even then it was a side project built formy cofounder and I.
It was for our own courses.
(08:48):
And it was, you know, a couple of months inthat we realized we can offer it to other
people.
And probably 6 months from the first time webuilt it to the point that I had conviction
this could be a venture backed company, went toCalifornia, raised a round of funding and all
of that.
You mentioned that it was a side product.
I had Dylan Diamond on the show, a couple ofmonths ago.
(09:09):
He founded this company called Saturn.
So they're a social calendar app that gotreally popular in high schools.
And I asked him, like, how did you get it togrow so fast?
He's like, very very similar to what you justsaid.
He's like, I didn't set out to build a productfor the world.
I just set out to build a really cool productfor myself and my friends and it ended up
exploding from there.
(09:29):
What do you think that says about how to builda really good product?
It's not the only way, but it's my favoriteway.
And the reason is you can it's really hard whenyou're building a product for a customer
persona you don't understand.
Like, I you know, vertical SaaS, someone isbuilding software for construction workers.
You have to spend so much time on customerdevelopment, and you run the risk of no one
(09:50):
actually wanting it.
But when you build software for yourself, youhave customer number 1, chances are you know a
lot of other people like you.
It it just gives you a much more intuitive feelfor how to build, which saves you a lot of
time.
So I think as long as I live and buildproducts, it's an approach I will take.
I took it with my next company as well.
So I really like it.
(10:11):
12 months in, you raised about $1,000,000 inventure funding, but you're only at $10,000 in
monthly revenue.
Walk me through the steps that that you endedup taking to go from 10 k to eventually
$1,000,000 a month in just a just a few years.
Yeah.
So different stages.
It took us we were definitely a little bit slowoff the block.
(10:33):
It took us a little bit over 12 months to getto 10,000.
6 months later, we actually hit 90 k, so we'vegot over a 1,000,000 in ARR in those 6 months.
And I think that was us just figuring out howto better convert our free customers to paying
customers.
So a few different things.
1, we realized that we were selling thesoftware, but in reality, what we had to do was
(10:56):
sell the solution, which I'll I'll clarify whatthat means.
But first, we you know, our pitch was, if youwanna sell courses on your website, use
Teachable.
At the time, it was called Fedora, but eitherway, use a software.
We then changed our pitch to, like, hey.
We are a comprehensive solution to teach youhow to start an online business that includes
courses.
So, you know, it just changed what we'reoffering quite quite considerably.
(11:19):
We also got very good at running a series ofwebinars and workshops that improved our
conversion rate from free to paid to, at itspeak, almost 10%, which is very high, and it
still leveled out at close to 5%.
So we got very, very good at that kind ofmarketing.
And then we also started leveraging oursuccessful customers, did a lot of storytelling
with them, and tried to acquire people fromtheir audience.
(11:41):
That was the unique insight we have that a lotof other companies couldn't use.
Why couldn't they use it?
My personal perspective is with acquisition,you have to find your competitive advantage
that's bigger and better than anyone else.
And for us, direct sales never worked becausewe didn't make enough money per customer for us
for me to hire a salesperson.
Ads never worked because it was still a littlebit niche to go out and find creators.
(12:05):
But the unique insight we had is our mostsuccessful customers, especially if they're in
a vertical of online business, Internet, thatkind of stuff, there were lots of people in
their audience that in turn were idealteachable customers.
So as soon as we had that insight, we doubleddown on that by making them affiliates, by
giving them equity, by hosting events, by doingstorytelling.
(12:27):
And honestly, that was, like, the onedifferentiating factor that allowed us to scale
faster than anyone else.
I think you hit the nail on the head in termsof selling the solution.
When I started the agency that I run today backin January, what I would sell was, hey,
founders, we're gonna get you on a bunch ofdifferent podcasts and we'll create content for
you.
Month 1, we did 2.7 Kin revenue.
Month 2 is 5.4.
(12:48):
Then all of a sudden, we flatlined.
And for 3 months, I'm just constantly trying tofigure out, like, what the heck am I messing up
in sales and I keep looking at the wrongproblem.
What I ended up realizing is I kept trying tosell, like, the PR content piece and not what
that is actually generating for them, which iscustomers.
So I pivoted that and I'm like, hey, we'regonna help generate demand for your company.
(13:09):
We'll generate more sales and revenue for yourbusiness.
And also, we're just gonna try to be as helpfulas we possibly can.
Like, if I threw numbers out the window, like,how could I be as helpful as I possibly can?
And all of a sudden, growth, like, explodedlast month.
So I noticed there's that's definitely a a key.
Absolutely.
And I think as founders, one of the one of thelessons you learn is even while pitching my
(13:30):
company to investors, one of the mistakes Imade is I actually described what we do, while
instead I should be describing the biggestversion of what this can be.
So when it comes to raising VC, investors aretrying to work backwards on how this can be
worth, whatever, 1,000,000,000 of dollars.
It matters less describing what you do.
(13:53):
Like, we saw dramatically better results whilepitching Teachable.
The original pitch was like it's like Udemy,but, you know, on your own website.
You know, we'll help you put courses and it'syour own branding.
And that did okay.
Like, investors are like, okay.
Sounds cool.
Little side project, whatever.
But then we changed our pitch to, today, mostecommerce is the sale of physical goods.
(14:16):
In the future, it will be the sale of knowledgeand we're the platform to power it.
Exact same product, different pitch.
One just talks about the biggest, grandestversion of the vision and obviously did a lot
better when it came to raising money.
Yeah.
And venture capitalists, as you all know, arelooking for that 100 x 1000 x outcomes.
So that's exactly the right way to pitch it.
To grow, you would reverse engineer a lot ofyour goals every single month.
(14:40):
What did that look like and and why was thatprocess so essential for the growth of
Teachable?
We used a framework where we had a certainlook, once we hired our head of growth, Andy,
who now runs a company called Circle, the waywe had an MRR goal for every single month, MRR
is monthly recurring revenue, a lot of startups kind of just chill and they're they take
(15:05):
the approach, MRR will come where MRR comes in.
We decided to be very intentional about it, andwhat we would do is we'd set a goal for every
month.
Like, let's say let's say this month we wannagrow 20% or 15%, and we would run the math on
what that would entail.
So we create a simple model being like, okay.
We'll churn 5% this month so that means we needto add $6,000 in new MRR.
(15:29):
Organic will account for 3,000 which means wehave to find $3,000 of new MRR, and then we'd
come up with initiatives that could hit thosegoals.
And this is a really important exercise for acouple of reasons.
1, it created a true growth framework and italigned us on what's important based on, like,
hitting those numbers.
(15:49):
We were almost never accurate in terms of wherewe'd end up, but that in turn gave us really
critical learnings of like, oh, we thought thiswould do x, but it did y.
And then eventually with time, we got betterand better at this exercise.
And ultimately, I think the reason it worked isit never left growth to chance.
Yes.
There are a lot of months we didn't grow.
A lot of months we missed our targets, but wedidn't leave it to chance.
(16:12):
We still had a plan whether we hit it or notwas different.
And you found a way to get unstuck from that 10k to eventually doing a 160 k a month the the
next year.
For founders in the audience who might feelthat they're stuck, they're working every
single day nonstop like you are grinding andthey're just not moving closer to their goals.
(16:34):
I know it's general, but what's one piece ofit?
What would you tell them?
What advice would you tell them?
I think we need to differentiate between wherethey're getting stuck.
If you're getting stuck super early, youprobably don't have a growth problem.
You probably have a product problem.
Right?
Like, there's a big, like, initially initially,you don't know if anyone wants a thing you've
built.
So this is counterintuitive, but I think in alot of cases, you shouldn't do what all the
(16:57):
books tell you, which is, like, keep pluggingaway and, like, you know, Elon slept in his
office and Bezos never gave up.
You probably should pivot.
You probably should do something else.
Like, there's so many great ideas.
If the market is telling you it doesn't wantwhat you've built, that's a valuable insight
and you should do something else, like iteratefast.
I think I think people hold on to ideas toolong.
But let's say you're the other type of stockwhere you have a $1,000,000 or whatever in
(17:22):
revenue and you're now getting stuck.
I think you need to like audit.
I'm I'm talking at this point, I guess morespecifically at software businesses, But what I
found is eventually a great software businessfinds a way where existing customers become
worth more over time.
Like, you have inherent expansion revenue.
(17:44):
And if you don't have inherent expansionrevenue, like a lot of whatever these AI tools
right now, they're like, you know, all the allthe, like, college student tools, for instance,
like the homework helpers, blah blah.
I think a lot of those companies should notraise venture dollars.
I think you can build a fantastic business thatgets to a few $1,000,000 in ARR, but eventually
your churn offsets new growth.
So that model will it'll inherently get stuckat, like, you know, 5, 8, 10,000,000 ARR.
(18:09):
And you could either have a business cashflowing 1,000,000 of dollars.
That's a beautiful business for you or raise 10or $15,000,000 and get stuck in this, like,
venture capital mode when your business isn'tsupported.
The flip side is if you have a business thateither like like Teachable, we processed
payments for our creators.
And as creators did better, the paymentsrevenue grew every year.
(18:31):
So that more than offset our user churn.
You but Cary, we have the same dynamic withassets on platform.
Enterprise SaaS has that where cup companiesadd more seats.
But unless your business supports goodexpansion revenue economics, I would say you're
better off not raising venture dollars and justtrying to build a business that grows really
fast and you get cash flow quite a bit.
And I know it's hard to pick, but from thecreators that have been on Teachable, what do
(18:56):
you think is probably one of the cooleststories that that you've seen that Teachable
was able to help them?
It was fascinating seeing the sorts of coursesbeing successful because we'd, everyone knows
you'd have to make money online, blogging,whatever.
But we had so many, like, crazy stories.
(19:16):
Like, one of our most popular courses in themusic category was, like, mastering the
handpan, which is an instrument I haven't heardof, and they made it over $1,000,000.
Wow.
There's a course on like how to have a safewater birth that also made it over $1,000,000.
There's all these like really niche topics,that ended up doing super well.
(19:38):
There's also, like there are also just, like,weird, controversial topics.
I remember there's one course that did quitewell that was how do you overcome feelings of
white supremacy, And it was insane that and Iremember at at at Teachable, we had a debate.
Should we take this course down?
Like, is it offensive?
(19:59):
My argument is, like, here are people who arepaying money to deal with their feelings of
white supremacy, But, yeah, we ended up seeingall all kinds of crazy courses.
That's pretty crazy.
You were a couple years in you're many yearsinto the business, and all of a sudden, one
day, you get this offer.
You weren't looking to sell, but it it waspretty intriguing at the time.
(20:20):
What was the offer and what did you think of itwhen you first saw it?
Business was was humming.
I think we were probably year 6, close to20,000,000 in ARR, not quite there.
And it wasn't directly an offer.
I think it was a private equity firm we had metwith as we're discussing a series b.
(20:40):
The second most senior guy at the PE firmemailed me, which is which is a little rare.
Right?
I was like, something's up.
And he's like, can I drop by your office?
If you know anything about like finance people,they don't come to your office.
They make you go to theirs.
So I figured something was up.
So comes by our office and he's like, well, wehave this company in Brazil.
They do exactly what you're doing.
(21:02):
They're making x dollars in revenue.
And that blew my mind because I'd never heardof this company.
And in our space, I'd know someone making thatbunch of money, but he's like, why don't, you
know, why don't you guys sit down?
Like, you know, it's like a blind date.
Why don't you go to dinner and see if you likeeach other?
And I was like, yeah, I'll do dinner.
And did dinner, started chatting, saw eye toeye with the founders.
(21:23):
We had a very similar world view.
They're building what we're doing, but biggerand international.
And we soon started talking about what a dealcould look like, and the numbers made sense
and, you know, we ended up kind of movingforward with it.
But one of my takeaways there is I always say,you know, companies are bought not sold.
(21:43):
Like before we even met with them, they'd satdown in a boardroom somewhere and decided how
it would be cool to buy us.
And as a result, it just makes the dealsubstantially easier than if you are like,
damn, I need to sell this company, and then youhave none of the leverage.
How were they cool to buy you?
The reason I I like working with them and Istill continue doing, the biggest reason is
(22:03):
it's a founder led, founder driven company.
11 years in, both the founders still run it.
Fascinating trajectory where they raised$400,000 early on, then no one wanted to fund
them because they're in Brazil and, you know,it's not the sexiest market.
So they built this business out of profits andthen raised it around 10 years later for a
(22:24):
$100,000,000 to start doing acquisitions.
So they almost bootstrapped this, like, massive$1,000,000,000 company run by founders, led by
founders.
We just got along very well where it madesense.
At one point in the negotiation, everythingstarts slowing down a little bit and you're
like, hey, if I want this to close, we got toget this done.
What did you do to speed up that process andand get a deal closed in 4 days?
(22:46):
Yeah.
So we'd reached a point where it was the firsttime for both of us, like even they had never
done a deal this size.
And what happens when you're doing these kindsof deals is if you're not careful, lawyers on
both ends can drag this on forever.
It's almost in their best interest to let it goon super long.
But I remember I this was also, like, you know,March 2020.
(23:08):
We were COVID was potentially around thecorner.
There was a lot of uncertainty.
But at some point, I remember being like, guys,our, like, the company kept growing, right, as
we're doing this.
And I was like, if we don't reach a conclusionsoon, we're going to, like, like, the deal we
agreed to is no longer on the table.
And that was impetus for them to, like, gethere, lock down in a room, and basically, we
(23:33):
all decided we'd stay in this room until thedeal closed.
And we did that just in time right before NewYork shut down entirely.
So it was a very, very close call on on allends.
During that time, were there any things thatyou learned about negotiation that most people
might not know?
(23:55):
I've sold a company one time, talked to a lotof friends going through that process, and it's
just one of the it's, like, exhilarating yetexhausting at the same time.
I mean, you're dealing with in your brain, youhave to account for the fact that there's 2
dramatically different outcomes.
(24:15):
Either you go back to work like nothing haschanged or you make an infinite amount of
money, and you have to be somewhat okay withboth outcomes.
Because if you go too far in one outcome, if inyour mind you've sold your company before you
sold your company, that's when really badthings happen.
So you have to try and be as okay with eitheroutcome happening.
(24:36):
You have to hide this whole thing from yourteam.
I'm I'm like disappearing for days on end.
Everyone's like, why is he not at the office?
Can't tell anyone what's going on, while tryingto run the company as if the deal never
happens.
Like, my biggest piece of advice to anyonegoing through this process is do not consider
your deal done until the literal day you getmoney in the bank.
(24:58):
I've heard so many horror stories of thingsfalling apart, you know, 4 days before, 3 days
before.
Sometimes, you know, like the department ofwhatever monopolistic antitrust stuff comes up.
So it's exhilarating.
It's so much fun, but it takes quite a bit outof you.
I presume that was an an intense process.
How did it feel after when the wire hit yourbank?
(25:21):
It was the world's smallest violin will playfor me because it was pretty anticlimactic
because this was in the middle of April 2020.
So at the time to recall for people who don'tremember what April 2020 was, we're locked in.
This was when people are, like, wiping downpackages from Amazon in case you might you
might get get COVID.
So literally nothing happened or changed forquite a while after.
(25:46):
The biggest turning point I found was honestlythe year later when I was able to walk away
from being the CEO, which at the time hadreached a job that I honestly found quite
stressful and didn't enjoy as much.
I felt like that was a bigger turning pointthan, you know, dollars in the bank or
whatever.
It sounds counterintuitive, but why were youhappier when you left a CEO and being your own
(26:10):
boss per se to now not having anything?
I believe it's got to do with the stage of thebusiness.
Like, by the end of running Teachable, and thisalso is I'm sure connected to why selling the
company made sense.
I just started feeling burnt out where we'dreached a size of almost 200 people, which was
(26:32):
so different from the stages of, like, creatingand building something from scratch that it
almost felt like an organization.
I mean, I had built it yet I was not proud of,like, the organization itself.
Like, we just like, my day to day was juststacked with meetings.
We also, at this point, we're a remote companybecause of COVID, which we were not used to
(26:54):
being at all.
And it just became this behemoth of anorganization that was so different from why you
start a startup.
Even, like, from a product perspective, right?
Like, when you first build a product, peopleare like, why your product is so simple.
It's so elegant.
It does all these things.
The incumbents are these, like, messyplatforms.
By the end, we were the incumbent.
(27:15):
We were no longer the upstart.
Towards the end, you had about 200 people.
Going back earlier to the conversation whenyou're working at Amazon, the reason why you
didn't like that job from previous interviewsyou've done is you said you just felt like you
were a cog in a machine.
How did you
It was irrelevant what I did or did not do.
Yeah.
I didn't show up to work and no one realized,which is pretty bad.
(27:35):
Your your entire team was working on, like, onepage for Amazon.
Right?
Correct.
We were doing the manage your inventory pagewithin Seller Central.
That was our yeah.
How did you prevent employees at Teachable fromfeeling something similar?
To be honest, I don't think I did.
So that ties back into why I think I may nothave been a good CEO by the end.
I think by
the
(27:55):
end, we did, like, we became a version of whatwe wanted to avoid.
I mean, we another breaking point, I think,happened when I saw a designer not working on
shipping customer value.
Instead, they were working on making anexecutive's deck nicer for an internal
presentation.
(28:17):
It's a pretty colossal waste of companyresources.
Yeah.
So I don't think I did a specifically good jobof avoiding that.
There's lessons learned and I hope this time Iwill, but if I don't, I think I'll have less
ego attached and I'll be more willing to stepaside and let someone else come in and run the
company.
Founding a company and running a company arecompletely different skill sets.
(28:38):
I feel good about one of those skill sets.
Still have to prove myself and the other.
Right after you ended Teachable, you left.
You now have all this money in the bank.
COVID hits.
What's next?
What what's going through your mind?
So right when COVID hit March 2020, I startedinvesting a little bit more just because we're
locked at home and had more time.
(29:00):
Had Angel invested in a couple of companiesbefore then, but I ramped it up during that
period.
After getting money in the bank, I'm like, Ican finally put my own dollars in.
So I ended up running a venture fund for about2 years.
We had 2 separate funds for almost 18 to 24months.
I ran a venture fund, invested in close to a100 companies, which was which was fun because
(29:21):
as I stopped working at Teachable, it let mestill feel like I'm involved in stuff.
I'm learning stuff.
I'm talking to smart people.
I'm not isolated from the world.
Yeah.
Yeah.
Purpose.
Correct.
Meanwhile, it also was a pretty easy job.
Like, investing is substantially easier thanrunning a company.
So I was able to travel, I was able to, youknow, play, like, got into surfing and playing
(29:44):
tennis and seeing my family a lot.
I left New York for a bit.
So it was a perfect balance for that interimperiod of time, though it eventually became
clear that I'm too young to do this for aliving.
So it was more like a good thing to do inbetween until I got ready to start something
else.
Yeah.
And you're building out this venture fund.
(30:04):
You ran it for 24 months.
When did you eventually realize, like, hey, Idon't wanna be in venture anymore.
I wanna go back to building.
And and what did you decide that you wanted tobuild?
It's funny.
At first, when I left Teachable, in my mind,I'm like, I never wanna do a startup again.
Startups are pain.
This is, like, painful.
But the funny thing about nostalgia is the wayit works is with the passage of time, you start
(30:29):
to forget the pain.
You reminisce on the good times.
And about a year, a year and a half in, I juststarted to think about, wow, it was so fun, the
early days, like the sense of purpose ofbuilding something together.
And towards the end of that period, I juststarted romanticizing the idea of a start up.
Specifically, what I was missing is the senseof, like, building something with other people.
(30:50):
The venture fund was great, but it was sort ofinsular.
I had founders I was working with, but itdidn't have a real team or, you know, sense of
us accomplishing something together.
So towards the end of that period, started tothink about it.
I also started to, like, self identify, like,what am I good at in building companies, I
almost think of it like, you know, it's kind ofmy sport and you don't retire from your sport
(31:13):
at 32 or 33.
You know, I was like, I have another another goin me.
And eventually, the turning point was I wasgoing to go to Portugal.
I was gonna go surf for a couple of weeks, andthat was gonna be my time that I was gonna,
like, fully think through if I wanted to dothis.
But when I found myself more excited to work onthis idea than literally go on a vacation and
surf, I was like, I knew it was time.
(31:34):
And, so you've decided decided to start thiscompany called Ocho now called Carry.
What was the idea behind it?
How did you come up with the idea for that?
While selling Teachable a few months prior tothe transaction, I was able to hire smart
lawyers and attorneys who structured theacquisition in a really smart way that ended up
saving me literally 1,000,000 of dollars intaxes.
(31:57):
And that almost radicalized me that doing acouple of relatively no.
They're not simple, complex things, but, youknow, someone can come and do this and save you
that much money was a bit of a light bulbmoment.
And the more I look into the tax code, yourealize there's so many things, especially for
business owners that no one knows, but if donecorrectly, can save you tremendous amounts.
(32:22):
So it felt like a really good, like, foundermarket problem, whatever fit where we can do
good in the world.
It's a brand new problem space that'sfascinating, and the opportunity is only
growing.
So I knew I wanted to do this problem.
The specific product took some time.
We decided to start with a 1 person 401 k sincethat felt like a really, really great wedge.
(32:45):
Most of my career has been, like, building andserving business owners in some way, shape, or
form.
So this felt like an extension of that missionin a lot of ways.
That one person or or solo 401 k, what is itand and how does that work?
Yeah.
So this was a very pleasant surprise as Istarted working for myself.
But if you work for yourself, you can set up a1 person 401 k, which in my opinion is the most
(33:08):
powerful retirement account in America.
It allows you to get a tax deduction upfront ofalmost $70,000, which even though your
corporate 401 k may allow, in reality, it'simpossible to hit because your employer does
not contribute enough.
So you can get up to a $70,000 tax deduction.
You don't pay any taxes on any of the growthinside.
So, like, if you get dividends, sales,whatever, you don't pay any taxes until you
(33:31):
take money out in retirement.
But you also have the opportunity to set upwhat's called a Roth account, which will allow
you to pay taxes in retirement.
All this while, because it's your own 401 k,you can invest it exactly how you want.
You can invest it in public stocks, equities,ETFs, but you can also do crypto, startups,
real estate, venture fund, whatever.
(33:52):
So almost think of it as a superchargedinvestment account that you get a massive tax
benefit for doing.
But prior to Carry, there was no easy platformto do all of this.
So that became our first wedge, and then webuilt from there.
What do you think is if you could go back intime and and give yourself when you found it
Teachable a couple of 2 or 3 tax tips orframeworks, what would you tell him?
(34:16):
So at Teachable, we got fortunate in that thebiggest tax strategy for founders is something
called QSBS, qualified small business stock.
And if you're not careful, you can accidentallyblow it up.
We got lucky we never accidentally blew it up,but QSBS is massive because it will allow every
(34:38):
single shareholder including employees,investors, founders to not pay taxes on
$10,000,000 each when the company is sold.
And with smart, you know, attorneys and stuff,you can multiply the 10,000,000 to 20, 30, or
40,000,000.
At Teachable, we still did that, but it wasdumb luck.
None of us even knew about it and, you know, 5years in, we didn't accidentally mess it up.
(34:59):
So as a startup founder, honestly, that is thesingle biggest thing.
There's a lot the playbook is much wider ifyou're an individual making money.
Like, if I could go back and tell the Facebookapp person stuff, I would have saved, like, you
know, probably 40%.
You know?
On Teachable, we got fortunate that there isn'tmuch more I could have done.
(35:19):
How do you accidentally blow that up?
So the most common way is if you have adeparting founder or employee that you do a big
stock buyback for.
And the challenge with that is that blows it upnot just for you, for every single shareholder.
So what I tell people is, like, again, justtalk to a tax attorney and double check any
(35:40):
redemption where you're buying back shares isokay.
Other less common ways of blowing it up is ifyou invest a lot of your balance sheet in
random equities, like treasury bills orwhatever is fine, but if you start buying
corporate debt and stuff, the they can take astance that you're no longer a qualified trader
business.
You're an investment company which would makeyou ineligible.
(36:02):
There's always like weird nuance like that.
And you spent a lot of time becoming a tax techtax expert for founders and not and
entrepreneurs, and you talk a lot about it onTwitter.
One of your posts that I thought was prettyinteresting is that a buddy of yours will earn
about a half $1,000,000 this year, of which hewould have had to pay about a quarter
(36:23):
$1,000,000 in federal, state, and selfemployment taxes.
You hop on the phone with him, and you gavehim, advice that would save him 6 figures just
this year.
What was that advice?
And to be clear, by the way, this is exactlywhere even I was at the age of, like, 19 or 20,
which is fine.
This is a sweet spot where I think there's alot you can do.
(36:43):
So right off the top, typically, most peopledon't realize, when you work for yourself, you
pay almost you could pay almost 15% in selfemployment taxes.
This is like social security and Medicaretaxes.
You don't feel this as much as the w twoemployee because your company pays half.
But what you can do is you can set up an scorp, which allows you to bifurcate, let's say,
(37:05):
the 500 k.
You can pay yourself a 100 k salary, take 400 kin distributions, and now you only pay self
employment taxes on the salary.
So that saves a few $1,000 right away.
Secondly, setting up a solo 401 k can getpeople a 70,000 69,000 specifically tax
deduction.
But if you're married as in this case, you canalso hire your spouse in the business, pay them
(37:30):
a reasonable salary, and now you each get yourown $69,000 limit.
So that really starts to multiply the benefits.
And there were there's a lot of other foundersthat have really taken advantage of the tax
code to, like, an extreme.
One of which is Peter Thiel.
He'll have access to $5,000,000,000 in inuntaxed dollars.
(37:51):
How did he do that?
So Peter Thiel, and by the way, I should Ishould caveat always that he was the first one
to go to the IRS and be like, you should changethis rule.
Like, he was very upfront about it.
Know that.
Okay.
He was very upfront about it.
There's a great ProPublic article, but he hewas very upfront about it.
But again, I mean, look, any smart person isgonna look at a code, especially if you're a
you're an entrepreneur and use it to the bestadvantage.
(38:13):
So Peter Thiel did, and again, this is allreported by ProPublica, so repeating basically
that.
But he set up a Roth IRA.
And the way a Roth IRA works is you contributeafter tax dollars, but then never pay any tax
on it in retirement.
The cool thing about a Roth IRA ishistorically, at one point, top tax rates in
America were 90%.
I don't know if we'll go back there, but a RothIRA protects you no matter where taxes go in
(38:36):
the future.
But what he did is he bought some of hisfounder shares in PayPal from his Roth IRA.
When PayPal sold, that was worth tens of1,000,000 of dollars.
And from that point on, he just used it as,like, a personal investment piggy bank.
And imagine the combination of, like, tens of1,000,000 of dollars in a tax free account
combined with one of the world's greatestinvestors just went on an epic, you know, tear
(38:59):
and is now at at least $5,000,000,000potentially much more on which you wanna pay a
single dollar in taxes.
Wow.
Is that rule changed now?
Or
So the only part of it what he did that isquestionable is if you are a founder, it's
debatable if you can buy your own shares in aRoth diary.
The reason being is they're self dealingtransactions.
(39:21):
Doesn't mean you can't.
It has to do with the threshold of how much ofthe company you own.
It it just gets a little bit tricky.
So what I tell people is if you wanna be safe,don't buy your shares, but I can invest my Roth
IRA in your company or my friend's company andall of that.
The general idea of taking a Roth and investingit in assets with high upside works super well.
(39:42):
If it's your own company, it could get a littlecomplicated.
Gotcha.
And before we wrap it up here, we have a coupleof closing questions.
One is, what's your greatest failure?
And what did you learn from it?
I think there are a lot of there are a lot ofmoments at teachable, where I felt like I was a
(40:06):
complete failure as either I had to straddlebetween being a failure as a human or a failure
as a CEO, and I felt like I had to pick onepath or the other.
Like, I feel like as a CEO, you have to operatealmost looking at humans as like
interchangeable pawns or whatever in this,like, grander scheme of building a company.
(40:27):
While if you're operating as a human, you'rethinking about loyalty, friendship, all of
these other things.
So I constantly felt like I was failing at 1 orthe other.
And at different points in my career, I thinkI, you know, failed as a CEO and other points I
think I was a good CEO, but, like, may havefailed as a person.
How can founders balance that dynamic?
I don't have a great answer to that.
(40:48):
It's a question I ask myself all the time.
Like, is it possible to be an an incredible CEOwithout being mildly sociopathic?
I don't know.
And that's why I struggle.
And that's why I don't know if I'll I'll alwaysbe a CEO.
By the way, I do think you're not really a CEOuntil you're at least 50 or a 100 people.
Like everyone says you're founder CEO, butthere really isn't CEO type stuff to do.
(41:11):
Gotcha.
But can you be a great turnaround CEO where youhave to come in and fire 700 people while being
a good person?
I don't know.
Well, I think at that scale, then it's more ofa numbers game than an EQ game.
And at that point, if you're firing 700 people,there's a good chance that you don't follow
those people personally.
Right?
So second, what's the best piece of adviceyou've ever received?
(41:33):
I was pretty young when I read RichardBranson's autobiography.
I think it was called Losing My Virginity.
And what was what kind of stuck with me throughthat book is like the sense of just like having
a blast through doing everything, which I findto be such a refreshing attitude since so much
startup stuff is about the pain, the struggle,like, you know, like like the fight and how
(41:58):
hard it is.
What comes through, not just in Branson's book,but the way he sort of has run his companies is
a sense of this man looks like he's having thebest time in his life and just, you know, doing
it for the sheer love of the game.
So whenever things get hard, whenever we're ina difficult time, even now, if you look at like
our company culture and what we believe, one ofour beliefs is we take our we take our work
(42:21):
seriously, we don't take ourselves seriously.
And that's something we're trying to trying tostick with.
Yeah.
And you joke with the the person at your deskevery day.
Right?
Yep.
Jokes a day.
Yeah.
I've noticed that the hard parts ofentrepreneurship are traditionally very over
glamorized.
Mhmm.
And
the fun parts parts are not.
And now that you brought it up, I think thereason why is because nobody's impressed by you
(42:44):
having fun.
Right?
But people can be impressed by you doing hardthings.
So I don't know if that will ever change.
But
But you know where I do think it changes, bythe way, is I think when you talk about, again,
all these billionaires that have historicallybeen quite unpopular, you look at the ones that
are popular to normal people, not the techcommunity, are the ones that are having fun.
(43:08):
Like, even I mean, Zuckerberg is a greatexample.
As he looks like he's enjoying his job more andhis life more, he's become more likable.
You think about there's a lot of very richcelebrities that don't face as much stigma and
what are they doing?
They're just having a good time.
So I do think if you come across likeauthentically being yourself, genuinely
enjoying what you're doing, you become morelikable to the masses even if it gets you less,
(43:32):
like, kudos from, like, other entrepreneurs orwhatever.
Yeah.
And what's one rule you live by that mostpeople don't?
Something really important to me, and it's onlygotten more important is I have this sense of
immigrant guilt having left my parents, left myfamily quite young.
(43:54):
They're getting older by themselves.
So right now I try and talk to them everysingle day.
I don't know many other people that do that.
And very often I miss, but, like, literallyevery morning, I will try and speak to them no
matter what.
And I'll try and see them 4 or 5 times a year.
And, I don't know many people my age who dothat.
Yeah.
(44:15):
I don't I also don't know a ton of kids my agewho are talking to their parents very
frequently given I am in college.
But the 1st month, everybody's calling theirparents, and then after that, it's not as
For me, it's all about digging it into theroutine.
It's usually, like, on my walk to the office ormy walk to lunch, and very often it's, like, 5
minutes, 10 minutes.
I don't know if you've ever noticed this, butwhen you take your calls that you end up
(44:35):
walking around a lot, you take, like, 20,000steps a day.
I've noticed that when I'm taking calls and I'mwalking, my mind just seems a lot sharper.
Do you see something similar with you?
Absolutely.
I can't think while seated at a desk.
All my best ideas, it happens when I'm inmotion walking.
Ideally, sometimes even walking without musickind of makes my brain work.
(44:58):
Yeah.
I also can't be on a phone call and bestationary.
I have I have to move.
Yeah.
Walking without music just makes yourselfforced, like, you have to kinda talk to
yourself.
Sometimes you look a little crazy doing it,but, hey.
I guess last up, if I switch you over a phoneand you could call your 18 year old self, would
you call?
(45:19):
And if so, what would you say?
I would I would call.
I I mean, this is a cliche, but it's a clichefor a reason.
I've I've almost linearly, every subsequentyear of my life has gotten better.
And I think it would be a good reminder toalmost just, like, chill out a little bit.
(45:44):
Like, I remember I had I don't know if it'sexistential angst or whatever.
When I was 18, I really wanted to, like, provesomething and just like a reminder that it'll
all kind of figure itself out.
I definitely feel like so far, I mean, I'm 35.
My thirties have definitely been the bestdecade of my life, and I think that would be a
good reminder.
You ever wonder if you did tell yourself that,that maybe you wouldn't I
(46:04):
don't think anything would change.
Nothing would change.
Nothing would change.
Awesome.
Well, I think that's a great way to end it.
Thanks, Anker, for taking the time to to jointhe show.
Greatly appreciate it.
We'll have a link to carry in the episodedescription down below for any founder
interested in checking that out and not payingas much money to the government.
So thanks, Anker.
Thanks for having me.
By the time I graduated, I had $1,000,000 justto these Facebook applications.
(00:04):
Ankar Nagpal, he's an entrepreneur who became amillionaire at just 21 years old before
founding Teachable and selling it for250,000,000.
He's now sharing his secrets on buildingmultimillion dollar companies and how to save
tens of 1,000 of dollars in taxes to the world.
Walk me through the steps that you ended uptaking to go from 10 k to eventually $1,000,000
(00:25):
a month.
We realized that we were selling the software,but in reality what we had to do was sell the
solution.
Peter Thiel, he'll have access to$5,000,000,000 in untaxed dollars.
How did he do that?
So what Peter Thiel did, he bought some of hisfounder shares in PayPal from his Roth IRA.
When PayPal sold that was worth tens of1,000,000 of dollars on which you want to pay a
single dollar in taxes.
(00:46):
And the more I looked into the tax code, yourealize there's so many things that no one
knows.
Ankur, before we get into Teachable, I want tounderstand what you did to become a millionaire
at just 23 years old.
You started building a couple Facebookapplications as a freshman in college.
Can you give me the full context?
What was going on behind the scenes, and howdid those applications go viral?
(01:09):
The summer after my freshman year, I wasinterning at Amazon as a software engineer, and
I realized I didn't quite like what I wasdoing.
I was a little bit in over my head, but thatcoincided with the launch of the Facebook
platform, which well, it was probably beforeyou were born.
But you could build applications on Facebook.
And the cool thing is you could tap into thedistribution network of Facebook, so you could
(01:30):
grow from 0 to tens of thousands of usersreally, really fast.
So I did that over the course of the summer.
By the end of the summer, I got to the point ofmaking 15, $20 a day, which was life changing
as an 18 year old.
I went back to college, kept running thatbusiness.
And by the time I graduated, I hit $1,000,000just to these Facebook applications, which
(01:53):
included like games, personality quizzes, allthese like really, really very viral apps that
didn't have a ton of utility but grew reallyfast.
You were getting a bunch of attention fromthese Facebook applications.
How are you able to monetize that attention?
So there were 2 business models.
1 was just ads.
At its peak, we had about, I wanna say, 2 to3000000 daily active users, which I don't know
(02:17):
how accurate Alexa traffic rankings are, butthere was a time where it showed we had more
traffic than the New York Times, LinkedIn,like, just like raw, like, user numbers.
So that was some ads was a big part of it.
Then there was a big virtual currency economy.
So we created an in game currency, and youcould either earn it by answering questions
(02:38):
about your friends or you could sign up forNetflix and earn a bunch of it.
And we got paid in that as well.
So at scale, it was roughly half and halfbetween both those channels.
There are probably college students right nowlistening to this thinking, like, how the heck
did he even do that?
I wanna do something similar.
If you could give one piece of advice to astudent in college right now who might wanna go
on a similar trajectory to you, what would youtell them?
(03:01):
If you have the technical or business chops, Ithink it's a case of just, like, running reps.
Right?
I got I was fortunate that the Facebook appidea worked.
It was right place and right time, but I havefriends who in the years after that did that
with iOS apps.
I mean, today, I know for instance, there's alot of people who built GPT wrappers that get
to a fair amount of revenue pretty fast.
(03:23):
So the actual technology keeps evolving, But ifyou're always looking for opportunities,
there's stuff to be found.
Even find even founding Teachable was me firsttrying to hustle and get people who had courses
on Udemy their own website and, you know, onething leads to another.
So, honestly, just trying to make $100 in theside, few $100 leads to bigger opportunities.
(03:44):
Yeah.
And a lot of people know you were building alot of these applications, but you were also
networking with a lot of really high levelindividuals.
At 19, you've met with some of the world'sgreatest thinkers like Marc Andreessen and and
Naval Ravikant.
What's one or two things that you learned fromthem that you took with you throughout the rest
of your career?
(04:05):
It was fascinating how willing and maybe you'venoticed this, how much people are willing to
meet with you when you're younger.
Like, there's a certain advantage you have, andI think it fades pretty early.
Like, I think it fades literally by the timeyou're even 21 or 22 years old.
You're no longer considered that young.
But living in Silicon Valley, I was amazed athow open people were to meet me just because I
(04:27):
was young and I had done cool stuff at the timeof the Facebook applications, which is another
important part.
Right?
Just being young is not sufficient.
I think people still did it because you'redoing cool things and doing interesting things
and you let your body of work speak for you.
But I remember even early on, like Navalspecifically, was very inspiring when I first
(04:48):
met him.
He right from the outset, I think trying tothink of his exact analogy, but we were at a
coffee shop and he made the analogy that theperson running the coffee shop probably is
working as hard as the CEO of Starbucks.
So why wouldn't you be the CEO of Starbucks?
Even then, like, leverage was a big, big thingthat he talked about a lot.
(05:09):
And I was just it was something that,especially considering where I grew up, the
fact that people in America were willing totake you seriously at such a young age,
especially in Silicon Valley is super rare.
I remember trying to go, to a business meetingin India and people were asking me where my dad
was, which was, you know, sort ofdisrespectful.
(05:29):
You were pretty successful with the apps thatyou were running.
When did you decide that you wanted to closeout building those and and start focusing on
your next endeavor?
We were at the mercy of the Facebook algorithmconstantly.
So we'd go from a business making 20, 30, atits peak, $50,000 a day to $20 the next day
because they changed how they do the feedrankings or they deplatformed you.
(05:51):
And this had happened repeatedly.
I think after it happened, maybe the 7th or 8thtime, I'm like, look, I made money here.
Nothing I'm working on is giving me, like, I'mnot proud of anything I'm building.
I'm not not proud of it, but, you know, there'snothing of lasting value.
Let me go and try starting a real techbusiness.
And I spent about 2 years trying differentideas with nothing quite hitting escape
(06:14):
velocity until stumbling upon Teachable.
I wanna say this point when I was just about 23years old, moved to New York City and then dove
into that.
And I really wanna understand, how is your dadinfluential in you wanting to continue to
pursue the entrepreneurship route?
Initially, things were great.
My parents were like so proud.
(06:35):
They're like, you're making money online.
That's awesome.
The 2 years of me trying a lot of ideas andthem going nowhere was tough.
They couldn't tell, especially my mom, if I wasactually doing anything because I talked about
it.
I was like, yeah, you know, working on theseideas.
And she's like, are you actually, are youactually working?
And it reached a point where, which is a verynormal thing to say, but it felt insulting to
(06:58):
me where she's like, why don't you just go workfor Facebook or something?
And, but even through that whole thing, my dadconstantly wanted me to be an entrepreneur.
He wanted me to start a business.
So he was very supportive and is like, nah,just give it some time.
You don't have to you don't have to jump into ajob.
We, you know, he always felt that he grew upmiddle class, lower middle class.
(07:23):
So it was hard for him to take a risk ofstarting a company because he had family to
raise and all of that.
But it was almost his wish that his childrenwould have the opportunity to kind of do that
to make up for what he couldn't do.
And you had this period of 2 years where you'rethinking of all these ideas.
Most of them you said on on Grace Beverly'sshow just sucked.
(07:45):
How did you come across the idea for forteachable?
And when did you realize that this wassomething that could be really big?
The idea for Teachable, and this is a patternI've seen with other startups as well, you
almost never come to the idea initially.
It always starts a little bit of side hustlethat keeps evolving into a bigger and better
version of what it is.
(08:06):
So teachable, for instance, we first started bythere are all these creators on YouTube, and I
was like, can we arbitrage it by taking thisYouTube content, posting on Udemy, and making a
little bit of money?
That was step 1.
Step 2 is like, do we actually need theseYouTube creators?
Why don't we create our own content and put iton Udemy?
Step 3 was like, why do we need Udemy at all?
(08:27):
Let me take our own content, put it on our ownwebsite, and then we're like, why don't we
offer the the same tool set to other people?
So it was like this series of ideas, each oneslightly better than the last one before which
we stumbled upon what became teachable.
And even then it was a side project built formy cofounder and I.
It was for our own courses.
(08:48):
And it was, you know, a couple of months inthat we realized we can offer it to other
people.
And probably 6 months from the first time webuilt it to the point that I had conviction
this could be a venture backed company, went toCalifornia, raised a round of funding and all
of that.
You mentioned that it was a side product.
I had Dylan Diamond on the show, a couple ofmonths ago.
(09:09):
He founded this company called Saturn.
So they're a social calendar app that gotreally popular in high schools.
And I asked him, like, how did you get it togrow so fast?
He's like, very very similar to what you justsaid.
He's like, I didn't set out to build a productfor the world.
I just set out to build a really cool productfor myself and my friends and it ended up
exploding from there.
(09:29):
What do you think that says about how to builda really good product?
It's not the only way, but it's my favoriteway.
And the reason is you can it's really hard whenyou're building a product for a customer
persona you don't understand.
Like, I you know, vertical SaaS, someone isbuilding software for construction workers.
You have to spend so much time on customerdevelopment, and you run the risk of no one
(09:50):
actually wanting it.
But when you build software for yourself, youhave customer number 1, chances are you know a
lot of other people like you.
It it just gives you a much more intuitive feelfor how to build, which saves you a lot of
time.
So I think as long as I live and buildproducts, it's an approach I will take.
I took it with my next company as well.
So I really like it.
(10:11):
12 months in, you raised about $1,000,000 inventure funding, but you're only at $10,000 in
monthly revenue.
Walk me through the steps that that you endedup taking to go from 10 k to eventually
$1,000,000 a month in just a just a few years.
Yeah.
So different stages.
It took us we were definitely a little bit slowoff the block.
(10:33):
It took us a little bit over 12 months to getto 10,000.
6 months later, we actually hit 90 k, so we'vegot over a 1,000,000 in ARR in those 6 months.
And I think that was us just figuring out howto better convert our free customers to paying
customers.
So a few different things.
1, we realized that we were selling thesoftware, but in reality, what we had to do was
(10:56):
sell the solution, which I'll I'll clarify whatthat means.
But first, we you know, our pitch was, if youwanna sell courses on your website, use
Teachable.
At the time, it was called Fedora, but eitherway, use a software.
We then changed our pitch to, like, hey.
We are a comprehensive solution to teach youhow to start an online business that includes
courses.
So, you know, it just changed what we'reoffering quite quite considerably.
(11:19):
We also got very good at running a series ofwebinars and workshops that improved our
conversion rate from free to paid to, at itspeak, almost 10%, which is very high, and it
still leveled out at close to 5%.
So we got very, very good at that kind ofmarketing.
And then we also started leveraging oursuccessful customers, did a lot of storytelling
with them, and tried to acquire people fromtheir audience.
(11:41):
That was the unique insight we have that a lotof other companies couldn't use.
Why couldn't they use it?
My personal perspective is with acquisition,you have to find your competitive advantage
that's bigger and better than anyone else.
And for us, direct sales never worked becausewe didn't make enough money per customer for us
for me to hire a salesperson.
Ads never worked because it was still a littlebit niche to go out and find creators.
(12:05):
But the unique insight we had is our mostsuccessful customers, especially if they're in
a vertical of online business, Internet, thatkind of stuff, there were lots of people in
their audience that in turn were idealteachable customers.
So as soon as we had that insight, we doubleddown on that by making them affiliates, by
giving them equity, by hosting events, by doingstorytelling.
(12:27):
And honestly, that was, like, the onedifferentiating factor that allowed us to scale
faster than anyone else.
I think you hit the nail on the head in termsof selling the solution.
When I started the agency that I run today backin January, what I would sell was, hey,
founders, we're gonna get you on a bunch ofdifferent podcasts and we'll create content for
you.
Month 1, we did 2.7 Kin revenue.
Month 2 is 5.4.
(12:48):
Then all of a sudden, we flatlined.
And for 3 months, I'm just constantly trying tofigure out, like, what the heck am I messing up
in sales and I keep looking at the wrongproblem.
What I ended up realizing is I kept trying tosell, like, the PR content piece and not what
that is actually generating for them, which iscustomers.
So I pivoted that and I'm like, hey, we'regonna help generate demand for your company.
(13:09):
We'll generate more sales and revenue for yourbusiness.
And also, we're just gonna try to be as helpfulas we possibly can.
Like, if I threw numbers out the window, like,how could I be as helpful as I possibly can?
And all of a sudden, growth, like, explodedlast month.
So I noticed there's that's definitely a a key.
Absolutely.
And I think as founders, one of the one of thelessons you learn is even while pitching my
(13:30):
company to investors, one of the mistakes Imade is I actually described what we do, while
instead I should be describing the biggestversion of what this can be.
So when it comes to raising VC, investors aretrying to work backwards on how this can be
worth, whatever, 1,000,000,000 of dollars.
It matters less describing what you do.
(13:53):
Like, we saw dramatically better results whilepitching Teachable.
The original pitch was like it's like Udemy,but, you know, on your own website.
You know, we'll help you put courses and it'syour own branding.
And that did okay.
Like, investors are like, okay.
Sounds cool.
Little side project, whatever.
But then we changed our pitch to, today, mostecommerce is the sale of physical goods.
(14:16):
In the future, it will be the sale of knowledgeand we're the platform to power it.
Exact same product, different pitch.
One just talks about the biggest, grandestversion of the vision and obviously did a lot
better when it came to raising money.
Yeah.
And venture capitalists, as you all know, arelooking for that 100 x 1000 x outcomes.
So that's exactly the right way to pitch it.
To grow, you would reverse engineer a lot ofyour goals every single month.
(14:40):
What did that look like and and why was thatprocess so essential for the growth of
Teachable?
We used a framework where we had a certainlook, once we hired our head of growth, Andy,
who now runs a company called Circle, the waywe had an MRR goal for every single month, MRR
is monthly recurring revenue, a lot of startups kind of just chill and they're they take
(15:05):
the approach, MRR will come where MRR comes in.
We decided to be very intentional about it, andwhat we would do is we'd set a goal for every
month.
Like, let's say let's say this month we wannagrow 20% or 15%, and we would run the math on
what that would entail.
So we create a simple model being like, okay.
We'll churn 5% this month so that means we needto add $6,000 in new MRR.
(15:29):
Organic will account for 3,000 which means wehave to find $3,000 of new MRR, and then we'd
come up with initiatives that could hit thosegoals.
And this is a really important exercise for acouple of reasons.
1, it created a true growth framework and italigned us on what's important based on, like,
hitting those numbers.
(15:49):
We were almost never accurate in terms of wherewe'd end up, but that in turn gave us really
critical learnings of like, oh, we thought thiswould do x, but it did y.
And then eventually with time, we got betterand better at this exercise.
And ultimately, I think the reason it worked isit never left growth to chance.
Yes.
There are a lot of months we didn't grow.
A lot of months we missed our targets, but wedidn't leave it to chance.
(16:12):
We still had a plan whether we hit it or notwas different.
And you found a way to get unstuck from that 10k to eventually doing a 160 k a month the the
next year.
For founders in the audience who might feelthat they're stuck, they're working every
single day nonstop like you are grinding andthey're just not moving closer to their goals.
(16:34):
I know it's general, but what's one piece ofit?
What would you tell them?
What advice would you tell them?
I think we need to differentiate between wherethey're getting stuck.
If you're getting stuck super early, youprobably don't have a growth problem.
You probably have a product problem.
Right?
Like, there's a big, like, initially initially,you don't know if anyone wants a thing you've
built.
So this is counterintuitive, but I think in alot of cases, you shouldn't do what all the
(16:57):
books tell you, which is, like, keep pluggingaway and, like, you know, Elon slept in his
office and Bezos never gave up.
You probably should pivot.
You probably should do something else.
Like, there's so many great ideas.
If the market is telling you it doesn't wantwhat you've built, that's a valuable insight
and you should do something else, like iteratefast.
I think I think people hold on to ideas toolong.
But let's say you're the other type of stockwhere you have a $1,000,000 or whatever in
(17:22):
revenue and you're now getting stuck.
I think you need to like audit.
I'm I'm talking at this point, I guess morespecifically at software businesses, But what I
found is eventually a great software businessfinds a way where existing customers become
worth more over time.
Like, you have inherent expansion revenue.
(17:44):
And if you don't have inherent expansionrevenue, like a lot of whatever these AI tools
right now, they're like, you know, all the allthe, like, college student tools, for instance,
like the homework helpers, blah blah.
I think a lot of those companies should notraise venture dollars.
I think you can build a fantastic business thatgets to a few $1,000,000 in ARR, but eventually
your churn offsets new growth.
So that model will it'll inherently get stuckat, like, you know, 5, 8, 10,000,000 ARR.
(18:09):
And you could either have a business cashflowing 1,000,000 of dollars.
That's a beautiful business for you or raise 10or $15,000,000 and get stuck in this, like,
venture capital mode when your business isn'tsupported.
The flip side is if you have a business thateither like like Teachable, we processed
payments for our creators.
And as creators did better, the paymentsrevenue grew every year.
(18:31):
So that more than offset our user churn.
You but Cary, we have the same dynamic withassets on platform.
Enterprise SaaS has that where cup companiesadd more seats.
But unless your business supports goodexpansion revenue economics, I would say you're
better off not raising venture dollars and justtrying to build a business that grows really
fast and you get cash flow quite a bit.
And I know it's hard to pick, but from thecreators that have been on Teachable, what do
(18:56):
you think is probably one of the cooleststories that that you've seen that Teachable
was able to help them?
It was fascinating seeing the sorts of coursesbeing successful because we'd, everyone knows
you'd have to make money online, blogging,whatever.
But we had so many, like, crazy stories.
(19:16):
Like, one of our most popular courses in themusic category was, like, mastering the
handpan, which is an instrument I haven't heardof, and they made it over $1,000,000.
Wow.
There's a course on like how to have a safewater birth that also made it over $1,000,000.
There's all these like really niche topics,that ended up doing super well.
(19:38):
There's also, like there are also just, like,weird, controversial topics.
I remember there's one course that did quitewell that was how do you overcome feelings of
white supremacy, And it was insane that and Iremember at at at Teachable, we had a debate.
Should we take this course down?
Like, is it offensive?
(19:59):
My argument is, like, here are people who arepaying money to deal with their feelings of
white supremacy, But, yeah, we ended up seeingall all kinds of crazy courses.
That's pretty crazy.
You were a couple years in you're many yearsinto the business, and all of a sudden, one
day, you get this offer.
You weren't looking to sell, but it it waspretty intriguing at the time.
(20:20):
What was the offer and what did you think of itwhen you first saw it?
Business was was humming.
I think we were probably year 6, close to20,000,000 in ARR, not quite there.
And it wasn't directly an offer.
I think it was a private equity firm we had metwith as we're discussing a series b.
(20:40):
The second most senior guy at the PE firmemailed me, which is which is a little rare.
Right?
I was like, something's up.
And he's like, can I drop by your office?
If you know anything about like finance people,they don't come to your office.
They make you go to theirs.
So I figured something was up.
So comes by our office and he's like, well, wehave this company in Brazil.
They do exactly what you're doing.
(21:02):
They're making x dollars in revenue.
And that blew my mind because I'd never heardof this company.
And in our space, I'd know someone making thatbunch of money, but he's like, why don't, you
know, why don't you guys sit down?
Like, you know, it's like a blind date.
Why don't you go to dinner and see if you likeeach other?
And I was like, yeah, I'll do dinner.
And did dinner, started chatting, saw eye toeye with the founders.
(21:23):
We had a very similar world view.
They're building what we're doing, but biggerand international.
And we soon started talking about what a dealcould look like, and the numbers made sense
and, you know, we ended up kind of movingforward with it.
But one of my takeaways there is I always say,you know, companies are bought not sold.
(21:43):
Like before we even met with them, they'd satdown in a boardroom somewhere and decided how
it would be cool to buy us.
And as a result, it just makes the dealsubstantially easier than if you are like,
damn, I need to sell this company, and then youhave none of the leverage.
How were they cool to buy you?
The reason I I like working with them and Istill continue doing, the biggest reason is
(22:03):
it's a founder led, founder driven company.
11 years in, both the founders still run it.
Fascinating trajectory where they raised$400,000 early on, then no one wanted to fund
them because they're in Brazil and, you know,it's not the sexiest market.
So they built this business out of profits andthen raised it around 10 years later for a
(22:24):
$100,000,000 to start doing acquisitions.
So they almost bootstrapped this, like, massive$1,000,000,000 company run by founders, led by
founders.
We just got along very well where it madesense.
At one point in the negotiation, everythingstarts slowing down a little bit and you're
like, hey, if I want this to close, we got toget this done.
What did you do to speed up that process andand get a deal closed in 4 days?
(22:46):
Yeah.
So we'd reached a point where it was the firsttime for both of us, like even they had never
done a deal this size.
And what happens when you're doing these kindsof deals is if you're not careful, lawyers on
both ends can drag this on forever.
It's almost in their best interest to let it goon super long.
But I remember I this was also, like, you know,March 2020.
(23:08):
We were COVID was potentially around thecorner.
There was a lot of uncertainty.
But at some point, I remember being like, guys,our, like, the company kept growing, right, as
we're doing this.
And I was like, if we don't reach a conclusionsoon, we're going to, like, like, the deal we
agreed to is no longer on the table.
And that was impetus for them to, like, gethere, lock down in a room, and basically, we
(23:33):
all decided we'd stay in this room until thedeal closed.
And we did that just in time right before NewYork shut down entirely.
So it was a very, very close call on on allends.
During that time, were there any things thatyou learned about negotiation that most people
might not know?
(23:55):
I've sold a company one time, talked to a lotof friends going through that process, and it's
just one of the it's, like, exhilarating yetexhausting at the same time.
I mean, you're dealing with in your brain, youhave to account for the fact that there's 2
dramatically different outcomes.
(24:15):
Either you go back to work like nothing haschanged or you make an infinite amount of
money, and you have to be somewhat okay withboth outcomes.
Because if you go too far in one outcome, if inyour mind you've sold your company before you
sold your company, that's when really badthings happen.
So you have to try and be as okay with eitheroutcome happening.
(24:36):
You have to hide this whole thing from yourteam.
I'm I'm like disappearing for days on end.
Everyone's like, why is he not at the office?
Can't tell anyone what's going on, while tryingto run the company as if the deal never
happens.
Like, my biggest piece of advice to anyonegoing through this process is do not consider
your deal done until the literal day you getmoney in the bank.
(24:58):
I've heard so many horror stories of thingsfalling apart, you know, 4 days before, 3 days
before.
Sometimes, you know, like the department ofwhatever monopolistic antitrust stuff comes up.
So it's exhilarating.
It's so much fun, but it takes quite a bit outof you.
I presume that was an an intense process.
How did it feel after when the wire hit yourbank?
(25:21):
It was the world's smallest violin will playfor me because it was pretty anticlimactic
because this was in the middle of April 2020.
So at the time to recall for people who don'tremember what April 2020 was, we're locked in.
This was when people are, like, wiping downpackages from Amazon in case you might you
might get get COVID.
So literally nothing happened or changed forquite a while after.
(25:46):
The biggest turning point I found was honestlythe year later when I was able to walk away
from being the CEO, which at the time hadreached a job that I honestly found quite
stressful and didn't enjoy as much.
I felt like that was a bigger turning pointthan, you know, dollars in the bank or
whatever.
It sounds counterintuitive, but why were youhappier when you left a CEO and being your own
(26:10):
boss per se to now not having anything?
I believe it's got to do with the stage of thebusiness.
Like, by the end of running Teachable, and thisalso is I'm sure connected to why selling the
company made sense.
I just started feeling burnt out where we'dreached a size of almost 200 people, which was
(26:32):
so different from the stages of, like, creatingand building something from scratch that it
almost felt like an organization.
I mean, I had built it yet I was not proud of,like, the organization itself.
Like, we just like, my day to day was juststacked with meetings.
We also, at this point, we're a remote companybecause of COVID, which we were not used to
(26:54):
being at all.
And it just became this behemoth of anorganization that was so different from why you
start a startup.
Even, like, from a product perspective, right?
Like, when you first build a product, peopleare like, why your product is so simple.
It's so elegant.
It does all these things.
The incumbents are these, like, messyplatforms.
By the end, we were the incumbent.
(27:15):
We were no longer the upstart.
Towards the end, you had about 200 people.
Going back earlier to the conversation whenyou're working at Amazon, the reason why you
didn't like that job from previous interviewsyou've done is you said you just felt like you
were a cog in a machine.
How did you
It was irrelevant what I did or did not do.
Yeah.
I didn't show up to work and no one realized,which is pretty bad.
(27:35):
Your your entire team was working on, like, onepage for Amazon.
Right?
Correct.
We were doing the manage your inventory pagewithin Seller Central.
That was our yeah.
How did you prevent employees at Teachable fromfeeling something similar?
To be honest, I don't think I did.
So that ties back into why I think I may nothave been a good CEO by the end.
I think by
the
(27:55):
end, we did, like, we became a version of whatwe wanted to avoid.
I mean, we another breaking point, I think,happened when I saw a designer not working on
shipping customer value.
Instead, they were working on making anexecutive's deck nicer for an internal
presentation.
(28:17):
It's a pretty colossal waste of companyresources.
Yeah.
So I don't think I did a specifically good jobof avoiding that.
There's lessons learned and I hope this time Iwill, but if I don't, I think I'll have less
ego attached and I'll be more willing to stepaside and let someone else come in and run the
company.
Founding a company and running a company arecompletely different skill sets.
(28:38):
I feel good about one of those skill sets.
Still have to prove myself and the other.
Right after you ended Teachable, you left.
You now have all this money in the bank.
COVID hits.
What's next?
What what's going through your mind?
So right when COVID hit March 2020, I startedinvesting a little bit more just because we're
locked at home and had more time.
(29:00):
Had Angel invested in a couple of companiesbefore then, but I ramped it up during that
period.
After getting money in the bank, I'm like, Ican finally put my own dollars in.
So I ended up running a venture fund for about2 years.
We had 2 separate funds for almost 18 to 24months.
I ran a venture fund, invested in close to a100 companies, which was which was fun because
(29:21):
as I stopped working at Teachable, it let mestill feel like I'm involved in stuff.
I'm learning stuff.
I'm talking to smart people.
I'm not isolated from the world.
Yeah.
Yeah.
Purpose.
Correct.
Meanwhile, it also was a pretty easy job.
Like, investing is substantially easier thanrunning a company.
So I was able to travel, I was able to, youknow, play, like, got into surfing and playing
(29:44):
tennis and seeing my family a lot.
I left New York for a bit.
So it was a perfect balance for that interimperiod of time, though it eventually became
clear that I'm too young to do this for aliving.
So it was more like a good thing to do inbetween until I got ready to start something
else.
Yeah.
And you're building out this venture fund.
(30:04):
You ran it for 24 months.
When did you eventually realize, like, hey, Idon't wanna be in venture anymore.
I wanna go back to building.
And and what did you decide that you wanted tobuild?
It's funny.
At first, when I left Teachable, in my mind,I'm like, I never wanna do a startup again.
Startups are pain.
This is, like, painful.
But the funny thing about nostalgia is the wayit works is with the passage of time, you start
(30:29):
to forget the pain.
You reminisce on the good times.
And about a year, a year and a half in, I juststarted to think about, wow, it was so fun, the
early days, like the sense of purpose ofbuilding something together.
And towards the end of that period, I juststarted romanticizing the idea of a start up.
Specifically, what I was missing is the senseof, like, building something with other people.
(30:50):
The venture fund was great, but it was sort ofinsular.
I had founders I was working with, but itdidn't have a real team or, you know, sense of
us accomplishing something together.
So towards the end of that period, started tothink about it.
I also started to, like, self identify, like,what am I good at in building companies, I
almost think of it like, you know, it's kind ofmy sport and you don't retire from your sport
(31:13):
at 32 or 33.
You know, I was like, I have another another goin me.
And eventually, the turning point was I wasgoing to go to Portugal.
I was gonna go surf for a couple of weeks, andthat was gonna be my time that I was gonna,
like, fully think through if I wanted to dothis.
But when I found myself more excited to work onthis idea than literally go on a vacation and
surf, I was like, I knew it was time.
(31:34):
And, so you've decided decided to start thiscompany called Ocho now called Carry.
What was the idea behind it?
How did you come up with the idea for that?
While selling Teachable a few months prior tothe transaction, I was able to hire smart
lawyers and attorneys who structured theacquisition in a really smart way that ended up
saving me literally 1,000,000 of dollars intaxes.
(31:57):
And that almost radicalized me that doing acouple of relatively no.
They're not simple, complex things, but, youknow, someone can come and do this and save you
that much money was a bit of a light bulbmoment.
And the more I look into the tax code, yourealize there's so many things, especially for
business owners that no one knows, but if donecorrectly, can save you tremendous amounts.
(32:22):
So it felt like a really good, like, foundermarket problem, whatever fit where we can do
good in the world.
It's a brand new problem space that'sfascinating, and the opportunity is only
growing.
So I knew I wanted to do this problem.
The specific product took some time.
We decided to start with a 1 person 401 k sincethat felt like a really, really great wedge.
(32:45):
Most of my career has been, like, building andserving business owners in some way, shape, or
form.
So this felt like an extension of that missionin a lot of ways.
That one person or or solo 401 k, what is itand and how does that work?
Yeah.
So this was a very pleasant surprise as Istarted working for myself.
But if you work for yourself, you can set up a1 person 401 k, which in my opinion is the most
(33:08):
powerful retirement account in America.
It allows you to get a tax deduction upfront ofalmost $70,000, which even though your
corporate 401 k may allow, in reality, it'simpossible to hit because your employer does
not contribute enough.
So you can get up to a $70,000 tax deduction.
You don't pay any taxes on any of the growthinside.
So, like, if you get dividends, sales,whatever, you don't pay any taxes until you
(33:31):
take money out in retirement.
But you also have the opportunity to set upwhat's called a Roth account, which will allow
you to pay taxes in retirement.
All this while, because it's your own 401 k,you can invest it exactly how you want.
You can invest it in public stocks, equities,ETFs, but you can also do crypto, startups,
real estate, venture fund, whatever.
(33:52):
So almost think of it as a superchargedinvestment account that you get a massive tax
benefit for doing.
But prior to Carry, there was no easy platformto do all of this.
So that became our first wedge, and then webuilt from there.
What do you think is if you could go back intime and and give yourself when you found it
Teachable a couple of 2 or 3 tax tips orframeworks, what would you tell him?
(34:16):
So at Teachable, we got fortunate in that thebiggest tax strategy for founders is something
called QSBS, qualified small business stock.
And if you're not careful, you can accidentallyblow it up.
We got lucky we never accidentally blew it up,but QSBS is massive because it will allow every
(34:38):
single shareholder including employees,investors, founders to not pay taxes on
$10,000,000 each when the company is sold.
And with smart, you know, attorneys and stuff,you can multiply the 10,000,000 to 20, 30, or
40,000,000.
At Teachable, we still did that, but it wasdumb luck.
None of us even knew about it and, you know, 5years in, we didn't accidentally mess it up.
(34:59):
So as a startup founder, honestly, that is thesingle biggest thing.
There's a lot the playbook is much wider ifyou're an individual making money.
Like, if I could go back and tell the Facebookapp person stuff, I would have saved, like, you
know, probably 40%.
You know?
On Teachable, we got fortunate that there isn'tmuch more I could have done.
(35:19):
How do you accidentally blow that up?
So the most common way is if you have adeparting founder or employee that you do a big
stock buyback for.
And the challenge with that is that blows it upnot just for you, for every single shareholder.
So what I tell people is, like, again, justtalk to a tax attorney and double check any
(35:40):
redemption where you're buying back shares isokay.
Other less common ways of blowing it up is ifyou invest a lot of your balance sheet in
random equities, like treasury bills orwhatever is fine, but if you start buying
corporate debt and stuff, the they can take astance that you're no longer a qualified trader
business.
You're an investment company which would makeyou ineligible.
(36:02):
There's always like weird nuance like that.
And you spent a lot of time becoming a tax techtax expert for founders and not and
entrepreneurs, and you talk a lot about it onTwitter.
One of your posts that I thought was prettyinteresting is that a buddy of yours will earn
about a half $1,000,000 this year, of which hewould have had to pay about a quarter
(36:23):
$1,000,000 in federal, state, and selfemployment taxes.
You hop on the phone with him, and you gavehim, advice that would save him 6 figures just
this year.
What was that advice?
And to be clear, by the way, this is exactlywhere even I was at the age of, like, 19 or 20,
which is fine.
This is a sweet spot where I think there's alot you can do.
(36:43):
So right off the top, typically, most peopledon't realize, when you work for yourself, you
pay almost you could pay almost 15% in selfemployment taxes.
This is like social security and Medicaretaxes.
You don't feel this as much as the w twoemployee because your company pays half.
But what you can do is you can set up an scorp, which allows you to bifurcate, let's say,
(37:05):
the 500 k.
You can pay yourself a 100 k salary, take 400 kin distributions, and now you only pay self
employment taxes on the salary.
So that saves a few $1,000 right away.
Secondly, setting up a solo 401 k can getpeople a 70,000 69,000 specifically tax
deduction.
But if you're married as in this case, you canalso hire your spouse in the business, pay them
(37:30):
a reasonable salary, and now you each get yourown $69,000 limit.
So that really starts to multiply the benefits.
And there were there's a lot of other foundersthat have really taken advantage of the tax
code to, like, an extreme.
One of which is Peter Thiel.
He'll have access to $5,000,000,000 in inuntaxed dollars.
(37:51):
How did he do that?
So Peter Thiel, and by the way, I should Ishould caveat always that he was the first one
to go to the IRS and be like, you should changethis rule.
Like, he was very upfront about it.
Know that.
Okay.
He was very upfront about it.
There's a great ProPublic article, but he hewas very upfront about it.
But again, I mean, look, any smart person isgonna look at a code, especially if you're a
you're an entrepreneur and use it to the bestadvantage.
(38:13):
So Peter Thiel did, and again, this is allreported by ProPublica, so repeating basically
that.
But he set up a Roth IRA.
And the way a Roth IRA works is you contributeafter tax dollars, but then never pay any tax
on it in retirement.
The cool thing about a Roth IRA ishistorically, at one point, top tax rates in
America were 90%.
I don't know if we'll go back there, but a RothIRA protects you no matter where taxes go in
(38:36):
the future.
But what he did is he bought some of hisfounder shares in PayPal from his Roth IRA.
When PayPal sold, that was worth tens of1,000,000 of dollars.
And from that point on, he just used it as,like, a personal investment piggy bank.
And imagine the combination of, like, tens of1,000,000 of dollars in a tax free account
combined with one of the world's greatestinvestors just went on an epic, you know, tear
(38:59):
and is now at at least $5,000,000,000potentially much more on which you wanna pay a
single dollar in taxes.
Wow.
Is that rule changed now?
Or
So the only part of it what he did that isquestionable is if you are a founder, it's
debatable if you can buy your own shares in aRoth diary.
The reason being is they're self dealingtransactions.
(39:21):
Doesn't mean you can't.
It has to do with the threshold of how much ofthe company you own.
It it just gets a little bit tricky.
So what I tell people is if you wanna be safe,don't buy your shares, but I can invest my Roth
IRA in your company or my friend's company andall of that.
The general idea of taking a Roth and investingit in assets with high upside works super well.
(39:42):
If it's your own company, it could get a littlecomplicated.
Gotcha.
And before we wrap it up here, we have a coupleof closing questions.
One is, what's your greatest failure?
And what did you learn from it?
I think there are a lot of there are a lot ofmoments at teachable, where I felt like I was a
(40:06):
complete failure as either I had to straddlebetween being a failure as a human or a failure
as a CEO, and I felt like I had to pick onepath or the other.
Like, I feel like as a CEO, you have to operatealmost looking at humans as like
interchangeable pawns or whatever in this,like, grander scheme of building a company.
(40:27):
While if you're operating as a human, you'rethinking about loyalty, friendship, all of
these other things.
So I constantly felt like I was failing at 1 orthe other.
And at different points in my career, I thinkI, you know, failed as a CEO and other points I
think I was a good CEO, but, like, may havefailed as a person.
How can founders balance that dynamic?
I don't have a great answer to that.
(40:48):
It's a question I ask myself all the time.
Like, is it possible to be an an incredible CEOwithout being mildly sociopathic?
I don't know.
And that's why I struggle.
And that's why I don't know if I'll I'll alwaysbe a CEO.
By the way, I do think you're not really a CEOuntil you're at least 50 or a 100 people.
Like everyone says you're founder CEO, butthere really isn't CEO type stuff to do.
(41:11):
Gotcha.
But can you be a great turnaround CEO where youhave to come in and fire 700 people while being
a good person?
I don't know.
Well, I think at that scale, then it's more ofa numbers game than an EQ game.
And at that point, if you're firing 700 people,there's a good chance that you don't follow
those people personally.
Right?
So second, what's the best piece of adviceyou've ever received?
(41:33):
I was pretty young when I read RichardBranson's autobiography.
I think it was called Losing My Virginity.
And what was what kind of stuck with me throughthat book is like the sense of just like having
a blast through doing everything, which I findto be such a refreshing attitude since so much
startup stuff is about the pain, the struggle,like, you know, like like the fight and how
(41:58):
hard it is.
What comes through, not just in Branson's book,but the way he sort of has run his companies is
a sense of this man looks like he's having thebest time in his life and just, you know, doing
it for the sheer love of the game.
So whenever things get hard, whenever we're ina difficult time, even now, if you look at like
our company culture and what we believe, one ofour beliefs is we take our we take our work
(42:21):
seriously, we don't take ourselves seriously.
And that's something we're trying to trying tostick with.
Yeah.
And you joke with the the person at your deskevery day.
Right?
Yep.
Jokes a day.
Yeah.
I've noticed that the hard parts ofentrepreneurship are traditionally very over
glamorized.
Mhmm.
And
the fun parts parts are not.
And now that you brought it up, I think thereason why is because nobody's impressed by you
(42:44):
having fun.
Right?
But people can be impressed by you doing hardthings.
So I don't know if that will ever change.
But
But you know where I do think it changes, bythe way, is I think when you talk about, again,
all these billionaires that have historicallybeen quite unpopular, you look at the ones that
are popular to normal people, not the techcommunity, are the ones that are having fun.
(43:08):
Like, even I mean, Zuckerberg is a greatexample.
As he looks like he's enjoying his job more andhis life more, he's become more likable.
You think about there's a lot of very richcelebrities that don't face as much stigma and
what are they doing?
They're just having a good time.
So I do think if you come across likeauthentically being yourself, genuinely
enjoying what you're doing, you become morelikable to the masses even if it gets you less,
(43:32):
like, kudos from, like, other entrepreneurs orwhatever.
Yeah.
And what's one rule you live by that mostpeople don't?
Something really important to me, and it's onlygotten more important is I have this sense of
immigrant guilt having left my parents, left myfamily quite young.
(43:54):
They're getting older by themselves.
So right now I try and talk to them everysingle day.
I don't know many other people that do that.
And very often I miss, but, like, literallyevery morning, I will try and speak to them no
matter what.
And I'll try and see them 4 or 5 times a year.
And, I don't know many people my age who dothat.
Yeah.
(44:15):
I don't I also don't know a ton of kids my agewho are talking to their parents very
frequently given I am in college.
But the 1st month, everybody's calling theirparents, and then after that, it's not as
For me, it's all about digging it into theroutine.
It's usually, like, on my walk to the office ormy walk to lunch, and very often it's, like, 5
minutes, 10 minutes.
I don't know if you've ever noticed this, butwhen you take your calls that you end up
(44:35):
walking around a lot, you take, like, 20,000steps a day.
I've noticed that when I'm taking calls and I'mwalking, my mind just seems a lot sharper.
Do you see something similar with you?
Absolutely.
I can't think while seated at a desk.
All my best ideas, it happens when I'm inmotion walking.
Ideally, sometimes even walking without musickind of makes my brain work.
(44:58):
Yeah.
I also can't be on a phone call and bestationary.
I have I have to move.
Yeah.
Walking without music just makes yourselfforced, like, you have to kinda talk to
yourself.
Sometimes you look a little crazy doing it,but, hey.
I guess last up, if I switch you over a phoneand you could call your 18 year old self, would
you call?
(45:19):
And if so, what would you say?
I would I would call.
I I mean, this is a cliche, but it's a clichefor a reason.
I've I've almost linearly, every subsequentyear of my life has gotten better.
And I think it would be a good reminder toalmost just, like, chill out a little bit.
(45:44):
Like, I remember I had I don't know if it'sexistential angst or whatever.
When I was 18, I really wanted to, like, provesomething and just like a reminder that it'll
all kind of figure itself out.
I definitely feel like so far, I mean, I'm 35.
My thirties have definitely been the bestdecade of my life, and I think that would be a
good reminder.
You ever wonder if you did tell yourself that,that maybe you wouldn't I
(46:04):
don't think anything would change.
Nothing would change.
Nothing would change.
Awesome.
Well, I think that's a great way to end it.
Thanks, Anker, for taking the time to to jointhe show.
Greatly appreciate it.
We'll have a link to carry in the episodedescription down below for any founder
interested in checking that out and not payingas much money to the government.
So thanks, Anker.
Thanks for having me.
Popular Podcasts
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Intentionally Disturbing
Join me on this podcast as I navigate the murky waters of human behavior, current events, and personal anecdotes through in-depth interviews with incredible people—all served with a generous helping of sarcasm and satire. After years as a forensic and clinical psychologist, I offer a unique interview style and a low tolerance for bullshit, quickly steering conversations toward depth and darkness. I honor the seriousness while also appreciating wit. I’m your guide through the twisted labyrinth of the human psyche, armed with dark humor and biting wit.