How Did Mr. Beast Build a $1.5 BILLION Empire, the 5 Ways to Brainstorm Business Ideas, and How to Hire FAQ

Alex Lieberman: MrBeast is trying to raise $150 million at a $1.5 billion valuation. What do you guys think about this? Is the valuation crazy? Are you all in on MrBeast?

Sophia Amoruso: It's not my style.

Jesse Pujji: Ooh, this is gonna be fun.

Sophia Amoruso: You guys have converted me and you can't really argue with success.

Alex Lieberman: I think there's two risks that basically could dethrone him. Jesse, do you have a dog?

Jesse Pujji: No.

Alex Lieberman: Okay, your feedback isn't valid. What's up, everyone? I'm Alex Lieberman.

Sophia Amoruso: And I'm Sophia Amoruso.

Jesse Pujji: Yo, this is Jesse Pujji.

Alex Lieberman: And this is The Crazy Ones, episode four of The Crazy Ones. I'm Alex Lieberman, as always joined by my co-hosts Jesse Pujji, Baby Buffett, and Sophia Amoruso, the Dean. Guys, we're keeping those names going.

Jesse Pujji: One of my friends told me you should give me a name like the Oracle of Omaha. He said the Soothsayer of St. Louis.

Alex Lieberman: Oh, I like that. I like that.

Sophia Amoruso: I need something edgier. I never went to college, so we gotta figure something else out.

Alex Lieberman: Also, those are just drafts. If you guys have recs on the nicknames, I'm happy to workshop. And also, I don't have one yet, so I'm waiting for that.

Sophia Amoruso: I think this is something we can solicit listeners for, for sure.

Alex Lieberman: For sure. If you have great nicknames for the three of us, email thecrazyones@morningbrew.com. Let us know.

Jesse Pujji: And don't send the Terminator. I've heard that one one too many times.

Alex Lieberman: Oh, that's amazing. We have an amazing rundown on deck for you all today. First up, MrBeast is trying to raise $150 million at a $1.5 billion valuation. We talk about why he's raising, if that valuation makes sense, and what lessons any entrepreneur or creator can learn from the rise of Jimmy Donaldson. Then we're going to be talking about business ideas. Quite frankly, I'm very bored right now. I'm looking to build something new for fun on the side, and so I'm going to be leaning on my co-hosts to think about what that is.

And we're going to be finishing up with a listener/viewer call-in. So one of you in the community sent in a selfie video asking a question of us, and we're going to be talking about what the answer to that question is. So let's hop into it.

Sophia Amoruso: MrBeast.

Alex Lieberman: MrBeast.

Sophia Amoruso: What a freak. What a freak.

Alex Lieberman: MrBeast. Axios reported a few days ago that MrBeast is raising $150 million for his business, $1.5 billion valuation, and this is across his whole business. So it includes his main YouTube channel that has 107 million subscribers, it includes his Reacts channel which has 20 million, his Gaming channel which has 29 million, his Shorts channel. It also includes his businesses that he's launched over the course of the pandemic: MrBeast Burger, which now has a thousand locations, and Feastables, which is going to be doing tens of millions of dollars this year. What do you guys think about this? Is the valuation crazy? Are you all in on MrBeast? What do you think?

Jesse Pujji: It's amazing.

Sophia Amoruso: It's not my style.

Jesse Pujji: Ooh, this is going to be fun.

Sophia Amoruso: It's impressive. I mean, the gonzo style, kind of chasing clicks, I get it, if you're going to do that. I'd rather educate people. That's just my jam. Putting more shit out into the world that's wasting stuff and wasting energy and wasting planes that he's crashing. He's staging plane crashes, which outraged the internet, where him and his buddies like show up to a crashed plane and have to kind of figure it out like Lost style. It's just guys giggling and cackling.

Jesse Pujji: Sophia, you don't like his content, but do you think you'd invest? Do you think it's an interesting business?

Sophia Amoruso: I would invest because it's not aligned with me...love hamburgers, but I would want to know more about the meat. I think again, it's just like there's enough hamburgers out there. There's a great place down the street from me. It's like, is there a need? Is there a need? I think we'll get into that later.

Alex Lieberman: Are you not a fan of Disney?

Sophia Amoruso: I love Disney.

Alex Lieberman: Okay, but how do you think about Disney differently from what Jimmy's doing?

Sophia Amoruso: Disney creates worlds. Disney takes people out of their life into a fantasy. I love Disneyland. I had a season pass before Covid. I'm not like a lifer Disneyland type.

Alex Lieberman: So you had a season pass as an adult.

Sophia Amoruso: As an adult, yeah. Yeah.

Alex Lieberman: I will say that I don't think about Disney and Jimmy all that differently. At the end of the day, I think content informs or it entertains, and there's value in entertainment. Now, if everyone was just watching MrBeast videos 24 hours a day, I think that would be a huge issue. Look, I think it's incredible what he's built. I think that the valuation of the business, so $1.5 billion, I was working through the numbers and I think it's probably a little rich. I kind of estimated that he will do $120 million in revenue this year, and that's based off of, in 2021 he did $54 million across his channels. I looked at how much his channels grew this year, so they went from 64 million followers the middle of last year to 97 million on his main channel, middle of this year. So my assumption is he did something like $80 million in revenue on his channels this year. And then I estimated $20 million in Feastables and then $20 million in MrBeast Burgers. Supposedly MrBeast Burger, they've done $100 million in revenue that's being shared with the different locations. So let's just say $120 million in revenue this year across the universe of Beast. He's valuating the business basically at 12 and a half times last 12 months revenue.

Just comparing it to public companies. So Netflix trades at 4x right now. Disney trades at 2 or 2 1/2x. Obviously, I think it needs a premium, given it's an earlier stage business, it's growing faster. But I think there's such like a sexiness premium to him. So I think almost like you can't think of it in terms of multiples because the people who are investing aren't thinking in terms of multiples.

I mean, I think what Jimmy's built is incredible. I will say I do question his first two businesses, why they were a burger company and a chocolate bar company. And I say this, by the way, as a proud small investor in Feastables. But yeah, I just wonder why those were the two first businesses he launched.

Jesse Pujji: Well, maybe he was trying to prove to himself that he could take the most commoditized business. As Sophia said, burgers are everywhere, and actually build a business. Because if he can do it with that, imagine what else he could do it with. I think it's a pretty exciting thing. I mean, I think the Disney analogy's very apt. We went crazy for Disney with my kids over Covid. Do you know what year Snow White was made in?

Alex Lieberman: I'm going to guess 1940.

Jesse Pujji: Sophia?

Sophia Amoruso: 1947.

Jesse Pujji: 1937.

Alex Lieberman: Wow.

Jesse Pujji: And my daughter can name all the dwarves. So can most people. So media has a crazy, I mean, it's the original software business. You do it once and that's it. And it's the same thing we're doing right now. We record this once, and it doesn't matter if a thousand people listen to it or 50,000. It doesn't cost anything more.

So I mean, I think it's one of these new age businesses, I think his ability to sell things through, I mean, there's so many examples. Like the concept of a soap opera, those came about to sell soap. And so media and entertainment are inextricably linked with commercial stuff. And I think the fact that he's kind of bearing down the new path of what this is going to look like, and literally maybe he started with the two, chocolate and burgers. And it's like, if you could actually build a business with that, then what else could he build? I probably wouldn't invest because it's not my profile of an investment. But if I was a private equity guy, I would definitely invest. Like if I was using a fund and had that kind of return profile, I would definitely invest.

Alex Lieberman: Yeah. If I remember correctly, Feastables, the original raise was a $5 million round at a $50 million valuation. But actually, to play devil's advocate to my point that I just made about, I wonder why he built these businesses? Businesses that are physical products, they don't trade at great multiples. The other side to that devil's advocate is what you're saying, which is, actually the best business to launch as a creator is something that is completely commoditized. You know there will always be product market fit for it because humans' appetite for it really isn't changing. And so you'll be able to sell a lot of it because you're the best brander or marketer of it.

I actually think, one last thing I'll say, and then Sophia, I want to hear your thoughts, is the Disney analogy and Snow White and the Seven Dwarfs' names, like your children knowing that, it reminds me of what I think are the biggest risks to MrBeast's empire right now. I think there's two risks that basically could dethrone him. One is just key man risk. So god forbid it happens, but Jimmy getting hit by a bus, that would obviously be a huge shot to all of these businesses because they are still inextricably linked to him. Now I'm sure they're thinking about how can Feastables, how can MrBeast Burger not be so tied to Jimmy? That's the first. I wouldn't be surprised, by the way, if whoever ends up investing in him, the lead institutional investor, takes out an insurance policy or has something related to key man risk related to investing in MrBeast.

The second risk, which I don't feel like is talked about a lot, and we saw little bits of this last year, is cancellation risk. I would actually argue that risk is the most likely risk. Not because Jimmy is someone who will get canceled, but I think in the world we live in, that is something that can take down the ship very quickly. We saw that with David Dobrik. And so to me, if I'm Jimmy, I'm thinking about, how do I diversify personalities in my business, and how do I make personalities timeless? That's the best part of Disney. It's...at the end of the day, the best line for people who are in media, in the media business, is saying, "The biggest difference between Disney and my business is Mickey Mouse isn't renegotiating his contracts." And so if they can create personas that live on beyond Jimmy or his group of friends, to me that's how you create a timeless brand.

Jesse Pujji: It's also a culture, though. I mean I would also add that the Imagineers, that's a thing that Disney has. It's like a role that they've created and a system that they've built to churn out more IP and more content. The name of the company is Walt Disney. Walt Disney, it's the guy's name, literally. And I think that he did a wonderful job of actually building the culture of the way to do that on an ongoing basis well beyond him being gone. He's been dead for, I don't know, 50 or 60 years. So I think that's the other one I would add to that, Alex, is culture and his way of thinking downloaded into the company's DNA broadly.

Sophia Amoruso: I think the word "key man risk" just kept booming in my head, and I think that is one of the top kind of risks of the business. But he's doing the smartest thing he can, which is diversifying himself and his personality, and he is building enterprise value. His name is on a lot of these businesses, but he's creating what a lot of businesses don't, a lot of content creators, a lot of media properties. I mean, they have to do licensing, and then they have to do licensing per each of their shows, and maybe the show doesn't last. And it's such a ton of work and he's not relying on advertisers. So he's taking himself out of the game where he's not really in control of his revenue, and the shifts in the ad industry and the media industry, and how sexy what he's doing is to people who hold the keys to that, specifically on eBay. And he's creating a really smart flywheel across multiple media properties, across physical products, across delivery services, across a hamburger joint. And you can't really argue with success.

So I mean, you guys have converted me a little bit, even though this is not within my wheelhouse in terms of taste. You can't argue with 10,000 people showing up to the opening of a burger restaurant. That being said...

Jesse Pujji: By the way, have you guys ordered MrBeast?

Alex Lieberman: I have not.

Sophia Amoruso: No.

Alex Lieberman: Have you?

Jesse Pujji: Yeah. So here's a crazy thing. I mean, this is another thing we'll talk about someday on the show, which I think is going to be a whole 'nother world. Or maybe we can actually talk about in the next segment. So I got on my DoorDash, you can do it right now. Order MrBeast. I look at the address it's coming from, and I'm like, "This is Olive Garden. I know that this is a 10 minute away Olive Garden." And I Google it, I'm like, "Yeah, it's Olive Garden." It's literally like they're just making his burgers for him.

Alex Lieberman: Oh yeah.

Jesse Pujji: And it's like this ghost kitchen or dark kitchen. I think it's called a ghost kitchen. Which, by the way, you just look at again at the power of media. I think everything becomes an API, right? You can just plug in. So we could launch our own brand probably in a month if the three of us wanted to launch The Crazy Ones Cookies, and the infrastructure is there now. So anyway, that's a different thing. But when you order it, it's like a mind...you're like, "What's going on? This is a different restaurant."

Alex Lieberman: This is, to me, the future of how celebrity chefs monetize themselves. So I'll just use an example. There's a huge YouTube and TikTok chef, Nick DiGiovanni. One of the ways that he's made money from himself is he came out with a salt brand, it's called Osmo Salt. He's gotten all of these other influencers to use Osmo to cook. But you can imagine, Nick DiGiovanni plugging into the same API that Beast has, which is access to...

Jesse Pujji: Totally.

Alex Lieberman: ... a thousand restaurants. And all of a sudden you have DiGiovanni's is a new restaurant. It never exists as a physical space. DiGiovanni's has a menu that was crafted up by Nick, and it's now available across the country a month after launch.

Jesse Pujji: Yeah. Well, a ton of people are growth hacking. I have a friend who started something called Scratch Kitchen. He's just figuring out what people are searching that there's not good search results for, and then he's launching a kitchen. It's all the same place...he just figures out what food. It's like what people used to do with SEO and Google. Anyway, that's sort of an aside we should talk about at some point.

Alex Lieberman: Sophia, I have one last sales pitch for you before we talk about the lessons that entrepreneurs can learn from Beast. Crew, can we roll the tape of Jimmy doing his launch of the first physical Beast Burger location in New Jersey?

Jimmy Donaldson: This is crazy. I can't even hear. Wow, this is wild.

Alex Lieberman: Let's wrap up this with lessons that entrepreneurs can learn. I'll start, because there was one that actually you had mentioned, Sophia, that I think is a huge lesson to learn, which is the way to build wealth ultimately is to transition from trading your time for money to no longer trading your time for money. That's especially relevant, I think, in the world of creators, of athletes. So to your point, the fact that MrBeast has built businesses that actually are establishing equity value. If at some point in the next five years he decides that he's burned out from creating content, it was impossible for him to go bigger and bigger. He never thought it would be, but maybe at some point it is. He's been able to no longer trade time for money, which I think is a huge thing. What other lessons come to mind for you guys?

Sophia Amoruso: I mean, I think I've seen and read a lot about his relentless obsession. He was on My First Million recently and he just talked about, this is all he's done. This is all he's done for 10 years. He has immersed himself. My guess is that he has no other life. I think he's kind of said that in the past. And that's what you need to be to become an expert. It's what you need to become the best in your game. A lot of people won't like to hear this, but it's that relentless obsession. It's the crazy ones who kind of change the game. And if you listen and you're smart. He tests his thumbnails for his videos just obsessively. That's a really big thing for him.

Jesse Pujji: Yeah, I mean, I'll be the broken record. I love talking about unfair advantages. I think in this case, what I would say, he's a pretty young guy. If you have an unfair advantage, use it. But if you don't, think about how you're going to build your unfair advantage. Actually name it. What do you want in X number of years to become your unfair advantage that then you can trade off of? And in his case, outrageous media things, YouTube, the thumbnail optimization, whatever you want to call it, he built it all up to be an unfair advantage that he can now wield with leverage and with scale.

I think we've all done versions of that, Sophia, with Business Class. When I started Growth Assistant, I had hundreds of people who already knew me as an amazing marketer and they go, "Oh, you're getting me offshore talent?" And a friend of mine called me and goes, "It's genius. You took something that was otherwise a commodity, and now it's branded as yours, Jesse." That's how we've got to 300 people in the Philippines in 18 months or something. It's just an unfair advantage. So it's something I built and he built, and if you're an entrepreneur listening, think about what yours is so you can build yours.

Alex Lieberman: Okay, it is time to move on and talk about my boredom. I am a year and a half out of the CEO seat. So in April of 2021, I moved from CEO of Morning Brew to executive chairman of Morning Brew. And I have had a lot of free time. I would say the first kind of six months of that transition, I actually loved my free time. It was really necessary. I was able to work through mentally kind of a lot of the challenges and anxieties that I had from eight years of building a business. I wanted that time.

I no longer want that time. I've been brainstorming a lot of different business ideas, but before I share some of them and have you guys give thoughts, I want to hear how you would approach this challenge of like, "I want to build something. I have no idea what I want to build. Where do I start?"

Jesse Pujji: Can I share my dumbest idea first?

Alex Lieberman: Yeah.

Jesse Pujji: My dumbest idea I've ever had was self-erasing chalkboards. But the lesson there...I always used to sit in college with my Ampush co-founders, and I'd be like, "Dude, this professor is spending 10 minutes of this class that we're paying an inordinate amount of money for erasing the freaking chalkboard." And then those chalkboards that go by each other?

Alex Lieberman: Yeah.

Jesse Pujji: I was like, "There should be a button that pushes an eraser so that when he does this, it just in one fell swoop swipes it." That's my dumb answer.

Alex Lieberman: It's like the eraser of an Etch A Sketch.

Jesse Pujji: Something like that. But I guess the only lesson I would tell anyone from that, and we talk about your lesson for you, Alex, is like, look for a problem. I was just sitting there in class going, "There's a problem. This seems really dumb. And why is it like that?" And I think that to me is a great place to start any kind of business ideation process.

Alex Lieberman: Sophia, was that how you thought of Nasty Gal? Did you see a problem? Or did it come more organically than that?

Sophia Amoruso: With Nasty Gal I reverse engineered a lot of what other people were doing, and then I did it differently, and I did it differently enough to where it stood out. There were...all of the eBay sellers selling vintage were selling like hippy-dippy, lady in the dust. It was all very 1960s. I showed up and I was like, "I'm going to call it Nasty Gal, and I'm gonna make it edgy." And there was nothing like it. And the models were edgy, and the styling was edgy, and the selection was edgy, and it felt really different. And also when you're building on a marketplace, what's especially hard is to create a brand. That was something that made Nasty Gal stand out, in a way, just among the pack. That's something that I think a lot of people don't think about, even on these marketplaces that they have the ability to do. And once you have a brand, you can take it everywhere with you. You can take it to other platforms, you can build that on social media, you can launch your own website, which is what we initially did, but it was really only with that marketplace that we were able to do that. But I took it and I used every...I was coding templates and uploading images into FTP servers on the eBay platform for my listing page with graphics that I designed, and really created, like we just talked about, a world.

Alex Lieberman: But it seems like it was a problem. Maybe like you didn't frame it in your head, but it seems like the problem was there are a lot of women's clothing brands out there, but the way that you were dressing and the brand that you wanted, that didn't exist for you, and you just made the assumption that there are other people that want an edgy spirit around a fashion brand.

Sophia Amoruso: This spirit didn't exist. And a brand should be a feeling. And the feeling of Nasty Gal wasn't something that you could find anywhere else.

Alex Lieberman: I was reading a lot on brainstorming ideas, and the hard part about it is I wanted to build up this big top of funnel with a lot of ideas that I can then pick and choose which ones were most exciting to me. But the issue with that is, I think to your point, you need to experience a lot of problems in order to have a lot of ideas. And so then in my head I was like, "How do I experience a lot of problems in a short period of time?"

I just want to share this one piece that I read by Paul Graham. Paul Graham, famous creator of Y Combinator, famous venture capitalist and entrepreneur. He has on his blog an essay titled "Startup Ideas," and we'll link to it in the description. But basically his advice is to what Jesse and Sophia were saying, the way to get startup ideas is not to think of startup ideas; it's to look for problems, preferably problems that you have yourself. Basically his view is that there are three traits of great startup ideas: something the founders want, something the founders can build themselves—and this is why I've always been kind of upset about not being a software engineer because it really limits me, and few others realize that it's a problem worth doing.

And to kind of the other side of it of not thinking about things problem-first, Paul Graham has a great way of describing these ideas where you find an idea versus finding the problem, and then what's the idea that solves the problem. And he calls them sitcom ideas. So basically the way he describes it is, imagine that one of the characters of a TV show was starting a startup, so the writers would have to come up with an idea. Likely what they would come up with is an idea that sounds plausible. Like, it's not a bad idea, it sounds decent. And actually when you go pitch it to people, they're like, "Oh, that sounds kind of interesting." And that's actually the...

Jesse Pujji: Self-erasing chalkboards, baby. Sitcom idea.

Alex Lieberman: ...most dangerous. Yeah, self-erasing chalkboards are the most dangerous type of idea, because it's the idea that sounds just good enough that you go waste 10 years of your life on it. And so I took his advice.

Jesse Pujji: I love Paul Graham, and I read everything he's written and I use a lot of it. I guess people listening, the third one I would take issue with, unless you're a Y Combinator...

Alex Lieberman: What's the third one?

Jesse Pujji: ...venture funded. The third one you said, which is make sure that few other people can do it.

Alex Lieberman: Yep.

Jesse Pujji: Right? Because don't get me wrong, I think way more energy is spent on people being like, "Oh, it's not proprietary enough." Or, "I found a competitor; now I'm not going to do it." I think I'm a big fan of going, "No, no, no, there was a million clothing companies when Sophia came out, a million offshoring." You can still build a business, and it's pretty life-changing to build any business of any scale. So I think unless you're doing a YC venture funded, then I agree with that. But I think for everyone else, that's the one I would X out in terms of that feedback and advice.

Alex Lieberman: I want to share one more thing from the Paul Graham piece. Then I'm going to share how I approach thinking of these ideas, and I'm going to share some of them with you, and then you guys can tell me which ones you're most excited about and which ones you think should go to the startup graveyard. The one other thing from the Paul Graham piece that I love, because I'm a visual person and he paints such a great picture, is he basically says, when you're thinking of an idea, you're gonna very likely not be able to think of an idea that's needed deeply by a lot of people. Because if you think of an idea that's needed deeply by a lot of people, someone's probably already thought of it, which means you have two options. You can either think of a business that a large number of people want a little bit, or a business that a small number of people want a lot.

And the way he paints a picture of this is as well. So he basically says, imagine you have a graph where you have an x-axis and a y-axis. The x-axis represents all people who could want the product, and the y-axis is how badly people want it. And basically what he says is, what you don't want to think of is a business that's super wide and not deep, so it's a shallow puddle that goes on for 10 feet. What you really want to think of is a business that is a well. It is an inch or two inches wide, but it goes wildly deep, meaning a small group of people want it really badly. He goes on to describe Facebook being at Harvard only; Airbnb starting literally as like air mattresses at conferences and concerts. Then he basically says it is then the innate or Spidey sense of great entrepreneurs to know that if they serve this initial small group, it will have the possibility to expanding in scope.

So I'm going to throw out eight ideas to you guys right now, and just tell me what stands out. Give me some feedback. First one, Dry Bar for dogs. As a dog lover, I would do anything for my dog in any market. And having a well-branded place that's known as an amazing place to get your dog cleaned and groomed. Okay, thumbs up and thumbs down. One sentence thought?

Sophia Amoruso: Depends on if you have a short-haired dog or a long-haired dog. If you got poodles, it's great.

Alex Lieberman: Jesse, do you have a dog?

Jesse Pujji: No.

Alex Lieberman: Okay. Your feedback isn't valid.

Sophia Amoruso: You're not part of our niche.

Alex Lieberman: Next one.

Jesse Pujji: I've been to retail malls and they all look dead.

Alex Lieberman: Oh, this is a good one on the ridiculous side of the spectrum. Selling fighter jet pee bags to travelers and truckers. I may have to explain this a little bit. Fighter jet pilots, because they can't go to the bathroom while they're in the air, they have a bag that has sand at the bottom of it and they pee in it and it absorbs it. For people who do long trips, like 18-wheeler drivers, travelers, so they don't have to leave their car.

Sophia Amoruso: My ex-boyfriend did that with like water bottles. So yeah, if you've got a gross feral man living with you taking long road trips. I think it could be something for the consumer audience as well.

Alex Lieberman: I'll do two more. This is actually, I think, a really interesting idea and I feel like you guys would have thoughts on it. Basically, Rakuten for consumers; so affiliate for consumers. Basically every day, we as consumers are buying things on the internet, we're recommending things to friends. Why is there not a platform that basically allows us to monetize our recommendations to our networks constantly?

Sophia Amoruso: I think that's brilliant.

Jesse Pujji: There are a bunch. I mean, but I think it's still a great idea. No one's nailed it. I mean, there's a bunch of people who try to do it at the shopping point of sale I've seen pitch it a ton, but I don't think anyone's nailed it in a way that feels organic, that actually has wide scale adoption. If someone could crack the code on that, that would be amazing. Maybe that's what Gas will do.

Alex Lieberman: Maybe.

Jesse Pujji: They'll start saying, "Recommend a product to this person who's really pretty or really smart," or something.

Alex Lieberman: Final one, and this is entrepreneurship-focused. Basically the go-to database for entrepreneurs and founders to get information that helps them make better decisions in their business today. So things like, it has everything from compensation averages for certain roles that you're looking to hire for; org charts for similar companies; templates for hiring, firing one-on-ones; growth rate averages for similar companies. And you only get access to all this information if you input your data into the platform.

Jesse Pujji: I like that one a lot. Let's start that one.

Sophia Amoruso: People would pay for that. Yes.

Jesse Pujji: Network effects.

Alex Lieberman: Network effects. Okay, we're moving on to the final piece, which is Startup AMA. We have a Crazy Ones viewer who has a question for us, so let's play the clip.

Viewer: Yo, what's up, team? My question is on hiring. I'd love to know the biggest and most impactful piece of hiring advice you've received, and the biggest hiring mistake you've made in hiring for your business. Thanks.

Alex Lieberman: Sophia, you want to take it first?

Sophia Amoruso: Yeah, expert. One of the biggest things, I mean, I guess the top thing that I look for when I interview someone is that they have questions to ask. That they've done their research, that they know who I am, that they understand the organization, that they understand the product. I had executives come in and say, "Have you ever thought about changing the name?" And I'm like, "Have you seen what this company's doing?" And when I ask them, "Do you have any questions for me?" which I always, always do, you can learn so much about how smart someone is, all of the things I just described, how much they know about the company. And that's an indication of how excited they are about it, how interested they are in it.

I'd say the worst mistake I've made is declining candidates and then going back to them and saying, "You know what?" I did that a couple times. I was a rookie. And saying, "You know what? Actually, for whatever reason, the job isn't closed. We reopened it," or whatever excuse I gave them. I made up some other thing that sounded less weird than, "I couldn't find anybody else and I need to put someone in this seat." Bad idea.

Alex Lieberman: Yeah. On that note, one of the biggest mistakes we have ever made and continued to make for a while at The Brew was rushing hires. When we ended up being down to, say, two people, and we didn't give an offer to one because they weren't our person. We go back, give an offer to the next person, they reject the offer, and then we go hire the second person that we didn't give the offer to because we don't have any pipeline and we're like, "Shit, this is going to take another three months to hire for." Every time that we have made that decision, it backfired. And so rushing a hire is one of the worst things you can do, but it is the easiest thing to do. It's so easy to make that mistake.

Sophia Amoruso: Hire slow, fire fast.

Jesse Pujji: Yeah, I've taken, this time around, maybe a little bit more of a hire fast, fire faster type mindset. I mean, I have a million mistakes. I think one thing just as a baseline for everyone is, man, hiring, especially in an early-stage company, is extremely hard. I was just talking to the CEO of Growth System. I was telling her 50/50 is a good rate, and then when it comes to executives, it's even harder. I think it's super hard. I think the biggest mistakes I've made have been not clearly kind of setting expectations up front, which relates to being able to fire faster. This time around, I'll say to someone, "Hey, I'm not sure exactly what the business needs and I'm not sure you're a perfect fit. I like you. Let's go for 90 days and let's see what happens." And obviously if you can get away with that, you can't always get away with it, I think that's just managing expectations of everybody up front, I think, is a super important one.

And then the only other thing, I have this matrix, this two by two matrix I always share with everyone, which is on one side is, do they seem really good, smart, capable, bold fast, mover? And then are they experienced or not? And if someone's not experienced and doesn't seem good, okay, that's easy. Just get rid of them, right? There's a lot of people out there who are inexperienced but seem to be really great; that's my favorite group to hire from. But the biggest mistakes I've made is people who are smart, who are experienced, but they talk a good game but they're not actually that good. And I think for a first-time founder, that's the riskiest category. You'll meet someone, you'll go, "Oh my god, they know 10 times about the industry than I do." Like all these issues, and then, "But they're not a hustler. They're not really first principles thinker," but you hire them anyway. And I think that's the group.

One day maybe you can get both the group of smart and experienced or good and experienced, but unlikely until you're Facebook or something. So I think that's a mistake. I may have just hired a lot of people who were experienced but weren't actually good. I think it's just hard, a hard one.

Alex Lieberman: And the big challenge of that is there's a trickle-down effect. Because when you hire someone who's experienced, obviously they're hiring other people who are experienced or inexperienced. You can assume that a C+ person that you hire that's experienced is going to hire C or D+ people below them. And so then when you end up having to get rid of one person, it leads to many other people. Hiring great senior people, incredibly difficult. The stakes are higher. And I think to your point, Jesse, valuing critical thinking over experienced but lack of critical thinking has generally always served us well.

Our listener asked for one or two hiring tips, and I think we gave them about a year's worth of content, but hopefully he found that valuable, and hopefully a lot of our listeners are either on the brink of making their first hires, or even if they have hired a lot of people, I think so many of these are just timeless lessons. And to that point, if you are a Crazy Ones listener or viewer and you want to ask us questions that could end up airing on the show moving forward, shoot us an email at thecrazyones@morningbrew.com. Also email us, like I said at the beginning, if you have better nicknames for us. Jesse Pujji is Baby Buffett. Sophia is the Dean. I don't have a nickname because my co-hosts haven't gifted me with one yet, so let us know what our nicknames should be. Thecrazyones@morningbrew.com.

Jesse Pujji: I'm going to call you Guy Smiley from Sesame Street. Remember Guy Smiley, or are you too young?

Alex Lieberman: I don't know if that's a good thing or not.

Jesse Pujji: He was just the host of the show always.

Alex Lieberman: Okay. Well, I'm Guy Smiley until I hear from our listeners what I should be. Guys, as always, enjoyed the conversation, and thank you for everyone who tuned in.