The Most Overlooked Way to Build Wealth Right Now

- July 4, 2025 (9 months ago) • 01:18:43

Transcript

Start Time	Speaker	Text
00:00	Shaan Puri	If you've ever thought about buying a business, then this episode is going to be for you. On the internet, there are a lot of people telling you how amazing it could be to just go buy a business that's already working: you take out a loan, put very little money down, and boom—you're cash flowing and working passively. But those are also people who are kind of selling you the dream. My buddy Dan is one of my best friends from college. He actually did this a couple of years ago: he bought a business—a very random, unsexy business that he had no experience in. He didn't have a lot of money coming in, he had never bought a business before, but he did it, and it's actually worked out pretty well. I asked him to come on and tell the real story. Tell us: what was it like? What did the first 100 days look like? How did you actually find buying the business? How much money did you have to put down? How much money did it make? What are the downsides? What are the traps? All the real stuff. I loved it because Dan was very honest and open about all those things. At the end, he actually brainstormed a couple of business ideas that he saw—because when you buy a business you look at hundreds of businesses. He shared a couple of his favorite spaces that he thinks people could go into, and we brainstormed that at the end. This episode, I think, is going to be a lot of value for anyone who's ever thought about buying a business. And we have a fun brainstorm at the end for other businesses that people could check out. Alright—enjoy this episode with my buddy Dan. This is a special one. My buddy Dan from college is here. Me and Dan—we've started a sushi restaurant together, we've owned a pet mouse together, we've tried to bring down the house at a casino together. We have gone through many schemes and dreams. Then Dan called me a couple of years ago and I convinced him to try to buy a business. He has done it—he bought the business—and he's here to tell the story of that whole journey: going from a guy who never thought he would ever buy a business to now owning one of the most random businesses that you'll ever hear about. I also got Sam here, who doesn't know Dan. So it's me and my college buddy, and Sam, you're sort of the third wheel on this date. Are you ready for this?
01:55	Sam Parr	Yes — sign me up. This isn't the first time it's happened. I'm going to ask questions, because usually what I think is what the audience thinks, so I'll ask some questions.
02:03	Shaan Puri	Yeah, exactly. Alright, so, Sam — where do you want to start? Maybe the first question is: "Who the hell is this guy? Who are you?"
02:09	Sam Parr	Yeah, who are you?
02:10	Dan Certner	Surtner — Dan Surtner. I wasn't his roommate in college; I was like the next‑door neighbor. So, for the Seinfeld references, I was like the Kramer — I'd show up from time to time unannounced. I lived with this guy for four years, so I go way back with Sean.
02:25	Shaan Puri	And by the way, Sam — the funniest part of meeting Dan the first day of college: I walk in, and Dan, the way he looks now, looked exactly the same at age 18. Dan was standing there, and he used to wear a visor because he was, I don't know, trying to be cool back then. I thought he was someone's dad — I saw him from the back and assumed that. He knew everything. He was like, "Laundry's down there," "You have to do this," and "The meal plan's not gonna work until you activate it; you have to go." He knew everything about the campus, and I was totally clueless. I didn't know anything about going to college. He also had a single — he was one of the smart guys who requested a single room and didn't have to have a random roommate. Dan's been ahead of the game for a long time.
03:09	Sam Parr	"Okay—what business did you end up buying, by the way?"
03:12	Dan Certner	So I bought a company called Fleet Packaging. It's a packaging distributor. Effectively, we work with large retailers in the U.S. who need any sort of packaging. For example, if you go to a mall and leave with one of those to‑go bags, we help companies buy those. Then we help with warehousing and distribution. We make it easy to buy bags overseas.
03:34	Shaan Puri	So, he is Dan the Bag Man now, which is all you really need to remember: Dan the Bag Man. But to get there, I think it's a fun kind of journey. We're going to skip the part about me and Dan in college and the company we tried to start together—for now. We can go back there later. I think the "buying a business" story starts in, actually, a kind of funny way. After we tried and failed at our first business, we went off and did different things. I moved to Australia. Dan moved to San Francisco and got a job at Facebook. A few months later Dan called me and said, "Oh yeah, sorry—I was just quickly fixing a bug." I was like, "Fixing a bug? What are you talking about?" He said, "Yeah, I'm coding now." He had been our finance guy. Why is our finance guy writing code? Basically, what he did was... I don't know if you know this, Sam, but I guess at Facebook they have a coding academy internally. Dan, is that how you describe it—like a boot camp? Basically any non‑engineer could go and become an engineer while on the job. Is that how it works?
04:46	Dan Certner	It's not explicit, so it's actually for engineers when they show up. I actually think they just got rid of this a few weeks ago, so this might be old news. For the first 20 years of Facebook's existence, when you got a job as an engineer at Facebook you went to this 8-week crash course on how to be an awesome Facebook engineer. It's not typically open to non-engineers, but why accept the status quo? I was one of the few people who, early on, was able to take classes there, so I started in fraud.
05:16	Shaan Puri	Do you have a good FarmVille fraud story? What does an average person like us not know about—like, on a farm? FarmVille sounds like the stupidest thing in the world. The fact that there's even fraud going on... it's like, you know, "Am I stealing crops from Sam's farm or...?"
05:30	Dan Certner	You are stealing crops. Well, what you're doing is... you're probably wanting to make a better farm than Sam, but you don't have time.
05:37	Sam Parr	Is this for pride or money?</FormattedResponse>
05:39	Dan Certner	It's—well, the fraudsters are doing it for money. The buyer is doing it for pride. They're like, "I want a bigger farm than Sean, but I don't have time to actually spend my time playing the game." So they're going to go online to the black market [wherever that is], and someone's going to sell them, say, 200 mushroom seeds to plant on their farm. Those seeds were procured illegally because the seller stole someone's credit card. There's this whole world of Facebook games fraud that existed.
06:03	Shaan Puri	So... FarmVille was basically, like, I don't know — is this the laundering part? Basically, the guy steals the credit card, uses it in FarmVille, sells the FarmVille stuff to me, which looks harmless, and he gets cash out the other side. Precisely.
06:17	Sam Parr	This is, like, a much less cool version of The Wire. </FormattedResponse>
06:20	Dan Certner	It was pretty much... well, there was also real money laundering, where people would make their own app and then launder money through it. That one was a little more intense.
06:29	Shaan Puri	"Dude, Sam—one time I was like, 'Damn, what are you even doing at Facebook?'" "'Dude, what do you mean, "fraud"? What is the Facebook fraud?'" He goes, "Have you ever opened up your timeline on Facebook? You just see a dick." I go, "No." He goes, "You're welcome."
06:42	Dan Certner	No — that was the later iteration. I moved on to community tooling.</FormattedResponse>
06:48	Shaan Puri	Yeah.
06:48	Dan Certner	Yeah, but effectively preventing porn on Facebook — so that was my go-to line.
06:53	Sam Parr	"And what did you do after Facebook?"
06:56	Dan Certner	So after Facebook, I suddenly transitioned into engineering. I went to a startup called Namely — it was a payroll company — and I joined as an engineering manager. Eventually, I worked my way up to be CTO of that company.
07:11	Shaan Puri	You gotta tell Sam they're brilliant. So Dan's—Dan's actually a marketer at heart. He just never worked in marketing for some reason, but the way he framed himself in the job market was amazing. So he's at Facebook; he becomes an engineer there, right? It's not like he's an MIT computer scientist, right... when you think about...
07:31	Dan Certner	I'm a Duke — a Duke Spanish major.
07:33	Shaan Puri	Dan is a Duke Spanish major. When he was at Duke, he kept taking this class called "Lemurs," where he would go to the zoo and look at lemurs all day. That's what he was going to do, but then he trained himself to be an engineer. When he went into the job market, he had a brilliant way of framing himself, so he ended up becoming the CTO of a fast-growing startup.
07:51	Dan Certner	Alright, so I left Facebook. As you will see, most of these things are schemes that Sean and I have done in our lives that slowly evolved into ideas. I left Facebook—basically the best of the best at the time. It was, and still is, one of the best technology companies. I joined Facebook when there were 3,000 people and left when there were 60,000, so I saw a lot of things. I'm not like old-school Facebook rich; I missed that. I also wasn't an engineer in the beginning, so I just want to clarify that. When I left, I had this weird amount of experience: four or five years of coding experience, which is cool—maybe enough to make me an Eng 1 or Eng 2 at a normal company [entry-level software engineer]. But I had moved into management while I was at Facebook, and the way I positioned myself was: "I am a Facebook manager. I know how things work at Facebook. Let me come into your startup and whip your team into shape. Let me help your team run like a Facebook engineering team."
08:51	Sam Parr	Alright. I've built a few companies that have made a few million dollars a year, and I've built two companies that have made tens of millions of dollars a year. So I have a little bit of experience launching, building, and creating new things. I actually don't come up with a lot of original ideas. Instead, what I'm really, really good at—what my skill set is—is researching different ideas, identifying gaps in the market, and reverse-engineering companies. I didn't invent this, by the way. We had this guy, Brad Jacobs — we talked about him on the podcast. He started four or five different publicly traded companies worth tens of billions of dollars each. He actually is the one I learned how to do this from. So, with the team at HubSpot, we put together all of my research tactics, frameworks, and techniques on spotting different opportunities in the market, reverse-engineering companies, and figuring out exactly where opportunities are versus just coming up with a random, silly idea and "throwing it against the wall and hoping that it sticks." If you want to see my framework, you can check it out — the link is below in the YouTube description.
09:50	Shaan Puri	But Sam, isn't it great to just be like, "How to rebrand yourself" — to say, "I'll make your engineering team run like a Facebook engineering team," as if you're a startup founder who's, you know, sitting nameless in New York? Right. That's kind of aspirational to have somebody say that versus just saying, "I have five years of experience," right?
10:07	Sam Parr	Yeah, man — that's great.
10:08	Dan Certner	Yeah, it's all about storytelling.
10:10	Shaan Puri	So, the story so far is, like, you know... whatever—pretty good. You're stumbling into things, just saying that... just an amazing guy.
10:16	Sam Parr	A smart guy with a dream and a little bit of scheme.
10:18	Shaan Puri	And now you're in a position where you're like, "I'm at the startup. We just raised a bunch of money at a good valuation. I'm the CTO. I got these shares. I'm gonna be rich — gonna be rich." What happens?
10:30	Dan Certner	I didn't get rich the second time. Facebook—cool. Really, I didn't get rich this time. I didn't get rich. Long story short, we found ourselves in a place where, in order to do what we needed to do, we needed to sell the company. In other words, for the company to do what it needed to do next, we needed to sell it. It became very clear that this wasn't going to be the massive windfall I had been expecting. Long story short, the company sells. I find myself out of a job because, as part of the transition, the acquiring company is like, "We have a CTO, so we don't need you." So it's five years of hard work, and that dream of, "Hey, we're going to take something and turn it into something else," kind of goes away pretty quickly. That's where things start to get interesting, because I have Sean on speed dial. I had a fortuitous conversation with him that day.
11:20	Sam Parr	Was he the one who inspired you to do this, or did you listen to MFM? How did that insight come about? Because it's not normal for a Facebook— a Duke, Facebook unicorn startup guy—to buy businesses.
11:34	Dan Certner	Correct. So, no — it was, and it wasn't even like, "Hey, Sean, I need advice." It was just a random... like.
11:39	Shaan Puri	We were just catching up.
11:41	Dan Certner	"Call? Yeah, yeah. Let's just catch up—it's been a while."
11:43	Sam Parr	Wait — so, Sean, did you say, "I use this bad company"?
11:46	Shaan Puri	No, no, no — we're on this college catch-up call. "What's going on with you? What's going on with you?" Dan tells us this story: "We got acquired, you know. There can only be one CTO. They already have one, so great — I'm gonna be..." He was just saying, like, if you know any cool companies let me know. "I'm gonna be looking." I kinda just mentioned to him, "Dude, Dan — ever since I've known you you've been entrepreneurial." I think Naval said this once: "Other people sometimes see your gifts easier than you can see them." [Naval Ravikant] He was saying for Naval, he also used to think, "I'm gonna be a scientist," and his mom was like, "No, no, no — you're gonna be a business person." He's like, "What? Oh, a scientist, right?" And she's like, "Every time we walk by a pizza shop you're telling me all the three different things that they should be doing to run their business better. You're always doing that. You're naturally a natural fit for a business person. That's what you're good at." So Dan — same thing. Dan was always somebody who was shooting his shot. When our freshman year at Duke, all of a sudden there's this huge package and Dan has a lifetime supply of Stride gum. I'm like, "Damn, why did you buy this much gum?" He said, "I didn't buy it. I won it." He would always be entering contests. One day with Dan, I go to work and Dan goes, "Hey, I gotta get off early. I got an audition." I'm like, "What? What are you doing?" He's like, "I'm going to try to get on Wheel of Fortune right now." So we — I went with him, and we both got cast on Wheel of Fortune.
13:06	Dan Certner	Well, you leave out the part about where we came from. We were working at a sushi restaurant at the time, so we had both been working all day. We were wearing bright green headbands and we even had our sushi knives on our belts. We walked into this interview like that—no wonder we got cast. It was like, "This is good TV, man." Yeah… these clowns.
13:24	Shaan Puri	But he was always doing this. Early on, he started recording product review videos for, like, two cents a pop or something. He was just doing random stuff all the time, so it seemed strange to me that he would be going to get a corporate job like this. This wasn't the vision I had. So I asked, "Dan, have you ever thought about starting a business?" He said, "I don't really have, like, a killer idea. I feel like I need a killer idea if I'm gonna put my whole life on the line for something." I said, "Oh, that's fair." I told him, "You know, I've been doing this podcast, and it's not something I was doing a lot, but I've met a few people who go and buy businesses, and it honestly seems like a little bit of a cheat code. If you find a business that's already working, you don't have to come up with a genius idea—it's already validated, it's already working, it's got years of profitable history. You can buy it at a fair price, and if you're good at executing, you can grow it over time. There are retiring business owners; there's a reason these are up for sale." So I just kind of planted that seed: "Would you consider that?" I don't know what Dan's first reaction was, but I bet it was probably just lukewarm.
14:27	Dan Certner	It was lukewarm. I mean, it was two-part. One: in the beginning I said, "Sean always knows what he's talking about; he seems to have his life figured out." My first response was, "Sean has no idea what he's talking about—he's never bought a business before." To this day, that is still my main thought: don't know, man. But the second reaction was, "Sean is a pretty smart dude, and if he's saying this is a good idea, it's a good idea." My real follow-up after that was: "With what money am I buying this business?" Let's recall: I missed the boat on the Facebook riches; I missed the boat on the email riches. But it actually turned out—I'll get into this more later—that you don't need that much money to buy a business. That's the crazy part. I think it took a bit of digging initially to figure that out, and I'll talk more about that.
15:13	Shaan Puri	Let's do a quick Tarantino, so let's give the ending first. So, let's say: "Oh—you ended up buying a bag business." As in, literally, if you go to a shopping store and buy something and they give you a custom-branded bag when you check out. </FormattedResponse>
15:29	Dan Certner	There's a decent chance I made that bag.
15:31	Sam Parr	So, it's—it's—it's—it's that big.
15:33	Dan Certner	"It's that big. I unfortunately can't. I—I'm under confidentiality agreements with most of my clients. But if you go to a mall, there's a pretty decent shot that you're going to touch one of my [bags]."
15:42	Sam Parr	"We're gonna get it out of you somehow. We're gonna... we're gonna get it out of you."
15:45	Dan Certner	I mean, I'll tell you after.
15:47	Shaan Puri	I'm not bound by any confidentiality... maybe I could say some things. Alright. But, Dan, let's give the headline. So you buy a business — we're going to work backwards because it's going to sound cool, and then we're going to be like, "Here's the crazy journey of how I got there." Alright, so how much did you buy that business for?
16:02	Dan Certner	I bought the business for $3,400,000.
16:05	Shaan Puri	"So he buys a bag business for $3,400,000. That business had been around for how long, and about how much money was it making when you bought it?"
16:11	Dan Certner	It was about 15 years old. The business had been making anywhere from $8,000,000 to $11,000,000 a year. This was right after COVID, so it had been a weird few years.
16:27	Sam Parr	In revenue.
16:28	Dan Certner	In revenue, it was doing, on average, about $800,000 in profit.
16:34	Sam Parr	And what's the URL? What—what's the URL?</FormattedResponse>
16:36	Dan Certner	"fleetfleetpackaging.com"
16:38	Shaan Puri	Best bags in the business.
16:39	Dan Certner	Best bags.
16:40	Sam Parr	In the business.
16:40	Dan Certner	Do you?
16:40	Shaan Puri	Have you, like, a slogan yet? </FormattedResponse>
16:42	Dan Certner	So, a jingle? "We're working—oh, maybe we could come up with it later; I'm brainstorming later." It's like, "No. We're working on 'Rethink Your Packaging Partner' or 'Rethink Packaging Partnership', because what we're trying to do is... there are a lot of people who sell packaging, but we're trying to do it better than everybody. Just kind of go that extra level of, like, 'Let's make your life easy as a packaging guy.'"
17:04	Shaan Puri	So, Dan, explain: you said you bought this business just about eighteen months ago. It was doing $11,000,000 in revenue and about $800,000 in profit. That—the seller, the guy who owned it—was able to... that was his living. He was making, you know, $800,000 a year. And now, last year, how much revenue did it do? You grew...
17:21	Dan Certner	The last year, we had a record year. I think we did about $138 million in...
17:28	Sam Parr	That was... that was pretty revealing. Pretty easy to get the information out of him. Didn't he just say he can't—no?
17:32	Dan Certner	I just thought, "I can't share client." I just thought, "I can't share client names. I'll share everything else."
17:35	Shaan Puri	You can share.
17:36	Dan Certner	His own information.
17:37	Shaan Puri	"Yeah, how much money did you put down to buy this business? Because, again, you talked about... most people assume, 'If I'm going to buy a business for $3.5 million, where am I going to get $3.5 million from?'"
17:46	Sam Parr	"Yep — and really quick, how much profit does it do now on the '13?"
17:49	Dan Certner	On the '13, we did $1,700,000 profit last year.
17:54	Sam Parr	So—you've creamed it, I mean.
17:55	Dan Certner	You—oh, crushed it. You've... you've, yeah. Last year, was it?
17:59	Shaan Puri	> "Suck on that, Zuckerberg. Don't need you there."
18:02	Dan Certner	You go.
18:02	Sam Parr	"I got it."
18:02	Shaan Puri	So, you...
18:02	Sam Parr	You bought a business that made $800,000 in profit, and you've more than doubled it.
18:08	Dan Certner	Yeah, and there were lots of factors. Were the things I did that doubled it part of that? Certainly they were a part of it. A lot of it was getting out of COVID and figuring out how we position it. It turned out the business had not really reached its potential yet.
18:22	Sam Parr	And back to what Sean said: you bought it for about three million—where did the money come from? </FormattedResponse>
18:26	Dan Certner	We did it through an SBA loan for $3,400,000, and we ended up putting $200,000 down. I say "we" because my wife and I put our house on the line. We went all in on this business. We spent $150,000 from our savings, and then my wife took a loan from her 401(k) for the other $50,000. So that was the house on the line, 401(k) on the line — this was it.
18:53	Shaan Puri	Was she just down from day one to do this, or what? Did it take a lot of persuasion? How did you position this with the wife to make that happen?
19:00	Dan Certner	She was down [she agreed]. I mean, she has a similar kind of philosophy: we should do something that's going to be a kind of step change from where we're at. If we're going to bet on someone, we should bet on us. And she knows Sean—she knows what we've been up to for the past… however long.
19:18	Shaan Puri	She knows she married a stallion who just needed to run.</FormattedResponse>
19:21	Dan Certner	So, this wasn't like, "Oh my goodness, where did this idea come from? This guy's crazy." It's more like, "No — that sounds about right. This is what you're doing."
19:28	Sam Parr	How much of a loan have you paid back now?
19:30	Shaan Puri	But the same—he put down $2.2 million. He got an SBA loan and then he had a seller note, which I think is a key part of this. Do you want to explain where the rest of the money came from? $200,000 from you—where did the other $3.2 million come from? </FormattedResponse>
19:41	Dan Certner	Sure. So $1.8 million came from the bank, $200,000 came from me, and the other $1.4 million came from the seller. Effectively, we said, "We're not going to pay this up front. Over the next five years, assuming the business continues to do well, we'll pay the second part of the... oh, sorry, the second part of the debt." So it's a forgivable seller note, which means that if the business doesn't do what it's supposed to do, that debt is forgiven in any given year. That was part of what made me feel better about the deal. You run all these scenarios when you first buy it. It's like, "Alright — we're going to put our life savings and house on the line. What happens if things go bad?" And it's like, "Alright, at least half of this debt is forgiven if things go bad."
20:24	Sam Parr	Will go away. Why'd they wanna sell the company? That seems like a...
20:27	Dan Certner	"He was retiring."
20:29	Sam Parr	He just wanted out. He—he was.
20:30	Dan Certner	He wanted out, and that's kind of what I loved about this world once Sean turned me onto it. The baby boomers are retiring — over the past few years and for the next ten years [I forgot what the exact window is]. A lot of them don't have kids, or they have kids that don't want it. This guy had three kids, and none of the kids wanted the business.
20:49	Shaan Puri	Dan had told me he goes, "Anytime I run into a business that looks really cool and the guy who owned it is 26, I'm like, 'I don't want to buy this off a 26-year-old. Why are you selling this business?'" He's like, "I want to buy from a boomer — that is my goal."
21:00	Dan Certner	Yeah. I want to buy from a guy who wants to move to Florida and play golf. To me, that's like: "This business has been great to me and now I'm done. I've made my money; I'm ready to go." That's the type of business I want.
21:11	Sam Parr	Now, [I] probably still answer your phone calls when you had questions.
21:14	Dan Certner	Right, exactly. And, you know—spoiler alert—I found, like, the nicest buyer in the history of the world. I got incredibly lucky. </FormattedResponse>
21:20	Shaan Puri	Well, tell the story now. I want to go through this, because to me there are two good things that come out of this episode. One: I get to hang out with my best bud. Alright. Two: for other people listening, they hear what I'll call the real-life take of this. Dan's not selling courses. He's not telling you that you should do this. He's not a business-buying guru with a book and a mastermind. None of that. I think he's got good opinions and a real story of, "alright, where do you start?" To me, this episode is interesting because if I'm interested in buying a business, I want to know what it's like from someone who's smart but came in with no experience, no money, and no clue where to start. Even though I was like, "hey, you should do this," it wasn't like I was there helping every day. You were wandering around figuring this out by yourself, and he told me this. I called in last week to ask, "alright, what do you want to talk about?" He said something great. He goes, "Alright, I started — I was high on excitement and low on knowledge, so I bought the book." </FormattedResponse>
22:17	Dan Certner	Have you ever heard this framework—like "no d one through four" [unclear]? It's like you start with high excitement and low knowledge. Then you go up in knowledge and down in excitement. You kind of enter the pit of despair, which is low knowledge and low excitement. Then you learn more and slowly get out of this pit.
22:37	Shaan Puri	His quote was: > "This is great. It's gonna be great. This is gonna be easy. I'm gonna be rich." He goes, "Then I started and I realized this is not easy. This is not going great, and I might not be rich." So, do you want to talk about how you actually—what did you do? We have, first, maybe the 100 days. What did you do? Well, how'd you find the company?
22:59	Dan Certner	So, I ended up finding the company through a broker.
23:02	Shaan Puri	Got it.
23:02	Dan Certner	Okay. A lot of what I started to do — and I'll go back to the beginning in a second — is related to the many business marketplaces out there. acquire.com is probably the most known for tech. BizBuySell is for more of those Main Street businesses. There are brokers who effectively represent buyers and put together packets that say, "Hey, I have this bag business; here's what it does." I was telling this to Sean — searchers — because they just assume people saw Cody Sanchez's video and are immediately ready to buy a business. "They saw the video this morning and now they're ready to buy," so they reach out to the broker. This one broker actually understood. He said, "I get it. I understand this jump from tech to this," and then, several months later — which is rare, because most people don't follow up — he called him back. He said, "I got this business. Check this guy out." So it ended up happening through a broker.
23:55	Sam Parr	And, to go back to Sean's thing: the first hundred days.
23:57	Dan Certner	So the first thing I did was hit Google, started reading books, and started watching videos — basically to learn, what is a search fund? That was something Sean didn't call it that way, but eventually I found that term. There are a few models to do this. One is the traditional search fund model where someone finances your search for a business. You'd get an investor to back you looking for a company, then you take a small piece of it and they effectively own most of it. There are lots of courses now in business schools teaching "entrepreneurship through acquisition" — that's the fancy way of talking about it. The other model is doing it yourself: you bootstrap, find the money on your own, or use an SBA loan. So, first it was educating myself on the different models. I thought a little about getting outside funding, but at the end of the day, if I'm going to do this, it's going to be me — I don't want to answer to anybody. After that it was really about finding the community. There's a really cool search community that's been growing steadily over the past few years. There's a website called [searchfunder.com] — those were my people during that time, because search is a very lonely process.
25:10	Sam Parr	When you guys say "look at a 100," what does that mean? Does that mean browse a website with a 100, or does that mean actually do due diligence on a 100? </FormattedResponse>
25:17	Dan Certner	So it's something in the middle. You basically see the headline on the website — it's like "Laundromat for sale, $4,000,000." Usually you'll get that flashy headline and not much more information. Then you have to double-click and request more information. You usually sign an NDA, and you'll get something called a CIM (a Confidential Information Memorandum). It's worth looking at a hundred of those because they're really going to show you the finances of the business and the story they're putting together.
25:44	Shaan Puri	It's a summary of the business today, and so that's the one where I think it's a mistake when people fall in love with the first few businesses they see. They think, "Oh, it's great—yeah, I could buy this." You kind of really like it. I mean, you're like a teenager who's just gone through puberty and you fall in love with the first set you see. But no—that's probably not the right way to do this. Let me actually plan: it's probably going to take me over 100 to even find one good one. Let me have that mental expectation and start counting how many I'm looking at, instead of being desperate to find the one right away. Then you're looking at an HVAC company and you think, "I don't know what HVAC is." You're looking at the financials and you think, "I don't know which number to look at."
26:27	Dan Certner	It's overwhelming, but you kinda gotta go through those reps and figure it out before you have any idea what you're looking at. I kind of liken it to looking for a house—or an apartment—even though that's something most everyone goes through, even if they're renting. Usually the first time you see it you have nothing to compare it to, so you end up getting to a place where you can spot the winners from the losers faster. But, like Sean said, when I first started it was super exciting because it's the ultimate career fair. It's like, "Oh cool—I'm gonna be a landscaper," or, "I'm gonna own a scrap metal recycling center." You just get so excited. And again, the business brokers especially make these things sound amazing. It's like, of course I want to buy this business.
27:12	Shaan Puri	"So, what were some of the cool businesses you saw? What's one—give us an example of one that you kind of liked but didn't end up pulling the trigger on."
27:19	Dan Certner	So, my favorite example is: I got pretty close to buying a sausage company. It did about $10 million a year in sausage. My favorite anecdote on this farm is also...
27:31	Shaan Puri	A fellow sausage man, actually.
27:32	Dan Certner	Yeah, no—I know that.
27:34	Sam Parr	"The kindred spirits."
27:35	Shaan Puri	Well, there's an event. It might also be a sausage fest — we don't know.
27:39	Sam Parr	You're almost a purveyor of fine wieners that could've...</FormattedResponse>
27:42	Dan Certner	"I've been... I could've been, and still, maybe."
27:44	Shaan Puri	So you went, but you didn't just, like, look at it. You didn't just read the sim—you were, like, touring, no? </FormattedResponse>
27:48	Dan Certner	I went there. I went to the sausage. I went to the... I'm walking through, pretending to know what I'm talking about. "You know, how hot does this oven get?" That's the big one... you gotta figure out what questions they ask.
27:58	Sam Parr	This is a really common topic. Have you guys heard of the "secretary problem"?
28:02	Shaan Puri	Yeah—somebody explain this. Somebody—somebody told us that on the pod.
28:05	Sam Parr	So, I used it when I was looking for an apartment the other day, and it was actually pretty magical. The thing is, I'm repeating from memory, so I might get it wrong. But basically, if you have it—started with the secretary—if you're hiring a secretary you'd want to interview, let's say, ten applicants. You wouldn't want to pick who to hire until you saw at least 37% of the applicant pool. For example, if you had ten interviews, you'd want to go through the first four. After the first four, you would select the first person you meet who is of equal value to, or close to, the highest person you saw in the first four. Does that make sense? So, if you see apartments—let's say you go and see 100 of them—the first 37 you skip. But the next one after the first 37 that is as good as the best one you previously saw, that's the one you select. That's called the "secretary problem."
29:05	Dan Certner	"So, you can't go back and buy that first one."
29:06	Sam Parr	You can't go back. You cannot go back. ... But you need to spend time exploring the first third to see what all is out there.
29:14	Dan Certner	"That's fair. I bought the house I found on the first day of touring. I just want to make sure I didn't, like, violate the secretary problem—but I did."
29:20	Shaan Puri	Yeah, you did, but you...
29:22	Sam Parr	"Didn't... with the business. And so, you — I didn't... with the business. And so, of the 100 or so that you saw, were there any that, looking back, you're like, 'That was a winner'?"
29:33	Dan Certner	No, it wasn't until we saw... You know, there were a few close ones where... I think I was under LOI maybe three or four times.</FormattedResponse>
29:40	Shaan Puri	For example, that sausage company had, like, one huge client.
29:44	Dan Certner	They had one huge client and no contract — no contract.
29:48	Sam Parr	But you thought they were amazing. That's kinda my... You thought some were so good that you're under "loi" [unclear].
29:54	Dan Certner	Yeah, but then you get — you're under LOI — and then you get the full amount of information, and you very quickly see... [LOI: Letter of Intent]
29:59	Shaan Puri	LOIs are also in this business. It's kind of like agreeing to a first date more than it is an engagement. People make LOIs—they'll have three LOIs out at the same time. It just says it's an agreement to—"we agree to look more," right? We agree to take this seriously, to show some interest here. But it's not binding in the way you might think when you first go into this. If you're the seller, you might think, "Oh, we got an LOI." Well, hang on. I would bet the LOI-to-close ratio is... I have no idea, but I would guess it's under 20% in terms of LOIs received during a process. [LOI = letter of intent]
30:36	Dan Certner	Yeah, because you're not giving them a lot of the information—you don't even get it until that point. Anyway, you're checking all the boxes up until there. It seems good; I think this is going to be good. Then you get their financials, or you go toward it, and you find that, "Oh—this is why you're selling it," or "this is why it hasn't been bought yet." That's another thing.
30:56	Shaan Puri	One thing you did that was great: I think the one piece of advice I was pushing on you was, "write a memo for every one of these deals that you like." Basically, he would write me a one‑page Notion memo that answered things like: - What is the business? - Why does it exist? What's the current state of it? - Speak in numbers only. - Why is the seller selling? - What's the one reason you would buy this business? - What's the one reason you would not buy this business? You would just go there and write these memos. I feel like that was key, because I remember you would call excited about—let's say—some deal you were excited about. Then after the memo we talked it through, we beat it up, and then we were like, "No, this is not worth doing."
31:37	Dan Certner	It was a "Clover" app. I remember the conversation. So basically, the Clover point-of-sale system — like when you're checking out at a restaurant.
31:44	Sam Parr	Got it.
31:45	Dan Certner	It's like—they flip it, and you're like, "What's your tip?" This guy made different apps for it. For instance, one of his apps lets you round up for charity. I think that was one of his apps. It was actually pretty interesting. It was like, "Hey, Clover's a growing..."
31:56	Shaan Puri	Super niche.
31:57	Dan Certner	Yeah — very niche, but he owned 20 of these things. It was more up my alley in terms of tech. When I actually hashed it out with Sean, it was kind of like: at the end of the day, it was very niche, very small, and there wasn't necessarily a good path to grow that business. It was just something that was interesting now but probably didn't have the longevity. That's another thing you said to me, Sean. You were like: > "This is gonna be... don't listen to all those blogs out there that say, 'Yeah, you're gonna buy this, flip it, and then next year buy two more businesses.' No — you're probably going to be working in this business for a little bit of time. Make sure it's good. Make sure it's lasting." I think that first one was an example of: sure, if I was gonna buy 10 businesses, maybe that was one of them. But that's not the game we're playing right now.
32:47	Shaan Puri	A couple other key points I thought of: one was don't buy a job. Early on, when you go to search, you see big price tags and you get a little scared because it's like, "How am I going to afford this?" It feels too risky, so you gravitate toward things that feel safer and more achievable. But that's actually a bit of a trap. Yes, it's safer and more achievable, and it might net $100 a year of profit. You think, "I can buy it for only—you know, he only wants $180 [unclear whether $180 or $180k] or something like that" and you get excited because it seems cheap. But the problem is it's still going to take all of your time to buy and run this business, and you basically bought a job. Versus the thing you could have bought, which was like $11,000,000 in revenue, doing $1,000,000.
33:30	Dan Certner	"Dollars — real, real, real dollars."
33:32	Shaan Puri	Yeah, that's not a job anymore. Now that's like an asset—like a real business. Yes, it took more risk; it took more time to find a good one of those, but it was well worth it. So I feel like that was another kind of key learning I think we both had during this process—it became blatantly obvious.
33:46	Dan Certner	Yeah — don't rush the search. Trust me: call it five months in, when you really hit this pit of despair and think, "I am never gonna find anything; everything under $5,000,000 is trash." Private equity is scooping up all the good stuff, and anything that's left under that threshold — there's a reason it's there. You kind of get to a place where you're convinced you're never gonna find it. It's easy to want to just grab one and say, "No, those things are fine," and kind of ignore those holes in the business.
34:14	Sam Parr	I've made so many bad decisions. Most of the bad decisions I've made were because I could... It's like I had principles going into this, and I got fatigued, so I didn't stick to my principles.
34:24	Shaan Puri	Fatigue. Yeah, exactly, exactly. There was one that was like an SEO business. It was actually like a good business, but what was the situation with that one? </FormattedResponse>
34:32	Dan Certner	Yeah. So that one was — it was like a competitor to SEMrush. It was a solid business. It made, I think, $500,000 to $1,000,000 a year in profit. It was a nice business, but this was right as, you know, AI was really starting to become kind of the center of the conversation, especially as it relates to search.</FormattedResponse>
34:54	Sam Parr	I helped a friend buy a company that was in the SEO space. Anytime an SEO company wants to sell, it's sort of like—at once, do you guys remember Bitcoin miners? (mhmm.) It's like: "If these are so good, why are you selling a digital money printer?" SEO is sort of the same way. Like, wait—if you're just getting a fountain of traffic and customers, why would you want to get rid of this?
35:19	Dan Certner	Well, that's the same thing. It's like when you meet a 30-year-old selling a business—you're like, "Why?" That was exactly it. I think going into, you know, let's call it the AI headwinds, there were a lot of reasons this business might be completely different. I think Sean said, "Unless you feel like you're the best suited to take this SEO company into the next five years, there's more risk than upside." That is not my background, so that's not the game I want to play. Funny enough, I was actually in an LOI with this SEO company when I found Fleet. I almost wrote off Fleet; it seemed really interesting, and there was some part of me that... didn't have me rejected, even though I was kind of in very late stages with this other company. Thank goodness I made that pivot.
36:05	Shaan Puri	So, let's tell the story. So you—the broker calls you and says, "Check out this business." What happens from there?
36:12	Dan Certner	So, from there—I think this was before I was under LOI—but Fleet looked very different than a lot of these other companies. The finances, at first glance, were super clean. The story made a lot of sense. A lot of these sims [sic; possibly "sellers"] and a lot of these brokers are padding things and trying to make them sellable, but there was always a blatant "gotcha" in many of them. Take the sausage example: "Oh yeah, this makes half a million a year, and by the way he also makes another $400,000 in cash, but we don't pay tax on that." You can't see that anywhere. Part of me thought that's kind of cool, but it also sounded a little dangerous—selling $400,000 worth of sausage on the side of the road. There was always something like that with many of these businesses. But Fleet was very clean: everything was buttoned up, the story was tight, and it checked all the boxes. This is a recurring business—people rebuy the bags several times a year. They have amazing clients and amazing factories. It looked very different than these others.
37:18	Sam Parr	Like Dunder Mifflin of bags.
37:20	Dan Certner	Exactly. Yeah—exactly. I am Michael Scott, you know. It's a necessity that these companies need.
37:29	Shaan Puri	So what'd you do? You go— you meet the guy?
37:31	Dan Certner	I was actually going to say no to the broker because, again, this SEO thing was heating up. I hadn't had my come-to-terms talk with Sean yet. He said, "Hey, the seller wants to meet you. Let's all go out for lunch." I was like, "Alright — free lunch, that's cool." So we met for lunch. My goal was to entertain this business, but at the end of the day I'm under LOI [Letter of Intent], so I really shouldn't.
37:56	Shaan Puri	Free lunch.
37:57	Dan Certner	Yeah, I should break up with him after this lunch. But we started talking and, you know, had this instant connection. He was the most stand-up guy I had met in the past few months, especially when it comes to business ownership. He wasn't trying to pull something over my eyes or spin the story. He was like, "This is the story." A lot of people, you know, put lipstick on a pig. This guy was like selling a rabbit—or selling a different animal. He just said it as it is, and it was very refreshing. In that moment I kind of abandoned the "I'm gonna break up with you" plan and we went the other way. We started talking about how we're going to work together in the transition, how we're going to grow this. My favorite part: they asked if we wanted any dessert and he said, "Do you wanna share a tartufo?" I was like, yes—we shared a tartufo. I don't think I've ever shared dessert with my wife, but I shared a tartufo with this guy. I remember calling my wife after and saying, "I didn't do what I was supposed to do. I was supposed to break up with this company." But we shared a tartufo and I think we're gonna buy a bag business now. It was a complete one-eighty... but in hindsight.
39:15	Shaan Puri	Literal Michael Scott, right? Isn't there a scene at Chili's that's exactly like this? </FormattedResponse>
39:18	Dan Certner	Yeah, exactly. It would be like a lava cake or something like that.
39:22	Sam Parr	A tartufo. A tartufo.
39:24	Dan Certner	Very... I don't—I don't think that was my first tartufo I've ever had, too.
39:28	Sam Parr	Who knows what a tartufo is? I had to Google it. You're my kind of people, Dan.
39:34	Shaan Puri	Tell there you.
39:35	Sam Parr	"You go."
39:36	Dan Certner	And then, from there, I broke it off with the SEO guy. Due diligence took a while — that's the second part. It was like, "Okay, now you're committed to buying a business; how are we going to do this?" It actually took four months because, again, I was signing my house away, signing my life savings away. I needed to be damn sure this thing was going to be solid before I did that. Then the world of search took on that next chapter: "Alright, how do you actually figure out — are the assumptions you've made in this quick few weeks of dating correct?" We kind of transitioned to that phase of the process.
40:15	Sam Parr	What was wrong and what was right about your assumptions? And what was the difference in his asking versus the paying?
40:24	Dan Certner	We actually negotiated the price pretty early. That part happened during the LOI, for the most part — like 99% of it. There were actually five bidders, which I thought was a lie. I kind of assumed they were bluffing because they said, “Yeah, we got four people in the packaging industry that want to buy, and then there's you, so it's going to be competitive,” blah, blah, blah. I just figured that was a tactic to try to drive the price up. To this day, the seller maintains that was the case, and I have no reason not to believe it. We ended up taking — I think they wanted $3.05 or $3.06 for the company — so we ended up agreeing to three four [unclear: transcript reads “three four” — amount unclear]. The part that took the most negotiation was that forgivable seller note. The biggest red flag in the business was that one client was over 50% of their revenue. My biggest fear — rightfully so — was, everything's great today, they've been a client for fifteen years; what happens if next year they leave? Suddenly this is a very different business. What we did was run the numbers with the bank and say, “Hey, in order for us to finance this, this is the number that we'd have to have if, for whatever reason, we lost that client.” That part was probably the most intense of the negotiations. But for better or worse, most of what he said ended up being true. There weren't any of these... and he said that in the sim — like, that wasn't news [sim unclear in transcript].
41:56	Shaan Puri	What was surprising to you, or what was different than the dream that gets sold on social media? If you watch the videos and you see Cody Sanchez telling you to "just buy a laundromat"—it's gonna... you—you'd be rich, whatever—that type of shit—was it in line with that? Was it different than that? What was the difference, if there was one?
42:16	Dan Certner	Yeah, it's not nearly as easy as Cody Sanchez makes it seem. I probably went a little more overboard. When I think about the amount of time I spent in diligence and the amount of money I spent in diligence... I'm a risk taker for sure, but I'm a calculated risk taker. Before I make this gigantic gamble on the rest of my life, I want to make sure I've done everything humanly possible. When you watch a lot of these videos about buying a business, they make it seem like you can just find one and transition right away. The whole process is really easy. The process of getting the loan—some people liken it, actually I think Cody Sanchez likens it—to a "financial colonoscopy": they want to know everything about you. That part's tough. Then you give the company a colonoscopy to try to figure out everything about it: quality of earnings, that sort of thing. One of the things I did that I'm happiest I did—because it got me the most comfortable, outside of paying for accountants and lawyers to scour things—was I shadowed the guy. So every week... [transcription ends]
43:26	Shaan Puri	Because he.
43:26	Sam Parr	He happened to live in New York City, too.
43:28	Dan Certner	Oh, the whole thing was serendipitous. He lived 20 minutes from my house. Before I signed the sim, it was like a packaging distributor in the Northeast — it could have been in Boston or anywhere. This guy lived 20 minutes from me, so that's how the tartufo was so accessible. I literally went to the office every week and sat with the guy for several hours. He walked me through packaging and his day-to-day. It started my training: okay, how am I going to run this business? It allowed me to take what was on paper and figure out the skills I would need to run the business, how I might be able to grow it, and where I might need more help. It made it more real. I think I was lucky in that I was able to do that. I've talked to other searchers and thought, "Let's go back to the laundromat example." You buy a laundromat and I would imagine on day one you walk in and a machine breaks. You're like, "Oh crap — what do I do?" You know nothing about these machines, now you need to find a mechanic. Everything is a little more complicated and nuanced. I went down the laundromat path for a while — I thought that was going to be my destiny. But valuing a laundromat actually has a number of facets and you need to really get into the weeds there. So my biggest takeaway is: it is hard and it takes time. It's not something you can just do for a few minutes a day. You really have to invest in making this happen if that's what you want to do, or you'll end up with surprises down the road. I think my biggest relief is that I've been waiting for the shoe to drop somewhere and for something I missed to surface — knock on wood, I haven't had that yet.
45:05	Sam Parr	How many hours a week are you working on it now? And how many hours a week was he working on it?
45:09	Shaan Puri	He was probably working.</FormattedResponse>
45:13	Dan Certner	Let's call it twenty-five to forty. I think he definitely was working less. He kind of had it on autopilot. I think he'd started to, you know, tune out a little bit — but not in a way that he neglected the business. It was just that he'd been in packaging all his life; he could run it in his sleep. He wasn't as focused on growing or renegotiating things with suppliers or building the supplier base. I'm probably working, you know, 50 to 60 hours. I spend a bunch of time on this.
45:45	Sam Parr	How much were you able to take home?
45:47	Dan Certner	So that's the million-dollar question. It's like, "Okay, cool — your business is making all this money." At the end of the day, two years in, I'm still only making 150 a year. I take the minimum amount I need for IRS compliance because I'm saving the rest and able to finance growth. I've made enough to pay back the loan, but I'm not paying it back because I need that cash to fuel growth. It's a very cash-intensive business, and I'm not in a place yet where I can take as much off the table. Although Sean has been giving me some other framework, saying, "Hey, you actually should be doing this."
46:23	Sam Parr	"What's that framework which is, like, if you want to replace yourself, you have to pay yourself the replacement cost?"
46:29	Shaan Puri	No, not that. But basically, I did this in one of my businesses. It's not right for everybody, but I think it's easy to go into "rainy day" mode as a business owner when you play too conservative. Several of our businesses right now—one of them has about $2–3 million sitting in the bank, and the balance grows every month. It's not like we have wild swings where you need a big cash-reserve buffer. It's not a heavy-inventory business. All of our operating expenses are salaries, so there are no surprises coming next month. Even if there were, one of my friends—our buddy Sully—told me this. I asked him, "How much do you keep in there? Three months of working capital? Six months? Twelve months?" I thought, "I have like twelve months of working capital sitting in the bank right now." He said, "No, I just take it all out." I was like, "Zero months?" He goes, "Yeah. I own this business myself, so if I ever need the money, I just lend it back into the business. I could always write the check back." It forces you to make a profit as well. Andrew Wilkinson came on this podcast and talked about his book—Profit First. I really like the philosophy, which is basically this: with a normal business you have your revenue, then all your expenses, and then, surprise, here's how much profit is left over. Usually there's less profit than you guessed because expenses were a little higher, etc. Profit normally comes last. Profit First says you decide upfront: you say, "Okay, I want to have a 20% profit margin." You take your revenue, set aside money for profit, set aside an amount for taxes, and what's left is your expenses budget. Instead of making profit the thing that comes last, you make expenses come last. Then you must say, "Alright, my marketing budget can only be this much," because you've already decided to take a set profit margin out of the business. I don't adhere to it 100%. I don't think it's right for every business. But I do think that—in Dan's case—I think he's being a little overly conservative about how much cash he's leaving in the business. I did that too, and the longer I delayed it I lost one very valuable thing. If you pay yourself every month out of the business, and one month is light and another month is heavy, the bobby [unclear—likely "business"] just reacts to it. If it's light, you're like, "Yo, what the hell?" and you will go fix the part of the business that was broken. If you just leave the money in and it's just a P&L—just numbers on a spreadsheet, not money you actually receive—you'll wait fifteen months before you end up correcting that problem, because it's all fictitious money anyway; it's not money you're actually getting. So I think actually getting that check every month creates a feedback loop that's quite valuable to a business owner. It will cause you to scrutinize unnecessary expenses or to go after growth. Once you taste a big month—like, Sam, we have this with MFM: we have a big month and then the next month I'm kind of like, "Oh, I kind of like the feeling of that one—let's do..."
49:18	Sam Parr	That again.
49:18	Shaan Puri	What do we need—one extra episode? Two? Should we go get a guest? What's going on today? Let me see what's going on over there. Right. You start to think about what you could do to drive it back up. I think there's an unhealthy version of that, but there are some healthy components to it.
49:32	Dan Certner	Yeah, so I think—that's a lesson learned for me. I think I'm still very conservative: "what if I need this money?" I do have high working capital costs, especially around now—kind of pre-holiday. I'm about to have to write a bunch of checks, but very soon I should get to a place where I can take more out and/or start paying back some of the debt a little faster.
49:56	Shaan Puri	So, Sam, I'm curious: what's your reaction to this whole thing?
50:00	Sam Parr	So, I think that for people who have your personality type — you're a very serious person. If I were a broker and I met you, I would not think you were kicking tires. I'd be like, "Oh, this guy's for real." You have a very obvious for real energy. If you have that energy — like, "No, I'm going to do this; this makes sense" — I think the path you're taking is wonderful. My assumption is that you're going to be wildly successful, so I think it's very wise. I also think that if you are an unserious person — someone who is not willing to put their house up or make a real commitment — that's one of the tells. If you're not serious like that and you're not willing to do the diligence and say, "I'm willing to look at 100 things," then I would say: do not do this.
50:51	Shaan Puri	Yeah, I think there's also one — I think you said it perfectly. There is one more thing to it, which is: what situations do you shine the most? So, for Dan, I think he always had an entrepreneurial streak that was used as random side quests in life. We would go try to win the McDonald's Monopoly game every year; we actually tried to win it — just hoping. I know we... [trails off]
51:11	Dan Certner	"Thought we were gonna win it."
51:13	Shaan Puri	We were, like, dumpster diving, trying to win this stupid thing, right? We started a blackjack club on campus and we were running simulations to see how much money we could make if we started a blackjack club. We were always trying to come up with ideas. It was more fun to come up with our own idea versus just going to get a job and doing the thing. I feel like you actually show up the most — you're the most version of yourself — when you're doing this type of stuff: when you're in control of your own fate and you have your own project. As arbitrary as, like, you know, bags [or whatever], it doesn't matter. It's like, I'll take bags super seriously. I took gum seriously, blackjack seriously, sushi seriously — all those things. I think that's the other part, which is not the part you said, but if you really are, at your core, more entrepreneurial and you're more switched on doing that, then you're going to have a better result doing this than you would if you stayed in a more traditional job.
52:06	Dan Certner	That's my... And I think— I think people, you know, when I tell them about it, at first it's always like, "Unbelievable! Wait, you do what?" But then, secondly, their mind goes, "Oh, I should do that," because it sounds great in theory, right? When everything works out, it's like, "Cool. Of course this is easy. Of course anyone can do it." But I think people miss that there are a lot of ways this doesn't go like that, and it's not necessarily the most glamorous.
52:31	Sam Parr	I also think most people shouldn't do this. For me, this does not fall within my skill set. If I had to guess, when you were buying the company you guys were negotiating over $10,000, $20,000, $30,000, $40,000 things. You were incredibly anal about the paperwork — asking, "What's this $300? What's this $3,000 charge? What's this?" That is not what I do. I do not do that; that kills me. That does not fit my personality type. I've bought, invested in, and done a bunch of real estate stuff in my time, and I lose on all of it because you make your money when you're buying it and when you sweat the details up front. Which is dumb — that is not what I do. I don't think, necessarily, that is what Sean likes to do. If you are the type of person who plays a board game, memorizes all the rules, and likes to sweat the details, then buying a company could potentially work well for you.
53:31	Dan Certner	"For I'm the guy that takes the rulebook out of the box and reads it to explain to everybody."
53:35	Sam Parr	Exactly. If you have that trait, this could be awesome—life-changing.
53:40	Shaan Puri	Yeah, so, Dana — one of the other cool things about doing a search for a business is you realize how big the universe of businesses is. I asked you, I said, "Usually we try to brainstorm business ideas with people. What opportunities do you see?" You said you would come up with a couple of ideas. Give us a couple of your ideas of what you think other people could go do. This is just the sort of random section.
54:00	Dan Certner	Yeah, I think the— I mean, the biggest takeaway from buying a business, before I get into the ideas, is: everything's a business. Go look at any store. Every little piece of that business is something that someone sells. That display that says "For sale"—someone sells that. The holder for the gum in the store—someone sells that. That's a business. I don't think I really appreciated how random and how basic some of these businesses can be, and people make really good money doing it. Even packaging—you don't really think about that.
54:31	Sam Parr	By the way, I'm pretty sure Robert Kraft is the owner of the Patriots. He owns the Kraft Group, which I think is a packaging company.
54:39	Dan Certner	It could be. There are so many packaging options; they make corrugated cardboard.
54:43	Shaan Puri	One of our best episodes ever—if you want to listen to a great episode, it's the Sarah Moore episode on this podcast. She's, I think, called "The Egg Carton Queen." Her thing was she basically did the same thing you did: she went and found a retiring guy who owned a business that sold egg cartons. Not the eggs—the cartons they come in. When you look at eggs, you're like, "Eggs—yeah, okay, there's a farm that sells eggs." You don't even realize that the farm has to buy egg cartons, and there's somebody whose job is to make egg cartons. They sell them at the best price and the best value, blah blah blah. Her episode is amazing. The other example I always give—Sam, when I explain what this podcast is to people—is this line I say: "Everything you see is there because someone sold it." Nothing gets there by accident. Even in the workplace: if you go to your break room and there's a poster on the wall that's like the labor code, there's a guy in Minnesota who sells that. He makes $1,000,000 a year selling you the poster every year. Once I heard that I was like, "Oh shit." It's like a physicist when he learns about string theory or some shit—you know, it's like, "Oh, it's everywhere, I get it. Oh, there's the wage of particles."
55:55	Dan Certner	See the world of the components.</FormattedResponse>
55:57	Shaan Puri	Yeah, all the components themselves are businesses too. Then you realize you're not making it in business mostly because of a lack of creativity and effort, not because of a lack of opportunity. Literally, every item everywhere is itself a business that somebody is running to get it there, so there's no lack of opportunities in that sense. </FormattedResponse>
56:17	Dan Certner	Yeah, so now I'm hardcore on the other end of the spectrum — as unsexy as possible. I want to do that. I want to—I want to be the guy that has the most random thing. Packaging is pretty random. Like, you know, in a future world, once I know if and when I'm done with this, I want to go even further.
56:32	Sam Parr	"Yeah, by the way—when you lay in bed at night, what do you think? In ten, twenty years, could we be this? Do you think this could be a $100,000,000 company? Do you think you could sell it for a certain amount? What's your sort of north star that excites you?"
56:47	Dan Certner	So, at this point I don't have any plans to sell it. I do think it could easily be a $100,000,000-in-sales company. Some of these big packaging players are huge, and we're able to compete with them. We're small in the scheme of things — it's a nice-sized business, but still small. What I'm finding as we work with these brands is that we actually have a pretty differentiated offering because we are small, we're scrappy, and people love that. As we've been able to add clients, I'm like, "Oh — this thing can really take off." We can really scale this up and start to gain more traction with larger brands. The crazy thing is these big companies spend tens of millions of dollars on their packaging, so you could easily get five clients to get you to $100,000,000 if it's the right five. My goal is to grow it. I do think in a few years I'll hire an operator to run it. One of my biggest pieces of advice to people starting is: don't assume you're going to hire the operator day one, especially if you're putting your house on the line. There is not a single person I trust to run this business when I'm going to get kicked out on the street if it fails. When I get to the place that I feel better about that risk, only then will I decide, "Okay, maybe I'll hire someone and just do more strategic work." Right now I'm loving what I'm doing, so I think it's eventually about scaling my time. I'm very involved in all the processes at the moment, and I designed it that way because that's how I learned. I'd love to be able to go away and not have to take a call because "the blue isn't blue enough." I do a lot of color matching.
58:24	Shaan Puri	When we were doing the sushi restaurant, Dan was not only sweating the details on the finance side, but we were like, "Dude, we don't really know how a restaurant works — none of us have ever worked at a restaurant." So Dan went and got a job at Noodles & Company. He studied them from the inside. We treated it like it was "Ocean's 11." Every day he'd come home and we were like, "What did you write?"
58:44	Dan Certner	"A report, yeah."
58:45	Shaan Puri	Yeah, he'd draw the workflows, or he'd...
58:49	Dan Certner	Did you learn? And what did you bring me? Give me the pesto, yeah.
58:51	Shaan Puri	Then he'd bring the pesto cavatappi and he'd say, "Trust me—do not eat the tomato basil soup." We're like, "Why? It seems just like tomato soup." He's like, "Don't eat the tomato basil soup, guy." And so he went undercover, and he was like, "Willie..."
59:04	Dan Certner	Then I had the big reveal — the big "Undercover Boss" reveal at the end when I quit.
59:08	Shaan Puri	Yeah. Were they, by the way, blown away by the fact that you're like, "I am creating a sushi chain"?
59:13	Dan Certner	She tried to hire the GM, and she's like, "All right — that sounds better than what I'm doing here at Noodles & Company." She was like, "I thought you'd—like, you betrayed me." It's like, "Cool." You're like, "Oh, you're trying to move next door? Great. We can trade food at lunch."
59:28	Shaan Puri	So, Dan, let's do—actually, do you have that business plan that we made? Do you still have that binder?
59:36	Dan Certner	Yeah, one sec. Let's find it.
59:39	Shaan Puri	So, the story here is that not only did Ann work undercover at Noodles & Company...
59:45	Dan Certner	Also, this was not a—I didn't just put that there. Like, that's lived there behind.
59:50	Shaan Puri	You just keep that there. I don't have one; I need to get a copy of this, alright?
59:53	Dan Certner	I also like our Sabi Sushi hat. It's right there.
59:56	Shaan Puri	Oh, nice. Yeah, so basically the first business — me, Dan, and our buddy Trevor — had out of college was to create... There's a brand called Sabi Sushi. The idea was to create the Chipotle for sushi. So you go get sushi the way you eat Chipotle: you walk down the line, pick your ingredients, and get the bowl. This was our big idea, which was... I...
01:00:14	Dan Certner	"Don't maintain a good idea."
01:00:16	Shaan Puri	I think, at the time, it's been proven. It's been proven.
01:00:19	Dan Certner	A bad idea, but I still want it. Okay.
01:00:22	Shaan Puri	So, we not only had Dan work undercover at Noodles & Company. We then... I don't know how we got a meeting with the founder of Noodles & Company, and we showed up to this meeting with this binder. This binder was our business plan. We had been working on it for months while we were searching for a location. Can you just hold up the thickness of this binder so people... [holds up binder]
01:00:41	Dan Certner	See? Oh — it's, like... it's thick.
01:00:42	Shaan Puri	Let's see. Yeah—this is probably a couple hundred pages of a business plan in there, and there was stupid stuff. Part of it was what you would expect, like here's the startup cost. But part of it was dumb stuff, like the uniforms and how we're going to progress people from entry level to manager, and what their values are. And we had not sold a single role to a single customer, and we were worried about all this other stuff. What I think is we're tricking ourselves into thinking that planning equals productivity. And, you know, spoiler: planning did not equal productivity. We're basically doing a very fancy form of procrastination. So we get to this meeting with this guy from Noodles & Company—I think his name's Aaron, if I remember correctly—and he...
01:01:21	Dan Certner	"I forgot that guy's name."
01:01:22	Shaan Puri	He's like, "Alright, so what's the plan?" We thought we were about to wow this guy. We whip out that binder, slam it on the table, and it's basically: "Here's our plan—look how great this is." I remember he looks at it. First of all, it looks like a kid's project. Even the cover—we had inserted this colorful thing in the front plastic sleeve. He flips through and realizes pretty quickly: these idiots wrote a 250-page business plan for their sushi restaurant, and they don't even have a location or any customers. They're starting from scratch. I remember the look on his face. That was the moment that was rock bottom for me in the whole sushi journey. He should have just ripped us and said: > "Guys, what the hell are you doing? This is so ass-backwards. Why don't you get out there, start testing your concept, see if people actually want this, and then you'll learn by doing?" Instead, he kind of took pity on us and didn't say that. I could tell he wanted to say something, so he tried to be nice about it. I thought, "Oh my God — we're so bad that he feels like he needs to be polite about this." That meant we were even worse than just being bad. I remember realizing, "I don't know what the right answer is, but whatever we're doing is dead wrong." I could tell that right after the meeting.
01:02:42	Dan Certner	Just remember — later, someone did tell us that, though, in Boston. We were talking about it: we were about to sign a ten-year lease, and we had literally just met this guy ten minutes ago. He—oh, he was... it was a guy who owned a bunch of Boston Markets. Don't you remember?
01:03:00	Shaan Puri	That John Prendergast—Prendergast. My goodness.
01:03:03	Dan Certner	"I don't know," he says.
01:03:04	Shaan Puri	That Call — that's his name. He wasn't — he was running a tech company now, but he was like, "You know, early in my career I owned 20 or 30 Boston Markets," and he said, "So I know a little bit about the quick-service industry. Let me, you know, be your mentor."
01:03:19	Dan Certner	Yeah, but he basically just tore the whole thing to shreds within five minutes. It was like, "This is wrong—don't sign that lease." Trevor wasn't in Massachusetts with us when we were doing this. He was about to sign the lease, so we called him and said, "Wait—no."
01:03:32	Shaan Puri	This guy was great because he cut through the nonsense. He asked us a direct question and we gave him the same answer we’d been giving everyone else. He was like, “So what makes you think there’s demand for this?” We gave him the usual spiel about sushi being on the rise, and he asked, “Alright, so is this gonna work or what?” Then he basically said: > “How do you know? Are you testing this? You’re just gonna sign a [10-year] lease with a personal guarantee with no clue if the market actually even wants this? Doesn’t that seem insane to you guys?” He gave us real talk, and I’ll forever be grateful to him for it because he saved our ass from signing that lease. He offered a different plan: test first. He suggested renting a commissary kitchen — the kind bakers and caterers use. They were about $20/hour, super cheap, and with no long-term commitments. His advice was: rent those kitchens, do delivery-only, validate the demand. See if people like your recipes and your price points. You’ll learn so much by doing that, and then you’ll know what you need out of your first location if you decide to go there. That advice saved us. Whenever somebody asks me for advice or help, I remember that and ask myself: Can I give them one-tenth of the value John gave us? That idea is my new “north star” for that situation. </FormattedResponse>
01:04:47	Dan Certner	Yeah, I remember he introduced us to Lean Startup and to actually figuring things out. We used to poll people. We asked questions like, "Would you eat sushi once a week?" and "How many times a week would you eat sushi?" — which was a badly phrased question. In hindsight, people would say, "Oh, I'd come two to three times a week." We did a proof of concept as cheaply and as quickly as we could, and the actual answer was more like "not even once a month." It was night and day. </FormattedResponse>
01:05:15	Shaan Puri	"Right outside of, like, LA, SF, New York. The answer is: if I eat sushi at all... To make a concept like this work, it needs to work in Texas, Colorado — you know, it needs to work everywhere. And the answer was: if I eat sushi at all, I eat it about once a month, and I'm happy with that. I'm not trying to eat it three times." </FormattedResponse>
01:05:31	Dan Certner	"And I'm going to go to the nice restaurant to do it."
01:05:33	Shaan Puri	Right. We were looking for the three people who validated us, rather than paying attention to the 97 people who were saying no. We were like, "Yeah—see those three." He also did one other amazing thing that, as an entrepreneur, I now see as a pattern over and over again. He suggested to us, "Do it delivery-only." We were like, "Ah..." He saw the look on our faces and said, "What?" We were like, "Delivery just sucks." We started... you know. He asked, "Why?" We said, "Delivery—I mean, you order food and you don't even know when it's going to come." This was before DoorDash [before DoorDash existed].
01:06:06	Dan Certner	I think the biggest thing is we probably invented DoorDash and didn't know it, and we were fixing it.
01:06:11	Sam Parr	Didn't know.
01:06:11	Dan Certner	We were fixated on the sushi, but we really came up with a better model.
01:06:16	Shaan Puri	Exactly. So, this is...
01:06:17	Dan Certner	Before all those, we were...
01:06:18	Shaan Puri	Like, you know, you call in an order, you don't know when it's going to come. It shows up an hour later, the packaging is all shitty, the food is cold, it's leaking out the bottom and just feels cheap. We're like, "That's why it sucks." Our takeaway was, therefore, "no." His was, "Wow — looks like you found all the things to improve to make this a 10x better experience." Since then, I see this all the time. If you talk to entrepreneurs, it's like: you think about a space and you're like, "Oh, that's horrible — that's horrible for these reasons." The customer response is, "It's horrible." The entrepreneurial response is, "Wow, what an opportunity, because if I just change those four things I've now created this huge level-up in the customer experience." So we ended up doing it. Our delivery times were sub-30 minutes. You knew exactly when it was going to come. We stamped the food when we made it so you knew it was fresh. We put a webcam in our kitchen so you could see us working on your order. We did all these other things to try to make delivery actually a cool experience. The bar was so low by basic delivery standards that it kind of actually worked. I thought that was the other really brilliant thing that John did for us.
01:07:23	Dan Certner	Yeah. Rethinking—rethinking what, you know, everyone kind of assumed we'd make: a restaurant, and flipping it on its head. It allowed us to fail faster.
01:07:35	Shaan Puri	Back to the business ideas—you had a few here. Are there any that you think are cool or interesting that you think somebody could go... [trails off]
01:07:41	Dan Certner	I'm very into what I'm calling a fund to run businesses. I actually looked at a few of these toward the end. I think I found Fleet when I saw some of these family entertainment businesses — laser tag, bowling alleys, that kind of thing. I have two hypotheses around them. One is: I saw one or two P&Ls that looked wildly profitable with very low ongoing costs. [Do your own research — don't just blindly accept that this is a good space.] There's probably a high startup cost in the beginning, but once you get it set up — like a climbing gym or something similar — it can run with relatively low operating cost. They have autonomous setups now, too, so you don't even need that much labor. Also, as a dad with two kids, I'm always spending money on these places. My son had a laser tag birthday party where there was just one person working. They basically own the laser tag game in town and even charge for the adults standing at the birthday party. I thought, "Wow — I could do this better."
01:08:38	Shaan Puri	And they have you hostage. Have you...?
01:08:39	Dan Certner	Hostage. All the arcade games—you gotta buy their food, kind of. These are very easy to run, almost a single-person [operation]. But, you know, let's call it a "teenage business," so you hire teenagers to work there—anything that they're not gonna mess up.
01:08:53	Shaan Puri	Yeah, like a bowling alley.
01:08:54	Dan Certner	There’s a bowling alley in my town that’s a good example of a business with multiple purposes. During the day it’s for kids — they have kids’ activities and after-school programs. At night it’s the bowling league for adults and they have a bar, so it’s the local dive bar. There are also five vending machines and a teenager working there — the whole no-frills setup. I have to imagine if you can find the right business like this, it’s great to be able to just go bowling at your own bowling alley. I can’t do much with my paper bags. I go and check them out and maybe walk around with them, but not much else.
01:09:27	Shaan Puri	Like, why family entertainment? Why this out-of-home entertainment? Why now? Is there anything that's changed in the market? Because, you know, these have been around forever: laser tag, Topgolf, bowling alleys—whatever.
01:09:38	Dan Certner	My hunch is they’ve been profitable for a while. I think a lot of these are sneaky businesses that you don’t immediately think of. I was reading about how millennials don’t drink as much and want more sober events. The idea of doing more games is starting to take off again. In my town, for example, there’s an arcade where you pay $8 for an hour and can play unlimited arcade games. That place is packed. That sort of thing never really existed, but there seems to be a desire to leave the house and do things—maybe it’s a post‑COVID thing. What I find really interesting—and this is probably true across the country—is how large commercial properties, like old malls and big buildings nobody wants to buy anymore, are being repurposed. When I see what people put in them, it tends to be newer, more interesting uses: pickleball courts, for instance. I read that they’re taking a lot of the old Bed Bath & Beyond spaces and turning them into pickleball courts. So you can take something that’s not being used and make a climbing gym or a ninja course. One of the most incredible marketing moves I’ve seen was when they marketed gymnastics to boys—suddenly demand doubled. Then there’s the climbing team; that place is packed all the time.
01:11:11	Shaan Puri	One of my biggest investments over the past two years has been in my brother‑in‑law's commercial real estate. He does what everybody thinks is dying but is actually thriving. For example, these strip‑mall–style shopping centers—they're not indoor malls but shopping centers, often anchored by a grocery store. At a Trader Joe's there may be a Crunch Fitness, other tenants, etc. The question becomes: how do you fill the rest of the boxes? People assume shopping centers are dead because of e‑commerce or Amazon, but these centers have about 97% occupancy. That's higher than multifamily and office—it's a really strong category. Even a few concepts that are declining, like Bed Bath & Beyond or Joann's Fabric, are being replaced with trampoline parks, pickleball courts, Tesla charging networks—there are always new tenants. The best part of this model is that the returns are bananas. It's by far the thing I've been most bullish on in the last 24 months. I basically took all my spare cash and put it here. The reasons are: a) he's a good operator; and b) there's no new supply—nobody builds new shopping centers. So it's all retrofitting existing centers. You typically buy them below the actual build cost of the centers themselves. My kids go to a place called Lil' Kickers in San Ramon, which is exactly what I'm describing. A teenager runs it. I asked to speak to the manager; he was 17, had a chain and a typical young haircut, and I was surprised he was in charge. He was actually a really good manager. Everyone who works there is young—definitely under 23—and all the coaches (two coaches per class) are probably high‑school soccer players. The venue is packed; it's one large space for kids' soccer, and it has to be printing money. [Rough math:] they probably have over 1,000 members, charging about $200–$300 per month. This is a very big business—basically a fun business that's run by teenagers.
01:13:49	Dan Certner	Yeah, and it's—you don't need to...
01:13:51	Shaan Puri	AI-proof, right? So, if you're looking for where to do business—if you know the whole world is changing with AI—well, AI's probably not going to run a trampoline park or a kids' soccer center. Those are pretty safe businesses.
01:14:05	Dan Certner	Yeah, and they're predictable. I mean, kids are always going to want to jump. It's not like you're buying a product and then, all of a sudden, you don't know if it's going to last.
01:14:13	Shaan Puri	Right. You put a bullet on here: "the least sexy business possible — touch the taboo." What do you mean by that?
01:14:18	Dan Certner	So, this is—start again. When you're in the "pit of despair," you start to go crazy with ideas. You're like, "Alright, what are—" I started looking at medical ambulances [non-emergency medical transport], which I still think could have worked. Effectively, the government subsidizes medical transport for disabled and elderly people—from nursing homes to their medical appointments. So it's actually government contracts. If you have a fleet of these special handicap-accessible vans, you can mobilize the fleet every day. You fill up appointments with people and you just transport them to and from—super simple. You don't really think about it, but the demand is there, especially as the population is aging. That's a good example of an unsexy one. I would love to buy a funeral home—something that's just like, "Oh man, you work in that." I mean, if you want to find a deal that's kind of punching above your weight, there is going to be some hair on the deal. At the lower end of the market, private equity will scoop up the easy ones. There's going to be something weird that no one really wants to touch or think about. To me, that's a great reason to buy it.
01:15:31	Shaan Puri	Right, because it might mean that—let's say there's a really sexy business on one side. Maybe it's software-only: you don't have to run it, it's low-operations, and it's about something fun, like party planning. The hair on that deal might be that the valuation is extremely high, so it's going to take you a long time to get your cash back. Or it might be something else: users are very fickle, the competition is very intense—there's going to be hair in every deal. The good thing about what you're saying is that if you choose the hair that isn't the most fun thing to run...
01:16:07	Dan Certner	> "Oh yeah — where the hair is going to be... you gotta cremate someone. If I actually... I don't really know if I want to do that now that I'm saying it out loud, right? I mean, I'll hire a teenager to do it, but that's a better amount of hair. You kind of know what it is. It's like the hair is the thing, almost, right?"
01:16:22	Shaan Puri	It's not just... like, the P&L has hair, or... there's a lot of debt on the business already. There are other problems in other areas.
01:16:28	Dan Certner	Exactly. So if there's something that—like, if 20 people are going to flock to the software-only party-planning one, but only two crazy-enough people are like, "Well, let me roll up these funeral homes, try to aggregate" ... I'm sure people do this. I'm not the first one to think about it, but I like that. The other thing I really like right now: Party City just went out of business. Where are you buying balloons? There's a guy about 20 minutes from me who had a fireworks store. His fireworks store happened to sell balloons. The day Party City went out of business, he rebranded. Now his store is called "Balloons." It used to just be called "Fireworks." He's taking out all the ads on the street. We went there for my son's birthday, and he's doing awesome. So it's like, how do you kind of— and don't copy Party City; that clearly didn't work, right?
01:17:16	Shaan Puri	"But the demand for balloons still exists."
01:17:18	Dan Certner	And will continue to exist — exactly. The supply just shrank a whole lot, right? I imagine the landscape is changing very rapidly these days, for better or worse. Maybe something goes out of business because they can't compete due to tariffs or whatever. How do you think about being opportunistic in that sense and doing it? You can do it. You don't even need much: you could start selling balloons with a permit and run a delivery-only balloon service. I actually saw a truck doing that.
01:17:47	Shaan Puri	When I went to Mohnish Pabrai's house—he's a great investor—on his desk there was a name placard. Normally you'd just have your name engraved on it, but instead it said "Trouble is opportunity." He kept it on his desk as a reminder. Since he's always reading the news or hearing something, it served as a constant prompt: trouble is opportunity. I love that.
01:18:06	Dan Certner	Yep, that's awesome.
01:18:07	Shaan Puri	Cool. Well, Dan — dude, awesome hanging out with you as always. I'm glad you got to tell your story, and congrats, man. I'm blown away by what you did with the business that you bought. You are officially Dan the Bagman for telling... yeah, the...
01:18:19	Dan Certner	Thanks for having me on. It's exciting to be here. Cool.

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The Most Overlooked Way to Build Wealth Right Now

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