Some people are really good at making money. Some people are really bad at making money. And some people are the Rob Dyrdeks. (Used to be bad. Now they’re good).
Okay.
If you don’t know who Rob Dyrdek is, yes you do.
He’s the king of MTV.
His show, Ridiculousness, is literally always on.* And I’m gonna tell you why - If you wanna be a CEO, you better think like a CFO (something my mama, a CEO, always says).
The year is 1993.
And Rob thinks like a CEO. (Ha).
He’s 16. (He’s a child). And he’s a professional skateboarder.
Rob takes the money earned from skateboarding to start Orion Trucks. So, yeah. He’s an operator. And he learns that inventory and supply chain and margins are really hard to figure out.
OKAY.
I wanna go down a litany of all the bad businesses this man has started. But I can’t. (Because this newsletter is called the skinny).*
So here’s what you need to know.
Rob’s a brand ambassador for DC Shoes. He owns a record label. He holds 21 world records. And he opens a skate shop. HOWEVER. Rob knows nothing about accounting and cash conversion cycles.
Which means -
Money in, money out.
The year is 2006.
And Rob is on MTV.
Rob and Big! Ridiculousness! Fantasy Factory!
The glory days…
Sure. Rob is bad at accounting. But he’s great at spotting trends. He negotiates his contract with MTV to own the integration rights - very unheard of at this time. (He wants use TV as a marketing funnel for his thousand businesses).
Which is super smart!
But he basically cash flows the money he gets from TV into his new, equally unprofitable ventures.
Like Alien Workshop.
It’s the company Rob first turned pro for, and it’s bought by Burton Snowboards.
So Rob does the “noble” thing, and he buys it back. He quickly learns that only skateboarders buy skateboards and that this business was never designed to do more than a couple million in revenue (market sizing).
He literally GIVES the business back to its original owner.
Okay.
Rob is approached by a private equity firm to buy his other business, Street League Skateboarding.
He thinks - “This is it. These people will finally turn me into the billionaire I’m meant to be.”
When they do their due diligence, they’re like, “You’re not investable. You spend all the money you have. And you’re not creating any value.”
It’s a deep awakening. Rob doesn’t know what an investment banker does (does anybody?).
But he randomly gets a call from a network executive asking if some guy who just sold his production company for $150 million can bring his kids to Fantasy Factory.
This guy provides a ROADMAP.
He teaches Rob that production companies need 30% margins and three years of consistent growth and that they trade at 6 to 8 times EBITDA.
He even introduces Rob to an investment banker who acts as his financial advisor.
Before bringing his production company to market, Rob negotiates his contract with MTV for additional seasons of Ridiculousness.
I used to think that being “smart” meant making money. Now I realize, it’s about being intentional.
Rob is finally building a business that’s designed to sell.
He already has relationships with MTV and Nickelodean!!! And it’s how he grows to $50 million in revenue in just one week.
There’s a certain mystique attached to doing something new. But there’s something beautiful about doing what you already know (and leaning into your unfair advantages).
Superjacket sells for $450 million three years later.
Okay.
Rob knows a lot about investment bankers now.
He doesn’t stop failing until the ripe young age of 42. At which point - he gets a wife. He has kids. He builds metrics and best practices into his personal/professional life.
He literally sends his wife an email every morning with a list of everything he’s going to do that day and a LOVE QUOTE.
Yes. This guy.^
So take one from Rob Dyrdek. Know what you want before you begin. And build your roadmap accordingly.
And that’s the skinny.
Ridiculousness is quite literally ALWAYS ON.
Wow! What a great story - and yes it's always on , and your father is always watching it... Truly learned so much from this edition. Keep up the great work!