057: Fund Your Start Up Using Your Tech Equity with Ryan Gallego

00:00 - 01:01 | Ryan: I remember our one GM, this was like the first day that we had come down here to Austin to open up that building and we were doing training and, you know, she just pulls up and this is like this blacked out Jaguar or whatever, just super nice. And I'm just like, damn, I'm like, GMs must be making bank here. Right. You know, I find out, okay, like the salary of a GM is about like 300,000. I'm like, that's cool. But then the real backstory was that, you know, she had been there for like 10 years and had just all this stock and probably had probably 20 million plus just sitting there in stock. And these, it was just story and story and story again, like that from all these people of like, don't touch your stock unless you have to like, just keep putting it there. And you know, is that drinking from the Kool-Aid? Probably. Yeah. But then you also see that you're not just drinking from the Kool-Aid, like it's a real thing. So that was that was how I thought about it was this is the strategy that these people use that have been here for a while. And there's a reason that they're still here because they continue to get more as well. So I'm going to do the same strategy.
01:03 - 02:28 | Christopher: Welcome to the podcast for financially focused technology employees. Are you working for equity? Do you have questions on how your career and money work together? Then welcome. Every week we discuss strategies and tactics for how to grow your career, build wealth and reach your financial and lifestyle goals. Welcome to Tech Careers in Money Talk. My name is Christopher Nelson. I'm your host, and I'm excited to be joined today by Ryan Gallego. Ryan is the CEO and founder of Pouch 6 Studios and also of Media Pouch. These are two multimedia companies. One is a full service studio that we're in today. But before that, he was actually an employee at Amazon as an area operations manager and also a financial analyst. This is where he learned to work for equity, trade his time and talent for equity, and use that to leverage and build out his entrepreneurial business. And before that, I think one of the fun facts about Ryan is that when he was 17 years old as a photographer, he earned $30,000, which I'm going to encourage my boys to do. But anyway, welcome to the show today. Thanks, Chris. Hey, glad to have you here. And I think, you know, getting right into it, you know, you came from such entrepreneurial beginnings, right? When you look at what you accomplished, then you went to school, you went to university and made the decision to go to work for for big tech. What was what led you to do that?

02:28 - 03:24 | Ryan: Yeah, I think overall it was just the upbringing from my parents, you know, of, you know, I grew up in a small farm town of like 2000 people in Illinois and, uh, you know, very. Average lifestyle growing up, you know, and that was just kind of the structure of what my parents had painted was, you know, if you go to school, you get good grades, you go to university and then you go and get a corporate job and, you know, climb the ranks and you do good with that. Right. So. That's that's ultimately how I did that. You know, the entrepreneurial journey started probably whenever God, I don't know how young I was, but I remember shoveling snow during the winters for my neighbors and getting five dollars and doing the lemonade stand on the corner of the cul-de-sac, you know, selling lemonade and even selling popcorn for the Boy Scouts. And the entrepreneurial stuff started very young. And I just followed that route that my parents had painted of, you know, basically just the societal route of like, this is what you do. And like, that's ultimately how I got there.

03:24 - 03:38 | Christopher: So you find yourself, you have this entrepreneurial spirit, if I can say that right. And now all of a sudden, you start, you know, I know you had a couple jobs before, but what what drew you towards Amazon? What was the big pull there?

03:39 - 04:44 | Ryan: Yeah, I mean, Amazon was, I remember, yeah, I had been working some different photography jobs and different insurance jobs and internships throughout high school and college. And I remember it was, I think it was my sophomore year. I had applied for an internship in Amazon and. Didn't get it, didn't hear back from them. And then my junior year going into senior year is whenever Amazon had, I guess, just re-circled the applications for that internship. And then they had offered for me to come out to Indianapolis and come interview for this area manager position for a post-college job. And so. My thought in college was that I just wanted to go apply what I'd learned and basically just go get a big tech job. And all I had seen too was like tech jobs were like where all the money's at and like that's how you can travel the world on somebody else's dime. And that was a big factor for me was traveling the world on somebody else's dime. Yeah. Um, but I knew that in order to, you know, have a big paying job and travel the world, like you had to go work for a big company like that, they can support it. So,

04:45 - 05:32 | Christopher: Oh, that's really interesting. You're the first person, you know, since I've started the podcast that brought up that aspect. And that was actually one of the things that drew me to Accenture when I was graduating from colleges, that exact thing is I wanted to travel the world. on somebody else's dime and get the opportunity to fly all over the place. And I think it's, you know, for people listening who may not be in their career yet or early in their career and want to pivot, I think there are a lot of opportunities to do that. I mean, is that what you found out? So let me actually, let me take that back a step, because you also highlighted the fact that you were aware in college that tech paid more than other companies or other industries. And you didn't come out with a technical degree.

05:32 - 07:04 | Ryan: Yeah. And from a software standpoint, right. But finance, I went to school for, I double majored in economics and finance with a specialization in portfolio analysis. So pretty technical in that regard. And I had the admiration Goal of going and getting like my financial engineering masters down here at UT right to be you know Financial engineering for anybody that doesn't know it's essentially being a engineer but for financial models, you know like anything that you know today of like mortgages or Just any type of financial kind of securities like it's all engineered by a financial engineer right back end of things that's right algorithms or schematics or anything of that sort. So I had, you know, to answer your question of how did I know that not having a technical background, I just understood that getting into the right company with tech would be able to pay that. But then that there would also be a ton of room to grow because because mind you, like I got recruited out to go be an area manager, which was inside of Amazon's operations. Right. Like I wasn't really going to be doing too much of financial anything at that point. But I just knew that when Uncle Jeff calls, like you open the door and you just go see what happens, because that was that was the opportunity of a lifetime at that point. And it was more than any other offer that anybody else like in my class or at that school had seen. And so I knew it was a big opportunity. Yeah. Amazon just wasn't recruiting out of our school at that point. And it had taken me just applying to them.

07:05 - 07:42 | Christopher: applying, being persistent. Well, and I do think, you know, stopping for a moment on the whole concept of the financial engineer, it's so important for people to understand that, you know, outside of software engineering, there's a whole lot of other tons and tons of other roles that can get you into to big tech that can get you trading your time and talent for equity, and in giving you incredible compensation. For sure. And I think that people who do enjoy numbers, who do enjoy some level of making the numbers work, I think financial engineering is a great path and working as financial analysts inside of tech companies.

07:42 - 08:53 | Ryan: Definitely. I mean, I loved it. Numbers have always been my thing, and so I couldn't get into finance quick enough at Amazon, because that's just what I really enjoyed. Towards the end of my career there at Amazon, I was helping manage all of North and South America, fixed and variable cost. I had been in charge of a project that was global, that was basically shifting around spare parts from all their fulfillment centers to decrease the amount of cost and supply of spare parts in every single one of their fulfillment centers that was going to save Amazon roughly like $20 million a year for a course of five years. So that's incredible. There's all kinds of different ways that you can engineer things because what started off with me coding macros with You know, my other financial analyst in Excel turned out to me building a team and working with data scientists to build Power BI tools to do that exact same thing. So you don't even necessarily have to be the engineer that's coding it or building it, but as long as you've got the right teams in place to go and fulfill your vision of doing that engineering thing, like you can build whatever.

08:53 - 09:20 | Christopher: Well, and I think that's a really valuable point just because as now a lot of the building may be augmented by AI and not done by engineers, the key role is really being the architect, right? Really being that person who can have the vision that combine different things together. I mean, this is where AI is not, is really in that visionary, that building. So what was the first opportunity that you had from Amazon? When did you receive the offer?

09:20 - 10:05 | Ryan: Received the offer, what, it was the fall semester of my senior year, and they basically sent me my offer via email and said, here's your salary, we're also gonna give you stock, and then here's your benefits, you know, 401k, health, all that good stuff, and that was the layout of it. I think the salary was like, I think it was like maybe 70,000 salary, and then the stock was like, it was like 80 shares of stock, Which is a good chunk too at that time, because this was 2015. So they were RSUs, Restricted Stock Units, meaning they vest over a certain period of time. They were going to vest over four years with the down, what do you want to call it? I guess the snowball of it coming on the last two years of it.

10:06 - 10:14 | Christopher: Right, right. So what they have is they have a backloaded vesting schedule. This traditional Amazon is because they want to keep you for the four years. So they usually do. What is it?

10:14 - 10:19 | Ryan: It was like it was 5, 10, 25 and then the remainder.

10:19 - 10:22 | Christopher: And then 50. Sounds like something like that. Yeah.

10:22 - 10:35 | Ryan: So. But yeah, I mean, even along the way, though, because I had gotten promoted two, three times. And so with all of those times I had gotten, you know, small bump in salary, but then some more stuff.

10:35 - 11:07 | Christopher: Yeah. Then they refresh, they add more on and then they put the schedule on. I mean, that's so. So I want to ask you a couple of questions about this, because I think it's so important for people to understand that many of us. I mean, myself included, I had the desire to go work for a stock. And the first time you really learn and understand about it is when you're sitting looking at a stock agreement. So what was, you know, you're obviously somebody who has an analytical mind, you enjoy numbers. So what was the way that you sort of broke that down? Like, how did you look at that stock agreement at that time?

11:08 - 13:08 | Ryan: Yeah, it's a good question. I'm trying to recall back to my feelings and emotions and how I analyzed it. I knew that 80 shares of Amazon stock at that point was a lot because I knew whenever I started in May of 2016, it was worth $727 and that's what started the that RSU period there. And so I knew based on, okay, if that's the price, and then whatever my strike price is, meaning strike price is like when I decide to sell or whatnot, if that's higher than that, then that's what all of this is gonna be worth. And historically, just looking at the data of Amazon and how it's done all of that, I knew that that was gonna be significantly more valuable than whatever was on that piece of paper right then and there. And pairing that with looking at the salary, because the salary was okay, but still, 70K out of school as a 22-year-old, I was pretty happy with that too. But I knew that the real value was in staying there for at least three years to cash in on most of that stock. But yeah, I just analyzed it like that. This is what these 80 shares are worth right now. This is what I think they're going to be worth whenever I start. And then this is what I think it's going to be worth whenever I would leave Amazon. And at that point, I thought I was just going to work at Amazon for a long time. I didn't know that I was going to. give that up after three years, but either way I knew that that was gonna help me pay off college debt, or that was gonna help me do whatever I needed to do in life, and that was gonna be a really, really good starting point, and so that's how I analyzed it from more of a, not like I need to negotiate it, but of how much value this is actually gonna provide of them giving that to me right now.

13:08 - 13:58 | Christopher: Well, in in what I also heard you say is that you you had a vision for how you wanted to manage it. Right. So so one of the things that I always try to educate tech employees on is that if you look at your equity as a completely separate stream of income, And you lock your lifestyle and say, I want to live within my salary. And if you're at the point in your career where you get a bonus, let's use the bonus for extras. But as you're working for equity, if you're able to then take that and say, I'm going to leave that to the side, I'm going to manage that completely separately and let that continue to grow. I'm going to divest, diversify, and have that as a completely different bucket of money. That's going to provide you options. Definitely. And it sounds like you, as somebody who was managing their personal finance as well, you had that vision. You saw that opportunity.

13:58 - 15:09 | Ryan: Definitely. I mean, I knew that I wasn't going to, like each time that that stock vested, I had no interest in selling it, because I'm like, there's no point in me doing this, especially since I believe in this company, Amazon. I know it's not going to go down. Something really catastrophic would have to happen for it to decrease. And being in those fulfillment centers and seeing how many orders you're pushing out, you really feel how much that equity is worth because you can see the money just getting printed and like just shipping out and stuff. So I believed in the equity in the company and I just never touched it. My goal was just to like accumulate it and let it sit out there until I just needed to do something with it. Right. And so. When I left on my three-year anniversary, I did sell that stock, and that was in order to go and fund my first company. But at that point, my strike price was three years from 727. So my strike price was around, I think, 2,000 a share, and that was before they had split.

15:10 - 16:03 | Christopher: Wow. So yeah, so you had tremendous upside. And so there's, and I think there's other other things that people, one of the challenges I think is, is technology employees, it's hard. It's challenging to really manage equity, because you get a lot of different voices, right. And obviously, there is the, you know, there's finance basics that say, you make your money through concentration, you keep it through diversification. Yeah. And so that principle would tell us, OK, as we're getting RSUs, we'd be harvesting them, diversifying. However, there's also the other perspective, because I've been a part of companies like that as well, too, where you see it growing and you see you're inside the company. I've been an insider where I wasn't able to trade except for very specific windows because of that. And you may have been, too, because of the finance team.

16:03 - 16:03 | Ryan: Yep.

16:03 - 16:36 | Christopher: And, but you see, you know, and I think Amazon's a very interesting story because you see it like being woven into like the, the fabric of our society, right? You think about how many people, and I know myself, like you just literally, your life is, is integrated with Amazon. You're at this core period of growth. You're seeing it. There is something that tells you No, I am actually going to go long on Amazon. I'm going to keep this concentrated position because I see it going up into the right and you have the direct visibility to some of those financials too. Was that a key data point for you? Definitely.

16:37 - 18:51 | Ryan: Yeah, definitely. Definitely. You know, especially being on the finance team and seeing the picture behind the closed doors, you know, right. Was very not that it was eye opening, but you just see. I mean, I was able to see like everybody's comp plans at that point, and I was able to see. how much volume we were doing on across all departments like whether it be Amazon Fulfillment or the Alexa team or like AWS and like you really get a picture of like wow, there's a lot going on here and like you you just start to believe in the company, but I my main thing to with for holding on to it and concentrating it for that period was that a lot of my former managers and bosses and people that I direct reported to had been there. Even the people, the leaders that were there even like one to two years before me. And going back to people that I direct reported to, like 10 years, 13 years, all of them had not touched their Amazon stock and they were all multimillionaires just from stock alone. And, you know, I remember our one GM, this was like the first day that we had come down here to Austin to open up that building and we were doing training and, you know, she just pulls up in this, it was like this blacked out Jaguar or whatever, just super nice. And I'm just like, damn, I'm like, GMs must be making bank here. you know, I find out, okay, like the salary of a GM is about like 300,000. I'm like, that's cool. But then the real backstory was that, you know, she had been there for like 10 years and had just all this stock and probably had probably 20 million plus just sitting there in stock. And these, it was just story and story and story again, like that from all these people of like, don't touch your stock unless you have to like, just keep putting it there. And you know, Is that drinking from the Kool-Aid? Probably. Yeah. But then you also see that you're not just drinking from the Kool-Aid, like it's a real thing. So that was that was how I thought about it was this is the strategy that these people use that have been here for a while. And there's a reason that they're still here because they continue to get more as well.

18:52 - 20:09 | Christopher: So I'm gonna do the same strategy and in that's a very interesting perspective Because you think about it Amazon is one of the you know, blue chip tech companies, right? It is is is a behemoth a backbone and so I do think that people that have worked for let's say the Netflix the Amazons the Google's, you know, some of these large companies have made multi millions of dollars. And this this is in this is one of the things that you and I, you know, we're chatting about in created this podcast episode is that so many people are fixated on I got to go to work for this startup company. I got to go to work in there's such risk because you are literally taking something that hasn't been built hasn't been proved or tested, versus, you know, I don't know the exact date when Amazon IPO, but it was, it was many years before you got there. Yeah. Right. But you were able to get there at a time and you made in three years, I'm sure significant amount of equity that you were able to take off the table, fund your businesses that if you would have stayed there longer, I'm sure you would have had site to, to multiple millions of dollars to working as a out of college grad, you know, going in there, applying yourself and, and just working for equity.

20:10 - 22:54 | Ryan: Yeah. All the people that I came in there with, they're still there. Not all of them, but the ones that are. They had the same purchase price of their RSUs and that same stock, and they've had promotions and stuff. They've got a couple million in the bank, and they don't have to do shit for the rest of their life if they don't want to. It comes down to opportunity cost, right? Is that what you really want to do and stay there? Or do you want to use that as an opportunity to go fund your business? And for me, that's what it came down to. If I'm putting in 60, 70 hours a week at Amazon, I'd rather be putting in 60, 70 hours a week on my own business that I can increase my own salary and distributions in that regard. And so that's what I used that money for, was to fund it. But yeah, I mean, it doesn't have to, I think it really comes down to, if everything went to shit today and I had to go figure out my next move, would I go work for, a small, small startup, even as small as what we are right now, with a team of four and a couple locations, and we're still very much in the nitty gritty of things, I wouldn't go that far down, just because there's also an aspect of, I've bootstrapped both companies, self-funded them, There's been no seed funding, series A funding. We're not a C corp in that regard yet. But I would look to companies that are basically a C corp that did just receive some type of seed funding or series A or series B. They're somewhere in that kind of investment funding pipeline to then negotiate some type of equity in that sense. Because when you're at a C corp, that's when you do have That option to break away more, you can get creative with how you give away, you know, your equity in the company and stuff like that. Um, but you know, the other option would then to be go look at the other big companies, like, you know, Amazon, Google, Netflix, like they're not going away anytime soon. You know, like there. like a Tesla or NVIDIA. NVIDIA right now is where Amazon was when I came in. So I would go and work for NVIDIA if that was the case. Because these companies have no shortage of stock or funding or anything. You're gonna be able to get in there as long as you've got the right skill set and the right experience. You're gonna get in and you just ride the train with them.

22:54 - 23:57 | Christopher: That's right. So what you just articulated, it sounds like your view of equity has now developed and changed, and you have a great understanding. And I actually think that I'm following the same thing, where I traded my time and talent for equity, took equity off the table, and then went to go self-fund a business. You learned how to do the same thing. At some point you were three years in, you had your original equity, you got a couple of refreshes, and then you said, and I know I've heard your story, you got to a point where you got promoted, you had a horrible boss and said, okay, I'm ready to now go take this off the table and go now build my own equity. what do you think at that point, you know, what were you, what were you trying to accomplish? What was really your goal when you said, okay, I want to go start my company because you did have these, you know, uh, unrequited or, you know, this open thread of, I'm really an entrepreneur. I've been working for somebody else. Now I've got a little bit of funding capital. I'm going to go make this work.

23:57 - 26:59 | Ryan: Yeah, I mean, my thing was that I had had enough shitty bosses at Amazon to realize that no matter where I go and work, there might always be that person. And and when you get the shitty boss, it sucks. You might love your job, and you might love that company, and you might love the leaders. I loved Bezos, not just for what he's done, but what he's built. I've had former bosses at Amazon that I still, to this day, keep up with. But when you get the really shitty one, you realize that not everything's in your control. And not that I'm a control freak by any means, but I'm sure we all are to some extent as an entrepreneur. you quickly realize that the fate of your future is not always in your control. And for me, I wanted to be able to control that of like how much time I get off, how much I get paid, like when and where I get to travel to, who I get to work with, where I get to work, what I get to work on. And I think a big thing for me as well was Seeing the amount of red tape at Amazon towards the end of like how long it took Like if I had an idea to do something And I had to run it up the flagpole and then how long that process took to get like approval for like, you know The capex expenditure like this person's sign off or whatever. It was like that just really started annoy me of like hmm we could be doing all these things at a much quicker pace. And ultimately, I just wanted to be in control of all of that. I just wanted to work on the things that I wanted to work on. If I'm building these cool tools and Power BI things and macros, why can't I just go do this on my own for my own thing? But ultimately, I went on that trip to Croatia for the Yacht Week and flew a drone. ended up capturing content for them the entire week. And that's when I had this realization in my head of, wow, I'm over here in Croatia on the Mediterranean Sea on a 50 foot catamaran yacht with some of my best friends all around the world. And we're just island hopping and I'm flying this drone creating content. And everybody wants to be on this GoPro. And it was at that point where I had this realization of, well, I picked up my first camera when I was 14. And I did that throughout college. And here I am, two years into Amazon, not doing those thing that I have been passionate about since I was 14. I want to build a media company and I want to travel the world doing this and, you know, working with brands and companies like Yacht Week and, you know, filming supercars and filming this and that and having different teams and like, let's just, I want to do that. Like that seems fun to me. And that was also, you know, back to our original thing of how do I travel the world on somebody else's dime? Well, cool. I'll have clients to do that at that point and they'll be funding that.

26:59 - 27:54 | Christopher: Let me ask you this real quick, though. Yeah. But you had the opportunity working for big tech, like you start understanding how that works, where, OK, now I'm putting together a project. I may have a client or customer that's paying for this. Now I'm going to take a part of that. That's going to be travel expenses. So you start understanding I mean, because I think that I've learned so much from my time in big tech and small tech and all my different experiences to say, now I have all the pieces that I can assemble and say, I can go do this myself. When also you have a backstop of like a pile of money that you took that stock and then it sounds like when you had this idea, you realized, I got to take my chips off the table. So then you divested from Amazon stock, turned it into cash and said, now I am going to be the VC of myself. I'm gonna have self fund myself.

27:54 - 29:06 | Ryan: Yeah, I mean, it's that's exactly what I did. I mean, it's a It's a scary feeling, you know, yeah Go and do that. I had that security net of The stock that I had sold to basically I knew that if I lived within my means spending X amount a month like this could last me for a year and a half and I think in a year and a half that I can get this thing up and off the ground and profitable to be basically paying for all of it itself. And then, you know, that was my theory there on that. But yeah, you've learned, especially in finance, you learn how all those things are hitting the buckets, right? That, especially with this company specifically, I've learned since we've got two different locations, oh, okay, this employee needs to hit this entity, that employee needs to hit this entity, this one needs to hit the holding company. This is where I need to sit and where distributions and salary are flowing that way. And like, this is how all this stuff needs to get sorted from an out counting tax standpoint. I learned all that stuff at Amazon. So, but without it, without that experience at Amazon or the stock, would I have just immediately gone and done this on my own? I don't know. It would have been pretty challenging.

29:06 - 29:53 | Christopher: Yeah, right. Well, and I think it was all things working together in the sense that you had this skill that you realized, I've been building this skill around being a media creator and editor and understanding all the dynamics of that. Then you go and you get this on the job MBA and you're taking equity off the table in terms of dollars. This is one of the things that I try to share with people is that we all have visions and we all wanna become founders. I think that, I think this is the question that I want to get to is, and it sounds, anyway, I'm not going to try and preload the answer for you. But because of the combination of those things together, would you say that you're in a better position now because you had those three years at Amazon than if you would have just struck out on your own, you know, coming out of college?

29:54 - 31:03 | Ryan: It's hard to say, you know, I always, I always say that to people, but I will say that I can look back on the last 15 years of my life and now and, and the moment in that exact moment, I didn't exactly see the bigger picture and I wasn't, you know, I was looking through the forest and not from a top on the forest, but I can see very easily that each one of those things was a stepping stone to getting to where I'm at now. So yes, I'm in a significantly better place having, gone and worked for Amazon for those three years and understanding business at its highest level and taking those practices and applying that into my own businesses, you know, yeah, from, I mean, just missions and values and SOPs and all of it all the way to the, you know, the stock funding, all of that. Yeah. I mean, I don't think Maybe it would have happened without Amazon, but I think who knows how that played out. Would I have figured it out faster? Would I figure it out later? Would it take more time? Who knows? But I know that it was a big stepping stone into this one.

31:03 - 31:10 | Christopher: Do you think that that on-the-job MBA is a value and how much do you use that every single day?

31:10 - 32:58 | Ryan: Super valuable. From the management piece, to project management, to finances, to… I mean, the biggest thing I took away from Amazon that I've implemented in both companies is just customer obsession. That value really just stuck in my head of that's why Amazon is as big as it is, is because it has very, very clear values. But, you know, one of their biggest one is customer obsession and starting with the customer and working your way backwards, whether, you know, and that can mean. How am I going to reduce the amount of clicks or, you know, listening to the feedback from the customer of like, hey, this thing's working well, it's not working well, but then overall just making it a super, super seamless, frictionless process for the customer to have an amazing experience. That was the biggest thing that I took away from working at Amazon was that. And customer obsession doesn't have to be just your customer. Your customer can be your client. It can be your employee. It can be your coworker, your boss. Just because it's customer obsession, it's not limited by all that. And so I look at everything around me like that of customer obsession. But yes, managing finances at that level really teaches you a lot on how to There's a lot of stuff at Amazon that I learned in finances that I wish I could apply here, but we're just not at that scale because there's economies of scale and we're not there yet at that point where we can apply some of those practices. But I always think about those things on growing it to that level and I'm already operating at that level of like growing it into that thing. Cause I know what to look for and like what's up there on those things.

32:58 - 33:46 | Christopher: Right. You've seen the, you've seen the pattern of what great looks like. And so, and, and I do think that when you have that experience and, and I've, I've had that at a few, few companies and it then gives you a clarity of vision and then a pattern to match to when you start seeing things clicking within your own company that says, okay, now we're moving in that direction, or here's the threshold that I need to get to to get to that. Help me understand now that you've worked for equity and you understand how powerful that is. And I know you were, you're talking a few minutes ago, you understand now when you get to certain sizes of the business, when you can structure the company in a certain way and start creating equity as an incentive for whether you call them partners, employees, how important is that to you moving forward as you scale your business?

33:47 - 34:37 | Ryan: Super important. You know, the right now we're working on productizing the software that we've created here at pouch six, which is, you know, the live editing of podcasts and the camera switching based on who's talking. And so that's basically like we're doing a whole corporate restructure right now. And essentially like that software is going to get broken out into its own entity and then that'll be set up as a C corp. Right. And so then if we do funding or not do funding, that still gives me the option to then go and give, you know, our developer some equity, right. His time and helping us build that because you got to take care of the team that was that with you at the ground floor. And like if they're with you at the ground floor, like, you know, Oh, I know all those guys want to ride this train with me. And so I'm going to take care of them once we get there to the top.

34:37 - 35:25 | Christopher: So well, to me, this is what we we learn intrinsically in the way that I try to describe it is you're going to have a different relationship with your team members when they move from being just team members trading time for money to to being shareholders. They're a part of the company. They're a part of the upside. And I know the companies that I've worked in where I had the opportunity to do one stint at a private equity company where only leaders got equity. And then the majority of the IPOs that I went through were all at venture capital companies where everybody got equity. It's completely different when everybody is incented and they're rowing the boat in the same direction. It's a huge motivator because people want to be able to participate in that upside and feel motivated by that.

35:25 - 36:33 | Ryan: Yeah, I mean, that was a big thing I learned at Amazon, having equity in the company. And, you know, I got to travel the world with them and stuff. And it was always the, it was always like my boss's thing was, you know, don't splurge, you know, but don't be a cheap ass. But find that happy middle ground of like, what would make the shareholders happy. And like, that was always a constant reminder of, you know, make the decision that would make the shareholders happy. You know, because at the end of the day, like my expenses, if I spent 10,000 on travel like that contributes to that. Right. So I'm I'm responsible for that. And you always felt that sense of responsibility. And it's that's what I also want for these guys to is to not in the sense of. I want all of that for them, that responsibility of, I'm working on something that it's going to directly affect the top line or the bottom line. Spending five grand on new equipment to test out, cool, that's your decision. Then that's how you're, just make sure that we've got the ROI on it, but you're directly connected to how this thing performs at that point, either way.

36:34 - 37:23 | Christopher: And that's what I think is so important because if educating employees that are also shareholders on what it means to be a business owner and helping them have that lens, then you're right. They're going to seek what's best for the company because again, they're participating in the upside or they make the mistake and mistakes do happen. That's going to result in the downside, but it's everybody working together to see this whole thing win. Yeah, definitely. So as we're winding this thing down, I'd love to hear for people listening that may not, you know, may be sitting across the table from their first piece of equity, what are some of the things that you now, knowing what you know, if I spun around and gave you a offer that included equity, what are some of the things that you do now that you didn't do before?

37:23 - 38:13 | Ryan: Yeah, I would have If we go back to that day that I got the offer from Amazon, 70k salary, 80 shares stock, I would have… I would have asked for less salary and more equity. You know, I would have, I would have been, I would have said, Hey, give me 48k salary for, which is 4k a month and put the rest, you know, like, give me, give me 20 more shares stock, call it a hundred shares stock, 48 salary. And let's do that. You know, and I would have asked for, I would have done more of a, um, curve like like more of a bell curve with the rsus even though i'm sure you're not going to get your way on that because like it's all structured but i would have asked for more of a bell curve of like the stock coming in that two to three year range versus the third and fourth year range like that

38:13 - 39:36 | Christopher: Well, it's interesting. So what's happening on the marketplace today, right, is is the vesting schedule, which is that, you know, there's there's usually the quantity of stock you're going to get. Then there's the vesting over time. Yeah, that's becoming a hot negotiation point because there is Amazon and I think Microsoft will do the back loaded. Then there's the straight. There's usually a one year cliff for your vesting was twenty five, twenty five, twenty five. But you don't get any until the end of year one. And then now for companies to be competitive, for companies that want to attract and retain employees, they're then now offering front-loaded. So they're saying 50% in the first year, 50, 30, 20. But this is becoming, so just so that you're aware, that's becoming, and people listening, that's becoming a negotiation point. And I think that whenever you're gonna sit down to negotiate, come to the table as, I know my skills. I know what I'm bringing to the table, which sometimes coming straight out of school can be hard because you really don't have the experience. So sometimes you just want to get your foot in the door. And there is a saying that says, you know, if you have the opportunity to get on the rocket ship, get on the rocket ship. Definitely. Right. Don't get hung up on negotiations. But they're being able to sit down and say, OK, let's look at all the pieces here. There's amount of shares. There's how I receive them. Those are two key negotiating points. You can always ask.

39:36 - 40:32 | Ryan: Yep. Yeah, I mean, it's it just it depends on the company and the leadership to, you know, do you really? Because if I'll say this, if I if Amazon wasn't what Amazon was, well, then maybe I would have decreased shares and asked for more salary. So it just really depends on. who's leading that company and how disruptive their product service is. But yeah, I think that's interesting to hear about how the negotiations have been updated to be front-loaded in some circumstances. And I'd be really interested to see how that data plays out of how long the employee ends up staying if it's front-loaded like that. Because me personally, if I had front-loaded 50% of my stock in the first two years. I don't know if I would have stayed the third, you know, so it's, I'd be really interested to see how that data plays out.

40:32 - 40:46 | Christopher: Well, those particular companies, the interesting thing is the strategy there is they're, they're front loading it, but they're actually then, uh, lowering the overall quantity. So you get it sooner, there's less, but then they're now they're focusing on larger refreshes.

40:47 - 40:48 | Ryan: Interesting, right?

40:48 - 41:48 | Christopher: So it's all I mean, there's always this, you know, this, this is why it's so important is why I'm here, you know, educating people is saying, understand the playing field, because what what I heard you say, you know, clearly is, now that I've been now that you've played the game, If you had the opportunity to go back in time, you would then be looking at, okay, what's the risk of this company? If this company, if I don't really see clarity that it's a disruptor, it has phenomenal leadership, it's customer obsessed, I might say, well, let me de-risk it, take more cash and less stock. But either way, I'd love to be able to negotiate for how my stock gets to me so that I can, you know, really focus on those years. Because ultimately, I think in the exchange of, you know, equity for time, you want to create a relationship where you feel engaged as the employee shareholder to be able to just focus 100% in and execute, right. And the company can essentially meet its key goals and grow. Definitely.

41:49 - 42:57 | Ryan: Yeah, it's, um, yeah, I mean, that was definitely one of the best things that happened in my career. And the fact that I got to come out of the gates with it, you know, as a 22 year old with Amazon, you know, uh, definitely set a lot of good things up for success. And I think that would be my advice too, for people coming out of college. Cause like there's tons of college kids that graduate and then they go work for these tech companies as, I didn't negotiate and I didn't feel the need to negotiate because it was such a solid offer and I was just happy with it. But these tech companies, there's tons of wiggle room in there and I would have negotiated some more on the stock. You know, even though you're coming straight out of college, like, you know, you just frame it to them. Like, well, you pick, you recruited me out before I even graduated. So clearly you see something there and that's right. That's your skillset and that's your strength. And even though you don't have all the experience that they have on the job description, like there was a reason they recruited you out early and secured that for post-college. So that's your negotiating tactic there.

42:57 - 43:26 | Christopher: It is, and I think one of the key negotiating tactics that I try to tell everybody is when you sit there and they're going to present their offer, I'm sure this happened to you, is they read you the offer letter, they read you the stock agreement. The best thing you can do is just take a breath, ask the simple question, what on this is negotiable? and then just shut up. And then they will usually tell you, oh, well, we don't have any room on the salary, maybe we have some room on equity, but they will tee you up. That's smart. For your next offer.

43:26 - 43:27 | Ryan: Yeah, I like that.

43:27 - 43:59 | Christopher: Yeah, thanks. So I do what I do. Well, hey, Ryan, I cannot thank you enough. I appreciate you being with us and sharing your experience. And I think the last question that I want to ask you is how Like, because of the fact that you went through that and you then self-funded, how, I don't know exactly how to ask this question, but did that give you, I think, a lot of confidence and clarity, knowing the fact that you were the sole funder and you could sort of drive this business how you want to?

43:59 - 44:00 | Ryan: To say the question again?

44:00 - 44:19 | Christopher: Like, the fact that you bootstrapped this company and you were able to take your Amazon stock, convert it to cash, and self-fund this thing, do you think that that gave you, you know, the confidence and control that you wanted, was that, would you consider that a plus versus going out and like having to raise money or do things like that?

44:19 - 46:07 | Ryan: Yeah. I mean, I definitely have the, especially now doing company two where it's self-funded again, I have the confidence that I could lose it all tomorrow and like figure out how to just build a different thing, entity, product, service from the ground up. Like, Even from the first company, MediaPouch, that had a much longer ramp than even this company did. MediaPouch took me about 12 months to get to six figures. Our first studio took us six months, and then the second studio took me one month. So my ability to go and build entities to at least six figures in that decreasing amount of time gives me that confidence of, okay, well, if I've gone from 12 months to six months to one month, and I know that two of those things are on track to go do seven figures by the end of this year, and that's within the timeframe of 12 to 18 months, then I have confidence that I can go do that with just about anything at this point. But I couldn't have done it without going through those other steps, of building the first company and having that confidence. Also being in that sink or swim situation of like, I've got this stock that I sold, this is my security net, I have to figure this out. But I learned all those things along the way on that one to make the second company go even faster. And then once we break out the software into the third company, I know that I'm gonna go fund it because I understand how that game works now. So good.

46:08 - 46:20 | Christopher: Well, no, I appreciate you spending the time. Thank you so much. And for everybody listening, thank you for joining us in another episode of Tech Careers in Money Talk. We would just ask that you stop by our website and leave us a review. Thank you so much.