Why Boring Businesses Win and Venture Capital Doesn’t with Travis Jamison

Speaker A: I tend to think that the boring businesses are probably better overall. I think the even. Even take, like, the venture capital asset. It's a shit asset class. It's shit. I mean that. I'm not. I'm not mincing words. It's a shit asset class.

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Speaker C: I kind of look at people like you that are successful, and I'm like, okay, I see you doing lots of different things, but were you the type of person that was good at many things in the past, or did you start getting really good at one project? And is that, like, the secret?

Speaker A: No, I think, uh, I've always been the type to have multiple projects at once, and I'm still not convinced that is the best way. It's just kind of what's naturally fallen to me with that. I've always had more than one company. I mean, yeah, even since, like, the very beginning, which I was a complete amateur and probably still am. But, uh, ever since the first one, I've always had more than one. It just. I had multiple ideas at the same time. Sometimes one would play into the other. Like, you develop one skill, like my really early skills, like SEO and that SEO would unlock other opportunities or similar adjacent paths that you could go with that. Um, so, yeah, I don't know exactly what the answer, but I've always had more than one thing.

Speaker C: Okay, that makes me feel a bit better because I've tried doing what you just said and failed really bad. And it's not until I actually said, okay, for me, it's one project. And where I look at it right now is like, I've got competitors that are doing multiple projects. I'm like, awesome. I'm glad that you're not 100% all in on this against me.

Speaker A: Uh, and again, so I've definitely had this discussion many times. I wonder the level of success I would have if I had focused on one thing or if I would do that now for example. But it's a double edged sword because if I had done that then probably some of my largest wins wouldn't have existed. Like when do you know when to focus on the one thing? Uh, currently, so, so I work with Taylor, uh, Pearson, who's just a great friend, but also we work together professionally a little bit. Um, and in kind of like coaching like sessions and he's always trying to just get me to like clear my plate so I can find the things that I find interesting and just like triple down on those. Because every time that has happened like really amazing things have come from that. Uh, but it's not like it's going to line up perfectly like, all right, this project's done or I've sold this company now here's the next thing. They always sort of overlap a little bit. And even, even right now I've got two different overlapping things that are just like very, very interesting to me. And um, they kind of play into each other a little bit. I'll even say, you know, maybe I'll be working on one specific business and then learning the skills for that business on how to maximize it. Other opportunities from this thing I'm learning pop up and then you can combine them. Um, cause I definitely a hundred percent believe that the kind of like outsized returns of like businesses will come from when to unrelated skills overlap. That's 100% true. Like capital. Ah pad my main focus now. Um, it exists because I understand finance and investing more than the average person and I understand marketing and platforms and software in ways that none of the people from finance do or very, very small amount of people do. And some of those skills overlap. Like I can do something that most people from finance can't even if they're better at the other stuff than I am. Um, so that's gonna work on.

Speaker C: Well I guess you have to be in that position to be that, you know, multi dimensional person or investor rather than, I don't think you'd want to be investing in startups that are kind of like, yeah, I've got three projects.

Speaker A: Yeah, for the most part. I mean for a lot of startups getting venture rounds, you know, they have to basically say like this is their only thing, this is their only project.

Speaker C: Um,

Speaker A: I don't know if I would do that personally. Um, but they're not wrong. It's still, it's, it's what the answer should be. You should focus on the one thing if it's like a great opportunity. But I Don't know, it just hasn't worked for me.

Speaker C: Yeah, well, uh, to kind of flip the narrative is AI making it more easier to actually be that multidimensional person? Like I just built an affiliate site last weekend with no intention of running one. I'm like, wait a minute, this thing's actually getting off the ground? What do I do?

Speaker A: Uh, in a way, I mean, yes. I mean the answer is obviously yes, but also, uh, in a way I feel like it's already helping everyone run quicker. And so what was the, what's that? The um, Alice in one was Alice in Wonderland. Like the, uh, the queen was saying here in this kingdom, basically like you have to continue to run faster just to stay where you are. I'm missing that quote. But something like, you get the idea kind of feels like that a little bit right now. There's obviously the people who are embracing and the people who aren't and that is separating with people who are embracing it. I'm not sure like a huge edge is coming if everyone's doing it at the same time. I don't know.

Speaker C: That's a whole other question. You, uh, have a background obviously in service based businesses. I mean both with capital Pad and an SEO agency. Um, I've been reading a lot on X that you know, there's like a big ship going away from SaaS to service and I actually think SaaS needs to uh, kind of add service on top of it. Are you seeing, um, this shift?

Speaker A: I see the narrative. Right. Um, I mean, so we can even start from just like the marketing agency point of view. M. It's pretty clear marketing agencies have historically been a pretty good business. Uh, assuming you can get customers and you're on the premium tier, they've been pretty good businesses. You know, they're low capex. Um, people like you're not having to float a lot of working capital. You know, customers pay first, then you do the service good. Um, margins baked in. But with AI, the business model is becoming way, way more attractive because you're selling more of the knowledge and the back end can be fulfilled with AI more instead of as many bodies. Right. And so like at my agency, which I still wholly own, even though I'm not like super, super involved with it. Um, we haven't let anyone go, but we've expanded our services quite a lot without hiring anyone new. And so you are seeing that. And so in a way the margins profile is increasing, the margin profile is increasing to that resembling SaaS. Uh, but to back to your original question, I'm not a super bear on a lot of SaaS right now. Uh, the, I think the idea that, well, this can just be built with AI in a weekend to replace it. Like, I feel like those people don't actually run businesses that were like the grind is just eating up everything and you just want to pay someone to solve this problem or pay a soft, you know, an app to solve that problem. Um, and to solve it. Well, instead of it being kind of half assed with AI, uh, now there's, there's different degrees of that I think. You know, I do way more of my work inside of Claude now than having to go to some third party. Um, so obviously things that integrate with that and how it plays, I don't, I don't have the answers for that. But again, I think Pure SaaS is still a great model. You could, you could make a couple arguments. One, you could say it's a worse model now. Um, I mean just the public market comps and valuations, that totally checks out. It's a worse model. You're going to get a lower exit. The flip side is you can build a much bigger, better project, way less capital infusion up front. Um, so if you're playing the cash flow game or even still the exit game like this is, it's just like, it's just a beautiful model that, that's almost more attractive now because you could do so much more with so many less people and create a lot of value. At the end of the day, how much value can you create for others? Is how much like a representation of how much you get back. And with that, if you can build something in a weekend vibe coding, but it provides a ton of value for others, well, who cares? They'll pay you for that. Maybe, maybe 1% will go build their own in a weekend, but the rest won't.

Speaker C: Yeah, I know from my experience, uh, just uh, being able to build these things, I, I envision what I wanted a couple years ago and now we're here where I can actually do. I've done it literally in weeks. Whereas before I thought I needed four professionals. I'm like, I need a statistician, I need a programmer, I need a designer, I need a product person. Now that's all me. With cloud code, it's done and I'm just kind of in shock. I'm like, I actually don't need that, that capital anymore for that particular project. It's uh, investment can now go somewhere else and it's uh, it's flipped the

Speaker A: script for me, I, I think more than ever the uh, the fund strapping model makes way more sense. You know, raise a, a small round to get off the ground, kind of pay the bills, get traction and you might not need it again. Um, I love that idea. Yeah. And, and if you do need it again, it's when the product market fits. Already found everything's good, you just need some money to scale growth. Basically.

Speaker C: Would you say that marketing is now more important than ever? Where if someone can build that amazing product, it's like you still need to get out to the market. It's kind of like, you know, the best product isn't always winning here.

Speaker A: I've always kind of been in the camp that marketing is slightly more important but a lot of really smart people completely disagree with me and I wouldn't argue that too strongly. Now probably more than ever, like distribution is almost the moat. Okay, um, what I mean extreme example why everything the Kardashians launch turned into billion dollar companies. I'm exaggerating but like they do all really, really well. Like I would be, I would love to have even one of those things. Right. Um, distribution.

Speaker C: Yeah, it sounds simple but I mean I think you're right. It's kind of like I think when a lot of people look at marketing, they're not thinking about distribution point of view. And I know from what we're building right now, I'm actually thinking a little extreme going the new product we're building, I'm like why don't we just Launch it on GitHub open source, build a community around it, make it free, but have the ready to pay models on the side. And I mean look at openclaw like they didn't have any real models. They just said hey, it's open source. And then OpenAI came, came along and said hey, we need you off the market. Uh, you're now one of us.

Speaker A: No, I like that. I tend to think there's quite a lot of people who feel like they marketing is a checkbox they have to do and if they do that they're probably not very good at it. It's like, oh, I'm supposed to do some SEO, I'm m supposed to do some ads supposed to like post on social media. But like that never really moves the needle. It's really like thinking how to get inside of your potential customers heads and how to draw them in to you to um, create that awareness, make sure that they're thinking about you in like your spare time or even like that immediate action and Then like expand out from there and all these tactics of paid ads or meta ads or SEO or social media, all that stuff is just an extension of that.

Speaker C: So that would have been helpful for me to hear a couple years ago, but we'll move on. Um, so yeah, you've got capital pad. And every time I've looked at it from the outside, like I'm not an investor, I'm like, what a really weird business, like investing in boring businesses. But you made me look at it in a different way and sure enough I got some friends that are just like that. I'm like, you know what, I think a lot of people just kind of disregard them. They're like, oh, you're not that sexy. You know, scaling SaaS business, you got a boring business that when you talk to them you're like, this is just printing money. Like, this is probably amazing.

Speaker A: Yeah. Uh, the way I approach it is, I think if you are a builder, obviously not a like hammer and nail builder, but like a builder in the tech sense, uh, you'll probably do better building something tech enabled because it can scale. Um, but if you are investing, I tend to think that the boring businesses are probably better overall. I think the even, even take like the venture capital asset. It's a shit asset class. It's shit. I mean that I'm not, I'm not mincing words. It's a shit asset class. Like Maybe the top 10, 15 funds do pretty well. They do okay now. Um, and they get all the deal flow. I, outside of that, which normies like you and I cannot get access to, the returns just are not great. And there, there are exceptions and you hear about those exceptions. Um, and even for angel investors, right, the, the returns aren't the same. The way the deal economics have worked out. The angel investors are just getting ground down time and time again. Um, it doesn't come back. And so I invested fairly heavily in venture and stopped around 2018. And I've done, I've done good. Um, and even with that, I'm like, I'm not doing it again. It just doesn't make sense. Uh, so the, the tech side of this I think is, is not great. And the side of, even if you were to do more like the M and a side of a lot of like tech based businesses, it's too able to, it's too easy to be disrupted. I think, I don't think the moat is the same. And I want to invest in things that are very lucrative but also like are harder to disrupt. Right. And so that's why back the boring businesses, right? These, you know, the H vac industrial services, just like those are kind of the memes. But there's something to those of they're resilient, they're not going away and now they're more popular than ever. Well, it's starting to pick up and be like, oh wow, AI can't disrupt these as much. That's interesting. Let's go into that.

Speaker C: Yeah. Ah, maybe not disrupt, but definitely enhance. I mean you must run across a lot of these businesses and go, wait a minute, these guys need maybe some good SEO and some, you know, some social media and maybe a better booking system and you've got more profit.

Speaker A: I mean that's, that's the big thing you want to invest in these things that can't be disrupted by, by AI, but can be, can benefit from AI. Um, and you see that with a lot.

Speaker C: So is that how Capital Pad works? Like, are you actually part of that weird ecosystem where it's not just capital, it's also trying to optimize that business?

Speaker A: Or is that depends a little, not as much. Um, the, we started with smaller deals and with those who were a little more hands on offering advice. Like, I mean I was getting in, fixing some code myself on a couple of sites, optimizing the SEO. Um, but as we started doing bigger and bigger deals, which are better actually, also the people behind them tend to be a little more sophisticated. If a deal's doing a few m million dollars a year in ebitda, they can afford to hire pros to bring in and do the right thing. So it's just not needed as much. Maybe we'll double down again on that in the future, but not right now as much.

Speaker C: Yeah, so I just talked about using one example of AI where you could optimize things, whether it's SEO or booking systems. And everywhere I look, it's kind of like you look at a SaaS website, you look at a business or an affiliate and you can almost tell when they're not even using AI. Like you can test their customer service and you can, you can create all these metrics. Do you think the next two years is going to be like some weird cash cow where people are going to be looking for these businesses to acquire and this is going to be part of their scouting.

Speaker A: It's already happening for sure. Um, um, the unfortunate truth is when we get these pitches, sometimes they're like, oh, we're going to do this a. I kind of write it off. Uh, because so much of it's fluff. And so much of this is, is hard. Um, it's easier to say that you can have these AI synergies than to actually do them. I uh, assume that'll get easier and easier. But there is a lot of, there's a lot of real to it. For example, in some of the service based businesses, you know a AI that would improve route based density of the text so they're going the right order of stuff that would be very beneficial. It's hard to implement that. Um, the AI phone services, AI messaging, AI customer support, that, that is very real and having an impact already. But there's, there's, there's nuance to all of this. Um, there's going to be certain industries where you can essentially acquire some of these businesses and cut the staff in half, which uh, I don't love but it's, it is the game. Um, and those will probably do quite well if you can double margins.

Speaker C: Goodness. Yeah. Because actually like just talking about like you know, the optimization on that part, like one thing we did recently, like we just built a new app to basically build more apps. And so we're, we're pulling in all the data in. We took our Jira, our Slack and our Intercom, so this is our SaaS business and we just ran it through a couple reports and right off the bat we're like, oh, we've got two critical things to change right off the bat and if we hadn't have had this we wouldn't have known. And now we're going to add even more. Like we've got a whole other backend. I've got all my calendly data. Um, there's a couple other things. I got my QuickBooks data. So we're going to have like a pure insight center and like it's making real change quickly. And what's cool is that I'm uh, not meaning to turn this into another business but that whole recipe of what we built is actually really easy to replicate. We can actually just share it and say hey Internet, here's this. And if you don't use Intercom, you can use your whatever like your Zend or mean just replace any of them.

Speaker A: I think there's a lot of value for those recipes.

Speaker C: Yeah, so what would you do with those recipes then?

Speaker A: Um, I don't have enough solid knowledge on like specifics to give anything for that. Uh, depends. I mean you can give it away just and build up other things or I think there's, there's still just a lot of like, monetary value into, I don't know, as Peter Thiel would say, like, the secrets, right? Like, you know how to do this thing. People will pay to do that thing to make their life easier, make things run better. So how everyone do it?

Speaker C: I'm thinking about doing that where the software is open source and then the plugins are open source. And the plugins could either be we build them and we can monetize them somehow, or we can basically say, hey, if you want us to build your plugin as a company and put you in the marketplace, then that's kind of like a weird way they can grab more customers. And what I'm hoping from a flywheel point of view is like, how do we get these. All these SaaS companies and data companies to send people our way and saying, hey, you can. You can basically get, like, the equivalent of, like, free analytics. But where we could make money is by being a hosting company saying, we

Speaker B: have it for free.

Speaker C: But if you don't want to mess with GitHub and you don't know what you're doing, you're not comfortable, you're one click away from paying, like, you know, a pretty painless SaaS pricing.

Speaker A: I'm going to be honest, that business model sounds really hard to me. Um, doesn't mean it can't be successful. But it's definitely not an easy swing.

Speaker C: It looks easy, but, I mean, when I look at examples, I mean, there's companies like grafana or N8N that have printed a lot of money. Like Grafana does 400 million ARR. And their data is. And it's like, we think we can do a better product, but it needs, it needs, uh, the market share, I think.

Speaker A: Okay, yeah, yeah, yeah. Um, I don't know. But also, I don't have enough insight there. You clearly have more.

Speaker C: All right, I'll keep researching, but, um, I like the skepticism.

Speaker A: Um, I like the easy swings.

Speaker C: Yeah. Um, yeah, I've definitely not taken easy. Uh, moving on. Uh, the investment landscape, I think it's different. Like, I've noticed a change in us trying to raise money. Um, like, it's just been a weird ride the last couple years, and I'm always on X and going, what are people doing? Like, the markets are doing one thing that's really weird. I'm seeing a lot of criticism, as you've already said, like, the venture space, where I feel like sometimes these people maybe don't know what they're doing. Like, they're all chasing the same recipe, and it's kind of, like, there's only. There's only so much that can go around. Like, how are you guys making this work? I don't know.

Speaker A: Uh, all right, so what do you. What is the question?

Speaker C: The question is, uh, what does a retail investor do? Uh, what does a pro investor start with? Angel investors? Like, what do they need to do to. To get in the good space,

Speaker A: stop angel investing?

Speaker C: That's probably true.

Speaker A: I'm serious, actually. Like, the math just doesn't make sense anymore, in my opinion. Uh, but there's really smart people who have a lot more money than me that would disagree, so take that for what it is. Uh, I just don't think you're going to. Most individual angel investors will be able to get into the deals that matter. Right? There's 10 deals a year that matter, and all the others are fluff. And why can you get one of those 10 deals? I mean, if you're plugged in like that. Sure.

Speaker C: Right.

Speaker A: Sure. Uh, I'm not plugged in like that. I can't get those. Um, there are the hybrid angel investing, which is where you can influence the company a lot. Like, say you have a huge following in a certain space and somebody in that space wants you to invest. That's a great deal. But I don't consider that to be like the traditional angel investing, where you're just finding a startup and investing in it and moving on. Um, but I don't know. I mean, at the same time, companies are doing really big numbers really quickly, so I could. You could make an argument either way. Um, yeah, it just doesn't compute to me.

Speaker C: Yeah, but that's what I. I think. I think we're getting a weird volatility that people are not really sure what to do. It's like, I know for the last couple years, it was like the carrot was AI. It's like, oh, we're an AI company. And then everyone's just dumping money in AI. And I think now everyone's are like, well, if AI has gotten that good, it's like, how do we know that you're not replaceable tomorrow? And I think smart people know that, but I think there's a lot of people. I don't know, maybe there's just a lot of, uh, opportunistic money out there.

Speaker A: Yeah. I mean, at the same time, I think if you're not an AI company, you're not getting funded right now, that should be true.

Speaker C: Unless it's a boring company.

Speaker A: Yeah, no, but that's a legitimate thing. The boring companies, uh, the V. The VCs are starting to enter the space. Yeah. Um, they think roll ups are easy and just combine. I've, I've heard some really funny stories of this. Um, it will not end well. Probably, um, for a lot of ones doing it but you know, they're interested, but I don't know, there's infrastructure plays going on, there's energy plays going on, there's interesting things. I think the venture industry in general is like a great service to humanity overall is like building innovation, um, the returns. I don't know.

Speaker C: Yeah, it should be. With the exception of uh, some of our experiences where I'm like, okay, these people want uh, really unfavorable terms and I think if we accepted some of them, I don't know if we'd be where we are today. But there's other companies where the opposite is true. Like that, that venture capital really did everything for them.

Speaker A: Yeah, yeah. Both for sure.

Speaker C: Yeah. Last, uh, question I want to uh, wrap this up with is what do you think about the younger generation that's going through having to leave high school and going okay, am I doing college? University. I did university, but as soon as I graduated I went from engineering to professional gambling. I pissed off all my friends and family that they're so disappointed now. They're like, can I borrow some money from you? And uh, so it's a whole other discussion. I just think that these kids are going through like this pressure that you have to get the degree and the software that I just built in a short period of time. I'm like, there's people taking courses in business intelligence, two year diploma, spending anywhere from 10 to $40,000. And I'm like, this software is free and probably better.

Speaker A: Yeah. All right, so I think we can dissect that in a few different ways. One like university still is probably a really good time and a really good way to develop as a human. Right. It's a, it's a stepping stone for a lot of people. They leave the house, they're still kind of connected to their parents, but they're still kind of not. They're doing their own thing. They're learning a lot of new experiences, getting introduced to new stuff. Um, so there's that and that's definitely not to be discounted. Um, I think, I think moving into the world that we are now, um, a players are going to be more valuable than ever. People who are doers and builders and are self motivated are going to make so much money, they're going to do great. Um, it's the C players and below that, um, I am more worried about and the ones who are not self motivated, who don't learn about things in their own time and take that initiative, maybe they should go to college more because at least you have like that. Uh, I mean it's terrible but what like 95% of like undergrad university degrees now are just a checkbox on an application. But that checkbox matters in a lot of places. Um, a checkbox doesn't matter to me, to the people I hire really either. But definitely like you know, if I want to get a job somewhere, like no one would care if I went to university or not.

Speaker C: Yeah.

Speaker A: Um, but a lot of places like I don't Europe, like good luck if you don't have that four year degree. And a lot of other places too. It still really matters in other areas of the world. Still really matters for a lot of jobs here unless you have something special. So.

Speaker C: Yeah, but I think there's, you know, just a lot of companies I know for me it's like I've stopped caring about anyone's degree a long time ago. I'm like, wait a minute, this guy I hired as a programmer has no degree and he's amazing. And this one I hired with the degree was just entitled and not putting in the hours.

Speaker A: Yeah, yeah, pretty much. Um, no interesting correlation. So many of the deals that we look at, we're investing in are from people that went to some of the better schools, went on the um, NBA path, um, a lot of Ivy leagues. And they're impressive people. Right? Like they are more impressive than the average. Maybe that's because of the path that they went down. Like you don't pursue the finance esque, finance related, um, path without kind of being like plugged in a certain way. But I don't know, they're impressive individuals doing impressive things. So there's something to it. Um, even if it wasn't learned in school itself, which a lot of it probably is, um, the, the mind, the mind shift that they're getting to like be in this certain space is quite meaningful. Right. The things that they're being introduced to and are thinking about and pursuing they probably wouldn't have done if they hadn't gone to that university path and been around that.

Speaker C: So would you say that a players are maybe going to be more difficult to find? Like if they've got AI tools and they could be like a one man show build their whole company? Like I'm just looking at this going, you know, how do we retain Our A players. Like, I'm a little nervous.

Speaker A: You're not wrong. You're not wrong. Uh, the, there's, there's a pretty big divide between people who are kind of entrepreneurial though, and people who aren't. There can be really good A players that the world depends on, I depend on, but they're not necessarily entrepreneurial. Um, I don't know what the world looks like for them, but they might not build things as much.

Speaker C: Maybe it's just the security, but I kind of believe there's truth in that, like, and I see both sides of it. And for me, I've always been that crazy, you know, person, big.

Speaker A: Mhm.

Speaker C: I don't know. I just want to just keep building and doing and I've made a ton of mistakes along the way, but now I'm starting to learn from those mistakes and I try to watch what other people do. So, um, I'm m trying to put together what I think is my best skill and pattern recognition and be like, okay, you know what? I've been watching a lot of successful people go really far. I'm like, it's time to put some of this stuff in practice.

Speaker A: I like it, I like it.

Speaker C: Travis, thank you so much for doing this. I really appreciate it. And also, uh, appreciate the group you put together, the Snowball Club, and looking forward to seeing what else you come up with.

Speaker A: Oh, thanks so much. I don't know how much value I gave today, but appreciate talking either way.

Speaker C: For me, what I always say to a lot of people, it's like, you know, if I had to pay my guests money, which I don't want to do right now, but if I had to, um, yeah, this would be worth the money. Every time I interview someone, not only it's not just networking, it's like I get a chance to ask like all my dumb questions and really good questions that, you know, help me get better. So I appreciate it.

Speaker A: Yeah, I love that. I was looking through your list of guests and I was like, oh, I want to talk to him. I want to talk to him.

Speaker C: Yeah, awesome.

Speaker A: Um, all right, thank you so much. Thanks so much. Appreciate it.

Speaker C: Lets give a shout out to a

Speaker B: few affiliate program platforms that are supporting this podcast that includes IG Suite, Afilka and Intellytics. Thanks for the support. And if you're looking to launch your affiliate program or affiliate network, check out these software and learn more at RevenueOptimization IO. This is Revenue, um, optimization with Statstrome, where better data leads to better decisions. If you're not measuring it. You're guessing. See you next time.