He Said $35M Was Enough, Then Moved His Family to a 150-Acre Farm (Ryan Levesque)

Moneywise

Ryan Levesque shares his transformative journey from a Wall Street professional in China to a highly successful serial entrepreneur. After b

Key takeaways

• Ryan Levesque learned to 'emulate before you innovate' by reverse-engineering successful products like Scrabble Tile Jewelry on Etsy.
• He identified the danger of 'fad markets' versus 'evergreen markets' after his jewelry business collapsed following a short-lived trend.

Main topics

• Entrepreneurial pivots and market selection
• Private equity and M&A challenges

Notable quotes

Emulate before you innovate.

Conclusion

The episode provides a profound lesson on prioritizing values and pres

Transcript preview

Speaker 1 (0:00) Welcome back to another episode of Money Wise. I'm Speaker 2 (0:02) your host, Daniel. Speaker 1 (0:03) This one's different. I usually jump in every couple of minutes to drag numbers out of my guests, but today I ask one question and effectively just shut up. Ryan Levesque is the best storyteller I've ever had on the show. So this is our longest episode and I cut almost none of it. It's also the only episode I've ever recorded where I had to stop myself from crying mid-interview. So viewer discretion advised. I won't give you the full story, but here are a few pieces. Ryan quit his job in China the morning a WSJ headline said his company was going bankrupt. His first business was Scrabble Tile Jewelry, and he eventually got offers for $42 million and $70 million for a different business, which are two incredibly stressful stories he recounts. you'll hear why. At one point when he was 30 years old, he received a rejection letter from a life insurance company with news no 30-year-old ever wants to hear. What makes Ryan's story particularly interesting is that he amassed a life-changing amount of money. But due to a health scare and a wake-up call, he decided to radically build his life around the things he valued most. And radical is an understatement. His story really does go into parts of philosophy and life and value that a lot of stories in this show don't even touch. He now runs a 150 acre farm with his wife and two kids and 80 % of the food he and his family consume comes straight from his own land. He walks through the specific cost of running his farm and all the different intricacies that come with doing something as unique as what it is like to run a farm of this size. Listening to Ryan. was like listening to my dad tell a bedtime story. It's really that engaging, and I hope you enjoy the conversation with Ryan as much as I did. One quick favor, if you're listening to this on audio, please hit subscribe or follow. Audio downloads are how I get paid, and your boy got mouths to feed. please follow and subscribe. Lastly, a lot of the conversations I have on Money Wise are a direct result of the network I've built in Hampton. Hampton is a private network for high growth founders and CEOs doing $25 million on average. If you're looking for a group of people that will genuinely change how you view life, business, and money, look no further. Go to joinhampton.com. Now, without further ado, here's Ryan. Well, welcome back to another episode of Money Wise. I have a really special guest today, Ryan. And man, I've already learned so much about him and I feel like I've just barely scratched the surface. And so I'm really excited to learn a bit more today. And hopefully my listeners will be as engaged as I was when I first met him. Thanks for joining us today, Ryan. Speaker 2 (2:39) Daniel, it's great to be here. Speaker 1 (2:42) Thanks. I would love to just start from the beginning. I feel like when we first met, you just kind of told me your story all at once. And I was like, it was like a kid listening to his dad read a storybook. And so I would just love for you to start from the beginning. Tell me how you grew up, what money was like in the household, and kind of walk me through some chapters of your life. And I'll maybe interrupt here and there to ask some follow-up questions, but you're a great storyteller. And so I'd love for you to tell your story. Speaker 2 (3:08) That sounds great. Well, I'll start not the very beginning, but at the beginning. I grew up in a pretty blue collar working class household. My dad worked nights loading boxes on the back of a truck for the U.S. Postal Service and my mom cut hair for a living. Neither of my parents went to college. I was the first in my family. to go to college. And I studied neuroscience and East Asian studies at Brown University, and at one point thought I was going to go to medical school. I was fascinated with the brain and thought I was going to kind of pursue that path. But I decided it really wasn't for me and tried to figure out what it is that I wanted to do. So after graduating, I worked on Wall Street. I first worked for the investment bank Goldman Sachs, and then later had an opportunity to work for AIG, the insurance company. which promised to send me to China to lead and expand the sales office expansion across the country. And they were looking for a young guy like me who was hungry, young, could speak Mandarin Chinese, had a little bit of a background in finance and could kind of be this bridge. between home office in the United States and Asia. And so I did that for a good part of my 20s. My wife and I moved from New York City to China. First, we landed in Shanghai. Then my wife decided to pursue a PhD at Hong Kong University. So for the first three years of our marriage, we had this crazy... by country marriage. And it was very romantic. We'd fly to see each other on the weekend. She'd fly up from Hong Kong to Shanghai. I'd fly from Shanghai or whatever city I was in that week, opening up a sales office across the country to Hong Speaker 1 (4:49) Kong. Speaker 2 (4:49) And that's not Speaker 1 (4:49) close. I mean, a lot of people who maybe aren't as familiar with the geography in China, they're like, oh, that's like long distance relationship. It Speaker 2 (4:57) was long distance. It was like the equivalent of living in the East Coast. One of you living on the East Coast and then the other person living either in the middle of the country. like Chicago and New York, or depending on where he's flying from New York to LA. So we did that for a few years. And then in 2008, the world financial crisis hit and AIG was one of the companies that was really shaken up. And I remember walking into my office one day and the Wall Street Journal Asia edition headline read AIG to file for bankruptcy. And it was one of these moments that was a pivot point in my life because up until that point, I had kind of dreamed of starting my own business, but was really afraid to pull the trigger. And that was sort of like the kick in the pants that I needed to finally do the thing that I'd been dreaming about doing for so long. So literally that day, I... Called my wife. I said, go to WSJ.com. Take a look at what the headline reads. She says, what does that mean for your job and your career? And I said, I don't know, but I'm going to use this as the opportunity to do the thing that I've been talking about for so long. So I printed up a resignation letter in the printer of my office. The paper was still hot. I signed it. I walked into my boss's office, who is a president of China for AIG. And I said, I don't have great news for you here today, but I've made the decision that I'm turning in my notice. And he thought, who recruited you and who did who stole you away? And I said, the reality is it's nobody. But I just feel like now's the time. And I want to do my own thing. So I gave my notice. I donated everything that I owned. to charity, except for two suitcases worth of stuff, moved into student housing with my wife in Hong Kong. Yeah, in Hong Kong. And we decided to live on a tiny little island in Hong Kong called Ma Wan, which is an island in Hong Kong SAR that you can only get to by ferry. So it was this tiny little island that we were living on. She would commute to class when she needed to get to class. And it was on that island that I started my very first business. Real Speaker 1 (7:10) quick, when you heard about the AIG news and you decided to resign, about how much money did you have to your name at that point? Speaker 2 (7:18) Oh, goodness. It's a really good question. Speaker 2 (7:25) And, you know, I have not, this is going back quite a few years now. This is 2008. So we're looking at almost 20 years ago at this time. I want to say, I mean, I had a good chunk of my money tied up in a 401k. So I had a little bit of money that was saved away, but I had squirreled away as much as I could. You know, in terms of money in the bank, gosh, I have to say maybe it was like $100,000. So Speaker 1 (7:51) you were successful at AIG, but maybe still risk averse, leaving was scary. Speaker 2 (7:57) Oh yeah, for sure. And I could be, I'm not off by an order of magnitude, but I could be off by like $100,000. Like it could be $200,000. It was not half a million dollars. I'm pretty sure if I think back to that time. It was enough money that I had a little bit of a safety net, but it wasn't an infinite safety net. Sure. And at that time, I kind of, I remember having this sort of running the calculus through my mind. And it was, I could either invest a quarter million dollars and maybe go into debt to go to business school, or I could take a fraction of that and everything that I'd saved up until that point and invest it in starting a business and basically paying tuition to the school of hard knocks. And that's what I decided to do. And there's a time in my life where I laughed that I was the least educated person in my company when I went on to become CEO of our business. And I'll tell a little bit about that story. I mean, even my assistant had an MBA and my wife, you know, a master's degree and pursued a PhD. And here I was, you know, like a lowly bachelor's degree. But it was on that island that we started our first business. And it was a tiny random business. We found this website, which was brand new at the time. It's old news now, but in 2007, 2008, it was a brand new website called Etsy.com. And the cool thing about- Never heard of it. Never heard of it. But at the time, I had never heard of it at that time either. My wife had come across it just being in that world. And she said, hey, there's this really cool website. It's called Etsy. And there's this jewelry that's selling really well. And it involves combining scrabble tiles and origami paper. And when you put them together in a certain way, they create these pendants that people are buying like crazy. And living in Asia and having access to all of the origami paper that you could imagine, I thought, oh, we're really well positioned to potentially to do a business in this. But I said, look, I don't want to build a business that's going to tie us to any location. I don't want to have a factory in southern China that's producing, manufacturing this jewelry and we're exporting it. And I just don't want that life. So we shut the door on that idea until a few weeks later, she said, hey, I want to bring back the Scrabble Tile jewelry thing. And I know you're done with the idea of selling the jewelry, but take a look at this woman here. And the woman's name, ironically, was named Ryan. So I always remember that because there are not that many women named Ryan. And she had this business that was teaching people how to make the jewelry. And she would sell this tutorial on how to make the jewelry step by step. And what was fascinating about Etsy, and even it's true to this day, is that you can reverse engineer someone's income because you can see what their daily sales are and you can extrapolate how much they're selling their product for. And she was selling this tutorial for something like $30 or $40 at the time. And she was selling typically between 20 and 30 units per day. And when I ran the numbers, I'm thinking to myself, like, she's making almost $1,000 a day. And that's all margin. There's no cost of its soul. Selling a digital tutorial on how to make this jewelry. I said, this could be something. So my wife, Tylene, learned how to make the jewelry, created a better mousetrap, a better tutorial, because the... one I was describing was actually not very good. I mean, it was a Microsoft Word document with spelling mistakes and the images weren't even aligned. The lighting was terrible. I mean, it wasn't a very good product. So we thought we could build a better mousetrap. And it was a lesson that I took from that that I've applied my entire life, which is to emulate before you innovate. to find something that's working and reverse engineer. And before you try to go off and do something creative and completely different, figure out if you can at least achieve a baseline based on what's already working in the market. So we did that very thing. I'm sorry. Speaker 1 (11:54) I said, don't reinvent the wheel. I mean, it's perfect analogy there. Speaker 2 (11:58) Yeah. And so we went down this path. you know, first month in business, we make a few hundred dollars, then a few thousand dollars. And I think at our peak, we're making something like seven or $8,000 a month. And then, uh, I don't know if you heard about this, um, uh, in 2008, but there was another crash, which was the crash of the Scrabble tile jewelry market. No, I am not aware Speaker 1 (12:22) of this one. No, joking aside. I did play Scrabble with my family a lot growing up. So it's a funny little Venn diagram there. But tell me about the crash of Scrabble. It was Speaker 2 (12:35) a total fad, as you might expect. It was one of these things that just kind of took the world by fire for like a six month period and then just fell off a cliff. And so I kind of learned the hard way that when you go into a business, when you choose a business, when you choose a market, how important it is to choose an evergreen market. That if you go into a fad market, that it can take off really, really fast, but it can fall off a cliff. So we kind of went back to square one. And at that time, we said, well, what are we going to do? She was close to finishing her PhD. I was not making any income at this point because our business basically crashed. We decided to move back to the States. We decided to move back to Texas, which is where my wife is from. She got a job as a museum curator at the Brownsville Historical Association on the Mexico border in a very significant border town of Brownsville, Texas. And I started building our business. And I kind of learned the power of education and selling tutorials and selling how-to information. I also learned the power of not being in a fad market, but getting into an evergreen market. So the next business that we started was in the... was in the gardening space, which is the oldest hobby that's been around forever in America. And Speaker 1 (13:47) I want to pause here so that the listeners keep note of this because this comes into play in your story later. It comes full circle. Yeah, it very much comes full circle. Speaker 2 (13:55) Yeah, yeah, yeah. And when we lived in Shanghai, I just had this memory when I bought my wife a whole bunch of orchids, the flower, in our apartment when she came to visit. because I wanted to beautify the apartment. And otherwise, Shanghai is a, if you've never been, it's often like brown, yellow sky. It's overcast. It's like a, it's an industrial sort of concrete jungle. It's not a necessarily beautiful place. So I wanted to beautify the apartment. I bought a bunch of orchids. And by the time she came to visit, all the orchids had died. And I thought to myself, what did I do? Like, I can't be the only idiot out there who, can't keep these things alive. And so I started doing research when I was trying to figure out different markets to go into. And it turns out that orchids are one of these things that a lot of people have trouble. They're kind of finicky. They're finicky plants. And they're, you know, one of the widest grown flowers in the entire world. And so I started going down this path of, well, maybe there's a business we could build in this space. And so long story short, I kind of applied everything I'd learned in the Scrabble market to the Orchid market. And then we grew that business from nothing to about half a million dollars a year. And I realized, okay, this is a process I can replicate. So I started doing the same thing in market after market after market. And at one point, I had gone into almost two dozen different markets and these tiny little niche businesses like this and orchid care and memory improvement and scrabble tile jewelry and random markets that you wouldn't even think about. And my vision at that time was, I said, if I could get into 20 markets and I could build 20 half million dollar niche businesses, I'd have a 10 million dollar a year sort of micro empire, if you will. But what I quickly learned is that there was no ability to cross-sell products and it was very schizophrenic. And, you know, it was an effort to diversify and not be in any one market in case the same thing happened with Scrabble Tile Jewelry where it just kind of disappeared. I wouldn't be in this case where 100 % of my income would disappear overnight. But along the way, I started teaching and talking about what it is that I was doing and how I was entering all these different markets and started to get some attention. And I had bigger and bigger businesses that were reaching out to me, offering to pay me increasing sums of money to basically do what I was doing, but apply it in their business. And eventually I settled on this model where I would get paid a revenue share or royalty of the income that we would generate together. And so I did this in, for example, the golf market. partnered with a company and we grew a golf audience to about 10 million golfers. Wow. Hundreds of millions of dollars in revenue and ultimately sold that business to NBC, to the golf channel and NBC. How Speaker 1 (16:47) much did you sell for? Speaker 2 (16:47) It's now called Golf Pass is the brand. I'm very Speaker 1 (16:50) familiar with the Golf Pass. Yeah, yeah. So Revolution Golf. What was the sale Speaker 2 (16:53) price? Uh, it was, uh, over this one. I don't know that I'm allowed to share cause I don't know that it's been shared publicly. I can say it's, it was over a hundred million dollars. It was a nine figure, uh, sale. And you made Speaker 1 (17:06) what Speaker 2 (17:06) from that sale personally? I made a small, I got a small piece of it because I wasn't a majority partner in this business. I got a small piece of it. Five million? No, no, no. Like less than, less than seven figures, like a high six figure. Yeah. Just Speaker 1 (17:18) a small thing. Speaker 2 (17:20) This wasn't the big. moneymaker for me. It was the, there's money to be made doing what it is that I'm doing. It was like the first time that I saw like big money knowing the tiny little piece that I got. And then, so I did it again in the business funding market. I partnered with an entrepreneur and building a company called Swift Capital, eventually sold to PayPal. This one I think is public. I think it was $168 million and rebranded around Loan Builder. And basically what I had developed was this methodology using assessments and diagnostics and quizzes and surveys to not only figure out what it is that people want to buy in different markets, but build marketing funnels that sift and sort people into different buckets and customize the messaging and the offers that you put in front of people. I've used a lot of Speaker 1 (18:13) tools like that. There are a lot of tools like Speaker 2 (18:15) that, but this is 20 years ago. You have to remember that. Yeah, right. Before Speaker 1 (18:18) it's time for sure. Speaker 2 (18:19) Before it's time. Yeah. From Speaker 1 (18:21) that, did you make a good stake from that or was that a minority Speaker 2 (18:24) stake? Speaker 1 (18:24) Again, another small Speaker 2 (18:25) sort of exit. Yeah. But what it kind of gave me was this confidence that I think I have something here. And so a few years later, I decided to write a book. The book is called Ask. And it really revealed sort of the methodology that I developed and that I was implementing in all these different markets. And surprisingly, the book went on to become the number one bestselling book in the country the week it launched. Not in a category, not in like a random subcategory, the bestselling book in the country. It just took off and it was not something that I expected. And I shared my story of what had happened in my life and how I had sort of built this. And I shared the methodology. And the book really served as the cornerstone for what became the company that generated most of my wealth, a company called the Ask Method Company, where we started teaching and training people how to implement this methodology. And I could name, you know, You know, if you look at the family tree, the lineage of companies that are using this sort of marketing methodology in their business, you could pretty much trace almost every single one of them to the work that I worked on and introduced into the marketplace. Companies like Noom, if you're familiar with Noom. You know, students, clients, automatic, WordPress. I mean, I could go on and on and on the number of the companies that you would recognize, name brand companies who have, you know, gone through what it is that we developed. So build a training and... education company. And then very quickly, the need in the marketplace was a technology to implement what it is that we're doing. Because people were sort of hacking together Google Forms, or they were using SurveyGizmo or, you know, in other cases, Typeform and products like that to try to make the methodology work, but it didn't really quite fit. So we built a technology product, scaled that. And collectively built a seven-time Inc. 5000 company, generated well over $100 million in revenue. And this takes us to about 2021. 2021 sort of had this feeling that, okay, I've been on this path now for more than a decade, and I'm getting kind of tired. And I've got two boys, two kids that are growing up faster than I could ever imagine. And a few things happened in my life, which I'm happy to talk about in more detail, that kind of led me to say, all right, I think I want to sell this business. It's time to get out. And so 2021 comes around. We take the business to market. We hire a business broker. And we get a bunch of offers and get into an exclusive with a private equity firm, go down this path. It was a majority recap for $42.5 million. Speaker 2 (21:25) And we take that deal pretty far down the line. And sort of at the 11th hour, they decide that they're going to flip the terms of the deal on us. And they're going to do a minority recap. And instead of $42 million, we're going to walk away with $17 million. Why did that happen? It's a move that private equity does. Like I've learned, you know, sort of- Ice the kicker a little bit? Yeah, it's a little bit like, yeah. I mean, they will, you know, private equity- Not to say that everybody in private equity is disingenuous and dishonest, but there's certain moves, sort of like I was watching my son's soccer game the other day and we were at a tournament and the opposing coach was doing this move. The opposing team was up one, nothing. And to burn out the clock in the second half of the game, he was subbing every time that there was a. a stoppage of play, he would sub his players and he would sub whichever player was furthest away from the bench. So let's say the bench is over here. You've got a left back that's like in the far corner of the field to maximize the amount of time it takes to sub out a player. Now, is that against the rules? No. Is it kind of, am I allowed to swear on this or do I have to keep it? Go for it. Is it kind of a dick move? It's a total dick move. Yeah. Right? How old is your son? These are like at the time he was 13. Speaker 1 (22:50) Yeah. Especially for 13, man. It's like, come on. Well, Speaker 2 (22:53) that's why, I mean, I was, you know, doing a little heckling. I was like, great job teaching your players what good sportsmanship is like. Yeah. Congratulations. Like, well done coach. And so is it against the rules? No. Is it kind of a dick move? Yes. And I think there are a lot of these dick moves in private equity that I've since learned, having gone through the process a few times now. And this is one of them. You get a majority recap at the 11th hour. Hey, by the