Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy where I interview entrepreneurs about how they built their businesses. And I do it for an audience of real entrepreneurs. I actually believe in the future that just calling anyone entrepreneur will be redundant, right? If you’re a human being, you’ll basically be an entrepreneur. Oh, or maybe we’ll assume that everyone’s an entrepreneur. And then, there’ll be some outliers, some people who are not because they happen to work, I don’t know, for the government or something.
But for the most part, we’re all shifting towards that. And if we are, it’s the type of thing where there’s nobody telling you exactly what to do and how to get the result that you’re looking for. You got to figure it out yourself and figuring it out yourself really doesn’t work nearly as well as hearing how other people did it, getting ideas from them and getting fired up because you get some really good, insightful ideas from people who’ve done it too better people and more importantly, who’ve done it and gotten further than you have. That’s the way to just keep growing and building as an entrepreneur.
Anyway, so what does this have to do with today’s guest? Today’s guest is a former laborer, started a company in real estate, and then said, “You know what, I actually want to help people much more than this first company and did. I have this vision for helping the world.” His name is Peter Rex. He founded this company called Trustwork. I downloaded it onto my phone. I went on to it. And what I saw was I could hire somebody to be a handyman and come fix my place. I can get apartment turns, which I didn’t know what it meant before I started talking to Peter but I know now. I could get somebody to clean my place. I can find a general contractor. And if I want to list myself as all those things, I could. I could do it.
And so I invited him here to find out how he built up this business and this app and how we grew to the kind of revenue that my team told me he had. And we could do it all thanks to two phenomenal sponsors. The first will help you publish your book and I know you don’t want to publish a book. So I’ll tell you why it’s here. It’s called Choose Yourself Financial. If you know James Altucher, that’s the guy behind it. And the second will help you host your website right. It’s called HostGator. I’ll tell you about those later but first, Peter, good to have you here.
Peter: Andrew, great to be here and great to be with your audience, the freedom fighters, happy to just be able to engage them.
Andrew: Revenue-wise, what did you guys do?
Peter: So revenue, we don’t discuss those numbers. My previous company, which is still alive and well, it’s about 150 million in revenue annually. And it’s growing I would say, you know, not at a very fast pace right now, but still growing to say 10% or so percent. This current company Trustwork, which is only about a year and a half, two years old, is growing, you know, the fastest company I’ve ever had as far as the growth rate month to month, but the revenues, I’m going to keep that private right now.
Andrew: Can you give me some sense of it? Because I don’t want people to thinking that you started out with $1 then you doubled it and now you’re at $200 which is a great percentage-wise but not nearly as impressive as what you did. Give me a ballpark, over 5 million, over 10 million, over a million, whatever you feel comfortable with. I just want people to get a sense of size.
Peter: Yeah, no, absolutely. I mean, look, it’s so early stage, that’s another thing. I mean, depending on even when this podcast is listened to, it’s going to depend on the number I’m giving you but it’s above $5 million annual revenue and it’s grown at about 30% month over month, but that number could go up or down. I would say that’s been the average so far. That is an unsustainable average. And it’s not something I’ve ever had happened where it was growing this fast. But we’ve also done a lot of hustle on this up front before I even launched the company. So that’s why I think we’re having some success early.
Andrew: I saw.
Peter: That’s where we’re at.
Andrew: And the hustle we’re going to get into because that’s one of the big reasons why you’re doing so well. The other part is your focus. You said, “Look, this is going to be a place where anyone can buy anything essentially or connect with anyone.” Am I right? But we’re going to start with real estate.
Peter: Yeah. I mean, reversing back up, you know, just to also for the audience to give them a little bit of credibility. But one of the things when I was starting out, you know, 13, 14 years ago was, before I’d listen to anybody, but there’s so much material out there I think, you know, who is this person? You know, can I trust them?
You know, I give you people, you know, a little background. I built the company a billion and a half dollars in assets real estate company, privately owned, controlled by me. And I visited 85 countries when I was putting a plan together for this Trustwork company. And it’s going to be the biggest company I ever built. And that’s my plan and I’m going to make it happen or my team is going to make it happen.
Andrew: Let’s talk about that previous company. Let’s talk about that company in depth.
Peter: Excuse me.
Andrew: I agree with you, I think, where’s this guy coming from? It was called InvestRes.
Peter: Yeah, absolutely.
Andrew: InvestRes invests its own money in residential real estate. Well, it gets money from investors and then invests it in residential real estate, am I right?
Peter: Yeah. So what I’ll do it for the listeners here, a lot of them are either entrepreneurs or they’re going to be entrepreneurs, or they’re trying to, you know, improve their trade, learn some tricks, whatever. You know, when I started out, I came out with a philosophy degree, kind of political philosophy degree in government out of Georgetown University, didn’t know a damn thing in business, never even looked into the business, never thought I wanted to be in business.
Felt called to go into business and decided to go in which is a complete change. I mean, my friends almost felt probably like I was selling out on my true self, you know, because I’m extremely idealistic. And so long story short. When I decided to get into the business, I came to the real estate side because I couldn’t get money for anything. So I didn’t have access to capital but with real estate, I could buy something small and get some money cobble together $1,000 here and there and buy something small. If I knew what I was doing, I could get a . . . I could flip, I could get money . . .
Andrew: Like what? What’s the first thing that you bought?
Peter: First of all, I bought a few four-unit properties which would be small multifamily, you know, real estate properties. And what you can do is . . .
Peter: I bought them in the New York area.
Andrew: For how much?
Peter: You know, I’m not sure of the details about 13, 14 years ago.
Andrew: Just ballpark, here’s what I want to get a sense of, New York real estate it’s not inexpensive. I can’t believe a philosophy graduate whose parents were in charities, they were nonprofits, has the ability to come out and suddenly buy real estate and understand it. I want to know like how you formed. If we go into the high-end stuff how you got into the millions, it’s [overwhelming for me 00:06:21]. Give me a sense of the small . . .
Peter: Yeah, yeah. I’ll drop it in very fast here for the audience. Basically, I used real estate [adventure 00:06:30] point strategy because I couldn’t get capital but I was able to cobble together money here and there and leverage line of credit off friends of mine. So I had a brother who’s still a partner of mine, actually. He’s past now but he’s a great partner. So I would say listeners to just choose partners well early, but he was an awesome partner and then another partner is actually still with me, Dan French, and he’s still crushing things actually.
But these guys were kind of critical, I was able to use their credit and their, you know, a little bit of their cash, hustle together, cobble together assets here and there and within about, say two to three years, I was able to put a portfolio together. But I’ll get to the bad part of the story quickly for the audiences. I did very well in my first two years but I didn’t really do well because I was good. I did well because the market was ridiculously overpriced and moving fast upwards but then I hit the Great Recession.
Andrew: I’m sorry, Peter. We’re going too fast for me, I want to understand this. You’re a guy who just decided, you know what, I’m going to buy a four-house unit, I’m going to rent it to four different individuals, it was doing well you kept doing more of those and they kept doing better and better. And the only reason that you did well was because you had access to money through friends and the market was heating up. Is that right?
Peter: I mean, you know, I didn’t have access to a lot of money. So, literally, I was cobbling together $1,000 here and there, so I didn’t really have access to capital, but I was able to . . . When you first get into the business, unless you already know what you’re doing. I didn’t know what I was doing. I mean, I did. I read a ton of books, they all had this type of stuff, I didn’t have access to podcasts, which are now available. This is about 14 years ago. So I jumped in, didn’t know . . . I thought I knew I was doing this time, but you got to get in the game, you know.
So I did get in the game. About two years in or about three years in 2007, 2008 hit, and the Great Recession came, but I was highly leveraged because I didn’t have a lot of equity. So I had to use a lot of debt from the bank. But this ended up clobbering me in the downturn, and I barely, you know, came out of that alive. I mean, I was at Harvard Law School, actually, at the time, trying to get the Harvard network in order to use that for furthering my purposes of getting capital, making moves. Ultimately, I wanted to figure out the way I can have the biggest impact of people through business, but I kind of had to hack my way into it, you know, so that’s how I got in this position, at this time. This is like, like 10 years ago. I’ll give you the quick version . . .
Andrew: I don’t want the quick version. No, no. We’ve got an hour. I want to take time. You’re here because I want to learn from you. So you had how many properties would you say you had and how much debt would you say you have when you went to Harvard Law School? And as you said, you didn’t go to Harvard Law School because you want to learn law necessarily and be a lawyer, you wanted to get that network, because you knew that would help in your business. But give me a sense, how much debt, how many properties just to get a sense of the height and the low?
Peter: Yeah. I mean, I’m not going to get into specifics, Andrew, but I’ll give you a ballpark.
Andrew: Ballpark. Are we talking about like $1 million worth? A hundred million?
Peter: It was in the millions. And I mean, it was in the millions and I definitely, you know, I ate it pretty hard. I mean, I was doing fine. I really felt that I was really on top of the world. I was, you know, knew what I was doing. And then when the Great Recession started hitting, I felt that before really anybody else felt that because what happens is the economy starts, you know, constricting. And if you have rentals, you start feeling it in different ways. Vendors have problems, maybe they fall out on you, maybe they start demanding things on you, or you don’t get payments you are expecting.
But for me since I was highly leveraged, if you have a lot of debt, you just feel that pinch much quicker. So I felt it so quickly. And that that caused me to react which probably saved me from ultimately going under in bankruptcy or something because I was able to react so quickly to it because of how painful it was. But I did a number of I would say pretty dumb things during that time period, which, you know, there’s never going to be . . . I mean, they’ll be another crash, but maybe not as big as this one was. But generally, you want to keep your head together.
And during this time period, I started getting, you know, somewhat frantic. I was like, all right, like, I knew I wasn’t going to give up one way or the other. But I was starting to feel like I was going to lose my hair. I had Harvard Law, you know, Harvard Law School, like the deans and people are saying, “Hey, you’re not going to class.” You know, I wasn’t going to go to class, really. I wasn’t planning to go to class anyways. But especially now that I was having, like, this type of existential issue was happening. I didn’t really, you know, what’s the point? If I come out of Harvard Law School, what are they going to pay me? I’m going to pay off this thing for like 50 years. So I had to figure out what to do, you know?
So that was kind of position I was in. Ultimately, I was able to you negotiate my way out of the situation. But I had to . . . I lost everything basically that I put together. And I started from zero or maybe slightly negative zero because I took out loans from friends at the time. So I was like, hey, I started calling my close friends, I was like, “Hey, I just need a little bit of money to float things.”
Andrew: And float things meaning just so you could get by personally, pay the rent for yourself.
Peter: Pay the rent, also pay off bills, stuff like that, because I was starting to go negative, I had reserves setup, you know, and I started draining through that in the Great Recession. Then I started taking out loans. I mean, from friends, and I was like, “Hey, I need some money.” And these are people that can’t lose the money. I’m from upstate New York, you know, these are people . . . hard working class people, and I was borrowing money from them.
I mean, I’ll give you an example. My sister called me one time. This was around Christmas too. I didn’t stop working. I was working around the clock till I got this situation figured out. But basically, it was a real tough time but I, you know, I learned the lessons of business in a very hard knock way during this time period. And I would say, well, what . . . . bottom line is I ended up coming through it.
But to give you an idea of the stress levels of it, sometimes I don’t like talking about this stuff and actually for . . . even maybe two to three years after I just wouldn’t talk about and I would just say, “Hey, I’m not talking about this.” Because it would make me go back to the experience where I feel like my hair was like, you know, going to fall out or something. Because I remember like the tingling, you feel like you’re scalp’s tingling, you’re not able to sleep as well.
But anyways, I turned the corner psychologically, where I realized, you know what, my things are all right, you know. My partners and I were having some, you know, we were beefing with each other. Blaming each other, “Hey, it’s your fault. Why aren’t you doing this?” This was starting to happen too, and we’re friends and these are great guys.
So we ended up meeting together for beers, and we laugh and have a good time. So listen, we opened it up, like, listen, friendship comes first. And we’re going to figure . . . I told I told them listen, “I’m going to figure this out. We’re going to come through this. I got us in this situation, and I’m going to pull us out of this damn thing. But I don’t know how I’m going to do that. So I don’t have a clear path right now, but I’m going to figure out this for you guys, and I got you man, but like right now, let’s have a good time, because we were at each other’s throats for like two months, you know?”
Peter: And that was it. I mean, we kind of turned that corner. I mean, give you that idea. My sister called me one time and she said, “You know, you better not lose, you know, one of the relative’s money because I borrowed money for someone during this time period.” And I was like, I know, I’m not going to lose the money. Don’t worry about it, all right?”
What I ended up doing was I did lose all the money. So, but I paid everybody back with compounded interest like three years or four years later. I had earned it all back in, so that’s why I say, when I came out, I did lose everything but I actually was in the hole. But I wasn’t in the hole with millions at that point. I was in the hole in a way, I would like, pull myself out.
Andrew: Let me pause again and just be sure that I understand this. What did you do to. . .
Peter: And it kind of totally closed the loop on it, though.
Andrew: No, you were closing . . . before we close loops. I’m not getting enough specifics. So all I’m hearing is, things were really hard, bad recession, I got into debt. I won’t tell you how much I had or what we had and then we turned things around and things are good and I learned a lesson. Great. That’s not as useful as here’s what I negotiated. Here’s the way I negotiated. Here’s the outcome, even if you can’t get into specifics, the understanding of how you can go from owning a bunch of money to undoing that is useful.
Peter: Yeah. I mean, so you’ve got to think about from the other party’s standpoint, right?
Peter: So everybody on their side in the Great Recession, they wanted to get out of the situation as well. But they didn’t want to be left in the lurch where, you know, “Hey, sorry, guys, this didn’t work out, man. I’m out of here, peace, you know.” But they didn’t want you coming out ahead if they didn’t come out ahead. So you had to think about it from their perspective. So that’s what I did.
And the arrangement was basically I had to sell everything and manage it myself until it was totally sold. So, and that’s what I did. I just basically had to agree to sell all the assets. But for me, that was a win because, you know, the only thing . . . this is kind of like an internal thing. But the only thing better than being a negative millionaire is just being just broke. So, when you’re just broke, you don’t owe people all this damn money. So when I kind of shed myself in that situation, I felt like, man, this is amazing. I mean, I was pretty burnt, you know, but I was like, man, I’m going to come back with even more [ferocity 00:15:22].
Andrew: I’m sorry. We still don’t have enough specifics. What you’re saying is, you want to take care of their interest and not show them that you’re walking away. When you say they, are we talking about the bank who lent you money?
Andrew: So the bank will lend you money . . .
Peter: Yeah. What ended up happening in the Great Recession, all the properties just dipped in value. You know, whatever. Everybody knows what happened, you know, 50% of value just dropped right over and in the course of say, 12 months.
Andrew: Yeah, yeah. So what did you do specifically?
Peter: So what I did was I ended up talking to I had to negotiate with the banks and say, “Listen, you know, I want to get out of this.” And they were like, “You know, no.” And I said, “Well, you know, what do you guys want basically?” And they were like, “We don’t want this stuff. You’ve got to handle it. And you’ve got to sell everything.” And I said, you know, obviously, I said, “Why do I keep it? I really . . . ” you know, you have this emotional attachment to all your work. You know, I worked like two to three years without sleeping basically, I was sleeping on floors, keeping the cost so low. I didn’t even have like a car. I was like, totally just doing everything in bare minimum costs trying to save everything, dumping it back in.
Andrew: So you said to them, “I will sell all this and then give you whatever’s left. And I won’t owe you anything even if it’s less than what I owe you. If I get back less than I owe you, then I won’t know you anything”?
Peter: Yeah, I mean, and that was enough. But I mean, I had to manage everything, sell everything and that’s it. You started from . . . at that point they agree to . . . I’m not saying this will always work, by the way, but in a situation and that’s why the listeners need to kind of discern what they’re hearing, right? Today in today’s economy, no, that’s obviously not going to work. But in a Great Recession, you know, no one really has a choice.
Andrew: What did work? I still don’t know what worked, Peter? What we’re saying that worked is you went to the banks and said, “I’m going to sell for whatever I get, you take what you get, and I won’t owe you any more, is that it?”
Peter: Basically, I said, “Look, we’re going to sell for maximum market value.”
Andrew: That’s it.
Peter: Yeah. You’re only going to get a market price on things. But the deal was I had to manage and sell everything and in that case, and they would say, “Okay, great, you’re out but you’re not out until everything’s totally sold.” So that was basically the agreement I set up with the bank . . .
Andrew: And by out, you mean you had to manage it until it’s all sold. You had to make sure that the tenants . . .
Peter: Yes, maybe this took about 6, 7, 8 months of work.
Peter: You know, you’re working for free but you’re not . . . to me it’s the freedom I was working for. Like a freedom fighter rather than you know, profit because, you know, you’re not going to get anything at the end, right? So . . .
Andrew: But they still said to you, you won’t owe as anything just sell for market value, manage these properties until it’s sold. You won’t owe as anything afterward. We’re not going to ding your credit.
Peter: I mean, some of this stuff is on the, you know, non-disclosure agreements and everything else, but I’m speaking in broad terms here. But generally, yeah, I mean, the markets down, I agreed to certain terms, I had to hit. I did hit my side, they agreed to do something in return, which was I’m out after it. It was more like, “Hey, you swallow these pills and do all this stuff. And then we’re good but in no circumstance are you out without doing these things.” And that was the deal I set up and other stuff is in some, you know, you agree to non-disclosures, everything else because I’m sure these . . . They don’t want people thinking that they can go set up something like this, you know, but this is not a repeatable situation anyway. So that’s just . . .
Andrew: And what they were trying to avoid happened was, you say, “Look, I’m bankrupt, you guys take the properties. I can’t owe you anything. I’m walking away and then it’s all on them to deal with it. Is that right? That’s the downside they were protecting against?”
Peter: Also, you know, I know the properties better than everyone else. I know the assets better than everyone else. I can maximize the value. I was running it super low. I mean, they’re smarter, I was running at very low cost and keeping cash flow pretty high on the revenue side, and able to send them a lot of money every month. And they knew that if they took this over they couldn’t sustain it. It was not really a hopeful situation for me or for them. So it’s basically, what’s the best in the world for them. And if I can attain that, they’ll take that and that’s basically how I set it up.
Andrew: Was it mostly residential that you owned?
Peter: Yeah. It was all residential.
Andrew: Under a dozen or over a dozen properties?
Peter: It was about 24. So, I mean, I had about, you know, I had about maybe 40 loans all personally signed. So it was a real, like, you know . . .
Andrew: That’s a fast rise, over how many years?
Peter: I mean, it was probably about two years, two to three years.
Andrew: Okay. All right. Wow, that’s super-fast. All right. Let’s come back in a moment after . . .
Peter: If you see in the company, Trustwork, if you see some of that in the virtues, I bake in stuff, but this stuff comes out of my experience where I say calculated boldness.
Peter: Because being bold is good but if you’re not calculated, it’s kind of, you can get yourself in a bad position. You just come out swinging too hard.
Andrew: The worst year for real estate was 2008. 2010, just two years later, you come back with this new business. We’re going to talk about in a moment. First, let me talk about my first sponsor. It is, every time I say the name of the company, nobody cares. Here’s what the people care about a guy named James Altucher, and the reason people care about James Altucher is boy, this guy’s made a name for himself.
I remember opening up “The New York Times.” I hardly ever open up the paper version of the times. I somehow open it up, one of those inside sections. I don’t even give a rip which one because I don’t read the paper of times. Here’s what I cared about, a photo of this guy going into a taxi. They are championing him as the modern-day hero of Gurudom because he gave away everything that he had. He decided he wasn’t going to have his own house. And we’re just going to like travel and live in people’s homes for a while.
And had a bunch of quirks like, in the photo, he was carrying a suitcase full of $2 bills because he discovered that people value $2 bills much more than they value to individual $1 bills. So it’s this kind of thing. And he built a name for himself by writing and publishing books. And he said, “You know what, I shouldn’t be the only one to do this. There are other people who should be publishing books, and I can help them do it.”
And I was trying to figure out why? Why does he care about it? What’s the benefit to my audience? Why would anyone in my audience even care about it? And then I met and got to know this guy, Nathan Lustig, when I wanted to go to Chile and interview entrepreneurs in South America. This guy literally wrote the book about how to do business as a venture capitalist, as a startup in South America, examined every one of these countries. I read the book cover to cover. And what I saw was, he basically took old blog posts and podcasts and turned them into this great compilation that was a book and felt more valuable than a set of blog posts and a set of podcasts.
And because he did that, he had not just more reputation with me and yes, I was willing to fly in and trust him and his team to hook me up with interviews and do whatever they told us to do, but others investors, entrepreneurs, startups, people there and people everywhere who invested in his company took it more seriously because of this book. And that’s what James Altucher is trying to do.
Now, this is kind of a quirky thing. And frankly, James Altucher is kind of a quirky thing. You may not have woken up this morning thinking, “I want to publish a book. I need to publish anything.” You might have just said, “You know what, I want to listen to Andrew.” Let Andrew do the publishing, let Andrew do the work.
But I’m going to suggest to you that you should hook up with what James is doing and get a read on what he’s doing this could actually change your reputation and change your life. The guy knows how to lead you through things in a way that just makes sense. And I kind of like how open he is about stuff.
Like I’ll tell you, Peter, in my interview with him. He told me that he wanted to kill himself. I said how he literally went. He said, “Andrew, I don’t think I should talk about it.” I said, “Yeah, this is Mixergy, you should talk about it.” He went through step by step how he’s going to kill himself, like, gave basically the process. I go, “This guy is intense.” Anyway, he went from there to these great heights. A lot of it is through . . . I’m going to say 99% of it is through publishing. And the other part is that quirky personality of his that he’s publishing that.
If you want to know more about this, he’s not even giving you a website address. He’s recognizing the most of us are on phones right now. He’s saying, Andrew, try this. Tell your people to pull up their phones in the text app, they should text this number 50445, that’s a number you should send a message to. Send a message to that number and the message should just say, Andrew, all right? So, instead of texting a friend, instead of texting some random business, you’re going to text 50445 and text them the name Andrew, they will follow up with you. And I promise they’re not going to send you a bunch of spam in your text.
I actually didn’t like the messages they sent the first time. I said, “Nope, that’s not good for my audience.” They spend time with our team and readjusted them so that it’s perfect for you. So I won’t let them spam you, but I also won’t let them send you stuff that’s not perfectly written for you. They did it great for you. If you’re listening to me, you should go check out what James is doing. Pull up your phone in the messaging app right now. Dial this number 50445 and text the name, Andrew. I wish that 50445 was a little bit more melodic or had some rhythm to it. 5445, who’s going to remember it? Maybe people remember it. I wish I had a better memory. 50445. Text the name, Andrew to them. Peter, how’d you get started then with InvestRes?
Peter: Yeah. With Trustwork, me, right?
Andrew: No. Let’s go to a little bit of InvestRes and then go into Trustwork.
Peter: Okay. I got you, I got you.
Andrew: Just a bit of a taste of what you’re doing there.
Peter: Yeah. I’ll give you some timelines here more or less, more or less between 2008 and 2010. Economy’s crashed. I don’t know how the listeners how familiar they are and what happened but it was the Great Recession. The economy dropped something along the line not as bad as the Great Depression 1930s but you know it was pretty systemic collapse across the board.
While that happened, it created somewhat of depressed morale up with a lot of people. I also myself got, you know, like I just told everybody got pretty well, you know, my head handed to me, learned some hardcore lessons, but was able to come out and fight another day. So that was the kind of that key position I was in, in my mind. And I also felt somewhat of almost like a resentment, sort of like what I went through and like I’m coming out even harder now. Because I felt like I really needed to prove myself and I was going to be even more successful as a result somehow and take these lessons and come at it and be more, you know, more aggressive than I was before. And I was pretty aggressive before.
Andrew: More aggressive? You didn’t become a wuss after that. I don’t think most people would have come back bolder. They would have come back scared. That’s impressive about your personality, okay.
Peter: Yeah. I mean, it probably is a personality trait. But who knows, right? Either way, I just had this determination, I was going to come out even more hardcore than ever. And I did so in 2009, 2010. But unfortunately I was still at or fortunately, for in my position. Unfortunately, I was still at Harvard Law School during this time period, for the three years and I couldn’t really get anything going, because I couldn’t get anybody to give me the capital. I had lined up some deals. The deals basically fell through. I didn’t get them in contracts because I couldn’t line up capital.
Because I’d find very wealthy people, I’d go and find them and say, “Listen, this is my background. I know what I’m doing.” And they would, you know, sit down with me, they hear me I’d be very interested. And the deal killer would be like, “Wait, hold on, are you at Harvard Law School?” And I would say, “Listen, I am but I’m telling you, it’s not what you think. You know, I got this. I can handle this thing I’m doing plus finish that.” And they were just like, “It never works, like zero, no traction.” So I just kind of gave up on that.
I did a CPA exam. I did a CPA license. I didn’t have any accounting background during that same time period. I couldn’t really get any traction. I did do some deals though. But it was on a smaller scale. I did a maybe a few million or something like that of buys during the time period. But I had lined up like a $60 million deal, which I could not get done in Boston, which if I had done it, I would have, you know, tripled my money out of it.
Andrew: Oh wait, this is . . . you found residential properties that you could buy at a deal that you felt good about. All you needed was money to put a down payment so that you can buy the properties and then rent them out and you couldn’t find people to give you money for the down payment, because you were still in school. Is that right?
Peter: Yeah, exactly. In Boston, I was in Cambridge. And I hustled together a bunch of properties at the same time owned by the same owner. So it could have been one deal, because Boston has a lot of smaller properties similar to San Francisco, you know, they’re like maybe three a unit of a duplex or four units. So I lined up about 60 million of these things in a string owned by one owner. And I basically got this guy to meet with me and he was pretty pissed off. And when I finally got in front of me, he called me like, “You know, you’re an A-hole.” And I said, “You know, I don’t know why I’m an A-hole.” “You’re the most persistent person.” He’s like, “What the hell do you want?” I said, “Well, I’m interested in buying your properties.” He said, “You’re going to buy a property with what kind of money?” I mean, it’s like the worst time ever, but I knew he must be interested because everybody was, right?
Because it was like, everybody was hurting. So I said, “And this was me on the rebound.” So I was like, man, I’m coming at this thing. So I said, “Listen, I don’t have the capital right now, but I’m pretty confident I can get it.” So I was able to line up all the deals, everything else. And he happened to be all right about it. He heard me out. He realized I knew what I was talking about in business and but then I couldn’t get the . . . I had lined up the capital sources. But I couldn’t get them closed. It just they just wasn’t having it. They weren’t buying into my, you know, Harvard Law School is not as bad as it seems type of line. It’s true, honestly, but and I couldn’t get it done. I’m telling you, 100% but they just weren’t believing it.
Andrew: Peter, what do you like about . . . ? I’ve never bought real estate before. What do you like about these properties? Tell me how you as an experienced person thinks about these properties and what excited you about them?
Peter: So, I mean, what excited me was I felt drawn to get into business in the biggest way possible and to try to use it as a vehicle to serve other people. And that’s kind of my personal mission that I keep written in my pocket is to serve people in business. And because like before this I thought about literally maybe going into missions or something, I was very idealistic, and I still am. But I couldn’t get into business and I know anything about business. My parents are teachers, and they’re awesome people, but they just don’t know anything about business. My siblings were teachers as well. But so real estate allowed me the ability to jump in with people not looking at me so much, they would look at the property. This was the advantage. Oh, this is a good you found, you know, so.
Andrew: What makes a good deal for you? What did you like about this $60 million set of buildings that you . . . what was it that you liked about them?
Peter: So this goes more into an investment thinking right, so at that, I’ve read a lot of books, right? But I also took some hard knocks and but by 2008, 2009, I had really consumed a lot of material and consumed a lot of experience in a very fast paced in about three years. Almost a lifetime of pain and some . . . I went on a high.
I mean, I’ll give you a funny story. I mean, I remember being at the . . . I don’t even go to horse races. I don’t know why we did this, but I went to the horse races in Saratoga with a few of my friends were there with their partners. And we kind of acted like we’re rich guys, you know, we’re like, “Oh, were so successful.” This 2006, 2007 and I was thinking, man, I can’t do nothing wrong. I’m just so good at business, you know. But when the markets going up, everyone thinks they’re good.
Similar in tech, right, in San Francisco. When things are booming, everyone thinks they’re so good, it’s natural, their natural abilities. But when the market goes down is when you find who’s really good. Who’s got the grit and determination and it kind of shakes out everything else, right? So this is why I thought I was good, but I wasn’t good. I sucked at managing. I didn’t know a lot of stuff. I didn’t know how to pick people well. I had tons of problems. I would pick certain people I thought I could trust.
And then when I started having problems financially, I started digging in. I said you guys aren’t even showing up to work in and stuff sometimes. I was not good at oversight. I had no accountability systems put in place. I had this kind of thing where I thought, you know, I hired this guy, he’s going to get it done. I trust them, you know, he trusts me, no way. It doesn’t work like that. I’m a pretty sure guy but until I thought we had aligned incentives, so.
Andrew: With the $60 billion sets of buildings, what was it that you liked about them? What was it that drew you so much that you kept calling the guy?
Peter: Yeah. There was nothing about those deals in particular. Those real estate deals that seemed attractive, particularly. What was attractive was that it was a depressed market where everybody was psychologically down. And I knew that this was not going to stay the same forever. So I figured this was a shot for me to get in there and nail it.
Because people were afraid in 2008. It’s hard for people to remember this, but 2008, 2009, 2010 people talk about a double-dip recession. The recession was already horrible, right? And they were talking about the possibility for a double-dip. How the hell much lower could it go? So I was thinking about it on . . . It can’t go that much lower even another dip. I mean, the country was absolutely, you know, getting wrapped. And really the government was stepping in and keep it exploding and that’s how things started . . .
Andrew: So, Peter, you were just saying, “Look, this is a lot of properties in a depressed market. It’s got to go back up.” Got it. It’s more likely buying the S&P 500 in a down stock market than me loving any specific stock. That’s what you were thinking, right?
Peter: Pretty much I would say. I mean, maybe a little bit more sophistication because I was targeting Boston, which is Cambridge, a pretty durable area. It’s got Harvard, MIT. Boston’s economy is strong. It wasn’t that basic. But in general, the primary driving force behind it was market down. No one wants to make a play. They’re irrationally negative about it. So I’m just less negative than them or I was positive, actually, that I felt things would go well in the long term. So I made the play while everyone else is down.
Now that deal didn’t go through so that was a failure, right, on execution. But this kind of shows why it’s important to just make plays anyways, right? Because the capital sources I came to, a number of them said, “Hey, you know, I’m not doing this, but I really like your style. And I think that you’ve got what it takes. So, when you get out in 2010, contact me.” So that was my capital sources when I got out.
So I came out in 2010, 11′, 12′, 13′, 14′, 15′ and I bought, you know, $500 million and $1.5 billion of real estate assets, right? That came out of the towel of getting . . . I got whacked. But then I had a failure, but I identified capital sources. I got these capital sources on . . . I talked about hustle, right? I mean that in a good sense. Not just working really hard and being scrappy and being opportunistic. So what I did was identified, you know, okay, who’s going to work well with me, I need somebody to make a decision fast. I needed people who made their own money, basically first time earners type of people understood me best. So from there, I tried to figure out well, who would have money? Well, generally people who own businesses or starting businesses, but then these guys are actually hard to find.
And they’re also tend to be pretty hard-edged guy, hard-edged people in general. When you go to approach them, they’re going to basically tell you to beat it. So you have to come in and knowing that they’re going to tell you to get out. And then you can say and keep coming in a pleasant way. And that’s how I got to them. And that’s a very summarized version of how I got the capital sourcing, but generally that’s how it works.
Andrew: Who is an example of somebody who you got that way just through your hustle because you knew who would have that, who would have the money to invest?
Peter: Yeah. I’ll give you . . . is a good example. There was like, 100 of these examples, right? But here’s one, a friend of mine wanted me come to a fundraiser. It was a political thing. I’m not into politics, but because my friend is hosting it. I said, “Okay, I’ll just go anyways.” When I was there, I was, you know, basically wasting my time and having a drink and a guy that was next to me said, “Hey, oh, that guy over there leases properties to Harvard University.”
And I said, “Man, anybody leases . . . Harvard tried to buy out everybody.” So in the area, I just know this, right? So I said, “Man, this guy’s leasing properties at Harvard. And they couldn’t buy him out. He’s got to have some serious, you know, holding power.” So I went up to him and I said, “Hey, you know, I’m interested in meeting with you.” He was like, I saw him give a card to someone. So I said, “Can I have a card as well?” And he says, you know, he was like, “Well, you know, the hell are you?”
I ended up getting his card. I was nice to him. And I ended up contacting him pretty much every month, I would just send him a text or an email, and I kept it pretty pleasant. And then finally, he was like, meet me at such and such place. You’ve got like, 15 to 20 minutes. And that’s it. So I met him, explained to him what I’m about. I was trying to get him for this one deal that I mentioned to you . . . That was a no that didn’t work out. But he did meet me on a follow-up. And that’s when he . . . And I wasn’t holding . . .
I told him my full situation and he couldn’t get past it, the part that I was still at school. So he said, “Screw that. Law school is supposed to be hard. I’m not doing it.” But he said he was very interested in actually doing some deals. So that was one example. But for that one example I’ve got, you know, 10 others that were actually didn’t work out. I chased them all the way to the end, and they failed, so.
Andrew: Okay. And then eventually you ended up raising some money. You started buying residential real estate. I saw a press release that you guys sent out just a few weeks ago. I guess not your company anymore. You found a CEO, you handed the reins over to him and you moved on to create Trustwork which is your vision for the world that you want to live in and the world that you want others to live in. But anyway, I saw this thing, you guys closed 148 unit multifamily acquisition of Oakwood Apartments in Sarasota and that’s the type of stuff that you guys are buying. Your buying homes and you’re renting them out to people who live there. Am I right about that?
Peter: Yeah. I mean, pretty much up. And I still do own the company, and I’m the Executive Chairman, but there’s not a board on the . . . I basically act as the board. I like the company. I’m not going to sell it. I still think real estate is good. I mean, look, Trustwork, actually, the target customer is real estate entrepreneurs, people who own properties. It’s looking to tool them up because in the long term Trustwork is trying to be, and it’s going to be the platform for entrepreneurship, where everyone because I look at . . . and you actually touched on this before we started is I see every person that’s out there as needing to entrepreneurialize themselves, they need to have become an entrepreneur. They can’t just be a, you know, nine to five worker.
And you hear about people doing side hustles, this and that. But even in your main hustle or your main work, you need to entrepreneurialize yourself. You’ve got to think, you know, opportunistically. You’ve got to get almost somewhat obsessive about what you’re . . . figure out what your passion is, what your point of, you know, focus is, and learn as much as about that as you can, and figure out how you can get an edge, how you can get a competitive advantage. You know, and that’s what Trustwork is about in the long term.
So any listeners that are out there to set up a profile on there and start investing yourself? That’s what they can do. But right now, the platform so new, but the idea, the first thing we’re targeting is real estate entrepreneurs. So, if there are people out there that have a property or they’re doing Airbnb or renting them out, or they just own a home, they can start posting on Trustwork to get jobs done on there.
And this kind of ties into how my background, what I saw was all these things that weren’t really flowing well inside the industry. And early you mentioned I was laborer. I started out in construction. So this also explains why I picked real estate, because I knew some of that stuff. Now, there are construction guys know way more than me. But I know say I know, probably about 10 to 20 times more than another technology entrepreneur. So I targeted this spot because I know it from my gut. I know it from my instincts and I know that people are really well.
And I also built a company operationally through there. I didn’t come to the finance side. Most people in my position come through finance, you know like they worked at Goldman Sachs. They worked at Blackstone, they came in. I worked in construction and I kind of came through and I ran all operations on the ground. So, and I kind of that’s how I came through that but that’s also how I had superior revenues or cash flow, I was just keeping tight, you know.
Peter: But as I was doing it, I saw tons of these inefficiencies and, and I saw the career opportunities for people there needed to get restructured and the entire industry needs to be restructured. So the first place to disrupt real estate and that’s what we’re going after in Trustwork. That’s our first entry point. That’s what we’re doing.
Andrew: Let me take a moment talk about my second sponsor, and then we’re going to come back and you don’t know how to develop. You don’t know how to code. How did you code is the first question I’ll ask you, how you got that first version up and then how you got users and so on. But first, the sponsor is a company called HostGator. If you’re out there and you need a website hosted just go to hostgator.com/mixergy. You know what? Period, end of story. hostgator.com/mixergy.
So, Peter, I’m coming right back. You didn’t know how to code. You found through your Harvard connection, I think. You found somebody who was good at computer science. Am I right?
Peter: You know, when I was starting Trustwork?
Peter: Or are you talking about when I was at Harvard? Well, when I was at Harvard, I did a side gig, which I kind of got exposed to some of the power of technology. And that was sort of a gig to get some revenue coming in, where I recruited a guy from computer science, he helped me out. But this is a small thing, but it gave me a little window.
So later on, as I got the Trustwork idea. I contacted him again. Now he ended up not coming in, but we were friends. And we stayed friends actually, since like four years, and we’re still actually friends. But he told me, he’s like, “I know what you’re calling about. You’re probably trying to recruit me.” Because for some reason, he could tell by my tone. And I said, “Listen, you know, his name is Peter, so I said, “Pete, listen, it’s not like that fully. But I am looking for some knowledge and who’s the best guy?
And he said, “I’m in finance and doing investments. I’m out of computer science.” So I said, “Give me the best guy you know.” So he did from his computer science days. And I contacted that guy. He actually worked in the other company now, but I recruited . . . I pulled him down. He was at Bridgewater at the time doing technology for them. But I pulled him down to my operation that I went over with him in some of the ideas. I mapped it all out on a whiteboard showing how I wanted to flow. I wanted to restructure the industry to create entrepreneurship.
Andrew: Yeah. What was the vision? You said, look, all these people who are working on these properties, they need to think more entrepreneurially. What was the vision actually?
Peter: So these things kind of patched together almost like a mosaic, right? The initial baby versions of it came to me and then I saw, you know, this problem. I said, I saw the turnover process, the way it was done, the routing of all the labor, and the connection of labor was so complex, and so inefficient, but could be much better done through technology. Then I saw a different problem, which I can no longer as I got bigger, make as aggressive moves because I didn’t know the reputation and the information about my own people in my company because the company has 450 employees. So when I was like, 15-20 people . . . And say when I had 100 employees even, right? I call them teammates, actually, but 100 teammates.
I could figure out who’s who and I could deploy capital like, lightning fast because I knew all these guys. I was friends with them, hangout with them, had beers, whatever, you know. But as we got the 200 or so it became very murky for me. And I couldn’t do it anymore because it was too risky. So it started slowing us down a little bit.
Now, we still did good, and we still made moves and kept growing and growing, right? But it slowed me down dramatically. I mean, I jumped from . . . Doesn’t matter about that but the bottom line is, this was a problem, right? Boom, reputation problem. Then I saw maintenance as sort of a dead end industry. I had maintenance staff as well, I still do in the other company but I couldn’t give them ladders of opportunity upwards. Now, when you have an industry like that, it needs to be recreated to allow people to move upwards. And I also saw how inefficient and how much better it would be solved all the maintenance jobs if we had a marketplace.
Then I saw the construction and I already knew all these things anyway, but I saw them in play. And I said, “Man, that can be done so much better as well.” So this is kind of how I got the patchwork in my brain. But then when I got this idea mapped out, I flew this guy down, we mapped it out, he said, “We can do this.” I said, “Okay, absolutely. This can be done.” And I said, “This guy, he is in my company right now. His name is Chris, extremely smart guy.” Knows computer design very well, says, “I can do it. Okay, I can do this.” I said, “All right.”
I took a little time to think about it. I took maybe like three, four days on my own. I had an office where no one would go to, it was separated from everyone else. I don’t have whiteboards and no internet. I would just go there and just like zone out, map everything out the boards, right? And I was like, man, I think like this could be my opportunity to really impact on the global level. And I was like, I’ve got something that could go very big here, but I don’t know anything about outside the U.S.A. Inside the U.S., I know entrepreneurship pretty well, because I had been an entrepreneur, I’d been through the wringer, and I knew the tools and things that are needed. Network, you need the capital, everything else, right? But I didn’t know the other countries. And that’s why I went to 85 countries. I realized I had a gap.
Andrew: So why didn’t you just say, “You know what, I know the U.S. really well. I’ll stick with the U.S. We’ll do others later on.” Why did it have to be you flying out all over the world to understand the rest of the world before you can build this up?
Peter: Because in my heart, I wanted to serve everyone everywhere. And I wanted to have the biggest possible impact on my life.
Andrew: This goes back to your parents. My parents, I mentioned earlier, they were do-gooders. They tried to get you to do good as a kid and you did it but you didn’t fully go along with it. What was it that your parents did that they tried to bring you into?
Peter: Well, no, I did go along with it. I mean, I ended up generally I had obedience issues in school, where the administration and I never really . . . I always thought it was them, you know, but as I got older, I realized it’s me.
Andrew: But they wanted you to go along for their charitable events and you said, no. In retrospect, you’ve told our producer, someone on your team told our producer, I was kind of a selfish 15-year-old kid. And eventually, you recognize what they were trying to beat into you or try to introduce you to which is do good in the world. And it did penetrate your . . . I don’t know what. I don’t know that I could call you selfish at that age but it did penetrate your skull.
Peter: Yeah. No. Well, here’s the thing, I never had a rebellious instinct around charity, never. That was probably a miscue for whoever’s on my team to talk to you guys. That was never a problem. I was always actually . . . I used to go with my father when I was a kid. My earliest memories, and he would go out and try to help out. He would pay for people’s electric, try to get people who are on the poorer side of things, delivering food to them, spending time with them, helping them out. He also spent his career focused on special ed. So special education, trying to help out using intelligence testing and things like that to help people to play to their strengths.
So I actually really loved that experience as a kid and as I got to about 15 I was walking out church one day and I was thinking, the reading was something about whatever you did to the least of my people that you did to me. And I remember thinking, man, I don’t do a damn thing for anybody. I was kind of, I had like a bald head. I’m like, 15, I used to keep my head bald sometimes when I was focused, and I was like, kind of a bit of numbnut, probably still am in certain regards. But I started waking and I said, man, I got to do something for somebody. And I turned around, I thought, let me spend all the time and pray for a second. And there was a nun there who was kind of famous for serving people.
She had like 500 people she would serve and help out so I went up to her and I said, “Hey, I want to help out with whatever you do.” And she looked at me like I was like a ghost, like, who’s this guy, you know? And but she knew my father. She ended up bringing me under her wing and showing me kind of here. She gave me some people to take care like kind of go visit. That’s kind of that’s the charity kind of angle or . . .
Andrew: That’s what I’m getting at
Peter: Probably the opposite side of my other rebellious side. I had what I had the other rebellious side in school, right, this wouldn’t . . . I would have like corner seats all year or suspension or whatever. Like, just basically problems with the administration.
Andrew: That’s what I’m getting at. Yes. I see that rebelliousness and I could see how it helps you get people to invest in you, to listen to you, to sell their properties to you. I also see this do-gooder part that’s been looking to come out. And that’s why you came up with Trustwork. It’s a big reason for it. And why you had to go travel the world to understand. Did you learn anything as you visited? What do I see here in my notes, 85 different countries? Did you see anything? Did you learn anything that changed you?
Peter: Yeah, absolutely. I mean, there’s probably just so much stuff that I came across that changed the way I think about things. It would be impossible for me to just download it all right now. But I mean, I went to 85 countries, but I also went to, you know, all the major cities. So, when I was in China, I went to like 12 cities or something. In India, I went to, you know, a 10 or 11. And I had about 1000 meetings and I took 1600 pages of notes. So I have notes on every city with like all the . . . I used the Harvard network. I use Georgetown network, I use another tiger 21 YPO network I have, plus I would try to engage people on the streets and tour guides trying to get every tranche of income levels to try to understand what are the problems in business or in life that they face. And then I can extrapolate upwards, abstracting up. What’s the differences between the American experience and entrepreneurship in their experience? And then I could get a mental model my brain better like how do I create Trustwork? So I can serve all these countries, you know?
Andrew: Okay. Before we started, I asked you about the revenue. You told me in private what it was. And then you said, and I asked some follow-up questions, which were about how did you get that revenue? And what you helped me understand was, you guys didn’t just create this platform, you’re also on the platform with three different businesses. What are these three different businesses that I can go to Trustwork right now and hire people from?
Peter: So the target customer is a real estate entrepreneur, a person owns a property or a homeowner, right?
Peter: So that’s it. That’s our target because you have to optimize for something in business, right? You have to produce a good, a product and deliver it to someone in a certain way. And the way that we deliver the product or something that someone needs is if you need maintenance, if you need to get your apartment turned over, or you need construction done, we want to be the choice for you that you can get it done there.
But because Trustwork is so new, then how do you just like snap your fingers and all of a sudden you have all the contractors on there and construction guys are damn do the work and the property owners, right? So the way we’re solving that is we built three companies on the platform on Trustwork because businesses can build companies on to Trustwork. The future of the vision of businesses can run off and Trustwork, similar how people use, you know how developers use AWS to run their servers on we want people to use Trustwork as almost their backend for their business and eventually be able to get their capital. We’re going to plug into banks, plug in insurance.
The idea is extremely complex. I won’t blow everyone’s mind here with that unnecessary detail but zooming into today, we’re solving for one pain point that I know very well and I know better than any entrepreneur I know or any technology person. Well, any technology entrepreneur I know.
Those guys in maintenance, I know it way better than being construction guys, own companies, they would 100% take me to school. So but I know better than these other . . . and I know it from the inside and the pain levels of what real estate entrepreneur needs. So we’re attacking three parts of what the need is in the area that we believe is most underserved, which is maintenance, personnel or entrepreneurs in the maintenance side, construction, same thing and the turnover process which includes like painters, handymen that punch things out, could be people that specialize in and countertops or cabinetry, flooring . . . I know it sounds off . . .
Andrew: I never heard of turnover before but you explained to me before that people who own real estate need this. Turnovers, all those little services that go into taking an apartment for example that was rented to someone and cleaning it up, painting it, fixing it up so that the next tenant could come in and have a good experience. And so you’ve said, look, these are the three different needs that people on our platform have. Before we wait for maintenance guys to come and establish themselves on our platform and turn people to come on and construct. We’re just going to create these businesses.
And now you own those three businesses. They’re on your platform. If I want turnover service because I own say, an Airbnb in Austin, I might hire one of your people. But eventually what you’re hoping is, other people who do this services will say, “Hey, they’re getting clients on this. I’ll go put myself on this service. What’s what do I have to lose?” And then the more those people come on, the more businesses come on, real estate professionals come on, and they’re going to start being on your platform. That’s the way you did it.
Peter: Yeah, exactly. And in the markets, I also had to focus on specific markets because you need both sides on. You need a lot of vendors on [bills 00:51:52], a lot of contractors on. You need liquidity, right? So it’s like a kind of like Uber. If you go to press for a car, you need the density of like drivers, otherwise, I’d be dancing around, right?
Peter: So I focus on Florida and Texas. Why Florida and Texas? Well, I know Florida and Texas pretty well. And I know that it’s not as well served as California with technology, and business, it’s very regulatory friendly in those states. And there’s a lot of entrepreneurs that are under tech and we’re teching them up, you know.
Right now, it’s not the best experience on Trustwork. But it’s good enough that we are, you know, getting millions of dollars in revenue coming through the rails. So people are spending money on it, they trust them enough.
But it’s going to get a lot better. And I would say in about 3, 6, 18 months, it’s going to be 10 times better because right now we’re under development. We’re parallel path and developing a new whole new interface and all the backend things because a lot of our first iteration and the current iteration that’s out was to test market and prove that it was going to work and start spinning up that initial vendors and entrepreneurs on both sides of it, which we’ve done. And now that we’re figuring out a lot of the flows, now we’re kind of writing those into, you know, more like putting those in into pillars.
Andrew: All right. I see who’s bought from you guys. I guess the company name is called, what is it? Turns. It’s called Turns. That’s the name of the business. And if I scroll down on their profile in your app, I can see that for example, two hours ago, Samantha Koenig spent $87.50 she got medium punch list, Chateau De John 2038. I’m guessing that’s an address. I see that Tom Moyers four hours ago got the painting at the Park at Elland. And I get to see all the people who’ve actually hired your service. Am I right? Am I reading this stuff, right?
Peter: Yeah, that’s right. Those would probably be things that are under contract.
Andrew: So what do you do the other way? Now, that I see how you got the service providers on the platform? How did you get users? How did you get real estate owners to come on and start buying through your platform?
Peter: Yeah, I mean, nothing’s ever linear, right? I mean, I won’t get into how nonlinear my approach is here, but it’s very nonlinear. So you’d be like, why are you doing it this way? You know, it would make more sense with where you want to go. You’d do it a different way. But you have to kind of go after markets that are underserved to get people on, right? So what we’re doing is for homeowners and other people to get them on the platform, we’re leveraging people who are either they just bought a house. So we target people who just bought a house because when you just buy a house, you have a laundry list of things you want to get done.
You spend like there’s, there’s data on this, I’m going to mess up the numbers, but I think you spent around . . . I’m not going to say the numbers because I’m going to mess it up. But you spend a good amount of money right after you buy your house. So we look at transactional information using the software, or other research or connections to find out when people buy a house and then we’re targeting them to get them as the owner side.
Now the vendor side and the contractor side, the contraction side. That side, we’re leveraging existing relationships we already had. And I’ve artificially kind of, I’ve created three companies that target and serve those homeowners, because getting construction guys to basically believe in the platform this quickly, I mean, they’re just skeptical by nature. And they also don’t have a very high vote of confidence when I have them talk to my software engineers, they don’t feel like we’re going to hit it for them.
They feel like why am I wasting my time on this call? And they do it as a favor for me. But then I’m going to ask them feedback, they tell me to listen, they don’t know what the hell they’re talking about. And I tell him to listen, well, that’s the whole point of the call. And so the way I’m solving the problem on the vendor side, on the contractor side, is I’ve created three of these companies. And they’re running, but they’re also proof of concept to these other construction companies to show them you can run a business on this platform as well and you can make millions of dollars doing it.
Peter: And it’s working right now but getting the vendors, getting contractors on, that’s difficult. But they also come on when they see the jobs. So it’s both, you know, they get the owners on, the jobs hit the platform, contractors get on.
Andrew: You know what else seems to work for you guys? It seems like you’re still going for SEO. For example, if I did a search for [Piranhas Hemet 00:56:18], I don’t know what this woman, let me see who she is. She’s on your platform. And so if I if I want to message her, first of all, if I do a search for her, the fifth link after Twitter, Facebook, Instagram, Pinterest, number five is her Trustwork profile. And so then that links me to your network where I could contact her and if she was on the network more actively, I could see her skills and maybe hire her to paint my house or something. It feels like that’s also something you’ve got going for you. I’m looking at your SimilarWeb traffic to get a sense of that. Am I right?
Peter: Yeah. I think so. But a lot of this is so early stage. I think right now, SEO, we are doing that. But I think most of our wins right now. And this is going to change over time here. But most of our wins are coming from the ground up referrals where we serve a homeowner that a realtor knew, a real estate agent knows. It says, “Okay, these guys did a good job.” Now the real estate agent could be a power agent, right? A power broker that closes like 30 deals a year.
Now they turn around they say, “Hey, man, I got 30 deals for you guys.” Right now, we don’t even have the capacity and then we’re building fast to serve them because we don’t have enough people on this three companies, but we have, we’re backed up on a job that we could take. And that’s what’s happening. We get in there we bang them out. Because the realtor wants to tell their client, “Hey, you close on this, and hey, we got this connection for you.” And they’ll take care of your work because that’s a giveaway to build up social capital. This has been a good network for us to work through.
And then, the other one is that people tell other people, you know, even contractors say, “Hey,” they usually tell people that are closer with them about it because some of them are a little bit competitive with each other. But homeowners generally the way we’re getting them as I think often and I’m speaking a little bit off the cuff here. My business development guys who these three companies would know better. But even from, from what I’ve talked to them, they told me a lot about how they’re buying is coming in. It’s through this word of mouth referral ground up.
And that’s good right now because our software is coming into place. We’re figuring out things more and getting it to connect. And then later, I’d spend more dollars and I will spend more dollars on the top down strategies was like SEO and stuff like that, and targeted digital marketing and stuff. I am doing some of that right now. And it’s mainly in certain areas like Austin, Texas, or you know, throughout Florida.
Andrew: Do you still have personal guarantees at InvestRes, the investment properties?
Peter: No, no. Absolutely not. I don’t do that again. I never do that again after 2008. I mean, it’s hard for the audience to understand how badly I got whopped but I mean, I don’t do that anymore. It’s just not happening, because . . .
Andrew: It’s hard for me to understand. One of the things that I heard was that your brain doesn’t register low points. You just don’t think about them. You don’t sweat them. It’s not an issue. In fact, when you moved your team from San Francisco to Austin, it just didn’t even register that they’re going to have some downside because they have to deal with physically moving a team. You’re that optimistic. Did you get to a low where you doubted yourself? Did you get to a low when that money went away that you said maybe I’m just a fool, I can’t do this?
Peter: Well, I mean, everyone has the temptation, right? Where you hear that side of that kind of negative side talking to you. And what I tried to do with everything . . . Well, first of all, we still have our office in San Francisco that’s growing and Austin now and Seattle. The reason why I have the three of them is that technology challenges there, but they have differentiated qualities of life and different reasons why this . . . I brought the office to where the talent is.
I located right next to Amazon purposely, that’s why I’m in Seattle. I just recruited a guy out of Amazon, just recently, he just gave his notice to Amazon. So we just started pummeling Amazon three weeks ago. And we have two other guys in the pipeline. So but I’m going after Amazon because I like some of the ways that they spin up products fast. So I got an engineering manager coming into the company and he’s already signed on and stuff. So I go with the opportunities, like, I don’t have any connection with Seattle. All I thought it was rainy, right?
So I didn’t move my family up there because we’re going to go attack Amazon base and talent, right, and their knowledge networks. Also, I want Starbucks. So my head of talent now is from Starbucks, actually from their corporate center. And that’s it located there. Because they have the best talent in the world. I think that’s why I did that. But so I’m extremely opportunistic. I’m strategic. Like I have this almost to the point that people think I’m just some wacky visionary.
Straightforward, I mean, I’m sure maybe you thought that too. People think that but then on the other side of me, my other half is just like, it’s just grit, determination and very pragmatic. You know, it’s like two different people. It’s like, I have this like vision I’m working towards but then in the meantime, I just like move through where I find like holes. It’s like, oh, there’s a hole here, boom. Pop through there. I see this opportunity, I move after it . . .
Andrew: This is all your money in the business?
Peter: I’ve capitalized Trustwork. I put like 3 million into it but I’m willing to come in with more. You know, so I make a million shortly.
Andrew: Is it profitable now?
Peter: It’s not profitable now. Trustwork?
Andrew: You’re still using your money.
Peter: I couldn’t make Trustwork profitable today, though. So now to do that, I would have to chop my BizDev and stop growing so fast. Then I would hit growth rates slow. I’m not going to do that.
Andrew: So Biz Dev it’s what growing the business? What kind of business development are you doing that’s growing the business?
Peter: Well, so if I want to get owners onto the platform, and I got to get them served, I’ve got to hire people to do that. That’s why I said I’m backed up on, you know, we have job requests coming in, but we can’t take all the jobs. So now I could turn down these jobs or I can go and hire ahead of me. But when you hire people that cost, you know, six figures, I mean, you’re going negative.
So, and yeah, they’re going to get those jobs done. But those jobs enough really the [inaudible 01:02:10]. They will be in the next I think in 36 months will . . . My thing is, I don’t need to hit cash flow positive, necessarily right now. I am a cash flow guy, I’m not Elon Musk guy, I’m basically the opposite business approach. I am a cash flow guy. And I don’t understand how else to think about things. But I’m also willing to just suffer for like, a long time without cash flow. So I’m going to suffer for probably another three years that in cash flow, where I’ll just watch my money get whittled down, but it’s an investment. That’s the thing. I’m not just wasting money.
Andrew: And you’ve got enough money in the bank to do this? You’ve got what more than 20 million in the bank personally. I mean, yeah. I’ve got a good amount of cash and I’ve got assets still, I mean, I’ve got you to know, a good amount of assets, but I’ve also got cash so I already capitalized Trustwork though with like 3 million and I took some additional investors in that were close friends. Like, those early partners I told you about, those guys are in for, you know, not a lot. I’d like 90 plus percent of the capital and but still I wanted to hook them up. So they’re in the early stage.
And I also hooked up another guy who’s been with me for about eight years as well. So he’s also in and they’re totally bullish as well. I mean, look, I mean, you’d have to be crazy to be bullish on this company, in a way unless, I mean, but they know me really well. So they’re counting on my ability to just basically figure out a way. One of my mottos is always been find a way or make one.
And, you know, so we’re just going to find a way or make one of the team and it’s, and that’s kind of what’s happening, right? Like, I didn’t think I was going to be in San Francisco two, three years ago, right? I love California, right? But I didn’t think that necessarily, I said I need software development talent. I started looking at where the best talent is. And I saw it was heavily concentrated for a startup, the best ecosystems, San Francisco. So I moved right in the middle of that. And before I moved, I had my assistant select the location based on where the most capital has gone in startups. So I moved right into One Hawthorne if people know what that is.
Andrew: In San Francisco?
Peter: That area actually . . . in San Francisco. It’s right on Third and like, Howard. I think.
Andrew: Oh, it’s like two blocks where I am right now. Right near the office, yes.
Peter: Yeah. So that’s why I moved and I moved there based on we just mapped up where all the capitals got the most invested, boom.
Peter: I’m in right there. It’s cool. I’m leaving with my family. I have three kids and a wife, but my wife knew how it was before I got married. She’s totally game. You know, so a lot of people be like, man, your poor wife and your babies.
Andrew: And she was okay with you all the way traveling for all those countries, all those cities. She just put up with it?
Peter: She traveled with me to about 60 countries. We only had one kid at the time. Now, she didn’t go to some countries that were, you know, at the time had, you know, a little bit of danger, or little bit more danger than other countries. So I went to those solo and I took, you know, took precaution. I checked the reports. I made sure I had people there to meet with me and stuff. So I wasn’t reckless, but I went to some of the countries that would just be inappropriate for her to go. And she was a little bit nervous too, so.
Andrew: Well, but, I heard that she didn’t get to see you much while you were doing that traveling. A friend of yours said, “Hey, look, your fathering kids. You can’t do this.” I mean, I can do it.
Peter: No, no. She was with me.
Andrew: She was with you for?
Peter: She was with me for 60 countries. Twenty countries, it would be like I would go hit like three countries that were maybe on the more on the spectrum of just more risky. I would hit those and then come back in like a week. Boom, pop back. And then we continue. Depending on the parts of the world that we are in and where those issues were.
Andrew: All right. I’m sorry. I’m looking at One Hawthorne. I’ve got bad memories of there because I was looking for an electric scooter there the other day and I was late to get home because it wasn’t there. So it’s a good area there where you were.
All right. Why don’t we close it out with this your T-shirt? No one is seeing it because people just want to listen to the audio. But I can see it, it says Facebook, thumbs up. Trustwork, and then Facebook, there’s a thumbs down, excuse me, for Trustwork, there’s that punch, which is your logo. I get the punches, your logo on the shirt. Why Facebook, thumbs down on your shirt?
I mean, it was a joke. And when we started out, it was before a lot of the Facebook negativity or whatever that started hitting. But we made a bunch of shirts. And the main thing is by juxtaposition us to explain sometimes how we’re, you know, what is Trustwork? Oh, it’s the opposite of Facebook. Facebook is a social network or whatever. Trustwork is a productivity network.
Andrew: Got it.
Peter: That’s why.
Andrew: All right, for anyone who wants to check it out, I’ve got the app. I think that’s the best way to look at you guys. Yes, you’re all over the web, too. But everything funnels me into the app. And I’m glad I checked it out because I feel like I get a much better understanding of it through the app. It’s in every app store that you know of, just, well, no, they’re two, it’s Google and Apple, who am I kidding? Or you can just go to trustwork.com and download it. And check things out from there.
I want to thank the two sponsors who make this interview happen. The first, James Altucher, he is the guy who’s got that phone number. I wonder if people are going to remember this. This is like a new thing for me. Phone number if you want to text to learn about how to write a book. Imagine, Peter, if you took all those notes, 1600 pages, I think it was of notes. Imagine if you took it and you wrote and you turn it into a book. Here’s how the world is right now, right? What would you title that book, Peter?
Peter: I would say we’ve got, I don’t know what I’d title it. The general theme would be we’ve got to get people to rise up across the world. The U.S. only has 340 million people and a little bit more than that. But the rest of the world we’ve got, you know, 6.7 billion people and a lot of these people got tremendous grit, determination, and talent. And we’ve got to give them . . . we want to open up similar opportunity that we have in the U.S. also want people moving up to but I mean, these are people with hearts and, you know, they bleed red just like us and they’ve got that determination they want to come up. So let’s make the world rise up and maybe entitle it.
Andrew: Empower or rise up and then the subtitle would be like to empower entrepreneurs around the world or create the opportunity to create entrepreneurs all over the world.
Peter: Yeah. I mean, the mission of Trustwork is empower people to rise up and live abundantly. So maybe I’d call that the book.
Andrew: Oh, there you go. Good. And it’d be a great reason for people to go and interview you because they look at your book people to understand what you’re about. I know that you’ve got way more complicated ideas, and we could fit into an hour-long interview, you’d be able to nail it there if you’re interested. And anyone else who’s in my audience who’s interested and want help from James Altucher to turn those ideas into a book, get your phone text this number. Here’s a number, 50445, 5445 and the name, of course, the one word that you texted them is, Andrew, like my name.
And finally, I want to thank the second sponsor who made this interview happen. It’s HostGator. If you need a website hosted you really should bring it to hostgator.com/mixergy. Guys let me know how this interview was for you. I’ve been on Twitter a lot more lately. Tweet at me and let me know how this and other interviews are. My Twitter handle is andrewwarner.
Peter, you got a lot of followers. I’ll tweet at you. I just follow you on Twitter.
Peter: @peterrex, if you want to follow or stay up to date on what’s going on with Trustwork because that’s where we let everybody know.
Andrew: Peter Rex, I like that last name. Rex, means King doesn’t it in Latin?
Andrew: Yeah. Peter Rex. It’s all right. Thanks so much for doing this. Thanks, everyone
Peter: Andrew, you’re the man. Thank you.
Andrew: You too.
Peter: Appreciate it.
Andrew: Bye. I’ll let you go. Bye, everyone.