When everything works, you learn the wrong lessons

Episode Summary

Executive Summary: Nick Huber reflects on being humbled after years of overconfidence, explaining how rapid growth, a major acquisition of Somewhere, and changing market conditions exposed mistakes in branding, hiring, and expansion. He argues that business is harder in a tougher macro environment, that focus on one proven channel matters more than diversification, and that international talent is a major advantage for scaling companies.

Main Topics: Humility after years of overconfidence: Huber revisits his earlier 'Midas touch' mindset, admitting he believed business and team-building were easy during the boom years. He says recent years have forced him to reassess assumptions and accept that business is cyclical and difficult. The Somewhere acquisition and what went wrong: A detailed breakdown of buying control of Somewhere/Shepard, including the structure of the deal, the risks he took, and the immediate setbacks: a costly name change, loss of SEO, weaker Twitter distribution, and increased competition. International hiring as a strategic edge: Huber explains how Somewhere evolved from junior staffing to executive hiring globally, arguing that high-quality talent in places like South Africa, Colombia, Egypt, and the Philippines can outperform and cost less than U.S. hires. Focus beats diversification: He argues that companies should double down on what already works—one product, one channel, one revenue stream—rather than chasing multiple experiments, citing examples from his own businesses and from broader operator lessons. Consistency and sustainable execution: Huber contrasts short bursts of intensity with long-term, even-keeled execution. He says daily focus on one big task, done consistently over years, beats frantic hustle and endless switching. Skepticism about holdcos and broad portfolios: He says operating multiple companies is often overrated and only works if the founder has already mastered execution. He prefers concentrating on a few businesses rather than accumulating complexity. Cautious, bearish view on AI hype: Huber says AI has useful consumer applications but is overhyped in business, expensive to implement, and potentially harmful through rising energy costs. He believes the long-term impact will be real, but current enthusiasm is unsustainable.

Key Arguments: Business is harder now than during the 2019-2023 boom; macro conditions, ad algorithms, and customer spending changed materially. Personal brand alone no longer guarantees growth; distribution channels can disappear quickly when platforms change. Acquiring Somewhere made sense strategically, but brand changes and platform dependence created immediate downside. International hiring can unlock better executives and operators at lower cost than U.S. talent in many functions. Great businesses usually have one dominant distribution channel and one core revenue engine; multiple streams often signal lack of focus. The most successful operators are consistent over long periods, not just intensely productive in bursts. Holdcos and multi-company portfolios work best for founders who have already proven they can run one company extremely well. AI is useful for some personal tasks and specific tools, but business ROI is inconsistent and infrastructure/energy costs may make the current boom unsustainable.

Data Points: Companies started: 11 - Huber says he started 11 companies beginning in 2016. Companies shut down: 4 - He says four of the companies have been shut down. Peak bottom-tier revenue: About $500,000 per month - He says the six smaller companies together reached roughly half a million dollars a month in total revenue. Somewhere valuation at sale discussion: $47 million - Marshall initially called about Andrew Wilkinson's acquisition offer. Somewhere acquisition valuation later: $52 million - The deal ultimately became a $52 million purchase/acquisition price. Company age at acquisition: 3 years old - Huber notes the company was three years old at the time of the offer. Employees at Somewhere: About 150 - He describes Somewhere as having around 150 employees during the acquisition period. Capital raised: $20 million - He planned to raise $20 million from investors to buy about 40% of the company. Seller note: About $9 million for 18% - He says he carved out an 18% seller note from Marshall, worth about $9 million. SEO leads lost after rebrand: 300 leads per month - Changing from Shepard to Somewhere caused search traffic and brand recognition loss. Total leads before loss: About 1,000 leads per month - He says the company lost about 300 of roughly 1,000 monthly leads after the name change. Revenue growth after acquisition period: Up 60% over the four months of negotiation; 28% year over year - He says recent revenue is above pre-deal levels, though still below his pro forma target. Americans at Somewhere: 6 out of 160 employees - He says only six Americans work at Somewhere out of 160 total employees. Americans at Ari Costseg: 7 out of 130 employees - He cites another company in his portfolio as mostly international. Americans at Bolt Storage: 6 out of 60 employees - Another example of a predominantly international team. Applicants per month: 60,000 - He says Somewhere receives roughly 60,000 applicants each month. Applicants filtered out for typing speed: 85% - His first screening step removes most applicants who cannot type 35 words per minute. LinkedIn ad spend test: $100/day for 5 days - He recommends a simple promoted job posting strategy to generate applicants. Estimated applicant volume from test: About 1,000 applicants - He says the LinkedIn promotion can yield around 1,000 applicants for about $2,000. South African conversion rate: 30% to 42% - For inbound sales, he says conversion improved after moving the team to South Africa. Revenue change: 15% year over year - He reports revenue up 15% year over year after operational changes. Energy bills increase: 60% - He says his energy bills in Athens, Georgia rose 60% over three years. Data centers online in Georgia: 30 - He cites 30 data centers coming online in the last four years. Additional data centers in pipeline: 30 - He says another 30 are in development. Roof replacement bid: $70,000 - He uses a roofing example to show how middlemen can extract margin. Roof hard cost: $45,000 - He estimates $30,000 labor plus $15,000 materials to do the roof. B2B labor benchmark: $3,000/month - He says a controller in South Africa can cost around $3,000 per month. Sales locations highlighted: South Africa, Egypt, Colombia, Brazil, Sri Lanka, Philippines - He identifies these as hotspots for specific roles.

Pivotal Quotes: "I have been humbled off my cocky attitude in my 30s." — Nick Huber: He explains the shift from early-career confidence to a more realistic view of business. "Business is hard. Business is really hard." — Nick Huber: Used to contrast his earlier assumptions with the current operating environment. "The people who can run my company can do it better and cheaper internationally." — Nick Huber: His key rationale for expanding executive hiring beyond the U.S.

Implications: For founders, the episode argues for less ego, more focus, and more disciplined hiring systems. It suggests international talent and proven channels can outperform trendy growth hacks, while holdco expansion and AI adoption should be treated cautiously.