Alternative Investment Ideas, His Book Deal Included 10% Royalty, $100k Advance from Entrepreneur Patrick McGinnis

Patrick Mcginnis

In Episode #638, Nathan interviews Patrick McGinnis. He’s the author of The 10% Entrepreneur which focuses on living your startup dream without leaving your day job, just published by Penguin Portfolio. He’s also credited for coining the term “fear of missing out”. He’s a graduate of Harvard business school and living in New York City.

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Famous Five:

  • Favorite Book? – The Lean Startup
  • What CEO do you follow? – Sheryl Sandberg
  • Favorite online tool? — Quip
  • Do you get 8 hours of sleep?— 6-12
  • If you could let your 20-year old self, know one thing, what would it be? – Patrick wished he had more confidence in his abilities and be more experimental and try things

Time Stamped Show Notes:

  • 01:30 – Nathan introduces Patrick to the show
  • 02:10 – Patrick is a Wall Street refugee
  • 02:21 – Patrick has his own advisory firm
    • 02:29 – Patrick built up his portfolio of over 20 investments
  • 03:04 – Patrick worked with his friend in Real Influence for free
    • 03:14 – They have sold $300K-$400K with the work
    • 03:19 – The business didn’t push through and Patrick sold his shares
    • 03:35 – Patrick was 33
  • 03:46 – After a year, Patrick’s friend asked him if he’s interested in investing in a startup
    • 03:51 – Ipsy has raised $100M
    • 04:08 – Patrick is one of the first investors of Ipsy
    • 04:32 – Ipsy’s co-founder is Michelle Phan
    • 04:49 – Patrick’s friend who is the CEO of Ipsy met Michelle through Funny or Die
    • 05:46 – Michelle’s huge fan base made Ipsy spent zero on CAC
  • 06:00 – How Patrick decided to invest in Ipsy
    • 06:03 – Patrick’s friend was already raising a round
    • 06:33 – Patrick’s friend already had a lead
  • 06:38 – Patrick started his venture capitalist path in 2000
    • 06:48 – Most of the deals Patrick look at are simple deals
    • 06:53 – Patrick invested in Ipsy in 2012
  • 07:50 – Ipsy is one of Patrick’s most successful investment
    • 08:00 – Another one is Bluesmart
    • 08:24 – And the other is Affinity which is a big data company
  • 09:04 – How many deals do you have to make sure there’s a big exit in the portfolio?
    • 09:12 – When Patrick started investing, he’d thought of the possible mistakes he can make as an investor
    • 09:41 – Patrick shares about a guy who is a major hedge fund and always get deals with friends in trouble
    • 10:03 – As an investor, you have to invest in your area of expertise
    • 10:08 – Second is think that you have a commercial deal even though you’re friends
    • 10:21 – Third is, don’t follow other people
    • 10:39 – Stay away from “will-to-be” syndrome
  • 11:09 – Patrick was working in AIG’s private equity fund
  • 11:41 – Patrick shares why he wrote a book
    • 11:48 – Patrick always gets to talk to people about what he does in investing
    • 12:12 – As Patrick meet people, he realized that he could actually help people and he believes in what he does
    • 12:25 – “It’s been a blast actually and I love writing anyway”
  • 12:56 – Patrick shares why he decided to have a publisher than to self-publish his book
    • 13:02 – Patrick wasn’t a well-known media figure and a publisher would help his credibility
    • 13:12 – Patrick got a great editor
    • 13:24 – Patrick wanted to go global
  • 13:34 – Patrick has sold an average of 50K copies
    • 13:40 – Book update is given every 6 months
    • 14:00 – Patrick gets around 10% royalties on sales
    • 14:26 – Patrick’s book is a best-seller in South Korea
  • 14:48 – Patrick had an advance of around $100K prior to book launch
    • 14:58 – Patrick has an agent too, whose with UTA
    • 15:38 – Patrick met his agent through his friend
  • 16:02 – If you are generous to the world, it comes back to you in so many different ways
  • 16:25 – “If you want to publish a book, you should know how hard it is”
    • 16:40 – Publishing a book is like running a startup but driving in a car and need to turn on right break
    • 16:54 – Patrick went into a couple of podcasts which boost his sales
    • 17:03 – Patrick’s book is in physical bookstores too
    • 17:20 – Patrick was also live in CNN Espanol in South America
    • 17:37 – Amazon’s ranking is always updated
    • 17:44 – Patrick also has a group who does social media for him
    • 18:22 – Launching a book is a process
  • 18:56 – Patrick has a day job that covers the bill and stuff
  • 19:12 – “Freelancing is great in terms of flexibility but you build zero wealth”
  • 19:48 – Patrick also invests in commercial real estate
    • 20:04 – Patrick shares how and his friend get dividends from real estate
  • 23:25 – The Famous Five

3 Key Points:

  1. Investing in your friend’s business is a commercial deal – invest wisely.
  2. Publishing a book is not a walk in the park. There’s a process to it.
  3. Freelancing is great in terms of flexibility but you build zero wealth.

Resources Mentioned:

  • The Top Inbox – The site Nathan uses to schedule emails to be sent later, set reminders in inbox, track opens, and follow-up with email sequences
  • Organifi – The juice was Nathan’s life saver during his trip in Southeast Asia
  • Klipfolio – Track your business performance across all departments for FREE
  • Acuity Scheduling – Nathan uses Acuity to schedule his podcast interviews and appointments
  • Host Gator– The site Nathan uses to buy his domain names and hosting for the cheapest price possible
  • Audible– Nathan uses Audible when he’s driving from Austin to San Antonio (1.5-hour drive) to listen to audio books
  • Freshbooks – Nathan doesn’t waste time so he uses Freshbooks to send out invoices and collect his money. Get your free month NOW
  • Show Notes provided by Mallard Creatives