Posted on June 21st, 2021
Below find a complete transcript of this video.
Good to see you again. You too. It’s been a while.
Yeah, man. I got to come to Mexico city. So Justin Petsche for my audience just tell us what you’re doing right now.
Sure. I represent a company called. We are trying to reinvent recruiting. So think, LinkedIn 2.0, or actually LinkedIn 10.0 is a better, really better description of it. Automated and recruiting.
I am in charge of sales and corporate development. So that’s what I’ve been spending the last year or so doing.
And so we used to run together in LA many years ago, and then you moved to Mexico city. What was the impetus to leave LA and, and try something in a foreign country versus staying in LA and, and, you know doing that whole thing.
Well, yeah. And you might remember some of this as well, but my first, I think four or five years in LA was basically me running a company on my own. And once it, once we started to grow and I was able to get a couple of people there, I thought, well, wait a minute. You know, I think I was 30 years old at the time. So quite awhile ago now I thought, well, I can do this from anywhere. Really. I’ve got my team here.
So I took off, lived in Southeast Asia for a few years and then thought, I’d get a little bit closer to home and come here to, to Mexico city on a three month trial. And you know how that goes? Seven years later here I am still,
Yeah. Speaking fluent Spanish. It was great visiting you a couple of years ago. So you’re getting married soon, so I guess I’ll, I won’t see you until November, but Mexico city is great and it was a really enjoyable visiting you there.
So the last time we talked, we were talking about, where things are happening and you were, you’re really into the crypto space. And you were telling me about, what States are really doing the whole crypto thing and, and where all of that’s happening and why it’s so important and the certain politicians that are into it versus not into it. So maybe you could speak on that a little bit.
Yeah. Well, and I’m, by no means an expert. I kind of fell into this by accident. The company that I had before I started doing what I’m doing now, I sold. And half of that was for Bitcoin. And I didn’t know about Bitcoin at the time. As a matter of fact, I think the price was like $6,000 or something like that.
So I sold most of it, but I ended up holding on to enough to, to have some fun, the last couple of quarters. And the more I learned about it, the more I go down to the rabbit hole. And I wholeheartedly believe it’s the future between, you know, crypto blockchain and all of that.
So I’m ingrained a little bit now in the marketplace, but by no means an expert, most of what’s going on is happening in Miami.
And the reason is very, very simple. The mayor, and really what he did is he’s acting more like less like a politician and more like a CEO. And he said, you know what? We want to attract all this business that we know is leaving San Francisco. We want to bring it here. And he’s also very passionate about crypto space.
So it’s become kind of the de facto headquarters in the world, really for crypto, but there’s a couple others as well, Wyoming because of banking. A lot of the crypto banking is happening in Wyoming because whoever the leaders are, there’s a woman named Caitlin long, I think. And she’s got like kind of a new age bank where a lot of the crypto spaces is happening there.
So Wyoming and Texas, Texas has a lot of political leaders that are saying, we, you know, we were pioneers in the golden age.
We also need to be pioneers in this as well. And you’ve got a couple of companies that are based mainly at Austin. I think that there’s a couple of other places as well, but one Unchained capital. I think that they’re going to do very great things.
They’ve got their headquarters in Austin and a couple of more as well on chain capital. So Unchained capital is a, let’s see, depending on how novice you are, you may or may not understand a lot of this, but it’s essentially a way to store your crypto and use it effectively like a bank, meaning that you can earn interest on it.
You can lend it. But it’s known to be one of the most secure places to store your Bitcoin out there.
So there’s a few ways that you can store it. You can store it in a, and they’ve exchanged like Coinbase or Gemini. You can literally what they call cold storage, meaning, you know, you’ve got a physical device and it’s all on you, which I have a couple.
The safest and the most dangerous exactly from the outside world, the most dangerous to yourself.
Yeah, exactly. And then, and then you’ve got the, kind of the, the intermediate places like Unchained capital, where they hold the key, you hold the key, someone else holds a key.
So it’s kind of like a vault for your Bitcoin, but also allows you to utilize it mostly for mostly people use Unchained capital for to take loans.
So I deposit a Bitcoin, it’s worth 50 K they’ll give me 25 K cash loan. And my Bitcoin is secure. I don’t need to touch it. I just need to pay the interest payments back.
Yeah, all that stuff is interesting to me. And, and you know, blockchain is just super interesting. But with this loan stuff that I’ve never really dealt in Tucson, I don’t understand it. So someone has got $50,000 worth of Bitcoin.
I can borrow that and then do what with it, put a down payment on a house, as long as I pay the interest on it, or so is it because I know you can convert Bitcoin to cash obviously, but is that what people are borrowing it for?
So there’s a couple of different ways to think about it when I say borrow against it. I mean, you with your Bitcoin acting like your own bank. So I’ve got, let’s just say, just for rounding purposes, I’ve got two Bitcoin. I put them with Unchained capital, that’s worth a hundred K what Unchained capital will do is use that a hundred K as collateral. Give me half of it in cash.
I can go buy a car with it, or I can use it for my business or for a house or for whatever. And I make payments. The interest payments right now are relatively high, but I believe that they’ll they’ll come down.
So essentially I’m my own bank. That’s essentially what, what I meant by that. I can also lend my Bitcoin as a matter of fact, I can’t remember if you can, through, on chain capital, but you can lend your Bitcoin through block fi through Gemini, through a company called L E D N led in out of Canada. And what happens is I say, instead of giving you my Bitcoin and taking a loan out, then I give you my Bitcoin and you pay me an interest payment because you’re lending out my Bitcoin to major institutions on the backend.
What are they doing? Yeah, well, Blackfin is now I think, valued at like three or $4 billion. So they’re where are they out of? They’re out of New York. And I think that they’ll be one of the major players in the space.
So who are the California guys doing this? Because I guess it started, you know, most of the tech came out of the Bay area, right?
Matt, really? So, so, so the tech, I mean, if you’ve ever heard of a Satoshi really it’s, it’s a pseudonym. Nobody knows who it is or essentially where it came from. But yeah, a lot of the early days in the space was San Francisco meetups.
But so there are some companies that came out of that space. I think crackin came out of that space, but San Francisco has never been a headquarters of the space.
Maybe you could argue that very much in the early days, because it was revolved around a bunch of nerdy techies. They’re going to meet up groups, but the major or the major players, the major organizations, almost none of them are based out of San Francisco.
So do you see any California politicians that are touting blockchain and cryptocurrency? Because I think that might be one of those things that could help save, you know, California, this there’s so many smart people there there’s so much technology and you know, there’s so much infrastructure for that type of stuff, but obviously there has to be support for it.
Yeah, I’ve never heard anything come out of California and, you know, there, there may be some reasons for that. I think when you think about the people who are kind of the, the OGs in the space, a lot of them are not anti Silicon Valley, but maybe a little bit, and that’s why they dispersed.
And that’s why almost none of the companies that I can think of now, I’m sure I’m forgetting some, and I’m sure that there’s a few in the Valley.
It’s interesting that Austin is one of the spots because a lot of Silicon Valley is, is moving to Austin and maybe not just Austin, you know, they may not be leaving Silicon Valley altogether, but there’s a lot happening in Austin.
So the fact that these blockchain guys are already there is just probably gonna promote, you know, I don’t know a ton about blockchain, but from the way I remember it being described as just internet 2.0, basically, right? And then the coins,
Well,
Sites, if you were going to put it in that way, because each point does something, right.
Well, the answer to that is, is I don’t know either, but it kind of depends. Think of the coins. Most of the coins are relatively worthless. I mean, think of a coin, like a, they call them ICO an initial coin offering because it’s something new. They need to raise capital.
So instead of IPO, it’s, I seal, but the differences in ICO is more like investing, not in an IPO of a company. It’s more like investing in their pre-seed or seed round.
Like they’re raising capital by selling this coin and you’re buying it and you have no clue if they’re going to succeed or what they’re doing, but essentially the ICO’s became a way for these companies to raise capital. And most of them went bust.
Now the blockchain can be described in many different ways. I’m not really an expert. I’m not an expert at all, but yeah, a lot of people say, what 3.0, I think there’s like four experts in the world.
Yeah. And I know I’m putting you on the spot here because I know this is not your industry. Your industry is, you know, you’re a sales guy, but whenever I hear that you’re interested in a space and you start talking about it.
I get interested, you know, because I know you’ve made a good life for yourself and you’ve done a lot of things with all of the, you know, anything you’ve ever started is turned out pretty well.
So, I was already involved in, in coins and stuff too, but just because tech guys were telling me about it a few years ago.
I think I started buying Bitcoin when it was like around $6,000, you know? And, and now it’s like what, I’m almost 60. So I’m like, wow, this is incredible. Right. And then I, you know, was really heavily invested in XRP at, I think I was buying it at 22 cents and now it just, I think the high so far has been like a buck 25 or something.
Thank you. The last time you spoke, which was less than two weeks ago, you said, Hey, are you going to buy XRP? And it was at 50 cents. It’s doubled in the last two weeks.
Yeah. One of my clients really, really, really smart, smart kid. I was telling him, Hey, you know, you’ve made all this money. You got to put some of this into real estate because it’s very, it’s dependable.
It’s just with the taxes and, you know, everything, it just is one of those things you should be putting some money and he’s like, Nope, he’s putting a hundred K a pop into these coins. And I’m like, Hey, what are you doing? And he’s like, if you don’t trust me on anything else, trust me on XRP. And I’m like, all right, just to, just to satisfy you, I’ll buy some XRP. And then I bought some and I’m like, wow, this kid was onto something because it, it really you know, that 22 cents multiplied by the amount that you buy that jumps up to you know, a buck 25 and, you know, so anyway,
A lot of money to be made and most people will end up losing a lot of money. I think personal opinion. I think that the only new and real advancements in technology that’s come out of this so far is Bitcoin. All the rest are incremental, technological changes based upon that one.
So that’s why I think most of the coins that have come out, most of the, you know, most of them have trended the zero. And I still think that that will be the case.
Yeah. You know someone else, you know, people describe it to you a bunch of different ways. And like you said, there’s only four experts in the world, so who knows, right. Who, who knows if what you’re hearing is is right.
But when someone was describing it to me, cause I didn’t understand the difference between Bitcoin and Ethereum. Right. And they were saying, okay, think of Bitcoin, Bitcoin as a gold. It’s like the original, it has value is going to always have value for everybody, but it’s a slower payment system. Right. So you can’t chip off a piece of gold and buy a car, you know? And so a theory is that is, is like faster than Bitcoin. So think of that, like silver. Right. So it’s okay.
I can use it for more things. Right. I can, I, I can also use it to build things and I can also use it for commerce and all these different things. And now all of these other things are like separate types of money. They have value.
So some are going to have value, you know this coin is similar to the Rwanda, whatever, right? So it might not have that much value, but this one, you know, my, so that’s the way he described it to me. I don’t know if that’s the way you understand it.
I’ve heard that as well. I think a lot of it comes down to narratives and you know, the two major coins out there between Bitcoin and Ethereum, they just have very different narratives. And not only narratives, they actually have very different use cases. And Bitcoin started as a peer-to-peer electronic payments and whether or not that was the original goal.
I don’t know. But the narrative is now changed that store of value. We don’t need it to buy our coffees. We need it to store our wealth. Ethereum was meant to essentially be more transactional between developers. So the use case is just very, very different.
Now, usability, if theory might actually be more usable, even though in Bitcoin transactions are a significantly larger, but the difference is a theory of them is how do you there’s, there’s no limit to how many coins could be out there.
They’re changing the protocols. So it’s kind of like saying, well, do we believe that the changes are going to be good because we don’t know. There’s a lot of, I don’t knows about theories that have been proven with decoy.
So what could happen is that theory could end up going through a massive boom and everything could work out and your returns might be better with the theory, but it’s still more like gambling because Bitcoin is all about safety.
It’s been around longer. And now the narrative has changed as you and I don’t need to go and buy coffees with Bitcoin.
Now with the lightning network, which is a story for another day, we probably will be able to, but the Bitcoin narrative now is, well, wait a minute, there’s 21 million coins.
That’s a 20% of them are probably gone or lost meaning that this is a much, much better gold for a digital age. There’s going to be no more. Which, you know, if you cut out the, all we need to worry about for prices, demand, because supply is set, which is unlike anything out there, it’s just a very different narrative.
So there’s some things that scare me with a theory. Am I still own a little bit of a theory on, but 90% of what I have in crypto is in Bitcoin 95, probably.
Good for you. Yeah. So this is really, isn’t a Bitcoin channel or whatever, but I just, it just interested me if Kela, and I know you were keeping up with who was doing what, in what space, even though you’re not a blockchain expert. And so I was just curious if you’d heard anything out of California any plans to ever go back to California. I know Mexico city is amazing, but
I don’t think so. There are things I miss about California. I’m sure you do, as well. As a matter of fact, we could probably talk about the good old days for awhile, but I think, and now every time I go back, actually I went back to visit you the last time I went back to visit you, you and I always have a good time, but the city of LA, I thought it was just does not feel the same as it did, you know, decade ago you might be able to say that because of age or because of, or in any city.
But that’s kinda my feeling. And I think that now, because the whole world is remote and you can live wherever you want. Even if I went back to the States, it would probably be somewhere else.
So, previous to what you’re doing now, I can’t remember what you were doing. You were consulting for some company in Mexico.
I was doing two things. I had a consultant company where we were working with FinTech companies, mostly from Europe. I like to try to make it sound complicated and complex. Really what we were is a sales and distribution arm for fintechs in Europe, into Latin America.
So we put, we, we had relationships with distributors in Earl, Y in Colombia and Costa Rica, the Dominican Republic, Colombia.
We were putting other offices in other places when, when one of the companies that we had a contract with just offered to kind of buy us out for those relationships. So that was one thing.
The other thing was I had a small FinTech company on my own, and we were an analytics tool for traders of, of anything, really from Forex to futures, even real estate, where you could aggregate information from multiple different brokers.
You could, it would show you the, any analytics you would want to see a run and then would take it one step farther. And you could run reports that would actually look like you were one of the major hedge funds in the world.
You could be a, a trader with 2000 bucks and you could be, you know, doing an analytics and reporting like you were an ambassador.
To have that technology. I might need it for real estate.
And actually because of crypto, it might be more valuable. Now, no, that company, that company ended up being a failure. I was working with.
Keep the technology though.
We ended up selling the technology to a small hedge fund based out of Stanford, Connecticut, basically out of New York hedge fund, no longer exists. So that maybe tells you about some of their, their, their business choices. And then the, it was a SAS play.
So then we also had a list of customers that we ended up selling to kind of like a financial educator out of Nashville, Tennessee of all places. So, no, we don’t have the technology anymore. It’s it wasn’t overly sophisticated. We, we ended up selling the thinking it was going to be a SAS for retail traders.
We ended up having more luck with kind of small to mid sized brokers that didn’t have in-house technology teams to build it for themselves. So they would white label it from us. Well, we got the revenue, I think it was up to like 200 K one year, but then it started to drop real fast and we, it’s just not a business that we were passionate about. So we ended up just selling it off for parts, essentially.
So with, with being in Mexico, I’ve been hearing rumors and seeing some things that manufacturing is, is moving over to, to Mexico. That’s U S manufacturing, Chinese manufacturing and European manufacturing.
Apparently China’s gotten to a place with its middle-class that its labor force is too expensive now. And so they’re, they’re moving it over to Mexico. I’ve you’ve been hearing those, those, those grumblings.
Yeah, absolutely. And for the reason that you just mentioned labor is cheaper here in Mexico as well, and getting more comparable to China and then you don’t have the massive shipping costs. Actually one of my very good friends has a zipper manufacturer that was started in Taiwan. They’ve got plants in China.
They started one here in Mexico about a decade ago, and now they’ve basically got all their business here. So it’s definitely a trend that’s becoming real.
Oh, that’s interesting. So, so when you talk about manufacturing, you’re talking about you know, mostly an uneducated labor force. I wonder why people coming up from central America don’t want to stop and take those opportunities in Mexico. Cause it seems like you know, any type of, any type of any country that, that begins a manufacturing base at some points, the jobs become higher, paying people start becoming middle-class and then you don’t have that cheap workforce anymore labor force anymore.
So at some point that’s going to happen to Mexicans and Mexico where the middle-class is going to expand. And so then they’re going to have to have you know a working class labor force from somewhere else, just like China had to move it, you know, to Mexico.
Yes. Is the answer to that. But what happens here in Mexico is you’ve got these massive gaps between the, so the middle-class here in Mexico has been growing for a decade and it’s huge and there’s so much money here, but the, the gap between the ultra wealthy and the middle-class is huge.
Like it is in many places and the gap between the middle-class and your average Mexican citizen is massive. And I can give you kind of an example from my business, I could hire a salesperson college educated, bilingual, and a decent salary for them. And a FinTech company would be $700 a month, maybe some commissions.
So you’ve still got you’ve you’ve got a long ways to go before you get there, I think.
Okay. So that might make more sense. Maybe there isn’t jobs in Mexico for central Americans, if, if there’s plenty of Mexican labor.
And there is an, you know, the dream of, of if you’re what a modeling or from El Salvador’s necessarily to come to Mexico, it’s it’s to get farther North just because those are the types of jobs that you’re going to get here. I, I actually think $700 a month if you were in that or more you’re in the middle-class technically in Mexico.
So that’s how kind of far down still that we are. But also I’m pretty sure it’s just because there’s so much workforce that in that area, that there are also some immigration laws that stop that because it’s not needed. There’s plenty of workers here.
Yeah. You know when I came to visit you in Mexico city, I don’t remember it being that inexpensive, I mean, it was certainly less expensive and you took me to the equivalent of the Beverly Hills in Mexico city. So it certainly wasn’t the same as Bev.
I mean, wise and feel wise, it was just as good as Beverly Hills, but price wise, it wasn’t, but I don’t remember it being so inexpensive that, you know, you didn’t look at the check or whatever.
Definitely not in Mexico city, you’re talking about 20 some million people at all, you know how big, but if you consider, you know, think of the table or the desk in front of you, if that whole thing is Mexico city, the parts I took you to would be no bigger than this case.
So inside that, yeah, you’re talking about it’s still Mexico, but it’s more, you know, first world ish. So you’re going to pay less than you do, but you leave there and you know, you go to places like Guadalajara or haka, all these different places.
You’re going to have a hard time spending a hundred bucks on a dinner for two, with all the wine you want to drink. But here in certain areas in Mexico city, certainly where I took you as is, you know, not the, not the place.
Yeah. What was that steakhouse? Cause that’s still the best steak I’ve ever had.
That’s actually, that’s actually a chain that’s called Sonora grill and it’s
Really that citizen chain, that thing was amazing. It looks it’s so, artisan that I didn’t realize it was a chain.
Yep. And it’s amazing. You’re not wrong. That it’s amazing. But yeah, it’s, it’s a, it’s a chain and next time you’re down here, I gotta take you to some more traditional places. That’s for sure.
Yeah. All right. Well, I know I’ve taken about 30 minutes of your time, so I don’t want to take too much time, but you as the consummate entrepreneur, and I know you’ve left California, so that’s not the advice I’m looking for, but for, for a California or anybody, what would be your advice for an entrepreneur? That’s just starting
Well, in what case, how to run the business, where to live or in anything in general,
You know, so, so, you know, a lot of people ask me advice, right? And then I have a few points that I always give, you know, one of them being, make sure that you’re actually an entrepreneur, you know, because I think some people are born with it and you certainly can learn it, but there are a lot of people that think they’re entrepreneurs and then one failure and they quit.
Well, you’re not an entrepreneur because entrepreneurs fail many times before they hit that one thing. That’s an entrepreneur, you know? So, you know, that’s one of the advice I get like, Hey, are you sure? You know? And then I tell them the story of the Wolf and the dog.
Yeah. I’m pretty sure you told me that over the first beer that we ever had. Yeah. You know, there’s, there’s definitely a couple of things that I think are important. And the first is if so many people ask for advice before they actually do something. And I think that that’s the reverse of how you go out and do something at least a little bit, and then start to ask for advice.
The second thing is you’re capable. I guarantee you because every human in the world is, have so much more than you think you are. So if it’s something that you’re looking at doing, just do it and be absolutely fearless about it.
The last thing is don’t underestimate how hard you’re going to work and just be okay with it from, from day one. I think it’s, no matter how often people told me that I was like, yeah, yeah, whatever. And then, you know, you, you eat, sleep, breathe it. And that’s what it requires to succeed this day and age.
Yeah. And that’s one of your strong suits is, is just the sheer Midwestern work ethic that you have. So, I remember you, you went to Mexico with like $1,500 or no place to live, like what was that story behind that?
Yeah, I think when I got here, it was 700 bucks. I was living in the maid’s quarters on a roof. Yeah, it was not a great experience. I was 33 years old at the time, if I’m not mistaken. And that’s the good thing about that particular situation is there is no alternative
Burn the ships. Right. And you know, that you’re, you’re, you’re obviously, and I know you well enough to say this, so you’re obviously smart and well read and well traveled and well, all these things, but lots of people are that, you know, and so it’s when you when you look at it, it’s just that other thing, it’s just that the fearlessness and the hard work, you know, and then everything else will fall in place.
Even if you don’t get to the ultimate goal that you wanted to get to, you’ll either get to something just as good, something better, or close enough there, where you’re like, all right, it’s at least better than where I was, you know? And, and, and, you know, people just don’t understand that they think, Oh, well, you know, it’s too hard or, you know, whatever, whatever it is that stops people from being entrepreneurs, but entrepreneurs, you know, they make the world go round.
So I agree. And you know, you’ve been kind of one of my mentors. No, I appreciate that. But, well, back to your, you know, back to your comment, I’ve always looked to you to kind of be one of the spots.
I don’t consider myself to be overly intelligent or anything like that. So to me, it’s either, you know, you work harder or you die. So if you’ve got the intelligence behind it, you know, and the work ethic.
Yeah, I think the work ethic is the, is the biggest thing. You know, I think the work ethic, because anything, anything works if you work it, you know, maybe not as perfectly as you want it, but yeah,
No, I was just going to say to your point that, you know, even if none of those things happen where you get something better than you want, or you get close or whatever, even if you fall on your face, it’s still a positive, it’s something that you’re going to take away forever until the next opportunity. But anyway,
After we’re done recording, don’t go away. Well, like a few more minutes off, off camera, but yeah. All right. Well, thanks guys. Appreciate it. Yep.
