Following her college graduation, Codie went on to work as a journalist. During her journalism career, Codie investigated human trafficking and drug smuggling along the US-Mexico border. This was the point where she realized she wanted to make a difference through her stories instead of just writing about them.

It was at this juncture that Codie decided she wanted to learn more about ‘money’, the catalyst for social change.

This led her down her path toward finance and private equity which eventually led to creating her own investment fund.

“ If you want to have big outcomes, you need to do the hard things. I don’t think there’s any way around that. It’s whether you choose to allow something to break you or you break free… if everybody could see the things that challenge them not as difficulties but as an odd, backwards, heart wrenching, awful opportunity to grow, then we’d all probably be a little bit more successful”

Today, she is the founder of the media company Contrarian Thinking, built on a mission to “free minds and build bank accounts”. She has also created a fund called the Contrarian Thinking Capital, through which she invests in “boring businesses” which are often overlooked by traditional investment companies.

Listen to the full podcast to discover more about Codie Sanchez and her building journey for Contrarian Thinking.

Where to Find Codie:

Follow her on Instagram: @codiesanchez

Follow her on Twitter: @Codie_Sanchez

Follow her on Linkedin: Codie A.Sanchez

Where to Find Contrarian Thinking:

Linkedin: Contrarian Thinking

Website: www.contrarianthinking.com

Episode Transcript:

00:00:04,923 –> 00:00:10,532

[al]: Codie Sanchez, welcome to the show! For those of you who aren’t familiar, Codie is the founder of Contrarian Thinking, an innovative media company, and she is also a private equity investor. So, Codie, a lot of people know you from Twitter where you have a big audience following. Tell me, what were you doing before all of this, for those who don’t know. 

00:00:31,820 –> 00:00:34,945

[codie]: Sure. So before I was public, I was in private equity. So I mostly did invest in small companies and I ran a business in Latin America and an asset management firm as well, where I would do deals. And so now I talk about the deals that I used to do privately.

00:00:51,113 –> 00:00:56,401

[al]: Great, so I believe you used to be a journalist back in the day, yes? Let’s talk a bit about that. How did you enter the world of finance and private equity from journalism?

00:01:08,240 –> 00:01:08,381

[codie]: Yep, that’s right. So back in the day, so when I was a journalist right out of school. So I was a journalist for my senior year of college and then the first year after I graduated college. And I covered human trafficking and drug smuggling along the US-Mexico border. So yeah, I’m definitely different from what I do now. And then I kind of quickly realized that you know those stories that I was telling they were getting out but they weren’t getting changed and so it started becoming more important to me to try to figure out how could I actually make a change to the story as opposed to just telling people about it. And that’s when I realized I wanted to learn about money. Because I think money is the thing that creates social change that’s lasting, it’s the best tool we have in modern-day society for that. And so then I went into finance to try to figure out what do I know about money if anything.

00:02:00,463 –> 00:02:07,622

[al]: Fantastic. Tell me, how did your social media journey begin? Coz, you got on all the platforms across the board and gained traction in a very quick timeframe. How did it all happen? 

00:02:15,190 –> 00:02:17,214

[codie]: Well let’s see. In January of 2020, I was you know I was in private equity. And I was doing deals, running around and making investments, and raising money. And then the world stopped and I wasn’t able to travel anymore. So I had a little free time on my hands like many of us. And I realized you know I missed sort of those engaging conversations that you have with humans when you are able to meet one on one and get that intellectual stimulation. And so I thought well what if I start a newsletter where I can start sharing my thoughts with some of my smartest friends pull them into the conversation and then see what transpires. And from there Contrarian Thinking was born that was my media is my media company and it started small with just a few friends and family and then grew into what it is now two million followers across social media. So it started by accident and then it spiraled

into an actual business. 

00:03:10,023 –> 00:03:15,315

This is a topic I’m fascinated with. “Outlier outcomes”. It’s common knowledge that people who have faced adversity early in life achieve outlier success. From Steve jobs coming from an adopted family to Chamath Palihapitiya who grew up in a deeply dysfunctional home with abuse and alcoholism. What are your thoughts on this? 

00:03:54,910 –> 00:03:55,451

[codie]: Yeah I mean I do think that iron sharpens iron. And difficulty and struggle often leads to a stronger human. It’s the same way with working out muscles work right? you actually have to stress the muscle to the point of breakage micro breaks continuously in the muscle fascia in order to grow. And so I think that seems to be true. If a seed breaks and then it becomes a tree, and only by breaking can something become quite larger than it started. so I think there’s a kernel of truth there for sure. and that if you want to have big outcomes you need to do the hard things. I don’t think there’s any way around that to be sure. it’s whether you choose to allow something to break you or or you to break free. Easier said than done but I think if everybody could see the things that challenge them not as difficulties but as an odd, backwards, heart-wrenching, awful opportunity to grow, then we’d all probably be a little bit more successful. 

00:04:57,583 –> 00:05:02,351

[al]: Perfect. Moving on, tell me what projects you’re involved in at the moment. So you have the media company Contrarian Thinking, you’re also running a fund I believe. Walk us through all that you’re working on right now.

00:05:14,352 –> 00:05:16,195

[codie]: So today, we have Contrarian Thinking, which is comprised of a newsletter which goes up to about a 160-170 thousand people. Then we have our social channels which are across all socials. We just launched youtube probably 4-5 months ago, and then you know my idea was, I think more people are curious about the word ‘money’ and about financial freedom. And I think if they get financial freedom then they can move to physical freedom AKA where they want to work, doing the things they want to do with the humans that they wanted to do it with, building something that matters in the world and then they can get to philosophical freedom which is actually thinking for themselves as opposed to letting narrative spin them. And so the idea was build this media company and then add satellites around it. You know in finance we call them ancillary acquisitions right? So you start with your main platform company, so for mine that is the media company. The media company is my platform on which I do add on acquisitions of new businesses. And so I started a fund we have a venture capital fund called Contrarian Thinking Capital, where we invest in boring business infrastructure. Which means, you know the companies that you don’t think of but you use every day, adding technology to them and seeing what happens. So what happens

if you digitize all the billboards around the world put it on a marketplace just like Google Adwords or Youtube ads. We invest, we’re looking to invest in a company that does that right now. What if on every truck that drove by for last-mile delivery, you had a billboard that could actually Geo locate and target users based on their pixels on their cell phones from Facebook and et cetera. There’s another company we’re looking into investing called Agile. So where can we take this thing that was boring, a billboard, a truck? We have another company that does postcard or direct mail but with technology on top of it and add this 21st century layer to it I think that will be the future.

00:07:07,183 –> 00:07:11,850

[al]: So why should someone consider these boring unsexy businesses as opposed to, let’s say, investing in the public market or even real estate? I’ll let you make that case.

00:07:31,167 –> 00:07:31,390

[codie]: Sure. First of all, I think you should have as diverse array of assets as the colours in the rainbow. I think it really makes sense actually to have diversification. Lots of people push back on that today. They say no go all in on something, if you’re not all in then you know you’re not going to execute. And I think that’s fine except bankruptcy sucks. And so it really sucks to become insolvent, nobody wants that. And so I think you actually have to protect the house you got to lay the foundation and then you can build on it. So the reason I like investing in boring businesses is a few reasons. One they’re not sexy so the valuations for them are not at you know 25x forward-looking PE ratios, right these businesses trade on a multiple of their profits and not a double digit multiple typically. So one is it’s a value play. Two is I think it’s better for the world that there are less Starbucks and Walmarts and that there are more corner stores and more local coffee shops. And so if we can put our money into those kind of companies instead of throwing it into the S & P and indexing to all the big guys then we have a cooler community of small businesses as opposed to the concentration of power and money in a few hands. Which is what happens when you only invest in public stocks and largely large caps. So the second is because it’s building a world that I believe in. And the third is because most people in this day and age have been told that they should invest for enterprise value for exit. For this one day if I buy this at this price it will be worth this price eventually. But in the meantime how do you eat? You can’t eat speculative price increases. You can only eat cash flow. So these businesses’ cash flow, they’re profitable now they were profitable when they were built and these businesses don’t require massive amounts of VC money to burn. And so that to me is a huge difference and most VCs miss that, and most people listening to VCs miss it.   

00:09:28,014 –> 00:09:35,664

[al]: Very true. Usually, most businesses are overlooked or hardly discussed until they come up with some private equity. I used to work as an analyst back in the day in private equity so I get it, but if you’re not coming from that background you won’t see it. Why do you think these businesses are so overlooked? 

00:09:48,931 –> 00:09:49,91

[codie]: Well I think to your point, one it’s not sexy. So I don’t think anybody wakes up and says I don’t want to go and I want to own a trash collecting company, probably not. You know two, I think because most people don’t have enough money to invest in private deals and so you can very easily go buy a fractionalized share of Facebook in the stock market. You can’t buy a fractionalized piece of a plumbing company. You have to own the whole thing or a relatively large part of it. And then three a lot of people aren’t accredited investors so they can’t invest in things like private equity funds or alternatives until recently when they started to become fractionalized investing platforms in the alternative space. So I think it was really that private equity has been the playground of the uber-wealthy. Billionaires have a higher allocation to private equity and alternatives than any other type of asset class. And so for the little guys, you know we put our money into the stock market, and the big boys they owned and bought businesses because they knew that’s where multiple expansion actually was with cashflow at this rate and you could do a lot of value add to these businesses. So that’s why in my opinion.

00:10:55,783 –> 00:11:02,794

[al]: Great. Let’s talk a bit about the great resignation. I think it plays into your area of business too. A lot of baby boomers are retiring now so a lot of businesses are going to get shut down or they’re trying to sell them. But I don’t think there are a lot of buyers in the market right now. How do you see that? Do you see it as an opportunity for you? 

00:11:23,391 –> 00:11:25,314

[codie]: Yeah. I think, you know the truth the matter is there’s something like 11 million businesses for sale in North America in the small business realm which is businesses below let’s call it 20 to 10 million dollars. So there are a lot of businesses for sale. To your point most small business owners will not sell their business or either shut it down or they’ll you know continue to kind of let it lag on or they might hand it down to someone of their employees for a very discounted amount. I think we have an opportunity to come in as the next generation of business buyers and invest in these businesses. And that is rare. Typically you do not have a wave of business owners transitioning out with assets that have real worth, and a way to buy them through SPA loans, seller financing, raising capital that is available to younger generations. So this has actually never really happened before in the US. We’ve never had this massive transition of businesses that the younger generation could buy. Even if it is buying a job, buying a business that is smaller, and transitioning away from these mega-corporations where I think a lot of people increasingly are moving to work. 

00:12:36,193 –> 00:12:43,225 

[al]: What are your thoughts on the macro environment right now, with the increasing inflation, the war in Ukraine, all things that can potentially lead to a recession? How do you see that affecting your portfolio companies? Does it have an effect?

00:12:55,571 –> 00:12:58,975

[codie]: Well, I don’t know what I think about the war in Ukraine in this instance at all. I think this is an American localized issue. And you know I’m sure there are opportunities in Europe. But I really think about what is happening right here in your neighborhood, in your backyard with the people you already know and probably businesses that you already frequent. This is a global phenomenon that you can act on very very locally.  

00:13:26,685 –> 00:13:32,151

[al]: On The Pomp podcast I recall you mentioning that pretty much anybody can be a multi

millionaire. Could you expand on what you meant by that?

00:13:38,663 –> 00:13:42,844

[codie]: Well I think that’s true today. So increasingly we have incredible access to resources in this day and age that people in the past just did not. You know you couldn’t go online and figure out how to get a loan from the government in a few clicks. You know you weren’t able to buy a business on let’s say Flippa for a couple of thousand dollars and start an online business. So democratization of information and really democratization of capital isn’t perfect, there’s a massive unfair advantage to some for sure. But it is an option. Just about anybody can take the steps I think in this day and age to become financially free. It just depends on where you’re allocating your focus and are you surrounding yourself with other people who can actually get you to that level as opposed to focusing on something that’s more entertaining. 

00:14:38,175 –> 00:14:43,541

[al]: So what is boring? What are the boring businesses right now that you think are interesting? Ok, let’s make it a quick challenge. If I give you 3 people, with 3 amounts of capital. The first person having 50k, the second having 250k, and the third with half a million dollars. If you’re one of these three people, where would you invest? 

00:15:04,201 –> 00:15:06,46 

[codie]: This is a great question. We actually just created something called the IOS, the Investor Operating System based on this question. Because the big fallacy here is that the most important part is how much you have. The truth of the matter is is that you actually have to have a lot of different determinants to what you should do. The bad answers that many people give you on social media is oh right now you should go out you should buy a laundromat, you should buy a carwash, you should do whatever the thing is that I have done. That is the cheap and easy answer to most people because it’s satisfying. It’s like she said I should do this right now. But the truth of the matter is you need to spend the first couple of tens of thousands that you have learning how to become a dealmaker, learning how to negotiate, learning how to increase your salary, learning how to look at financial terms, looking at how to read a PnL, looking how to read a balance sheet, looking at how to do a thirteen-week cash flow. Most people don’t know those things. Even if they have half a million bucks they might not know those things. So that I think the place where you start no matter where you are is actually your financial literacy, it’s not how much money you have. We have something called the investor cash flow matrix, which basically takes you from spender-saver to master-allocator and there are four levels so two in between. Most people are spender-savers. So they basically have money, they spend it to a certain amount, they might save a little bit without a lot of thought they don’t understand why they put their money there, they don’t understand the return, they don’t understand the context for money, versus a master-allocator which is where you want to be is somebody who understands what’s the difference what a good real estate fund and a bad one. Why should I invest in inflation-protected securities right now? What does it mean to negotiate terms on this deal? How do I determine if one investment is better than another? And this person has leverage at the top, this person doesn’t. So that’s what I think people should focus on, no matter where you are we have a series of questions if you go to Contrarianthinking.co and you look up the cashflow investor matrix, it’s free, a newsletter on our site, you can see we have questions to ask yourself to figure out which one of those you’re in and your whole goal should be moving up the knowledge chain before you start trying to make your money work for you.

 

00:17:19,553 –> 00:17:26,665 

[al]: Tell us how you’re leveraging your audience through social media to your business’s advantage? 

00:17:32,851 –> 00:17:34,373 

[codie]: I think audience is the biggest form of leverage there is. I don’t think you have to have a singular mission to realize that attention is one of the highest forms of leverage you can have in today’s society. I mean I was saying this along time ago, but then then you see it so perfectly this week with like Kim Kardashian launching a private equity fund or night media Mr Beast’s manager raising a hundred million dollars from TPG a huge private equity firm they realize that capital has become relatively a commodity there’s not enough good places to invest it and so what they’re trying to do as they’re trying to become content engines because it’s become really expensive to advertise, privacy laws are increasing across the board and so any business that is not a content business today will need to either buy or become a content business. And I’ve been saying this for years and people thought i was nuts when I was leaving private equity but now they are starting to realize that this is the case. So I think the real answer is you make content for the sake of content you want attention so that whatever you do you could do it at a really low-cost basis because you have a trusted audience. It’s like raising capital without the strings attached. And then yes it could be dealflow, it could be investors, it could be new projects, it could be new partners, could be all of those things but the mission should really be creating incredible content that serves an audience that you’re interested in and then watch the opportunities that spiral from there. 

00:18:59,536 –> 00:19:02,982

[al]: Let’s say somebody is going to come with a content company. Their first concern would be ‘how to come up with good content?’ It’s not as easy as it sounds. So what are your strategies, how do you come up with your content?

00:19:14,912 –> 00:19:15,212

[codie]: We talk about the three Cs. So you start with what you’re curious with because whatever content you do, you have to be consistent. So you have to be something that you’re willing to talk about or put effort into at least daily for at least a year. So where are you curious? Then we talk about where is there a crowd. Where is there a group of people that are interested in this topic? If I’m super niche, like I’m into green grasshoppers only, maybe that’s a tough audience. So you want to find a crowd of people. I usually like to do that by looking at Facebook groups or I might look at Reddit threads and see if there is a crowd of people who are pretty voracious about this topic. Then I go to cash. Where is there a group of people who spends money on this subject matter? So you know if it is I’m curious about hunting. I really like to go hunting, cool. I could talk about that all day. Hunters are a voracious crowd, they love talking about it, there’s lots of them around the world, they’re really into it, and three they spend a ton of money on hunting every year. So that is a great audience to target. And then it becomes easy to create content around the things that you’re interested in, especially when you get feedback from your crowd and you can support yourself by making your content business profitable.

00:20:29,264 –> 00:20:36,203

 [al]: I believe I came across this probably from one of your TikTok videos. You said something along the lines of “don’t nurture girls to be princesses” what did you mean by that?

00:20:44,584 –> 00:20:48,369 

[codie]: So I think it’s really important when raising daughters to think about raising them similar to sons in a lot of ways. You know people asked me all the time you know, how do I raise a strong daughter or you seem really confident how did you become like that? And I always thought those questions were weird until I started thinking yeah you know when when my father was raising me he always talked about you could be president, not a princess. And so you know he didn’t play the card that I think a lot of people play which is like you talk to your son and you’re like the son you’re going to go out there and you’re going to crush it and you’re going to work so hard and you know you get back up you fell down and that thing is bloody but get up you’re fine and you’re not going to die let’s keep rolling you know that guy hit you in the face what are you gonna do about it right that’s how we talk to our sons at least stereotypically in the US. How we talk to our daughters is something like, oh my sweet princess she can do no wrong you know I’d give her anything she wants, isn’t she so beautiful she’s so perfect she’s so whatever. And what I think that does, is I think it creates softness. And it’s okay to be light and it’s okay to be kind. But I think the world can be tough in many ways. So you want to create daughters that are comfortable with struggle. You know it’s it’s life is hard you know none of us to get out of it alive. And I think one of the most important things you can do is create a daughter that starts to love difficulty, that likes to strive for things. And you do that not by creating a false reality of princess hood. But you do that by telling them that that they can be the president and then if they want to be a princess that’s awesome. But it’s because they’re choosing to not not that’s because what somebody told them that they were capable of.

00:22:24,163 –> 00:22:29,348 

[al]: So if I were to go back and talk to your high school buddies, how would they describe you? Were you an introvert, extrovert, an athlete or a geek? Just want to get a sense of who you were during your high school times. Were you as confident as you are now?

00:22:42,381 –> 00:22:42,481 

[codie]: It’s a great question, you might might have to ask them. I think I was probably pretty confident when I was younger my parents would probably back that up. I certainly wasn’t a nerd because school was never my biggest forte. I did okay in it you know I got As in everything, but I was never the smartest in class and I was super into athletics. I think probably more than anything else I just I was a little bit of a loudmouth, you know I knew what I wanted, I was a little bit of a rebel. I threw my first protest at fifteen years old I think and got the whole school to go outside of our principal’s office and protest some new rule that they had for us which I now can’t remember. So I think I was always a little bit of a contrarian and I had that rebel spirit from a young age good, bad, or otherwise. But I certainly you know I don’t think I could say that I was super confident when I was that age. I was full of doubt and misgivings and concern about who I was and typical teenage angst and does this boy like me. Am I pretty enough? And all those things. But it takes a while to grow into the fact that you can be a multi-faceted human and it’s not the tragedy that we think it is when something goes wrong like in high school

00:24:02,434 –> 00:24:07,303

[al]: You mentioned somewhere that your dad used to make you play softball all day long. Could you tell us a bit about your experience with sports and how it influenced your life?

00:24:11,670 –> 00:24:15,115

[codie]: yeah group sports are incredibly important in my opinion. I think they’re one of the most important things that you can have your kids do. It teaches them competition, it teaches them coordination and teamwork, it also teaches them to lose, and learning to lose is an incredible thing to learn early. Especially when you’re part of a team, even if you’re the best all the time, you can still lose. And so I think that ability to lose with grace makes it a lot easier to fail consistently and realize that each failure is moving you forward. My father was very intense about athletics, volleyball, and softball when I was in school and would coach me in softball in which I played a competition league and in school. At the time I was annoyed I didn’t like him yelling at me all the time and you know I felt like he was harder on me than the other girls. But now I’m very grateful for that opportunity to spend that time with him and to have a singular focus and know what it is to compete so early in a healthy way.

00:25:17,205 –> 00:25:20,030

[al]: Tell us a bit more about your fund. Since you have a media arm, you can leverage that towards your fund yes? Could you tell us about what’s happening with your fund right now?

00:25:37,813 –> 00:25:38,414 

[codie]: Yeah the fund, so it’s called Contrarian Thinking Capital. We are closed to new investors at the moment. So we we’re fully fully sold out on that perspective. But what Contrarian Thinking Capital is is we invest in early-stage companies that we think are going to be the future of VC that people are paying attention to now. So typically when I reach out to mainstream VCs they want to see a really big market size, they want to see an incredible TAM, they want to see a potential next Youtube, Facebook et cetera and I don’t have any interest in investing in those. I’m not smart enough to compete with the top VC’s out there. What I do have is a really unique insight into smaller medium businesses and into things like what is going to be the best technology for a carwash. why is that going to matter? who’s going to buy it? how big could the market really be? and how sticky are those users? and so our goal is to find more of those. Where can we find the postcard company that adds tech to it? where can we find this other company that adds fractionalization fractionalized investing to AirBnB? where can we find these companies that are doing things that most people think are pretty nonautomated and boring and add technology to them? And so we’ve made six investments to date, we’ve allocated close to a million bucks and you know this fund I think you know I think we have an interesting mission. We’ll see what we’re able to do from the returns perspective, but in my mind, this asset class will be one of the ones that moves forward in the next generation, because it’s slightly underserved, the valuations are more reasonable than generalized VC, and simultaneously we can have an unfair advantage in the fact that if I with my audience of let’s say ten thousand carwash owners or carwash investors across the country can tell them that we invested in this company, we can help them reach their audience size and get a product out that’s quite a bit into a niche that would be very hard to reach typically.

00:27:50,035 –> 00:27:57,610

[al]: Is your fund limited for accreditors investors only or can anyone invest in your future funds?

00:27:59,320 –> 00:27:59,520

[codie]: Yeah it’s, they’re all accredited investors only. You know they’re on angelist. This is probably the most retail fund that I’ve ever done. Before typically my investors have been pensioners and sovereign wealth funds. So it’s interesting I think to have an opportunity to get to have investors that are like me and you. My mission is sort of this mainstream greater than Wallstreet mission and so it feels right to me that those are our main investors we actually cap the limit that investors can give us and so because we’re only doing a ten million dollar fund we didn’t let anybody invest in the fund at over two hundred and fifty thousand dollars. And so the idea was get more people into the mix, I like the idea of getting rich together, as opposed to getting rich fast and that’s our goal and we’ll see if we’re able to accomplish that.

00:28:50,844 –> 00:28:54,914

[al]: So when do you plan on starting your next round? Is there’s going to be another one this year or what’s your roadmap looking like?

00:28:57,860 –> 00:29:00,664

[codie]: You know, I want to spend we’ve, we’ve allocated about a million bucks of it, like I’ve said we’ll do I think we’ll spend the next two years allocating. I don’t want to go fast unless we get into a market where which which could happen where there’s a ton of opportunity. So we’re going to move really diligently in this because it’s not the main way I make money and you know we have a portfolio of twenty-five, twenty-six other businesses, my goal here is to do this really systematically and then you know, and then double down will allow co-investment rights to the companies that do well for those people in our portfolio. And I think that will be the opportunity. But if anybody’s interested to get on the waitlist, it’s Contrarian Thinking Capital is the name and you can go there and there’s a waitlist. And you know we may open it up to a small amount, but we’re not going to raise a mega fund. I think we’re going to make a ton of interesting investments, with a small group of humans and then if that proves to be scalable, then you know maybe we’ll raise something bigger from strategics on a go-forward basis. 

00:29:59,773 –> 00:30:06,231

[al]: So how can people find you via your socials? Which ones are you on?

00:30:08,990 –> 00:30:15,241

[codie]: yeah my Twitter is codie_sanchez and then Instagram is Codie Sanchez TikTok youtube and Contrrianthinking.com you guys pick your pick your poison on platforms we’re on all of them!

00:30:22,465 –> 00:30:26,411

[al]: perfect thanks Codie. Thanks for coming. Thanks for your time. Appreciate it. Cheers

00:30:27,020 –> 00:30:27,443

[codie]: thank you

00:30:28,514 –> 00:30:28,697

[al]: Bye now

00:30:29,550 –> 00:30:32,057

[codie]: Bye that was great thank you made it super easy

00:30:34,296 –> 00:30:34,576

[al]: all right, all right we’re good to go

00:30:38,945 –> 00:30:40,089

[codie]: I appreciate you having me.

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