#162 - Why Clubhouse Will Fail

my favorite kind of podcast content person out there dm me and was like this is this is this is a fucking great thread and i was like blown away that this guy wrote this and then cnbc was like hey would you like to do this some german news station was like well you come on and talk about it and i was like wow this is unbelievable what could happen with just a random mass tweet yeah i feel like i could rude world i know i could be what i want to from at all in it like a days off on a let's travel never look back how many people did your tweet reach how many people did my tweet reach yeah so go to twitter and then click insights and then look at reach i'm gonna guess five million okay let's give it a shot so it has thirteen thousand likes and yeah almost five million four point eight million impressions wow and who all who are some of the more interesting people who reached out to well first what what what did you what happened here for the listeners you know okay so what happened i went on twitter and i wrote a thread i wrote a thread about club house and the thread starts basically saying you know everybody seems to think that club house is the next big thing and i think it's gonna fail and here's how i think it's gonna go down and then i wrote it in this way that's a little bit like goofy i kinda went over the top i just i was like alright you're the ceo like first of all congrats champ you did it you know and i i walk through like the high that they're on right now i know because everything going great and everybody thinks it's the hot shit and then like where things might start to go wrong and what what might go wrong based on you know the way that the product is set up first the nature of that product and all that good stuff and so that that was a thread i put it out there and i thought it was gonna kinda flop because right away nothing happened and usually you could tell like you know this you could tell pretty quickly within a couple minutes you know if the thread if your tweets gonna get any action or not it didn't look like i was gonna get any action and the first reply was just sky being like dude this is way too effing long like what are you doing and like the way he said like what i thought i i assume something was like this is super super long because it's like don't know fifty tweets or something crazy but when he was like what doing i felt super embarrassed and i was like shit let let's just delete this this is stupid and then i just like let it ride for a few more minutes and then it took off and now some crazy shit's happening and like i i'm going on cnbc tomorrow to talk about it shit so all kinds of crazy stuff has happened you're going on cnbc tomorrow yeah i wonder if it's the same person who invited toronto on so you're the second person associated with the company who's been on in the past two weeks i'm hot on trunks heel i i'm on last week talking about cathy wood and arc and stuff like that and he was great so if i can do half as good as see he did i'll be in good shape and who else reached out to can you say you told me a couple yeah i mean okay so i can't say all the names i'll say well okay so first i started getting mentioned by a bunch of cool people so like the guy who started youtube but was like dude this is fucking hilarious like i love this and then so that a bunch of people who have started big companies kind of were saying something and i started getting dms from people and and i kinda went to sleep i at first was refreshing for like four hours because i couldn't stop like i was mid workout and then like between sets i would go check my twitter it was kind of annoying and someone was like what hell are you doing like what is this and i was like i don't know i'm obsessed i i really just wanna see it was like i would pull the refresh thing and then a different kind of famous person who i look up to was usually saying like this is awesome or something like that so that was kind of addictive i went to sleep and i woke the next day and so in my inbox is a offer for a book deal hey like a famous movie director who directed like a bunch of movies that we've heard of wrote like dude amazing storytelling this is i found my email address and emailed me that he's the i think i can say it he's the director of like space jam two and like a whole bunch of famous movies and then i don't know if i could say this one but my favorite kind of podcast content person out there dm mean and i was like this is this is this is a fucking great thread and i was like blown away that this guy wrote this and then cnbc was like hey would you like to do this some german news station i was like well you come on and talk about it and i was like wow this is unbelievable what could happen with just a random tweet like i was gonna take me to write not even a good one really it took me an hour i sat down and so the way this played out actually was i had already believed this but i thought okay that's not cool like nobody thinks it's cool to just say oh a startup is gonna fail most startups fail so like there's nothing that original there but because i had built a product very similar to club boss i kinda knew what the challenges are gonna be and where they might get tripped up and what's gonna be really hard for them and and so i thought well i kinda feel like i know the product strategy here but like it's kind of a if i just write about the product decision like some of the product challenges and the product strategy this a pretty boring tweet storm nobody's gonna really care so when i ended up writing it i wrote it like an episode of silicon valley affect earnings ability to jerk different takes simultaneously shit yeah i think it would make the hbo show like i basically wrote it in that style like i wrote like you know okay you know emily chang invites you on to you know whatever cnbc and to do an interview you know you wear your your visionary a gray v neck shirt you go on and you say this this and this and so i was just kind of writing like a goofy style i wasn't just writing information i'll try to entertain a little bit and and then emily chang replies to the thing being like you know i can't confirm or deny this but this is on point and so all kinds of crazy stuff was happening but yeah it took me about an hour and then i just hit publish i new guy like thirty thousand try congratulate or twenty thousand maybe yeah the dude that's the way that twitter works though is like you think it goes against like all the conventional good advice which is just like you know be consistent put out content all the time and like you know try to hit like hit a bunch of singles i and like what i found and i think i you tell me if you found this too which is like it's just like five tweets that grew me from twenty k to a hundred twenty k five tweets it's everything else was a cost of doing business it's a it's the hits business yeah it is and hits business and so so summer summarize this actually but you asking me to ask you to summarize this the your bare case for club house because we're actually gonna use this probably for a one of our twitter videos okay alright so alright so let me okay we gotta we gotta we gotta we gotta get the the video guys video guys this is the part you're gonna edit it alright here we go so everybody saying that club house is the next big thing you're hearing about it all the time they went you know from a test i think they were in test flight and they raised at a billion dollar valuation which is kinda crazy apple they're test white and raised at a hundred million but it's right but now they're at a billion dollar valuation it hasn't been long they're still on ios only still pretty exclusive you can't even they can't even join the app unless you have an invite and so but i see the other side of it i think that they're gonna fail i hope they don't fail i think the world is more fun if they win it would be awesome if they win but i don't think me wanting them to win it doesn't mean that that's what's gonna happen i i sort of i said in the twitter thread i said you know if if me wanting something to happen would happen then every bag of ships would come with walk but that's just not the way life is and and so okay so here here's how it works i pretend you're the ceo of club sam you know first of all you fucking did it you made it people actually like the thing you made and they don't even like it they love it and you know you check your dms and chris osaka in your dms he says dude congrats this thing is this thing is kick ass and you know neville is liking your tweets and keith boy is basically saying like this isn't shit you know you know this is not garbage and so you take that as a huge compliment as it is and it feels like every day you open up the app and like a new stars coming on the platform like first kind of like just tech door stars like you know the market entry and ben h with people that we like but they're kind of niche in our in our circles and then it'll expand and all of a sudden you'll get you know nba players coming on you know as famous musicians logan paul will come on and then this was the most like tweet the thing was as i said you know gary realizes that you've created a new place to yell and he starts tell it everybody hey if you really wanna make money go move back with your parents and sell their furniture on craigslist and so every life is good right you get a term sheet you're valued at a billion dollars and you know you're doing interviews about you and you gotta kinda ham it up right because you can't just say oh i made this app where you can go in chat rooms and talk to people that doesn't sound very very fancy so you try to play it simple but you talk fit really fancy you say things like you know this is like a this is a serendipity network this is this is not not just chat rooms this is audio escape is this is you know then you start saying like historical shit like you're like you know humans have been talking to each other since the dawn of time you know around the camp you know around the campfire and you know audio is so powerful because you could see your your tone and texture and and so you're going on the media tour and then like you get back your computer one day and you look at the charts and you know the graph doesn't look as you know as out into the writing as it's supposed to be and so you're like what's what's wrong with this thing you refresh and still the you know the growth is kind of flat maybe even declining and you you start to look a little deeper and what you'll find if you're the ceo of of home is after about you know a year into the product you see that retention is not so good it's not as good as it used to be in the early days and you know why is that the case and and what will happen is that you'll realize that club house is used for two totally different things there's two ways that club has can be used if you talk to users or you watch them you'll see these two things number one it's a place to create content and number two it's a place to just chill just to go hang out with other people and have conversations and so content is what we see all the time on there it's panels as fireside chats q and a's ama and it's like oh this is content is like the next youtube it's where you go you make make content people consume it you know and the problem is that a lot of the content like on youtube is just like meh you're right ninety eight percent of the content is junk and that's okay that's the same for every platform you just need to find that gold and there is gold on club house right if you watch the good time show or the the nyu girls who go on there and they they have that show called shoot your shot that is gold but you and so you wanna triple down on that you're like guys this is what this is what we need to double down on how do we make this how do we get more gold content and you tell the whole team we're gonna go get more gold content and so the the engineers they go start building features for content creators they build like a scheduling feature and q and a tools and like a monetization features where you can make money from your fans and the creators are happy but the retention stays bad and what you realize when you talk to somebody who knows what they're they're they're talking about here is that there's this like problem called the interesting this problem which is that when you open up an app there's one metric that matters called t t and t is time to fund how long does it take me to have some fun inside this app get some dopamine and all the great apps within seven seconds if you open tiktok youtube instagram in seven seconds you're gonna get something juicy you're gonna get fun and and you know the way those apps do it is they have billions of pieces of content to choose from and the algorithm knows okay this is the most like content the last twenty four hours so it shove it in your feed and when you open the app it's gonna show you something great right right tiktok calls is the four you page is it's here's the best stuff for you and that's why it tiktok is so addictive every time you open it you get something great but for club house you know you tell your engineers hey that's what we need make an algorithm that will do that and the engineers you know they they sit you down in a chair and they'll say okay we're gonna do our best but just so you know it doesn't like it's one thing to just find what's interesting but we have to find what's interesting and is being created live right now and when you multiply those two things together it doesn't become twice as hard it becomes two hundred times as hard to find interesting content when you open the app and so the what happens is most people will download this app they heard about club boss they heard it's cool the open the app and whatever's on right then to walk into the first room and it'll be kind of boring it'll be kinda of mad and then they'll walk into a second room and then within thirty seconds why the hell here this app is stupid they'll close the app and they'll probably never come back and so they'll get a bunch of downloads a bunch of sign ups and then but they'll all just be leaking at the bottom of the bucket and so you know you're the ceo and so you're like oh okay yeah live is harder i get it but twitch did it twitch is live and look at they got you know hundreds of millions of users so clearly it can work you guys the engineers you guys just need to make it happen and then you know the product manager of the engineers will come to you and they'll say well twitch is a little different right because on twitch the great content creators are creating about forty hours a week of content they stream every day six to eight hours a day and they're playing a game so they can do that they can play a game for six hours straight and just talk while they're doing it it's harder but it's not anywhere near as hard is just opening club and being entertaining for six hours straight while talking maybe some radio hosts can do that but the average person cannot and and then the second thing they'll say is like also you know almost all the content on twitch is about gaming so as a viewer if i come on there maybe one creators is not live but another fortnite creators is live or another fortnite creators is live it's like density around one passion whereas club outs is every category some people come there for music talks some for sports some for tech and so if i'm a sports person and i see a tech remit of zero value to me so twitch vertical club boss is horizontal this is gonna be really hard to get great content in every category and so you know i kinda fast forward and you know you okay this is tough and you know your your meeting ends the next meeting engineers leave next meeting is the biz dev guys biz dev guys come in and the biz dev guys are lot you know they're what do you want us to do boss and you say you need to go get great content go get all the stars we got all this money in the bank go go pick cut some checks let's get some star creators on the platform and you'll go to people who have who have a big audience you go to podcast right you go to people like us and then we're gonna say okay so if i could spend an hour on club house and get i don't know two thousand three thousand people in the room that's good right but like if i just record a podcast i'm gonna reach three hundred thousand people with that so why am i why would i ever make this train why would i go live here when i go live there right when i could just record my podcast so you're the ceo you say alright that's a tricky problem but maybe you could do both right why do you have to choose do your show live on club and we'll add a recording feature so that you could just make a podcast out of it later you can have your cake and eat it to and so you do that and some creators start to use it but you realize there's a big problem with that which is as soon as you start to like let people record and the core thing becomes i'm recording my podcast here i'm just doing a live version that will turn into my podcast turn into a youtube video well then this live thing becomes a second class citizen and i stop letting guests hop on my club house room and chat with me because i don't know what the hell they're gonna say it's unpredictable and you know what makes for a great live session is that sp turn but that makes for a shitty recording and so you know that's that's another trap there so okay you finally you have an emergency team meeting you say this whole content thing sucks you know we we only have a few piece of great content only a few hours a week for every vertical this is gonna be in to do in every category that's like recreating all of tv and that's just really hard to do you know and and i'm tired of all these people on there doing shows and q and a's and the success coaches trying to manifest millionaires and all this bullshit you know what is this discord for douche bags like screw shows we need a new plan and we we're going to plan b plan b is chilling right this is a social network it's not a performance network you come here to socialize you come here just talk to other people that's the most human thing in the world seven billion people on earth talk to their friends this what you know this is what we'll do here and you know you you you you ask people who had a great experience so far on club the people who think it's amazing like our you know our friend narendra or you know bit different people who have really enjoyed their experience and you asked them why and they'll say well i came on and i was i was in this room where this really cool thing happened and mark andre jason was there and then this guy was there and then you know i went into a side room and i met a bunch of other cool people in the tech world and we got along i made a bunch of new friends and you say alright that's what we're gonna do and and sure enough that actually solves your retention problem because people will come here it'll it will solve loneliness people will come here they'll hang out and they'll make friends but all of a sudden in your growth will stall right because if i'm coming here to make friends and i'm not bringing friends to the platform that's kind of the the the rub there right so any platform where the value prop is to make friends i'm not gonna bring friends now you have sticky retention but now you have no growth and in the other world you had fast growth but no retention and so you're stuck in this catch twenty two and you know so then you know just to really kinda round it out you you eventually get disillusioned you realize this shit's not gonna work you try to pivot you eventually sell the company to facebook you spend a year as the manager of facebook voice and then you quit you go you travel southeast asia for a year you do some ayahuasca and you vowed yourself i'm only gonna ever work in enterprise saas again you know screw this social thing and so that's my story over the top i'm hope i'm wrong but i think that's how it's gonna play out and i think a lot of people who are hate and you didn't realize that this is the life that you led yeah yeah some people are like wow that's really detailed where this where is this coming from and some people are like dude that's way over the top and i'm like dude i built this before like we built app so similar to today i say grew to four million users and tony robbins was using it and espn was using it and the jonas brothers and then oracle was using it and then you know some of the tech guys and the thirty seven signals guys were using it and it was also a product help we using it and then we hit you know we get to four million members and we just started to see these same issues and we tried everything to fix it and i hope these guys find the solution that we missed or maybe the world has changed or there's some differences but the reason i you know this was seventy percent my experience thirty percent you know fantasy that i wrote this thing with well i guess working up to check on this podcast and like maybe one year i bet i think we'll see how things shake out in about twelve months yeah and i guess like the more interesting part that i wanted to talk to you about was okay so first of all creating something that goes viral in such a crazy feeling and you've done an a ton i mean you built the hustle with a bunch of really viral blog posts like this is kinda nothing in comparison to the blog post you guys wrote and also you're a writer so you kinda have a process where you sniff out stuff that you think is gonna go viral whereas for me i'm not really a writer this is kinda me just trying i you you you have the it factor i think that i think you can study and how to do it i think that you can just be born with the skill set i think you and i are quite similar in that it's both born or we we have that natural gift and also we learn and master the craft right i think you've you've tried it a lot more and therefore your hit rate i think is is higher i i personally i just think that but the question i was gonna you i mean dude you got a hundred and twenty thousand followers on twitter in like basically six months yeah that's true so i i wanted to share so when i so the way this this came about because i think this is ultimately more interesting right the the rant is kind of interesting but the how this happened i think for people who are listening they'll probably find it i think the find interesting the way they started was a a pretty high profile vc person called me one day i had never read them before they had said oh you seem interesting on twitter i'd love to meet so we did a phone call and then we were talking just about each other's background was this cool and then they were like well what do you think club pass by the way i gotta ask and and i think they asked us because they had looked at investing they ultimately didn't invest and they were trying to figure out like am i gonna kick is this gonna be is this gonna haunt me you know for the next five years that i missed this deal or is this gonna be a good one and you know a good pass and i basically i i just went on this rant on the phone about this it just kinda came out of my mouth let just the way i kind of explained it here and without the whole like kind of drama like tv show script but just the reasons why i think it's gonna struggle and and they were like wow that was great like that was amazing and i i was shit i should've wrote that down that was like that would have i feel like that would have been like a good like piece of content and so i went i i kinda like quickly was like gotta go and i have the phone and i went to my computer and i just typed the whole thing out and and it turned it and like and i was like okay whatever i kinda i edited i took it out i i did your your which i took a break for an hour yeah just when it went and did something else came back and i edited it for about thirty minutes editing is the magic to everything it doesn't matter talking about viral tweet a good email editing is the magic they say right drunk edits sober oh that's a great one i've never heard that i love that i a to just it i used to just edit in the moment like i'd run and that was a mistake the tip you gave me a while back was go do other shit let it simmer in your head while you do other things don't even actively think about it by the time you come back you can make it twice as good in twenty minutes yeah and there's actually one science behind it i i i i can't tell you the exact science off the top of my head but basically you know how there's like a shower thought yeah of like not doing it so there's like science behind like doing something really hard and then not doing it and then things hit you there there's is science behind why that works so that's kinda what you're doing yeah basically like the brain relaxes in some way and then when he relaxes it's able to be creative in a in a new way and so okay so then i post it and then whatever you know she goes well so then so i was that was oh sorry the other part that i i forgot which i think is my new it's something i've been doing and i'm curious if you do something like this before before i write anything now at the top of every page have a template and at the top there's like seven lines that says what reaction is this meant to get and i have seven emotions it's like los like this is meant to be really funny is it w tweet etf where it's like dude what the fuck and that's when you're talking about something that's really unjust or people are pissed off and you wanna you wanna explain hey there's just really messed up thing that's happening and people will be like oh my god then there's other ones like you know like something really cute e all like like that something is awesome like wow that is like kind of amazing way did i tell you did i do this no i actually learned this from these other guys who make viral videos rubber republic they had a search engine where you would just search by one of these emotions and it would fill up viral videos that had that that were based on that emotion this as well so the way to go viral is you always wanna start you start with the emotion that you're trying to get out of someone and you and we already know that certain emotions get more shares so for example creating depression or sadness that doesn't get shares creating outrage gets far more and right with small tweaks you can make something sad outrageous and that's far better right you know so it's either amazing it's super funny is really really outrageous it's it's really touching and heartwarming that's another one hard to do and then the one i had for this which is kind of like a new emotion which was i wrote finally someone said it and i actually think that's a that's its own genre that i didn't even have in my template because i was like i think this is gonna go viral but it doesn't match any of these i was like i think for some people it's gonna be wtf like do this guy's a jerk why is he predicting failure what what an asshole but i thought no it's gonna go real because if you say something that a lot of people have been thinking but they've been afraid to say or they couldn't put words around it exactly but they had this hunch they will share it because they agree with your european opinion you stay for them it's the idea of recognizing something that you feel that you weren't sure if other people feel but you see it on paper so the same example is with location so when you see like how you know you're a san francisco bro or how do i know do you know sean per like i said if i saw ad that's said do you know sean i'd be like oh wait that's directed just towards me right so with the emotion that you just vote was like finally i didn't think i was the only one who thought like it's a recognizing it's a it's a rec recognizing something type of vibe and they're they're really sharing because they're like i knew it i i'm right so they're not saying wow he's so right they're actually saying i'm right re this this proves i'm right which is like a real subtle thing but i'm so interested in studying the like psychology around why people do it to do why do they share what they share because i wanna grow an audience and this is the best way to grow it and i feel like this i'm i'm this process that i'm doing i'm so glad you said you do it because i thought i was a little crazy i was like my that's what we used to do i mean that's what i do when i i'm like i i i start with the emotion then i start with the package like how am i packaging this then i start with the headline then the preview image and then i work backwards from there right and i always trying to like i'll find something that catches my attention just one factor one line so for example i was just doing research on one yesterday do you know what recapture is you know like know signing it for something signing up for someone says spot right nowadays they say like spot click the thing or type in the the the what whatever pictures assigned click it yeah it'll be like you know where are the traffic lights click all squares with traffic lights and yeah and by the way this a good example i saw this meme that was that recapture with the traffic lights and in one of the squares just the tiniest corner of the traffic light is in it and this shows the guy like suit like sweating like crazy like oh fuck should i include that should i not include that and that's one of those words it's like me too dude i have i i almost feel that way almost always yeah confused by this thing supposed to we could continue to do i always feel that way meme now here i can take it in another way do you wanna know a when i look that up on wikipedia you wanna hear a fun fact do you know why they do it this way is because people like google i might be pushing butchering this just a little bit but the idea is the same people like google are paying recapture to translate stuff so for example somehow picking out that sign or saying where the headlights are that actually helps google and google's paying you money it's paying i a little so so the original capture was done by this guy he was a professor at duke and carnegie give me and capture originally was letters remember it was always easy kinda of like like kinda hard to read letters but you could read it and that was basically taking they had scanned a bunch of book pages but who's gonna con the the the computer was not good enough at getting all the book pages to translate over to text in the computer because some of the book pages were rolled around it or wrinkled or kinda of fuzzy so the the computer can do it but a human i could easily do it so they yeah basically outsource the work and solve two problems with once done on the website side they just wanna make sure you're not a a bot who's signing up for their service like a scammer who's gonna spam everybody but then they did good in the world also because that project ended up transcribing like millions and millions of books i think all the books that they had scanned eventually and then capture two is about a recapture i believe is about image classification so for self driving cars we need to know is is this a bus or what is this and so i think that's where the original idea was classifying images let humans do it while the they sign and the inventor of recapture the second one his name is a lewis von think that's how pronounce he did both and that guy started duo oli lingo and he when he started duo he started it for two reasons one he i guess he just cared about helping you learn language but two when you are learning the language you're actually translating stuff that a third party service is paying for you to translate so this guy's crazy so what genius the exact emotion that you just had of this guy's crazy that the emo emotion wow this guy's i am trying to evo by sharing that so i can tell that story and probably five tweets and i bet it will like if viral reality is pretty impossible to predict but i can bet there's like a three out of ten chance that it's gonna have that has legs say i could say this has all the checks all the box to get popular i can't i anyone who says that they're gonna be able to predict it they're wrong like sean's thing just reach five people he was like this is not gonna work right it's a part the other part you had there that was good is that you took a thing that we've all seen it's a relatable oh yeah i filled one of those in and you so you took a very familiar thing but i told you the uncommon truth around it which i think is like really cool like i there's one yesterday sir i saw you know tom cruz his name is not tom cruz his real name no what is it it's tom tom cruz something it's like his middle name is cruz and his last name is like tom like looking up it's some like i don't know random like name and he changed it's tom cruise which sounds like a total movie star name makes total sense that he did it and so yeah it's really miss thomas cruz map the fourth or some don't even pronounce to pronounce that map yeah tom map versus tom cruise and so you take something really familiar we all know tom cruise right boom here's the uncommon did you know and then it's like oh sweet like wow know and that one doesn't have as much shock factor so it won't go super viral but it'll get a lot of lights but you know the the closer you can get to that the surprise gap between what i thought i knew and what's real the more shares people will get you yeah i think if anyone cares about this stuff i like the book made to stick and i like the book contagious by jonah berger contagious made to stick is how to to say something so people remember and contagious is a great book by this wharton professor on how to make things get popular to make them spread like a virus sense contagious i like it i haven't done that you wanna talk about paid news newsletters really quick a topic that we've discussed a lot yeah let's do it but this one is particularly interesting the reason why is we've talked about this company a lot ago go financial i've brought it up to a ton they spun off a couple of their brands and they tried to do a spa and when they tried to do a spa the company that they were spa with just like kinda like went down like dropped like significantly so they there was already a publicly traded company that was gonna buy a a few ago go brands the stock went down big time but that's not that important what's important is the numbers behind this paid newsletter business so there's this company called actually i don't know what they call this little it's a subsidiary of gordon of go i think they call it beacon hill it owns owns six sorry twelve different newsletter brands collectively those newsletter brands do where did i put the number five hundred and fifty million dollars in revenue and two hundred million dollars in profit and by the way growing some that grew seventy seven percent over last year is that crazy now i'm gonna tell you all some more numbers they have ten million free subscribers so kinda like the hustle that's like they've got ten million of that this is even while they're they have five hundred and fifty thousand people paying them six hundred up between one dollar and six hundred dollars for subscribers then they have a quarter of a million people paying them six hundred dollars to five thousand dollars and finally they have a hundred thousand people paying them more than five grand for a product for a paid newsletter and what is in this paid newsletter what's the what it's way here's where things get way crazy they have some paid newsletters that cost thirty five thousand dollars now the reason why what gets crazy what gets crazy with this is that they have a hundred and sixty products of across twelve brands so what's that math so each each brand has twelve twelve or thirteen products and the products i don't even understand but basically i'd understand the business model the business model is they get you to buy a fifty or forty nine dollar thing then they get you to buy a two thousand dollar thing and they're and so they get you to buy that forty nine dollar thing and that forty nine dollar thing is like a monthly paid newsletter like it's not significant right i don't understand i how they get to work and a large percentage of those forty nine dollar people by the two thousand dollar thing okay so but i feel like okay so these must be b2b b oh newsletters right no they're not yeah that that's an important part that i left out nearly all of this is around and we'll link to their deck so they have a whole deck when they they they it's kinda scam so they it's a financial and a wellness company which is kind of weird that it's talking about health and they're talking about wellness and if you click a go up there sean under my name you'll see the deck yeah they say that their their target demographic is self directed investors what's that mean well i'm gonna tell you if for looking on the website it's just a bunch of old kind of wealthy white people who are probably republican under and because the reason i think this is they have ads and say like nancy pelosi is coming for your guns you better invest in these eight stocks like they say like crazy shit like that right it's basically the like motley fool on you know steroids right yes but i think molly fools ethical the goal these guys aren't they also sold the book on how to cure diabetes okay i was gonna ask you why do you think they're ethical goal and then you answered my question and so it's all financial news financial newsletter financial news related stock picks and it's just just a crazy story i brought this up tons of time we don't spend too much time on it but it's pretty wild to actually see these numbers i actually guessed that this is how big they were now we have proof yeah you've been talking about as like you know doing hundreds of millions of dollars and you know some people know about but i would say most people don't know about this empire and most people i mean this blows away most people's expectations of you know paid newsletter right like oh i'll you know like i just had to paid newsletter as an individual right i made you know a few hundred thousand dollars total and i thought i was crushing it these guys are making hundreds of millions of dollars so when you look at this is my honest quit my honest reaction is do why could you have done this with the castle why what what did they do or what was the why was the hill too hard climb where you could scale like this because this is huge i don't think it was too hard to scale i think i could have done it i would say that this business has been around since the seventies right so it's kicking ass now it didn't always kick ass if you're willing to be patient you can do it second of all if you're willing to put your ethics aside a little bit it actually is quite easy to do helps so not how would you do this you let's say you wanna be these guys or beat these guys what does you know you're sam you're probably one of the most well equipped people in the world to do this how would you have gone about it well what you have to do is you've gotta create multiple brands that are won it's really hard to have one brand and only a couple products make all this money right so you'd have to have for us we would have done and we were going to do this but then we got bought and the reason i got bought was a whole different reasons which is basically i wanted to get a payday like and i wanted to i mean like i was i was pretty clear about that before like i wanted i like it was cool it was it's awesome i'm gonna stay here but like it was nice to like hit get a lot of ticket but if i wanted to be patient and do it for fifty years which i kinda do it to to be honest i would have created trends but for subset sub subcategories and you make the first newsletter the one that people pay for only like forty nine or fifty bucks and we send you just a couple things a month and then the second thing is you go to sub subcategories you charge thousands of dollars for example if there was a newsletter that dissect media companies i work in the media industry and you told me it was four thousand dollars and i also got access to a community i ain't get a complaint about it right i'm coming i'm gonna do it if there's something for digital streaming and that you know that the five analysts are smart twitch is gonna buy that it's not that like challenging not that hard right and so that's what i would do from multiple industries and the thing that a lot of newsletter writers do would which i've talked about those plenty times and i don't want to talk about too much is they do one of two things one they charge too little and two if they charge too little they don't have a higher and back back product you need a back a front end and a back end so you need your cheap thing that gets a lot of people and then use your paid thing that gets only a few people but it charge makes a lot of money so so you guys at trends is like i know three hundred something a year you could have been forty nine dollars and then five thousand dollars would have been a better mix of value if you want if you were optimizing for how do we get this things as profitable as we can lucrative as you can yeah and had we not gotten bought i would have done that i would i actually we were about to change it we were about to make that change and by the way what happens to trends now people will still pay for it or it's free now they pay for it we're we might lower the price before we are either gonna make that the back or we're gonna make up the front end but we were gonna copy this model of a ninety nine dollar thing and then a two thousand dollar thing yeah dude when i see companies like this it just makes me wanna do it so badly because it's like it just seems so doable now i know that in practice when not and by the way we get we heat for this sometimes because we're like dude it's so easy it's so simple we're talking like relatively like building a successful business is hard okay like it's not just gonna insane we're not saying things are easy sometimes we actually do for say that word easy really what we mean is simple so like being able to bench five hundred pounds that is simple like it's straightforward you just you've here's how you get strong in the bench trust you lift a lot and then you eat a ton now that is quite hard to do for five years but that's that was that's the steps you take so it's like simple and so what we're saying is that this is simple it not i think i think weight loss is actually a better example because five hundred pounds is a is a hard thing best what else is is literally simple it's like hey you need to eat these you know avoid carbs v sugars you need to eat a little bit less less calories than you're the burning and like you should work out regularly do kind of whatever just try to get an hour a day of you know break a sweat if you actually just did those two things and be like hey give it like four to five months six months boom you're in great shape everybody knows that formula it is actually simple executing it and doing it having the discipline and having the rigor to like actually stick to it hard but it is way easier relatively than becoming the crossfit the champion right and so when we're talking about business the scale is that it's like it's hard to create the next facebook that's really freaking hard is it hard to create a paid community well i don't think most people who try it will do it but it's relatively way easier than create the next facebook so for people that out there they get all sensitive when we call something easy it's not not trying to mislead you like yeah it's gonna take work most likely it won't work it'll take some time but we're on a scale of one two spacex this is more like a one than it is a spacex and like that's that's a scale for for people to think about i completely agree and i think like now let's talk about what makes this hard the first and is that you have to sell your soul a little bit now many people will not be comfortable with this stuff sean is pretty comfortable with it i think i'm i'm comfortable with but i think i'm a little bit less comfortable with it you have to be a fakes sometimes so you have to be you have to say i'm an expert at x pay me money to for me to tell you my thoughts right second well no this is off that so guys like james alt who we've had this podcast he was ridiculed for doing this with bitcoin everyone made fun of him he made sixty million dollars doing it but he still got mocked constantly and shockingly most people would actually prefer not to make the money and not get made fun of than they would to make the money and get made fun of well the way i think about it is most people truly will not that they are afraid that they're gonna get them i'm not gonna get the money and get mocked and so they're like fuck i i won't do it if you really had a guarantee i think people would fun happily trade reputation points for bank points but well yeah man perhaps but that's a moot point because the fact is is that most people don't even wanna because the first one you said of like they may not get the money at all that is also true and that's what they're they're they're not gonna do that you have to do that second it's a treadmill you can't stop this is a lifetime job so if you are a content creator you i hire people to do it for me you one hundred percent can do that but you you're gonna you can't you have to you actually have to do the work for a little while in the anyway so you're gonna have to work and by the way quick question hiring because people ask me this and i have no idea i'm like why don't ask sam this you he's why he's you're asking me they'll be like dude the hustle has had amazing talent like they talk about trump they talk about steph smith and by some of the people you guys do me i mean the right i mean i consider you you be part of our crew you me trunk steph it's got colby we've got yeah we've got a bunch of people so the question is where the heck did you find these people so can you give me the ten seconds on each where did you find where you find steph where where'd you find colby where did you find you know all these people colby was worked at a p firm where he was doing some copy work and chong ea amen just did he just apply to you or are you like recognize recognized i this guy's good mutual connection in friend of a friend said you should talk to this person chong came from ea troy a mutual friend and the investor of the hustle steph i found on twitter because i read her blog who else i i i just wanna wanna and then when you found these people are you what's your did you cycle through thirty people who kind of sort of sell where you found the gems when we actually sold to hubspot they're like well you guys have a lot of churn i'm like yeah but here's what we do like and this is actually quite normal in the editorial industry but you hire a bunch of people and you got a you you either fire or there's a mutual like alright we try to it wonderful print and that happens a lot yeah and you also you have to the tone i would say that was also a key right because you were writing it originally and so you yeah and you saw the right people you saw the trends community like i was the one actually doing work every day you were posting in that thing yeah and that sets the culture and it attracts like minded people i also think that once you find the winners then you go all in on them so chong is what i call he's he's a made man steph a made woman whatever steph wants to do something cool sounds good what do you need when me with an idea negotiate baby trying to time to double it time to double that number whatever's no sam gave you time to double it these guys are all doing great when whenever if if an outside person or of a non main person comes with an idea it's you know let why don't you just show me a little mvp and let's just see what people think it trunk says something it's alright yes sir right yeah like you you you're a proven hit maker so and then the the last thing is when we interview them i always ask about the bottom fourth of the resume which is like the college classes and all the things that they take i want them to like entertain me during the interview so in the same way that you are really good at storytelling you have to have other people that are good storytelling right right okay i like it can we do one idea real quick before we we jump so because this kinda kinda kinda kinda feel like it's out of left field but i would say there's something interesting here so light it on the page oh yeah it's on i'm down here virtual team building so for a long time people have had this problem of we have a team we're working on stuff together you know as the boss you're you know sometimes you gotta crack the whip and it feels like it's just task after task and deadline after deadline and you wanna make sure that this team is really coming together and is bonded and you want people to have a good time here and you don't want them to leave and all the good all the good things you care about your people the experience they have working for you and so in the old world this was different team building solutions and so we would do off sites i don't know what you did with the hustle crew but like you know some people go to a a shooting range some people go to an escape room some people do like you know painting and wine tasting and what are you some you know what i liked most just like a fancy dinner right yeah let's go out to dinner right let's go to a cool place i you know it's on me order what you want type i just like we would do like fancy dinners right and and and this is every every team literally i a nba coach talking about this other day goes man we got all these new players so hard with covid because in the old days you just go to the bar you put your your card behind the tab you know and you you say all the drinks are around me tonight get you know go crazy guys he's was like he's like you didn't have to like have conversations like you just needed to give guys a night out together and good things will happen and and so with the you know we have this remote work trend everybody's going remote so how are those teams gonna do it how are they gonna do team bonding because although you get to spend more time with your family and you get not less time in traffic commuting you do lose the water cooler you lose the team bonding so how are people gonna do so i've seen some cool companies popping up that are doing this and i think they're doing quite well so i wanna point out a couple and then get your take on if you think these are good ideas as bad ideas or how you do it so the first team team team rod is that right yeah team rode like cam but for a team and so this is actually backed by some pretty legit players like some pretty pretty famous people in silicon valley which i'm surprised because it kinda just looks like a goofy like they seem like small bootstrap ideas but actually they have some big backing because i think people recognize the spaces big c companies pay tens of thousands of dollars per division a year to have team bonding and so then you you know in a big company you have you know easily high six figures low seven figures worth to spend on on this type thing that's my guess i'm i'm not in the finance team so maybe i'm off but i think it's not right i'm first of all team rode looks interesting horrible name what a awful game they've got a pretty bad ass a pretty bad ass set of advisors guys like keith boy who seems to hate everything as you've said is on their adviser or their board pretty interesting yeah exactly so he's on this and it says trusted by a three three hundred plus global team do you see pension you now who's summer sanders who is that do you don't remember summer sanders she was from and she was like a a swim in the nineties and then was the the nick nickelodeon and tv shows no way that's that's hilarious suburb sanders weren't at product development at team rode so like you know you could do things if i click their experiences right i clicked the bond and engage category so it's like a coffee and tea tasting a wine tasting a guacamole tasting a painting class or whatever it could be if you do kickoff off kick team kickoff okay we got our guacamole tasting again but we also have the high heel shoe project a lesson for inclusion you know so there's these like kind of team experiences lessons in a box or bonding in a box experience so that's one then our friend from the pod greg is at created one called nice break dot fun pod dude this guy loves like cute names yeah give me give me a name named how do feel about nice break that fun it's okay it's good he loves like he he greg is like the cool sky and like he like public school or like school works so like school plus like what his studio called late checkout late checkout like you know about for i remember being like why we open this agency late checkout it seems like a weird thing to do like you're entrepreneur sure you do have this like kind of like product design creative agency thing and and then every week he's like yeah we like i'll i'll put post a cool product that i think he's awesome he's yeah we work them we designed the prototype i'm like he he's doing it for all of them i'm like oh actually this is fucking awesome you're like on the ground floor of all these things you can invest in them you're meeting them you're like seeing all these spaces and getting paid to do it like okay that's pretty cool and he's using that to fund his own in his own projects so their their own internal projects which i don't know that's that's it's actually a pretty good cool way of doing it but they have things like a comedian will do like an improv class with you guys over zoom or a virtual escape room or a you know a wardrobe makeover or stuff like that right so i think this is kinda cool and there's other products like this that are like just a straight up zoom escape room it's like eight people enter one hour goes on the clock and the whole thing happens in zoom so i think there's this is gonna be i think a pretty big space that starts out looking like a toy but ends up being a pretty pretty solid business what do you think yeah i first of all late checkout dot com or sorry with late checkout dot com is greg it's mostly sean's buddy he's got a community community design firm go to that website and look at what he's doing it's really good that guy is really good nice break fun nice break that fund i think it's cool they're charging a lot of money which i think is badass so they charge two thousand dollars a month plus okay so a grant a month gets you two nice breaks per month for and that's for companies that are twenty five to fifty if you're oh okay i understand how this works yeah this could be break this could be a hit i think this is great i think this could totally be a hit could it be a huge vc thing no i don't know but this could make tens of millions of dollars and if that doesn't exactly and the other thing is one way to think about problems like these or find opportunities like these is you go in the c suite so you say okay there's a ceo there's a cmo there's a cto cfo cio or whatever right you go through all of them and we were laughing because you were like what the hell is a c so this is what a c thinks about they're the chief people officer essentially of a of a company that i kinda use this inter interchangeably internationally maybe there's some nuance difference sorry to you know the the three c that listed to this podcast i didn't mean to to what is the c chief human resources i think officer right so so they think about this stuff right they're like okay the whole workforce has just gone remote we really care about what's called employee engagement which just means how happy are people to work are they gonna leave are they gonna is this a toxic work environment or not and so then they have this do so one thing you could do is you go talk to these people and you just sort of say what sucks what's what's keeping you up at night what are you stressing about and you start to ask these questions and at first they won't give you a whole bunch but then you say alright can you show me your budget for the year oh wow you spend a lot of money on you people development what is people development means and it's like oh that's corporate training and blah blah oh interesting who do you guys use for that you go look up those companies that is like some people sometimes people ask like how do you guys think of these things that's how we learn these things it's like we just start to sniff in these types of ways and you start to learn about all these spaces that are outside of just your day to day worldview view so if you're out there as an entrepreneur trying to figure out where can i build a company where there's i don't wanna just guess on demand this is one way you go talk to somebody who's in charge you figure out what what's stressing them out what problems they need solve what language they use when they describe it that's your landing page that's your ad and then you look at their budget and you see do the does the money map to the problem and if the money maps to the problem you start to see oh okay and you asked them hey which budget line item is growing a lot year over year which which line item was smaller last year and is bigger this year because that's the where they're still looking for new solutions and you could do that for an individual as well i think what you can do is you can go sign up for minute or whatever and just look at the categories of your money and just look at the trailing twelve months and be like wait what am i consistently spending money on and do that with five or ten friends and that's actually a great way to find an idea and doing it with businesses is far more profitable so you just go and you look at oh they're you look at quickbooks and you say alright what's going on here where's is all the money going to right it's an awesome way that's actually kind of a cool business in itself which is like how do i how do i what like wallet share like how do i just see how wallet share these people are moms in america where's their wallet going right like what are they spending their their time and money on i think you know big brands like i don't know f and gamble they they think about this a lot they interview a ton of as they say okay you know the mom controls this much at the household budget you know seventy percent or whatever and then within that every month she's spending x percent on groceries y percent on household cleaners this percent on this this percent on this and that's how they decide okay we need to invest our product development according to where the budget is because that's how that's how we make our money back that's such an interesting way to do things like i guess you could do it how many public company there's two thousand public companies in america you could easily or i think there's like four thousand somebody there four thousand however many michael actually said us episode four thousand let's say you could easily do that with with all their categories right you can't see line items but you could see like g and a or but you might be that's kind of an interesting study right and and you could use this with just media company how are our media what what is the expenses look like of a media company where are the allocating you know where where are they where do they spend all their money and where which which ones are changing over time where is things shifting and so i think that's kind of like an interesting signal that you can use at the company level one division and a company individual person whatever and and i think you get a lot of insights from that i think that's a great idea i think what we just said of like did you make up that name while chairs is that a thing i think that's a term in general like it's a it's a general term but but i i've also seen this by the way in terms of for for in the social networking space in terms of time so wechat i think or i don't know the chinese companies they had this presentation i saw and you know i'm sitting there trying to go through a chinese presentation so you know maybe some of his lost from translation but i got i got the general idea which was they want a app for every minute of your day there because china has all these x super apps like we wechat you can pay your house bills in it and it's like whatsapp and you can also like subscribe to netflix through it you know they're version of netflix but it's also like you know where you post photos and like that so what they said was like they took a person's day so they're like okay fifteen year old kid wakes up in the morning at this time first ten minutes of the day what what products are they using what apps are they using and they start to break it down minute by minute basically like what where are there gaps so today we're taking up four hours of this person's time if they're awake for twelve hours how do we spend how do we get twelve hours of their or sixteen hours how do we get sixteen hours of minds share from this person well they watch movies at night we need an app for movies well during the day they need they message the friends we need that they need news they get the news alright cool we're gonna do news and that's how they they think about because how do they expand if you're an ad based business you need attention so how do we get more attention why need more hours of the day of yours do i give more hours of the day while i gotta figure out how you spend it today and i gotta insert myself there i have a few friends that have worked on the on that at facebook where they're were like alright we have found out that if you put stickers on def photos people spend like five seconds more and they have like fifty people just working against stickers and i'm just like kill yourself like these people hated their job do like one of my best friends his job at facebook was literally he was in the you know it was called like security and safety and privacy of community or stuff like that department and literally he's like i just try to make sure dick doesn't show up on your facebook feed he's like so he's like you wouldn't believe how many dicks are posted on facebook every day he's like have you ever seen dick and i was like no never not one he's like that's right i was i least cool you're like trying to protect people whatever that's cool but like he's like i'm writing like he's like i'm reviewing folders of images that are just being like dick not dick dick not dick right and then like also same thing on the algorithm side like it's we we're writing programs to train the computer to recognize this first that and he's like it's cat mask game almost harder than to think they're always one step look like zach dimes or sean sean d no not just about a dollar and pennies they but yeah i mean at least that job is alright but like i can't imagine working at a facebook or in instagram and just all i'm kinda to do is suck more of people's time yeah it is sad when we think about it like the the best brands of our generation are basically sitting inside the giant slot machine and being like okay how do we how do we get the rat to come back again you know like all how do we get her to come back more and more and more and spend more time and more time right i'd like that's the real reality and it's like hey i get paid five hundred thousand dollars a year to do this and i get free lunch and they do my laundry and i get foot massages on fridays and like people think i'm joking that's those are all true things that happen before we wrap up did you see that you're were you so you and i are one for one of being turned a meme so you posted something like i'm looking for a a meme creator five hundred dollars a month no vacation and you you posted all this other funny stuff and people like mocked you like liquidity do my a bunch of people mocked you it's pretty great i think hopefully they realize that like we do this shit on purpose yeah or like it's not even okay like okay i'd love to say i'm in on the joke and i knew this like yeah i knew it was silly but like i didn't think i would to a minute like we we know like we're self aware enough to know this is like like yeah mock i wrote no vacation it's not even a real job like well of course it's like what outdoors this is a fake job posting i'm not fake it's like i'm basically like just being like hey does someone what upside hustle for me by making a bunch of memes you can make five hundred bucks a month make me a few memes every week that's really i was trying to say but if i say that it's only gonna get like a hundred likes but if i say it the way i said it over the top boom i got thousands of likes and if the thing spread and a bunch of people got angry and literally like taylor was like why does this person not get sick leave like because it's not a general like so and so yeah we're kinda doing this on purpose but also i am just kind of a character and like it's i don't i'm just saying things you know as i think them and then i move on with my life and like i win either way like i win if if you get mad i win if you you know like if you take it seriously and you apply i win like it's win oh i win a matter of what as long as i don't get completely canceled i win which might happen one soon but we'll have we'll have fun until then and i will explain someday why i am hiring a a personal meme god to to to do some memes for me i will explain you happened to explain that why i mean there's nothing there's something actually a cool story there's actually a cool story around it but it's not quite ready yet this story will be cooler if i put the whole thing together and then explain it when it's when it's ready so that they'll come and i don't know a couple months and i guess you'll have to share some of the best ones you got yes sir alright that's it yeah i feel like i could rule where i know i could be what i want to from at all in it like a day's off on a goal travel never looking back