#195 - A Discussion on Sam & Shaan's Recent Investments

props to this guy for doing this i gotta give them credit i'm i'm more into this that you are i kinda love that a guy's dreaming like this yeah i feel like i could rule the world i know i could be what i want to from at all in it like a days off on a goal less travel never looking back so we we're we just did this other intro mike got screwed up we're gonna do it again we could say what we said even faster though we're talking about the stuff that worry the startups that we're investing in i actually put it into a format so like the name of the deal why each of us did it why it can be great but i also wanna say why it can suck why it will fail yeah this is like the disclaimer here we have a stake in everything that you're gonna we're gonna be talking about i frankly don't care if people use it or not i mean this is more so entertainment i have a feeling some people will use it but that in also this isn't like investment advice a lot of these companies are very likely gonna go out of business because that's just how start investing works yeah and you couldn't invest in them if you wanted to most likely the the the good outcome of this would be a you hear about some cool startups that are doing interesting things and it just gets your real turning about like oh shit i remember even thought about that that's exciting and then the other is you get a taste of what it's like to invest in deals and how you think how how an angel investor thinks about investing in in early stage startups alright i also to say it really quick that doesn't i want people to know i'll say for me i'm not necessarily i'm not saying i'm good at this but i i'm home i'm just kinda doing it like publicly so people are watching me learn like get in shape publicly i've probably done thirty deals but anyway you wanna alright let me go first because i have this deal that i i have to make an introduction to because they specifically ask for you it's the top one it's called abstract ops and i need to know if you wanna join this or not i actually i i just emailed the guy today because i was like when i saw you write this i was like oh shit i forgot to reply to that guy did i introduce you you told me about it and i was like i i forgot to ask about it so i email yeah he i i offered you him or him wanted somehow you're already in the know and he said he wants to talk to you so i know this guy there's two guys i don't know the second one first one his name is adam spec he's one of the founders i think he's a coo i've known him since two thousand and fourteen or fifteen maybe i've been in a book club with them there's four of us who have a book club and i invested in the sea i didn't have much money at the time but i think i invested either one thousand or two thousand dollars i don't remember but i got right pro rat so when what that basically means is when they're were gonna raise again i got to invest again and that's why i find out about this adam's amazing i ended up investing around four hundred thousand dollars and and i got a preface that saying that i do my own money that comes straight out on my checking account and then i also had this thing called hampton b c so hampton b c dot com or is it dot com dot c and you can it's where i use angel where i invest is hampton b c dot com so where i invest like my own money and then if someone wants to join they can so in this deal i did both my own and hampton funny and we invested about four hundred thousand dollars basically explain what it is what most abstract tops so have you the like if you're like know what you're talking about a little bit if you would say it's like net nets sweet for startups if you don't know what that is which a lot of people don't know that is it basically what next we is so when you start a company there's a i don't actually know if you have to do this because you actually had people earlier on on but when i started my company there's a lot of stuff that i would always forget to do because i'm just an absent minded person so for example if you have employees and different states to file taxes into each state or even just a register in each state and it's not like a huge penalty it's like a hundred dollar penalty if you don't do it correctly and you get a notice so it's important to do it all right otherwise it adds up or another example is like certain hr practices and certain back end practices like onboarding contractors in a very particular type of way getting them to assign like an intellectual property released there's just a thousand different things and abstract ops is software that helps you that basically adds in what all those things are and it's workflow so you can see which tasks need to get done does that make sense it's a little bit fluffy but does that make sense that's a little bit fluffy but i recommend people actually go to their landing page not because that has anything do with the investment but it's such a good landing page so so what you see if you go there so it a so i just gonna point out a couple of brilliant things i'm gonna use this in my power writing course because this is an example of an amazing landing page for a fairly boring business that would normally have a cookie cutter very boring stock photo type of of website and so it says stop running from your back office tasks which is basically like they had a million ways they could explain their business like we make it easy to handle you know your your back office task or to handle hr legal and and hr legal and finance ops and so stop running from it i think it's great it shows me this person understands like how founders are which is like we put this shit off as far as we possibly can because it's a pain in the ass which we don't wanna think about it and then it has this stick figure running away from a tornado like a little hand drawn tornado and i love it and then the the the first like sub headline is i started a company to do a bunch of back office work literally no founder ever right and it's like i just get that i i love the that they have personality i think what that does is it makes it way easier it shows me that whatever's behind this knows marketing and they're gonna have a much easier time recruiting like customers and and users because they're taking the the average mundane things and they're turning them into little sales moments where i start to love this brand and and i think slack did this extremely well if you open up slack there's like ten little delightful details that make you kinda like slack even though it's a pretty boring like work chat tool and so so that was something that stood out to me right away so i'll explain why i made the decision to invest the first is i know the founder his name is adam and he had previously sold the company to twitter i don't know if it was incredibly successful but i don't care to me it's like alright it's in what we call that the sweet spot yeah you know you did just enough that i don't think you're an idiot but you didn't get rich enough where where i or i i'm worried that you're gonna be you some lazy wannabe be steve jobs visionary type for your next thing it's like you're you're hung than you were the first time and you're smarter than you were the first time too yeah and so that's one of the reasons why the second reason is the product i like i'd know like frankly i think they're still figuring out the product they have like close to seven figures in recurring revenue but i think they're still even figuring out the product which frankly is a reason why you shouldn't have it i shouldn't have investors like they're still kinda tinkering exactly what it's gonna become but i do know that when it comes to the back office of startups this was something that i failed at for years like i struggled so hard to like make sure i filed my taxes in washington because we had one guy who was working more than forty hours a week there yeah like it it was just like a nightmare and it stressed me out and there when i was selling my company there was so much stuff that i was like loose paperwork the the the things that make me worry though is that zen gust or the thousand of other companies that they can just once you because like it's hard to get once you start using gust or some payroll provider getting out of that is a pain in the ass so if these companies are smart which some of them are but they're still big slow companies then they're gonna do a good job of ripping abstract apps off and offering their use features as a add on but i ask i think that can be set for a lot of different companies also because it's this like huge it's kind of vague now because it's not a very narrow product because this is like huge idea i get nervous that they're not gonna be able sell this to customers they've done a pretty good job of getting someone like the cooler hip companies already as beta customers so it's incredibly interesting to me what about you yeah so so i kind of agree so i guess like the one thing for me is it's not super clear like even on their website they have a bunch of these like little examples so for it says you're ceo we handle and automate your hr legal ops finance so you don't have to and then i like it it says be scrappy not sloppy which is definitely a distinction i've i've i failed at many many times falling into sloppy but calling it scrappy as my as my cover but they have a bunch of like use cases like pay legal invoice send equity grant to advisor set up health insurance compose investor update and so i'm not sure how one platform can either do all those things or is it just a to do list so that you actually do this so i don't actually know the product well enough because i haven't used it but i would say that's one challenges it seems like it's trying to do a whole bunch of things which means it's either a very generic horizontal tool or to complicated tool which one is it i think it's gonna be a complicated tool first that said i think that like a company like a nets suite which does a little which is like a net you know quickbooks yeah nets sweet is like that but plus a lot more right and what i've noticed is that being particularly being a helps hubspot once i can get if i you could be good enough salesman and get someone to start buying your shit it's incredibly easy just to start selling them more and building more stuff on top of that i'm hoping that's what we can do with abstract ops and one of the kinda question marks here is is this automated or are there just humans in the back that are like helping do all this stuff a little bit of both currently currently a little bit of both but think that's the question is can they get it to be more software than than humans so that it scales better are you gonna invest see i wanna actually use the product because i i'm guilty of this like i said so like i have a a company that you know my basically my my personal company that's like back office is kind of sloppy kind of a mess like our quickbooks like i don't wanna open any of those tabs like i don't wanna open gust i don't wanna open quickbooks it's like something i like choose to avoid i'd rather like i'd rather put it off until shit breaks and then it's i know it's too late but like fuck i just i hate thinking about this i only run i only wanna think about growth if i can and so i actually think i would be a potential user for this and so i'm gonna use it and i'm gonna see is this magical for me or and that'll be the the make or break for investing which is always the best if you can be if you are the customer it's way easier to invest than things that you're guessing about tell me about one that you're excited about alright i'm gonna tell you about one called jar so i i think i emailed you this deal because i think you should do it but what is it so jar is you know that app acorns it's like kind of a big fintech app acorns public i don't if think i think they're like backing or something like that they're they're like a multi they're like over a billion dollar valuation and what what towards the the the genius there was like you would buy something and they would just be hey do wanna like do you wanna it would just tell you upfront do you wanna be a saver okay you wanna be a saver great well here's here's why we can make it easy for you you don't have to think too much when you buy starbucks and it's your bill is you know three twenty three let's just round up to four and we'll just round up the savings and we'll just deposit and outlook over time if we just keep rounding up you'll you'll save that's how it started at and there's pretty clever idea people like that and so what these guys are doing is they're taking the acorns model and tweaking a little bit but they're doing it in india and so here's what i like about it you most apps when you wanna go invest it's like you download some fintech app and then you gotta like link your account so you gotta deposit money and then it's like great what do you wanna invest in or how do you wanna set this up you know do you wanna do a mutual you wanna do a index fund like what do you wanna do and it's like shit i need knowledge now and then it's like hey by the way you can't just start investing right away like we have to verify your identity so like scan your driver's license hold it up to the screen you know with a nude photo and whatever else there's like all these steps that go into just getting started with any investing app because that's the law and what these guys figured out is a did did seems could be called spin no are you sure yeah i think they're i don't remember spending they didn't mention that at least it's it's called their their url was like change jar dot i and so what they were doing is they were like look the average person in india is this is like their story they were like i got my job when i was twenty one like most people but i don't start i didn't start saving anything or investing until i was thirty and when i was thirty i was like oh shit i wanna like buy a house sometime and like i wanna get married and like oh i really should start doing adult stuff and so he's like that lost decade between twenty and thirty is like a huge difference in your net results if you had started saving earlier like i've already seen these compound savings charts where if you start at twenty one versus thirty one you know you end up with millions of dollars more because you've been able to like say for an extra decade and even in small amounts and so what they said was how do we solve that problem how do we get you to start investing at twenty one instead of thirty one and what they did do was they're like we're gonna simplify the shit out of this we're gonna simplify it where in forty five seconds you can have your first investment done so how do you do that and they said well here's the thing in india everybody believes in gold and i know this because my family in india has like gold shops they like sell jewelry and whatnot and gold is like the thing every like if you ask a mom there about stocks they can't tell you a single thing it's not even a big stocks is not like a a big thing there but everybody has like a gold set of jewelry as they're like safety nets crazy demand like if if we ever have to flee we'll we're just gonna grab the gold and we're gonna run and like this list literally happened in india where there's like a where pakistan in india split up so people literally did have to so it's like kind of baked in that way and so they're like we only offer one asset it's gold everybody already believes in it and they want it the second thing is your first up to a certain weight of gold you don't have to do all the financial compliance that you have to do for like stocks or real estate or other like larger investments or different asset classes so they're like there's this loop loophole where basically we can get you to start saving right away you don't have to verify your id and you don't have to like link your accounts or do all this other stuff so i love that like the simplicity that was in their go to market because i was like oh people will actually do that if i can in forty five seconds get saving great and then once i reach this threshold when i've bought a certain weight of gold then it asks you to put your put your put way more information in but by then i'm kinda pot committed because i already have my i already have wealth here even a small amount i'll like protect that versus a normal app you just bounce before you even put the first dollar in was this zero money that you invested or the funds money well i put my own money into the fund but then all my investments have to go through the fund unless the founder itself won't let the fund invest and so long that's like a like an angel rule well that's the rule i set when i started the fund because i didn't wanna have a a conflict of interest where i'm doing the good deals of my own money and i'm doing the borderline deals in the funds money know i wanted it to be clean so that hey every deal i do i just do it through this one vehicle how much you us so i put in a hundred fifty k and it's got a twelve million dollar valuation and a twenty percent discount and so so so i put in a hundred fifty k they're raising about a million bucks they already have good traction so like you know what do what do you look for you like the team you like the product and then you gotta like the traction in the market size and so market size i like because i think this micro savings thing can add up really big in india there's just so many people and so like their average user after i think things like two or three months has has saved three hundred dollars already in the app us dollars and so that's pretty significant for a very early like just putting micro payment after micro payment in of just rounding up your expenses or just automating and saying every day i wanna put in fifty rupees which is like you know whatever a dollar or less than a dollar and so it's like every day i wanna put in fifty rupees and because my goal is to save up enough where i can pay for my wedding you know in five years and so it's kinda like sets the goal and then it says great you should put in seventy five a day and do you say yes and then india also has this crazy thing i don't know if you heard of no so basically the country like you know how like in the states you have like every bank just kinda has their own clunky software and there's different payment you know you can use stripe for payments you can use something else for payments and there's no like just no country level payments rails and so in india the government came in and was like y in the next year everybody has to move to this news payment standard it's to the universal payments whatever infrastructure or something like that and this will just make it so that anybody who's taking payments you just build on top of these rails and we're gonna modernize payments in india cool through this and so they did that big change and so that's that's changed again game that's why there's a lot of innovation in india right now because this ups thing was like a pretty major breakthrough and the second thing is they just released this feature called auto pay which is just like a recurring auto investment and so these guys are using that new feature of ubi so i just think that like why now makes a lot of sense for for this and i like the the fact that they have around just buying gold so that you you've reduced all the friction of getting somebody started do you so are you're totally okay with investing in india like because i don't i've only invested in american based companies i've had australia i've had your all over europe and i'm like for some reason that gap freaks me out a little it yeah it kinda does for me too but i've been investing in india and and so so when i do when when i invest in india there is definitely like some t so that's my why it could fail i just wrote india question mark question mark question mark like easy for me to be fooled right like these guys could be well known scammers in india that i don't know right these guys could be i mean they weren't right they went through yc i think so so so so so you know don't actually i know if they went with yc but i know well the other other companies i invested know these guys and they went their a competitor went to yc which is your second point why they could fail there's a lot of people in the space exactly so fintech is just super hot worldwide right now there's like every day there's a new credit card a new debit card a new neil bank that's popping up and then there's bigger players that are trying to modernize and so i think the one way they could fail is that there's probably like ten between ten and fifty legit competitors to this in india that are not doing directly this but they can add this as a feature or they could pivot into this or they could like recognize that the clever things that these guys are doing and implement so i think that's the the those are the two which is like there's a bunch of competitors in fintech right now for every idea and the second thing is india is always a little bit of a question mark and it's it's very easy for shit to look good in india because you know it cost of customer acquisitions is always super cheap so like man you're getting users for eighty cents that's awesome but like the reality is yeah not not all these indian companies can be great so so i gotta like my own filter for india is off because i come at it with a us point of view having said all that the two in the investments i've done so far are probably two of my best investments and so i'm gonna keep betting there because i think that the country is like it's in a sweet spot where there's just a lot of innovation there's just gonna be a lot of winners out batch and i just need to bet in on enough of them that okay even if i get fooled by one or two i didn't understand the market landscape i get into enough winners is my goal also because i'm indian i kinda have this advantage where a lot of people in india follow me through this podcast or through twitter and so i been able to get like any deal like these guys when they were reaching out there like we asked only for two intros you and naval and i was like okay bro you have one of us in the wrong league there but the the reality is that's kind of an opportunity for me i agree i i build my brand bigger there i can get into any deal i want there i agree i think it's why like like bruno mars was like the most watched person on youtube it's because what you see because in the where see from philippines wherever he's from if you see someone who you recognize in america who's crushing in kicking and ass everyone rallies around that person from the outside country to like like oh he's one of us so that manny pac in the philippines he's he's like the president there and he's just because he's like a famous boxer here they just wanna go all out for their guy yeah or bj and iceland so you're like the you're the you're the maybe outside of india i'm saying if i keep betting then i have a path to do that but if i'm never investing there then i can't build that like it takes a stack of of of reasons why you should be like known and and and respected in a place and i think one of the reasons why you could be known and respected is having invested in some winners but i plant those seeds now alright can i tell you when i'm really excited about and i wasn't excited at first and then i started using it and i'm like oh i'm in okay so okay the name is bad and they're gonna change it they're they're gonna change the name i think it's called the names really bad it's called the rumor so i'm actually highlighting it you could see the memo that i wrote for you say it the name fine when you spell it you you know it sounds like you got cotton in your mouth or something that so i've talked about bring a trailer bring a trailer is this website that originally started was like a car where they would show off cool cars that were on sale from around the web they eventually launched their own auction platform but they just did a really good job of making editorial it making feel like a community so you can buy classic or even newer cars that fit a certain demographic rumor is doing that for houses and by the way if you wanna invest sean let me know i've interested i wouldn't have been interested in this except for to bring when you've educated me on how bring a trailer is a great business and then we've looked into different auctions through the podcast so now when i look at this i see it differently than like oh just another home buying website okay i don't really power you different than it'll be cool because look at some of the example options then click comments and read the comments that's kinda like why it's neat how do i go to an auction i don't even know if those are fake auctions or or what the founder bought a bunch of homes just to put onto that site for auctions right and so go to the web i bought a bunch of homes to to feed the marketplace i think he like homes like twenty he's like he was like he's a property owner like he owns he's like a landline so let's just let's just explain it so i'm on rumor it's r u u m r dot com right now did might changing the name so i go washington looks to be the only market that's open so i'm there right now and i'm just looking at this for the first time so i see that there's this house in washington there's a bunch of pictures and it's on sale for a hundred three thousand dollars and it says that there's thirteen hours left presumably in this auction and then there's some details about it like all the normal house details and then i can log in and i can make an offer and then i see people who are making offers but then there i see people who are also commenting like is the electric heating system baseboard or something else and that you see replies from like i assume either they're the owner or the agent like answering questions in the chat here well people are bidding a hundred thousand one hundred one thousand one hundred and two thousand and it's currently at a hundred and three thousand is the it's an neat auction it's house this and yeah but it's a little bit different than ebay it's a a little bit different but yeah that is but the reason it's one of the reasons why i think this can exist is let's say you're buying a house for half a million dollars and they do like a first and final offer process where everyone submits their offer on a friday this if you're bidding half a million dollars for a house and you see that the winning bid was five zero five you're like well fuck if you guys would told me i would bet five ten and you would made more money and i would got what i wanted right and so it's kinda trying to solve for that but let me explain to you why i think this could be cool so first i'm the founder was pretty interesting he's a military guy so i like military folks he also started stay alfred you know stay alfred by the way we should we should highlight the groups that we are inherently biased us to invest in mormons military guys russians yeah jews what else are guys it's israeli jews is what we said right you know who else in the immigrant i'm always partial to have a great any any immigrant anybody who's lived in the us illegally you know for a period of time anybody who is you know single parent i'm in you did you already did the hardest thing of your life oh mckinsey you no us that's a that's a no for me the the other ones that's i i guess like our are i'm almost like i lean in i'm a little bit interested it's like oh how'd do you what what were you doing like when you were younger and it's like well i was like you know flipping cars or i was flipping shoes on ebay or i kinda don't wanna say because i was like this affiliate marketer for these like shady dating sites no you don't understand that's like shady internet yeah shady internet arbitrage so this guy started stay alfred which was like a you know sander it's like a competitor sander where they would like rent out entire buildings and then sub lease them for work travel got to a hundred million in revenue raised sixty million dollars crash and burned in money out of business and you know what that's awesome i right love that so that's initially why i was interested i told them i love bring a trailer and he goes oh great their c founder works here and so does three other their team bring a trailer sold the rumors like half a million dollars and since two thousand billion half sorry half a billion since two thousand and twelve i remember in two thousand twelve i was playing around with the real estate stuff online and i thought homes should be bought and sold online just like we buy and sell clothing and i a lot of people in with rumor you can actually still go and see the house and a open home like at a open house but in my mind i still think that in ten twenty thirty years it will be normal actually to buy a house sight on scene even though a lot of people don't think that now i think i i think that'll be the case and check this out so why would i okay so let's say let's say i'm a seller so why would i sell here when i feel like okay i'm gonna have this thirteen hour auction i don't know what's gonna happen do i have to take the offers or i can just reject all yeah you can have a reserve okay great and then is it because i think i'm gonna get a higher price or because i save money through the fees or what's the reason i choose this over like traditional health listings yeah the higher price that's the goal higher price by creating like a like did they take the same fee as like a normal five percent or whatever agent fees they take less because what the problem at real estate is the agents are still like integral like they're still very important to the industry if you cut the agents out then like the agents agency you're like fuck you guys i'm gonna bad matthew you i'm wanna make sure no one ever uses them so they actually get the agent in on the deal and they just like make the agent's job a little bit better and a little bit easier right and so we'll see if it works but let me explain two things first is we invested along and the reason why i was intrigued is all of stay alfred competitors this guy's whole company all the ceos all invested in this company and i was like that's kind of an interesting signal your competitors of respect to you like i'll bet on your next thing that means something and they were all real estate guys so this is still related to that business business so i was like that's intriguing second so i i invested and then i get a call jordan call calls i made the guy who's starting this he goes adam newman it just put two million bucks in i was like fucking a got it like i think that's pretty good i think that's a good sign so why is that a good time because some people would think that's a bad sign no no no first of all like i'm not saying what adam did is great i frankly don't even know the entire story but i i i'm pretty he's the the founder of we work who like none of like whatever did a bunch of shit and ended up walking away kinda like drove the company into a weird spot and and and was accused of a lot of things and then he walked away you know pretty wealthy as part of the his agreement to leave and my thing is adam newman neumann regardless let's say he did a lot of bad stuff let's say he was unethical let's say all that's true i'm not saying it is but let's for argument six aid it is he still built something huge and amazing in a very short amount of time and has access to all types of stuff and seize all types of stuff so i think if he's interested it's a good and then why can they fail i think if they execute this poorly it's gonna it's gonna be bad i also think that like oh i put i put it could be if they raise too much money i actually don't think that's gonna be the case i think they have to actually this companies have to raise a a ton of ton a ton of a ton of money what can make this fail i don't know maybe if zillow offers this well also i think it's a new behavior and any anytime you're betting on a new behavior that's like the risk of it failing is that like maybe people won't wanna buy the house side unseen or maybe won't wanna sell the house in this way they want their handheld through a traditional process because it's the biggest asset in their life and they they don't wanna risk it which is traditionally they bought one life you can buy this you can go this is not entirely sight on scene right but yeah it's a new behavior there's a lot of new stuff about it but my thing was like when i was doing the math i'm like you don't need that much volume to build something quite large and one once you have the home on there you could upsell like property assessment or what's it called the inspections i think you can upsell i just thought it was interesting i think closing so so one thing that's good here is you you don't want all your bets to be logical clear good ideas because that means your risk profile wasn't right with start investing you need a few ideas that you know sound like they're gonna fail when you when you invest in them and then you either either they fail and you're like yeah well duh or you end up looking like a genius six years later seven years later because that non obvious contra idea turned out to be something people actually wanted to do turned out to be a new behavior people were willing to do and so i think it's good to have i i this was the one note i told my team who like helps me with investing i said i don't think we're taking weird enough bets i don't think we're taking loud enough bets because that's where the big outs sized crazy returns are gonna be as in things that are non non obvious today you know like low valuation not everybody wants to invest in them the sort of thing do you did you do space yes is does that interest you to talk about or no we've kinda talked about them before i wanna talk another one alright i wanna do okay you'll kinda i think you'll like this one i think you'll want and on this all the it might be too late so it's called one build so what one build is is here's the problem as the guy described i talked so i meet the guy how'd did you meet him ben or zach found him and then they really liked him and they were like hey you really gotta talk to this guy so i said okay great let's do it and i forgot i know how they found them him i think he was like in some yc batch or something like that so so basically i talked to this guy and he's like yeah i i was working at cloud kitchens that the startup started by travis he's like i was of the first twenty people there and my job was like you know they wanted to go build out all these cloud kitchen all these kitchens around the world and they were like alright you know we wanna build this ten million dollar project we wanna build this twenty million dollar project and he's like i'm a data guy like my background is like data science and they were like look we need you like be intelligent about how we're gonna like plan out these builds we're trying to spend this much this year it's a big number so like help us out with the data side of building out so he's like alright no problem how hard can it be and he goes into it and he's like okay great so we have this let's say we're doing this deal and we're trying to build out this kitchen in seattle and the estimate is like ten million but like it could be plus or minus like four or five million and that's a pretty big difference like if it's fifteen it's different than ten which is different than six so like which one is it and the guys were like well like it depends like it depends on what he's like it depends on the cost of construction and he's like okay well what does that depend on and it all comes down to like one one of the biggest variables is material costs so there are many ways that your construction costs can go out of whack like if you don't get the permits in time and so this it gets delayed labor errors one big one is materials and so what he was like he's like okay well how hard can that be like let's just figure out the material cost and let's just spec it out and they're like no it doesn't work like that like here's the spec here's the plan like a construction plan and now to cost this you either you need to hire a cost est and what they do and what you would do if you wanted to do this yourself is there's this book that gets printed once a year which is like the there's like the the blue book of like all materials cost like if you wanna a three foot piece of lumber it's gonna cost you this much but like if has anybody seen especially during covid like material cost like lumber has like has huge amounts of variance i don't know if you've seen this but like yeah yeah yeah like you know much a truck carrying lumber is like like right now it's like a truck carrying bricks of gold it's like if you rob that truck you would have like so much value right now because lumber was so expensive and so he's like the problem is that there's no real time data like he said so that's what i decided to leave and go build it's basically an api that will give you real time material pricing for construction so all you do is you upload what your what your your construction plan is so and then it basically gives you an accurate real time cost of it and if that's changing over time you'll see how it's changing week by week weekday by day and companies who are building i don't know any of the companies but companies who are building construction companies who are work in the construction business who are who are designing stuff they will use one build software to integrate with their software so it says in real time how much does this cost in exactly so so basically you infrastructure plan and there's yeah they're selling straight to the to the they're selling to the builder and to cost est who do this as their job it's hey here's a way to do your job faster but i think over time my my sense is that over time it eliminates the need for cost est as a profession but but i think you know the main thing is if you're a contractor right whether if you're building your own project you wanna know what are my real cost gonna be and you wanna know how those change over time and then oh if we swap this out for this how does that change our pricing and the other thing is let's say you're a contractor you had go bid for a job if you bid too high if you put your budget if you put the cost too high you may not get the job right because that's your sales pitch hey i'll build it for twelve and if twelve is too high a number they're gonna give to some other guy who bid bid eight but if the guy who bid eight is underestimating it and it actually costs him ten he has to eat that loss and so bidding for jobs and accurately bidding for a job is basically like a huge part of the sales process of construction alright so what do i like i like that this problem seems real i talked to a few people in real estate and they were like yeah of course this this is like this is a huge problem the you know the just the material cost for construction is twice the amount annually of all of e commerce so it's like humongous market i say a multi it's a trillion dollar plus market of just the cons of just material construction costs and smart guy i like their approach there i think they're kind of like the leader in that space it doesn't seem like they have a ton of competition like i don't think like what i saying before about savings at micro saving apps or credit cards it's like there's a hundred of those startups ups right now i don't think there's hundred of this startup and then they already have some traction right they have seven figures of arr already booked and so i invested in this thing in their series a and and i think there's also a big idea that i like which is after you cost it for them after you say oh here's the here's your estimated cost for this you could also just add a buy button down the road and then be like cool purchase all those supplies and and actually build a marketplace where suppliers can sell the supplies so through their thing because the person's already at the at the at the they already have their invoice basically ready ready to buy so i amazing i thing it can fail right so why would i hesitate first the valuation was higher so it was like at a over fifty million dollars valuation you know so i put in a hundred k i don't own a big piece of this but i wanted in rather than being on the outside and then the second thing is i think construction is a pretty old school industry it's all pen and paper like that trillion dollars of material purchasing is all done just through pen and paper offline right now who bringing it online can be a brutally hard thing to do i'm looking at my meta prop i'm seeing who all invested in these folks i think maybe i know some of these people who's leading this series a you know i don't actually know i don't remember i top my head oh wow this is sick this is is a cool one if they're still reason i would talk to them in harp my fear about this like if i had to like say what the downsides are is can you easily replicate this like can i don't think so because what they're doing is not just the it's not just the app that says great you know upload your thing and get your cost it's like where does that data even live so this is like you know that company climate corporation that basically like what they did was they basically yeah yeah organized agriculture weather data sold millions soul for billions and basically what they offered to like you know hey farmers like here's all you know farmers and others it's basically like we took this unstructured offline data and we made it structured and online so for example they're first taking all of the material call all of the materials and they're turning them into skews like if you've ever done e commerce a sku is just like you know if you're had a grocery store a hershey's chocolate bar that's one sku and then a t bar will be another sku and the large t bar is another sku so basically they took everything you can buy in construction and they're turning them all into skus first so first that's the first step then they have to get the price feeds okay how are we gonna get real time price data on all these things when prices vary from supplier to supplier vendor to vendor and so then they're they have to do that and then they have to turn that whole thing into an api that like can be que easily and get accurate price data it and so i think they have a i think that's the real innovation here is being the one to organize and collect all that data then after that really anybody can build an app that just asks them hey what's the price of lumber right now in tucson arizona for this size of this type of lumber and they should get back an answer and then if that changes in three months they should get that change notification that the price is increasing that's sick i'm into this i'm looking at all this now i'm taking out notes i think this is amazing i'm into this one a lot you wanna do one more you like or one more here's a boring one let me let me look let's do a boring one okay so i actually included this email in here because i wanted to show it and i blacked out a couple things so don't read those things but this one's like boring it's not a seed investment but i just wanted to people to see how this worked yep so my friend nathan barry nathan barry started this company called convertkit you know convertkit i'm a user yeah i pay them here love convertkit if you google convertkit revenue you could see all their metrics all their numbers it's amazing nathan is you know he's young he's like twenty eight maybe right but he like comes off way older he owns i think almost the entire company so convertkit kit is like a mailchimp competitor but slightly different i don't you it's hard to explain unless you're an email marketing nerd but it's just like mailchimp it's just like hubspot it's just like a lot of these companies but geared particularly i i believe towards bloggers and he has grown the company very steady for a about of years and he asked me if i wanted to buy some secondary at a seven x multiple so the revenue is twenty eight million and he's raising at seven x that what's that i don't even know three hundred two two hundred million two hundred million dollars i invested i thought i invested fifty thousand dollars of my own money and but the reason why that i would do that in a heartbeat yeah well what you want to yeah i do want to that's great like no brainer alright i'll make an intro hold on let me write this i i i know the guy but yeah the i i didn't intro so i get credit yeah so he owes me one so the way that it worked was he goes nathan emailed me about a week ago he goes funny story after you and i talked on how secondary liquidity works on my podcast i guess i could say zane dart mesh heard the episode da mesh is the founder of hud hubspot who's gonna be on in a few days heard the podcast and you reached out saying if you could buy ex worth of shares directly from our shareholders after serving former and current teammates to consult hold stock options we're putting together a secondary round at seven times arr and we're looking to raise two point five million in total with two point o so two million already committed arr is twenty eight million net revenue is twenty seven point three million which is up thirty four percent revenue churn three point eight percent customers thirty six thousand profit this year eleven percent twelve percent profit he sent me that email and i just said all here's what i reply i go how will i get liquidity he goes i'm either going to keep buying more companies and you and then i'll go public or i'm gonna do more offerings in the future to you can sell yeah and i go great in fifty thousand right yeah that so here's my thinking my thinking is it's just super safe right like the the odds of this going south are under sub five percent easily and i so this is my safe bet so to me this is not so the way that i'm doing my net worth is one percentage of the vast majority let's say ninety five percent is in index funds boring five percent is going to be in angel investing and this this is considered private equity i guess it's but it's not angel investing to me right so is more of the boring stuff this is in your boring stuff budget yes but it's not quite boring like i can't sell it overnight but i know nathan he's trustworthy he's ethical he's amazing i've been asking to invest in him since he started the company right so i put fifty grand of my own money in this and this is gonna come straight from this is coming out of like the boring pool what do you think about this you like this yeah i i like it a lot yeah i think that this is a really def defense stable company there's a lot of people that are super interested in you know email software there's like bigger companies and then there's like the subs stacks of the world that are trying to do things but i've used all their products convertkit is the best best product out there of the of this batch once you're once you're hooked on it it's hard to stop paying in fact i told my team i was like hey guys our convertkit bill is like two two two to three grand a year like we should just isn't there like a free thing that will just let us do all this i feel like email software everywhere and then sure enough if they go kick the tires of a bunch of different things you're like we can switch we can get it cheaper but we're gonna give up x y and z it's like well x y and z all seem like the important things i don't wanna give those up and so so i think he's built a very steady business that you know today i think convertkit could sell for more than two hundred million i think i think if you wanted to sell this business today he could probably sell it for somewhere like thirty to forty percent higher than that that's that'd be my guess and it's just gonna keep growing i think twenty five to thirty five percent a year and there's a overall compounding i can see nathan being in the type of guy and a lot of people say but i actually believe if he told me this is what he wanted to do was he was like i i think i'll run it for twenty five years and try to grow at twenty five percent every single year through buying different companies i'd be like oh okay cool i believe you and right and i i believe you're gonna try that and i believe you're you're capable of that and we see pretty much every major like creator economy deal and they're all just like like you i think you're sick of creator economy at this sick of it there's just so many creator tools and creator economy startups and honestly most them are not very good it's like there's more funding in the creator economy startups than there is like actual revenue in the creator economy right now so so there's like this there's like this at an over hype in that space but this is an actual this is a real business in the creator economy right this is like independent creators use this as they're like back for sending emails to their audience bloggers and and newsletter folks and and i think that there's a lot of room to run like the thing i would do if i was him is i would figure out i would go into the click funnels market i think click funnels is a bigger company i think click funnels does over a hundred million a year yeah but they're churn to shit they're trying to shit but you know the i think as a upsell i think there's a lot of people who use convertkit that all create landing pages and try like sell stuff and i think that click funnels is actually one of the better products for doing that even though is great jan it's just it's very effective at actually converting people and i think that that's the way i would go with this as a like as a route to to getting bigger but but yeah i think there's is a pretty safe bet well i already made an introduction nathan in your inbox awesome you wanna do one more yeah let's do one more okay i have a crazy one yeah have a crazy one actually can we talk about that other crazy one that you told me about let's see that one let's do that one okay so what what cam his name's cam i had this guy reach out to me because he was a volunteer at hustle con years ago and i've always seen in touch with them i love cam he's a nice guy and i i i thought he would always go places he emailed me like a week ago or a five weeks ago like maybe a month ago and he's like i got this idea i'm gonna build the builds a world fair and i you and me misha sean are way different immediately i said nope nope how about like i i was never even entertaining this explain because i i didn't even really know what the world fairies so explain what that even means i'm gonna build world you do it because it's like it's i'm just not imaginative or smart enough to understand these things so you go ahead so and actually if you can link me the link the the memo in here because i think it'll be it'll be useful to talk about but basically what i understand is the world fair is an event that happens has has happened like you know seventy years ago and then twenty years before that or whatever it's sort of like the olympics it's basically this world scale event and in the same way that you know the olympics every four years it happens and it goes into some come to country and it like you know some city and like takes over the whole city and it brings like tons and tons of millions and millions of tourists and and and so you know the previous world fairs so here's here's previous world fairs so seville nineteen ninety two had forty two million attendees shanghai twenty ten had seventy three million in milan in twenty fifteen had twenty three million attendees so basically this guy is trying to throw an event with fifty million attendees so that's like the that's the premise hey i'm gonna build this event and it's gonna have fifty million people attend and i think i can make billions of dollars he he he estimates you know over five billion dollars per fair that he'll generate in in some combination of tickets plus additional spend when you're there as well as like you know the virtual live stream media rights to the to the thing and and forget about the fact that like you know the like the city itself gets like this huge amount of economic activity when you get fifty million people come coming town that generates a lot of economic activity for the city so his idea is basically go city to city and say hey do you want this like jump start of economic activity host the world but put up put up your city up and put funding up and put resources up let me host a a world fair here so and it's like disney world on crack i told cameron this earlier today and so he's a listener so i wanna you let him know i love this guy and i think he's very competent i just think this idea i think it's stupid particularly for a like a vc funded thing i have hosted a like we're calling this the a world's fair venture thing this is a conference this is a trade show can conferences and trade shows make money yeah they can but like just start coachella coachella makes a hundred million dollars a year and they've been around for like they're know twenty years now or a lot of p twenty years like right this is oh the degree the degree of difficulty on this is like at at an insane level i would say and a insane level so it's so that's the reason not to invest the reason to invest is also that the degree of difficulties is insane and the person behind this is insane and it's gonna compete against nobody and it's sort of this tickets against nobody if there's tons of these like like this will question try to do this i mean website summit did something like this like would you dude do you wanna compete against the olympics what happened to the olympics last year yeah i that's the thing who is competing in olympics nobody it's like with elon goes and competes against nasa it's like nobody else is competing against shit are there's a commonwealth games there's world championships chips and different sports there's all types of stuff i they're they're you know who like on entrepreneurial nobody who's who's trying to do it for capitalism basically nobody's trying to make a profit one one person ted turner he launched the the common or what did ted turner launched the goodwill games yeah i don't i mean i even did that work the not work what do do you know about that i know if but i don't know if it made profit but i know that it was a thing he he invented it because he needed a programming for first tv station tv stations yeah i believe it was called the goodwill gains anyway no i mean like do they work yeah they don't not work it's kinda like does the american pageant work like well it kinda probably makes money it's like an annuity it kinda works like every year for forty years and it does only okay so so is your okay what's your criticism is your criticism that he's not gonna be able to do it at the scale or that even if you do at the scale it's not gonna make that much money it will never ever ever happen at that scale i'm just saying that like look like and this is me saying someone betting my own money like i'm not willing to bet my money that it will i'm boy bet my money that cam will do many amazing things i just think it's like literally like it's this is like it's is like against physics i think like like do you know what i mean so the most most relatable version of this is the summit right so so the guys who created summit and they bought the mountain and they're like you know doing that i think that's sort of the like the closest analog that i know and i've personally seen and it's not a good business and that that was not a great business horrible business it was nowhere in your well okay why do you think it's a horrible business they ran a money multiple times that doesn't make a profit the event part or you're talking about the mountain part the event both all what did you talk about ryan will tell you first it ryan made all his money selling trade shows and ads for a real estate newsletter and trade show business that was a killer business then they invested in this other thing and it was just okay like would you wanna to have invested your like i just is this this bible is my mind i have only a few dollars to pick between x y and z this like doesn't even come up on the like i'd rather go all it out abstract docs just like give me some boring ass software that's just gonna make money for fifty years so i i agree with you from that point of view if i'm if i'm gonna invest i'm i'm not personally gonna invest in this but i i think from his point of view from the guy who's billy this point of view i don't know you could be if you're a luna to take you can do some kind of amazing things you can really exceed like where others have gone for example i know patty who start a web summit and you know him that's cool what's he like awesome awesome guy like you know should be the whatever a violin someday prime minister president or whatever they have over there he's amazing he's a really amazing guy but at this same same time if you are trying to build a huge conference you're gonna approach it very differently then trying to create a world fair than trying to create like an olympics and so i think it is really not that much harder i i think it maybe it's it's harder but it's not that much harder than pulling off what patty date over seven years summit the good thing with summit is he was able to iterate so was to start super small like great i got a hundred people to come ireland for this conference in the next year i got a thousand next year i got ten thousand and then i got a hundred thousand like he was able to step it up whereas i don't i think with the world fair thing there's no like tiny world fare i don't think so i'm not sure you know how he's gonna possibly do this i yeah his two is two phases are facebook at host twenty five million guest phase two host another twenty five million guest i i don't wanna i gotta say props to this guy he like young i hope he's young he's twenty six he he props to this guy for doing this i gotta give him credit i'm i'm more into this that you are i kinda love that a guy's dreaming like this i also think it's in insane and slightly you know impossible you you don't put your money in it i will not put my money into it but i did put my money into something slightly crazy also i put a very small amount put twenty five k into a which is like below what i would invest in any other startup up into a guy trying to build a startup up city so but i think that that has better odds just succeeding than the this world fair yeah because you have rent every month yeah well can i talk about that real i know we're need for the other thing but basically what this guy's is doing so you we've heard about startup city's biology came on this podcast and he kinda said i think the twenty tens were about crypto and i think the twenty twenty are gonna be a talk about startup up cities ba also invested in this so it's this thing called p and basically what they did was they created this social network like kinda like a club in new york la s f with just a bunch of cool people like founders inter people from entertainment like hollywood new york stuff circle type shit yeah just like you know soho house type shit and so they host cool parties so they've just been hosting cool parties and then basically they were like awesome we have the seed community of dope people and you know a city is basically just like if you wanna create the next hollywood right you need all that aspiring actors you need the filmmakers whatever if you need if you wanna create the next silicon valley you need the fun the vcs and the entrepreneurs and the engineers to build stuff and so either these guy's premise is basically like if you're gonna build a new city you need to have a a network effect of dope people who wanna be around each other and so he's been c this community for a while and then they're going to the like mediterranean and they're going to these countries like hey croatia can we get like a piece of land that's ours i give us this land for free that's beautiful land by the ocean and let us come up with our own financial regulation rule of law we're not gonna do croatian law we're gonna do our own law and like just give us total sovereignty and in exchange you own a piece of equity in this land and we're gonna bring like the best american cool kid talent to this like this startup up city basically to come live here and and then we're and the base it's a real estate company that's just building buildings and renting out the the office space the and all all all the residences to the cool kids theoretically i'm into this i would have to i would wanna know are the people like buttoned up real estate people or are they like people from burning man who wear like coachella hats all the time and you know like leather shoot like like really like leather like pants like i need to i need to know like what they look like and what they're about if they're buttoned up maybe just one above you want what about agree who's just gonna he's gonna be out there recruiting the community and then you need the real estate guy who's like go do your thing let me let me actually set this thing up so that this works right so and by the way on the website for practice cameron weiss from the last company he he's a member he started blogging about the world's fair on march sixteen two thousand twenty one i linked it to you yeah he's a member that's that's that's the kind of dreamers you'll get in this community so i put us all about of money into it because i'm just really interested to learn and like this is a this is a wild idea that you know i think the portfolio has to have some wild ideas it cannot just be like things that are easy to understand and easy to like imagine working because i think we'll miss out on the the large outlier winners so alright pi your can people still sign up your rolling fund yeah go to go to angel list just type my name in and then you could just you don't even need to email me could just subscribe my rolling fund and then i'll email you so you can invest with me we're doing we have about four million and formula me here we invest across about thirty startups and for me i don't do a rolling fund i have a syndicate if you go on to angel and type in like it's called hampton bc because i i used to live on a street called hampton not because i'm from the hampton but hampton vc c dot com if you just go there and then just click learn more you'll get taken straight to the angel page and just click apply and then whenever i have a deal you just are notified and you can invest or not invest up to you and sam's memos are dope so you should go subscribe well thank you by the way everyone's saying great stuff about power writing oh yeah i love it i'm telling my heart into it i i i'm like i was like too embarrassed if it sucked so i like really really tried well everyone's saying great things sarah's class is going live soon but they're saying great things about alright we talk to you soon i feel like i could rule to word i know i could be what i want to put at all in it like a days off on a travel never looking back