#215 - What Venture Capital Will Look Like in the Future

if you wanna a bet on the future of humanity and where a lot of growth is gonna come from investing in technology is the way of doing it yeah i feel like i could rule world i know i could be what i want to from at all in it like a days off on a travel never looking back alright this is one of the best episodes i think we've done in a long time i'm gonna tell you everything that we talked about but first spotify just has this like new feature i wanna see how great it so basically if you're on spotify go to pull the app up look at it look at our my first million page and you're gonna see a little bell do me a favor hit that bell i wanna see if you'll be notified when we have our next episode i wanna see if this thing works if it does work sign up click the bell and then tweet at me tell me if it works and i'll like give you a re tweet or something like that and exchange or clicking it but click that for me and let me know if it works so today's episode i think is one of the best episodes we've done in a very very long time we talk about the amazon liquidation business i'm i'm actually gonna record myself buying from one of these websites it's a fascinating business where they sell you a bunch of return stuff but it's packed in a mystery package we talk about fake data there's this new company called tonic that's selling fake data to help you test your stuff crazy fascinating business and then my favorite topic is this guy called harold a he's the billy of the week this amazing billionaire that started a shoe company and i'm eventually gave away most of his money but incredibly fascinating we talk about a few other stuff like like how tiger global is making all this money in the future of vc that's pretty fascinating but my favorite part was the billy of the week check it out and by the way on your phone you're probably listening to this on your phone go to spotify click that bell i think they just released this recently someone must tell me about it tell me if you get notified like send like a like a click the bell and then just send me a screenshot when the next episode comes out and tell me if it works the sam par in twitter i wanna know if this works i'll re you if you send it to me alright enjoy the episode okay so what did you think about the ram remit episode i thought it was pretty good i thought he does a good job like i guess i was breaking it up into two categories how how interesting is the stuff you're saying and then how interesting are you at saying it so he was like i thought he was very interesting in how he says things like he bright he brings energy he is not afraid to like call something stupid like you know he he brings a little bit of that flare that you need for something to be fun in terms of the info i thought it was pretty good i think yeah know we talked a lot about courses and i just think not like we are interested courses because we can make courses that might be successful and so and he already does that i don't know how many other people really care as much about how much we nerd out about it but i don't really care because i wanted to know it and so it was usually good let me tell you really quick about this book i'm reading it's called empire of the summer moon have you heard of this no but it sounds very it sounds like a teenage girl book no it's about the coma the coma indians you know what the coma are no what is that alright so let me this is this a quick break how much time you spend reading i feel like every time you get on the pod you're reading a different book are you reading like four hours a day what's happening i it's when i say reading it's audiobooks and i could do at least one a week so wow like yeah like i if i exercise if i go for a walk i'll listen to it so and i listened to it at like one point two speed so like a ten hour book ends up becoming like eight hours and so i could do that a week easy is this a problem for you when i listen to an audiobook and it's read by like a professional narrator i just hate it and i can't get into it but when it's the author reading it i'm like okay i'm kinda down with that is that a problem just for me because it seems like most are professional narrator professional voice over actors or whatever they call it it actually is a huge problem for me so i do two things the first if i find a narrator that i like i go oh oh has that you find their other books that they've read yeah so if i find it sorry my phone's it all if i find a who's your favorite narrator like some random guy who nobody's you're like yeah no so craig smith ron turnout ron cher is a great author he's he wrote titan he wrote house morgan i'll go and read books he gets he has a great narrator that i like the second thing so if i find a narrator that i like i'll go and i'll read something that they've done the second thing that i do is i think more celebrities should na books so i just read this amazing book i loved it it was by john stein it was like part fiction part not fiction and it was read by lieutenant dan from fore gum okay you know what come up his name gary re or res or something and it made the books so much better so lately i've been trying to find books sign i don't even know to say his name sinus is his name i wanna go and find books only by like certain celebrities that i know and that makes the book more fun i actually in no way find and and and and you know what's it's funny i always think about this sometimes it's like the reason i don't like i don't really read like self help business books that much anymore and the reason i don't is i found this one author that na narrated literally like two hundred like self healthy books and i looked at what he was doing now and he like still wasn't doing much i'm like well this fucker read all this stuff that it should have worked like you hello you i thought you were gonna say they all sound the same but you're saying this guy read all these books and he still you know an average joe so fuck it doesn't work yeah like i looked at like how much he charge to read a book and like dude what the heck like you're making like fifty grand a year and you just rent yourself yeah what what the hell is going on so i'm reading this book right now come empire the sun of a summer empire of the summer it's about the coma indians the indians was like twenty thousand indians in america but it they were like in the colorado and west area but when you think of indians like you stereotype as like like when i am in my head i have this picture of like the pilgrims in the indians coming together and then eventually the white people like mess them up so the the coma were badass so they were just like normal they were kinda normal they weren't like that particularly special but then they got a hold of horses in the fifteen hundreds and they mastered horses so much so that a coma on a horse what they could do is they could get they could be riding the horse lean to the sides so you can't see them and then pop up and shoot twenty arrows faster than one person could fire one bullet and then reload it and fire another and they were wild they were wild wild while they didn't even have the word surrender in their language like it wasn't a word and this is great i'm now that's my criteria now when i when you look for in founders when you invest could you have been a coma you right are you a coma or not i wanna coma you as as a founder that i'm investing that's they're crazy these guys were like be bad to the bone and last that they didn't do was like great like like in their in their culture it was okay to torture and kill captive and they would kid people and so they're a while but the whole story is about the history of them and then also it centers around they kid nap a family or are they like take a family like a white family and they kill most of the family but they keep this twelve year old girl and end up like raising her and she mar the chief and she gives birth to someone who eventually becomes the chief and the white people america after like twenty five years get her get her and they think that they're saving her and they bring her back and she's like no i wanna go back and they're like no look lady you don't know what you're talking about you need to be here and she's like no no no like that they're my family now and so out of protest because she like inherited these like these like you know these values of tough she was like fine and she'll she starved herself and died what it's it's the craziest book i've been reading you you'll you'll have to read it's called the empire of the summer moon it's about the community tell you right now not gonna read the book definitely not to read the book but i loved that story and i feel like i already got the way win i feel like if i go in and read it now i'm gonna do a whole bunch of work and not really get that much more out of it than i already have i'm so happy with what you just gave me well i got like on this kick where i was reading about navy seals and i was like alright who else is badass ass and then i got to the coma so is it because you met what's her name husband and he's a ex navy seal one hundred percent yes i bet of the other day he's awesome you waiting okay great that's good alright we have a lot to go through this is gonna be interesting i what do you wanna start you wanna start with harold no let's save him for a little bit later let's do some cool ideas i have a couple you have a couple i think you wanna go first you want me to go i want you to okay which let's start with this okay i think i think this one is as one of the more interesting ideas it's kind of random so i'll i'll start with that it's it's pretty fucking random but this this thing called tonic fake data and so i'm trying to chase this guy down because i really wanna invest in this company now after i heard about it so my so i have a cousin i got a couple of cousins that are in tech i free i think three or four cousins that are in tech one of them my cousins mirror he tweeted this and i think his tweet literally has two likes which is just a shame because like is actually like an amazing twitter thread i'll i'll re twitter right now so it's go see it it's on my twitter feed now but he's like you've heard about big data but what about fake data you heard of fake data i had never heard of this so he's like check out this company called tonic fake data and they grew about six hundred percent this last year and and he starts to like tie some things together so he's like you remember when hbo had that thing where the intern accidentally sent an email to every subscriber and it's because you know they were doing a test of a of like a some software system the email system or whatever it is but when a developer's doing a test they have to input some dummy data right some information and and so typically like you know a developer will just kinda like make it up it'll be like first comma last name you know like just trying to get through the task quickly so they're just like inputting fake data you know just from their hand and and so you know if you think about this at kind of like a bigger level let's say you're testing you know you're uber and your you you have a new feature in your app and so gives us an example basically like let's say you're uber and you are releasing this new thing about notifications and so you there's like this process of quality control testing right so they'll they'll they'll try to like okay sign up as a new user and try it okay let's say you're you're already using log out log back in pretend you got a new phone right there's all these like if you have a product that has hundreds of millions of users that are living normal weird lives there's all these random different paths a user can take and you kinda need to test your product to each and so and so there was a guy this this is kind of the famous thing is there was a guy who he had logged out of his account on his wife's phone but even when you logged out she kept getting the notifications because of just this like the developer didn't test the feature properly of this use case you go into a new phone you log in you accept notifications then you log out you're still getting notifications somehow so which we did all the time i walk around and be like hey who you're at the office as an android let me see it real quick right yeah yeah yeah exactly who's got an android okay i think we tested all of android it's like dude there's like two hundred models of this things like two thousand models you think you just tested android because you know the one guy who's an android bro like you know used it for a second so what happened with this uber guy is his wife got a notification that he was going somewhere or like you're you know you you're ride is ready or whatever and she's like wait he's supposed to be some other place and she found out he was cheating he ends up suing uber forty seven million dollars because you know i found out about this left hand blah blah the cheater sue which is hilarious and so i he's giving all these little examples i don't know if you want or not it's not in the thread i'm i'm the more than friend so so it gives another example let's say here's the last example if two thousand eight the financial system was crashing banks are failing and banks owned at that time if you remember like the subprime mortgage crisis they had basically on their books a whole bunch of mortgages that they needed to get rid of and so they needed to sell them super fast because they were like they were at a risk of going bankrupt and so they they set up a call center that any real estate investor or buyer could call in and make an offer on one of the more they had because like an auctions like you know closing you know final sale everything must go was was the idea and so they hire pal the big data company that peter till started and they say hey come up with a recommendation engine usually that will figure out what offer we should accept because we we don't have time to like vet each offer as they come in it needs to be quick like a garage sale type of decisions i'm like hey give you two dollars for we you take it yeah go ahead go ahead take it everything must go and so so the developers were like okay we need to like test our recommendation engine for like should we or should we not accept the offer but they couldn't use the data because the data had like all this personal sensitive information right a person's name credit score their income their address like who's was too much information the bank can just give it to pal and say hey use this real data to figure out what offers we shouldn't and shouldn't accept and so what they did was the developers went to the bank's office they go inside the building and they looked at the data and they said okay we understand we can't take this data and use it for our models but we can replicate this so like the way a mannequin is a replica of a human body or whatever they did that to the to the real bank data system of all these mortgages and so they came to a replica that that would have the same like let's say distribution and and outliers and whatnot but it was all dummy data it it's all fake data and so they do this they go back they create this thing they create the model it's all successful it all works so what happened is i think the guy from pal took spot i think he's for x pound he's spun out he is and was like i'm gonna create this yeah in c i'm gonna create this for any business because biz businesses need to be able to generate fake datasets to test in all their scenarios from like the uber example show me all the things that users do all the all the different like they do this step and this step and this step to this step cool i need to be able to simulate those steps accurately and so what they do is they basically say alright people are pretty sensitive about privacy and data nowadays you got gdpr so companies can't be using digit using their data for these things or giving giving data to other groups for it so tonic fake data can basically analyze your data create the dummy data and then let your developers or other developers use that date those fake data that fake data that mirrors the real data and so i know this is like such a niche problem that you would only understand if you'd ever been to this but then once you've been through you're like shit this solves is a big problem that they have no other way to solve and i love this this is the opposite of guy who can code makes a to do list app or makes a music streaming you know like a playlist generator based on the music you like right those are the ideas everyone has that everyone can do this is an idea no one has but pretty much no one could do and so i'm like good dude i'm like super bullish on this idea and i love this i love this and especially now with machine learning with machine learning you need a lot of input data to make recommendation engines better well how do you do that how do you get more data well you can simulate or or create fake data that mirrors a small sample of real data so i just think it's awesome it goes on two big mega trans privacy and machine learning and i just love that i never even been thought about this this is amazing how are they doing i think they're doing well they raised some money he said they grew six six hundred percent in twenty twenty he what he does what my cousin does is he basically helps people do what he did like you're interest in tech but you're not a programmer or a designer i'll help you get your first sales john your cousin tech tech yeah so he went and he went and worked at sip science it's like fraud detection like machine learning since or store by the way ex facebook guys were dealing with the spam problem at facebook spun out and created sip sign so if you have any platform they'll help you fight fraud and spam and using the same stuff that facebook was building internally they exported that idea this my import expert framework and so he was the he was like you know just a what they call sdr like a sales development rep yeah basically he just spam cold emails all day and and then he kinda worked your way up become a manager like what they do now he teaches people how to get a gig so he's basically like you wanna break into tech and get a sales job like cool most people don't know how to how to interview for this or how to like do well at this so he takes you for one month he tells you here's a bunch of good companies like that you haven't heard of tonic fake data they need sales reps they have a great product it's a dude really i'll help you i'll i hope you understand it and i hope you get do the job if you will and i only make money once i place you and so he's like a one man recruiting firm right now for this i think it's kind of a this this awesome do i don't know i he's just gonna be started so i think he's got like you know five people at a time right now per month that he's helping get jobs like i her critique at the moment i'll give him a shout so his twitter handle is sami underscore joe unfortunately no one's gonna know how to spell any of those things but if you go to my twitter feed you'll see i retweeted his tweet and just know now and i said that's great saying i i is more interesting almost than than tonic i i i always talk you're gonna say than me well he might be if you're pretty interesting but this guy sounds great too i i've always thought that you should that that job that you're cousin suing sami doing that that could exist for all types of positions because i've had when when i was just breaking into silicon valley and and live in there and and i i would have so many people email me and they would say which company should i apply to and for this for this role or that role i've always i always thought that that'd be a a cool service that's so cool that he's doing that and he's gonna take a cut like a like a percentage of their first year's earnings yeah it's like like if i help you get this job then i get x x thousand dollars i don't know don't know was pricing it's exactly but by i get x thousand dollars but hey you just got a job that's you know eighty five k base plus bonuses whatever like are you cool paying four to this guy to who gotcha you that job like really was pretty hands on with it i think people will make that trade every day of the week plus the companies will pay a placement fee like it once he establishes himself a little more like they already are playing recruiter fees of twenty thousand dollars per person so they will happily pay him once he build his name a little bit but it's not super scalable i don't think he cares he's just like dude i just wanna make money and i don't care like making twenty k a month would be effing and sweet and if i could just do that with my bare hands and not have to like run a whole business and have a big team great i'm gonna do that and i kinda think that's actually pretty smart i've got a buddy who was a executive recruiter for years and we he he eventually needed to he was i wanna start my own thing and i was like i'll are i'll be your first client i was his first client in his first eighteen months he's done close to a million dollars of sales wow just from recruiting a one person recruiting of course he has like ten years of experience and he's been doing for it's not like it's just like you just pop into it but recruiting an amazing business it's it's a really good business for like if you have a one to three person shop i think you could kill it it's pretty ridiculous yeah of the of the like agency service type businesses head hunting executive recruiting executive placements seems to be like a one of the best if you're gonna go into service that's like one of the best service industries to do yeah i completely agree what's amazon liquidation because you've been talking a jack about it i saw i saw the messages you're holler adam well i just start to pay attention right this is one of the one of the the the meta lessons of listening to this podcast right you listen to this podcast you should start seeing businesses everyone right like your cousin comes up to you you're you're saying hello but you're looking at everything that they're wearing and you're thinking oh what's this what's that brand i've never heard of that word that come from what is this thing you're wearing under wrist and so you start to like see businesses every go you're go to i told you the story i was at the dentist he's doing a cavity thing i'm looking at his monitor wondering software is that oh who's selling software of dennis that that looks at the x rays that it's like this looks like it's from nineteen eighty like that's probably that's probably like a super successful business because they didn't have to update their software that's how i know it's that good our business whenever i drive by a library a university or a church or a school and i see someone it's named it for someone i'm always looking them up on my wikipedia like right where did this cover from because if you if you have a named at for you you're a baller and we have the ability of the week i'm gonna talk about this week is is exactly that so alright so anyways the idea is you see this ever so same thing happens with ads now every time you see an ad it's not this annoying thing to scroll by it's like who are you that you can spend money to get in front of me are you making money who what what is this business so i saw this ad on tiktok that was basically like it was somebody receiving at their doorstep not package but a palette of packages like a normal person was like so excited to open their door and the like you know like you see it like a shipyard like pallet of box just taped up and they're all like a mismatch of boxes it wasn't seem like it didn't look good so i was like was that and said ji palette of amazon i was like amazon liquidation get a palette of amazon goods for like ten dollars so that's my ridiculous ridiculous spike claim and the one the one that i was looking at what do you remember what the service was called okay so so look up this this url charming so c h a r m i n g charming z r dot shop right so you already know this is some fucking drop shipper motherfucker who is doing you this this is not a a long term brand they're are investing into charming charming z hotshot shot shop okay okay okay so yeah so it's like a drop yes it's just shit they're just a trap right okay so the the crappy leggings that you see on tiktok so in the thread that me in look in the thread that me and jack and you are in and look click that exactly so this says huge value backlog picking liquidation package nine ninety nine and then you see these giant like from an amazon warehouse packages and it's basically returns and you can get like the medium value you get the large you get the super large it's a zero super large one which i think is or the whole thing which is what the picture is is sixty sixty dollars so sixty dollars for the whole thing and so here's what it says if you just scroll down their site and you know it's good because look at this it has like the flashing yellow and red text so like this is some again drop ship promote the motherfucker who's like i'm gonna optimize this limited stock flashing red and he goes in the united states and europe amazon ebay and other commerce platforms have too many returns and there's no redundant warehouse system to accommodate those returns therefore as a top liquidation company we've collected these returns at a very low price and put them rep package into pallet for sale some of the packages in the pallet lack the outer packaging like there's no box some of them and the functions are normal and do not affect the use at all this is why we can sell these at low prices and it says this is a mixed palette of amazon bulk which is also like junk there's just a whole bunch of random things and it's like you get what you get and you don't get upset you know that's really good to their listen to their sizing it's medium large and super large three fire emojis by the way edna the picture is like a palette wrapped in plastic it looks like like an nintendo and like an oven a coffee maker we have to by the way right okay five to fourteen business yeah we need to do by the way you wanna grow the youtube channel here's a stunt that becomes a youtube video that's i ordered an amazon liquidation thing for sixty bucks here's the unboxing of my liquidation so i don't know where you're at if not if you don't wanna do it i'll do it but but we should do this in filming and i think i think you'd be great at this oh american picker days are gonna come back in handy alright so who me just tell a few other hilarious things oh customer service guess what his customer service emailing is sam what is it his is it is it help at a help desk at charming z shop no is it sub service is it returns no it's like big baller sixty nine yeah speed arbor speed of villa act ninety six at gmail dot oh my god this is awesome did you saw a facebook ad for this tiktok i've been getting tiktok ads for this thing like crazy so i bet you this guy's found some arbitrage where this is hitting on tiktok and he's he's advertising or was retargeting me at least because seeing quite a bit of it but there is this market and so i i mentioned this to jack is jack who is our clever friend x smith who just finds shit like this before we do typically he's he's always like interesting interesting stuff so he had told me about this like a year ago he's like yeah there's just amazon liquidation thing you just check this out and i was like what what is that and then he sent me something that was actually like the high class version of this so so blue lot yeah so blue lots dot com so that's the yc version of i don't think it took off what they were doing was they were taking these pallet these liquidation and they were just listing them for like an instant auction like live auction it's like the retail price of these items would be five hundred dollars you can buy it for fourteen go like just click buy now and they're just basically taking junk i think i'm kinda consignment and and flipping it and so this is like a flipper business of liquidation but i don't i don't really know anything else about i just thought this was funny and interesting and i don't know what do you think about this so let me tell you what i would do i wouldn't do it the way the blue lots doing it so there's this company that we wrote about and two thousand twenty it's called it's it's called un claim baggage that's all it's called and right what it does it's based out i believe alabama scott alabama it has like two hundred employees it was launched in nineteen seventy by a guy named hugo owens and when he launched it basically the idea was he made a deal with the local airport and it says any luggage that has been there for like thirty days or whatever it is you you know we'll take it off your hands and they just have a a huge store and you and they also have it online store but they have a locations like a warehouse that you can go and buy all the stuff and all the stuff that's in it and i believe he's crushed it and so it kinda looks like kinda you know like remember like raw stores or like like marshall like hacks yeah yeah the stores it where it's like it's not high quality shit it's mostly crap but you could find some gems but it's like just there's stuff all over the place you know and it's like fun it's kinda fun like you go there and like i even know what this thing is but like this bluetooth speaker i don't need it but i'm gonna buy it any i'm i'm gonna buy it right that's what i would do with this is i would have a massive store and just sell this stuff i wouldn't do it online i would do it one hundred percent in person in a cheap area where it's relatively low income and i would have tons of stuff and by the way by the way the un unplanned baggage thing it says cool basket lost and then ninety nine point five percent of them like get back to their owners but then it says less than point o three percent are never claimed and so they made an agreement with all the airlines it says with it says we will kinda give these bags the second life will take it off your hands so you don't have these bags un unplanned bags that just sitting here and we can resell we can resell the items that are from it they say only about a third one third of the unclear items can be res sold they go through like a kind of a qa process that says and they have about seven thousand uniquely discounted items for sale each day where where they got from from baggage and then they have like an online store and and they they clean so what they do is they clean the clothes before they get them they clean seventy thousand clothing items a month and a million people go to the store every single year and it's about a hundred and fifty miles outside of atlanta so people are going like just for the store it's like a it's like a it's like a a sticky type of like cute thing to do i have a friend you should check this guy out on twitter he's pretty interesting guy sonny bird bird with a y he has a he created like a returns business he had a clothing brand and he saw one of the challenges is somebody sent something back for return or an exchange and he was selling like suits that were like in a few hundred dollar suits or something and then what he did was he was like alright look you you he basically like alright you send back the suit now i need to like get this stain off or i need to reapply the tag or i need to do this other thing otherwise this is like an un un unacceptable item and so he like got a facility basically in north carolina somewhere and started accepting these items for him for for his own returns first and started getting good at ref them like reapply the label get the stain out res steam it so it's not w or crumbled up or like he's like dude you i can't even explain the number of variations of how people send back the shit wrong and he's like so we just had to handle all those variations and once he started doing it for himself he was like oh cool i can just make this any brand you could just if you have items like this just send them to us we'll turn them over seven dollars per item or something like that and then we'll like you can go resell that item we brought it back to life for you to be able to resell as new and and i thought that was pretty interesting he's doing well it's like it was just one of those like kind of messy businesses that's like you wouldn't i wouldn't really wanna start it but i totally think it's gonna kick ass for whoever is willing to do the work there in two thousand and fourteen when i launched my first conference hustle khan i was like crazy cheap and i didn't have a lot of money and costco is famous for like taking so many returns and i bought like maybe it was a second conference but i think i bought like ten thousand dollars worth of stuff from costco ranging from tables to table cloth to like two grand worth of soda and we didn't end up using a lot of it and i was like let's just return it and i returned like three to four thousand dollars worth of stuff and i was like yeah i'm so i'm so cool i'm like getting money back so we'd would i'm saving and wanna it i like to this day i still lose sleep over this because i found out there the cashier were like giving me a hard time they're like looking at me funny and the and the reason why and i kinda overheard them say they threw all of it away really they just threw it right away it was like but i was like but this is like a case of soda that's like still in the wrapper like they're really problem and they're like our rules would just throw it all the away and i was yeah devastated that was one of the biggest regrets that i've ever had is returning four thousand dollars worth of stuff that was like consumables that they ended up just throwing away like it it breaks my heart that i did that and so at least you have an answer to the question like what's your biggest regret in life you got your answer actually this should be a thing people do there's all these questions of like oh you know what's the best what's your favorite movie what's the biggest regret you ever had you know what's the let's put a turning point in your life whatever this is random questions that you'll only get so often but it's very fucking hard to think of a good answer on the spot and so we should all just do over the favor and like one day just be like alright i'm gonna i'm gonna write down my answers to all these questions in got and i've got because you you have a great answer in that moment you're like a star because nobody one of them that's what i'm the second one was when i was in college i went to a tip a guy like a i was staying at a hotel and the shuttle was driving me around and i gave the guy like twenty dollars and he goes oh well thank you and i said oh no you need it and i meant to say like you earned it or something like that and i say oh no you need it and i was devastated i was like angry that i bought i've haunted by that i said you need it and i was like oh my god that was the worst thing i could have said this just to say you deserve it or or you heard it stupid already i don't know why we're that already bad yeah oh it's like that those saves i think about all the time i'm like what was i thinking right yeah that'll hit you once a week and you just have a wave of sadness right that's like the bad version of you know the flight to attendant are you you check in at the front desk or whatever for your at the airport and they'll like hand you the boarding past like have a good flight you too and you walk away yeah and you're like well oh boy bleep that out if people were are listening on the car with your kids sorry you can leave that one out so okay so i'll tell you by the way i have a theory on this stuff which is it's my halloween costume rule alright so so what is this there's an art to these stories so the way you just did it was perfect which was you tell the story it does the job like you you did something regrettable but it's not like you said like you know you know i hit my girlfriend back to this whoa bro like you know you're not actually supposed to like put some dark shit out there or something really bad that makes you look bad like these are things that are kind of enduring like it's in it's it's funny that you did it you made an honest mistake and then you recognize recognized and it still haunted this day what a good guy and we all had a laugh and i feel like i got to know you you're interesting guy it's so this happens with halloween costume one time i went on there i was in australia it was halloween and they had a boost cruise and so we went on and i'll always remember to do was this there was you know halloween thing most guy dress up as whatever but most most females is like the it's like okay to be kinda s on halloween right they will be okay to dress a certain way to like kind of like you could spice it up but you don't wanna have your halloween costume be accurate and inconvenient so i saw this one girl she came out the on the boost screws and she was dressed up as a bush show of grapes and so she gets had balloons all over her body like green balloons so she looked like like you know like like drape on a like she was this vine or whatever and there's grapes all over but she couldn't like she couldn't have fun on the cruise like she was bumping into everybody ate her she couldn't dance she could barely breathe it was like so hot in there and like she paid the price for having this creative and accurate looking costume and in my head when i saw this bush of grapes girl just struggling the whole cruise she couldn't even get off this boat she was just stuck there in her costume i was like oh the halloween principle which is like there you don't wanna be you don't wanna answer all questions accurately if it's gonna make you look bad that's so there's a way answer something there's a way to do the game to play the game but still look good in the process i can't believe you were making frameworks up and you're like eighteen yeah as i'm drunk on this boost that's what i was thinking about i like made a mental note never make this mistake as i saw her because i would do this i would come up with a clever idea and then it'd be like i'd have like the most inconvenient night so i i i it resonated what ram me actually said something amazing that i that i it was just one line and he said when i think of copywriting it's he goes effective not cute remember when he he reset something yeah he he's like effective not cute not clever something like that yeah and and that and i i think that's always the i'm like whenever i see websites that are i'm like that's not effective it's cute not effective be effective don't be charming or whatever he said yeah exactly you wanna do one more or you wanna talk about i i'm eager to talk about harold but we can do one more if you want well let's do harold because it's actually it actually relates to the liquidation amazon liquidation thing i'll tell you one so okay so where did this come from this is the cue the music billy of the week is this guy harold alpha i never heard this guy did do you know did you know this name before i wrote this here no and i added a bunch of stuff though for you okay great so let me give you kinda like the brief story and then you fill in the gaps of what you found in so here's the brief story i or i'll go backwards tara style last time we were on here a two podcast podcasts or something like that we talked about universal basic income which is idea of like every year you would just get like a ten thousand dollar check and like oh why like oh so you everybody it's like social well social service or whatever social security for everybody and including non retired people unemployed to everybody so i had said oh i heard this interesting idea and i forgot that it was cha off who had said this that i heard it from of of a birth dividend instead which is basically giving somebody some money at birth if you if you're a citizen the government gets you x dollars at birth and the beauty of it is it's gonna compound over eighteen years so by the time you're eighteen they only had to give you a thousand it was invested in the economy and then it grows over time to this larger amount by the time you're eighteen you wanna go for college you have something there so two things happen a bunch of people on twitter were tagging me saying dude i actually did this for my kid and look at this and so some guy was sharing screenshots of like i put in i think it was a put in a thousand dollars or something like that and he's like and then i added i think it was fifty or a hundred dollars a month and he showed that the balance was now ninety three thousand dollars that was in this he's like how much you it how much have they invested it's crazy that it grew i don't know i don't know all the details but he was basically saying like yeah i did this kid and if you know it was a great idea for me and i thought okay that's interesting and so then i saw that somebody somebody goes yeah it's like harold a fond and maine i say okay i don't even know what any of those words mean what what are you talking about like google it and basically there's this guy harold a he was kind of like a shoe mo basically he he were he started off as a shoe boy working in a shoe store i don't even know what the job title is but he went from like shu boy to manager then he left and him and his dad by a factory they buy a factory a shoe factory and they flip it in three years to a larger company and then he goes and he buys another factory called the dexter either like the place called dexter or something like that but it's like the dexter shoe factor something like that and he becomes he becomes a a private label so he's making the shoes that are being sold in jc pan in sears and a bunch other like department stores nationwide nationwide and so that that grew pretty fast as he became their their shoe provider and and then he says alright it's i'm i'm so worried about like if jc penn cuts me off or they're always putting price pressure on me because they know they're they're my big customer like screw it i'm going to direct since this guy hires a salesforce creates a public facing brand called dexter shoes or whatever and takes it like kinda of nationwide himself starts to be successful but the thing that's interesting is but just two things so his business story gets into because he actually ended up inventing the outlet store which is similar to what we were talking about with the liquidation thing so in any factory he knew this because he own factories and any factory not a hundred percent of the shoes are like up to snuff up to standard right so what do you do with the like non first grade shoes that were made he's like got you either throw them away like you mentioned or you would sell it to i we we call like a jab i don't know what that means you'd sell it to a jab for a dollar he would go market up and sell a five dollars something he's like hey that's a pretty good like five x why don't i just do that myself a job it is typically it's just a company that distributes so it's a they have shelf space at kmart and they just need gotcha to fill it gotcha gotcha gotcha okay exactly so so what he did was he's like i'll create my own and so he creates this this kind of signature looked this long cabin looking store and he's like this is where you can go get the stuff for cheap because these are the the kinda like refurbished or not quite not like kinda on side slightly imperfect and so he creates outlet store he's so he creates the concept of outlet stores it gets really popular other brands start to see that oh wow this guy is like he's turning his waste into revenue he's cost into into profits like okay we wanna do the same so they start opening up stores right next to his off the highway and so that's how you started to get these like fat so what whatever you like outlet malls or you would get a bunch of different stores all putting her outlet stuff together here and so that was kinda like one of his inventions anyways he ends up selling the company to berkshire hathaway so he sells it to warren buffett for four hundred and thirty three million dollars in an all stock deal of berkshire and i think you added some notes here but all i know is that later on warren buffett apparently said like you know this was one of the worst investments i remaining so why did he say that what i added there was basically when he bought it i think he bought it in the eighties when he bought it he said it's this business is amazing he and he wrote dexter i can assure you needs no fixing it's one of the best managed companies charlie i charlie and i have ever seen in our business lifetimes right he he says a business jewel he goes when i go to work i sing there's no business like the shoe business he thinks it's excellent but what the issue that happened or around that time is basically cheap international stuff started coming in coming into america and he said something like he goes well cheap imported shoes from low wage countries started coming but someone forgot to tell the dexter managers and their workers about that and they just forgot to address it and so over time he he he predicted that i was gonna make about a hundred hundred twenty a hundred and fifty million dollar a year in profit after a handful of years it ends up losing tons of money he merges it with burlington coat factory or at least tries to and eventually it goes it it it goes it's done and the a big problem what was that harold started the company and a small town in maine where basically two thousand people worked and at this point they they were mostly older people and and buffet was like well we just lost all this money was a horrible he goes if you look at to get his book world records it goes down as the worst del lever but the worst part is now all these people are all out of work and they pretty much are too old to learn new trade and we and and they're screwed and so i calls that one of the worst deals of all time the quote was we lost our entire investment which we could afford but many workers lost a livelihood that they cannot replace okay good good good guy warren buffett alright so so okay this were okay harold hop harold alpha now has a bunch of money a bunch of berkshire stock berkshire stock continues to appreciate over time so he he sold it at nineteen ninety three berkshire just continue to grow and grow and grow over the years so anyways i think he owned over one percent of berkshire hathaway stock wow that's kind of incredible okay i don't i don't know what berkshire market cap is now dan check check bur market cap now but he sold it an all stock deal so whatever that four hundred thirty three million was worth if he held ended up being worth hell of a lot more so what's interesting is the like you said the guy's in maine and what do you decided to create he starts giving a away so he starts giving right he's like okay i'm gonna live you need a new library i'll fund it the the university of maine you need a football field i'll i'll i'll fund it berkshire me six hundred forty six hundred fifty four billion and by the way dan check what it was in nineteen ninety three when we sold i wanna see how much it's grown so so he starts giving way one thing he decides to do is just he says you know education is the most important thing i didn't get to go to college just because of my what my opportunities were i wanna make sure everybody has that opportunity i think it's one of greatest opportunities you could have so he creates a pledge where he says i will get five hundred dollars to every baby born in maine on their kinda like birthday you know when they're born that in a five twenty nine account right so in this like special kind of like tax advantage a saving account if you open up your account i'll put five hundred dollars in and by the time they're eighteen that will have grown over time to have appreciated it and so he starts doing this and at the beginning he does it for like you know whatever few hundred people than a few thousand people so now life is let me just break down some of the numbers here so sixty million dollars has been given a away to babies in maine for their college tuition that's a hundred and seventeen thousand babies that have taken him up on his offer for free money statewide wide so it's a it's the largest state college savings program is sponsored by it's one dude and his like a family trust and i suppose families the families because they open up the account they can kind of like he his he he was big on matching so everywhere he gave he wanted the recipient to match in some way whether it's money or effort or you have to do something rather than just give so in this should had open the account which was a bunch of people weren't doing that before this and the second thing was you can then match the five hundred dollars it goes in because you realized it's a good idea and so here's the the basic math if you had just if you just took the five hundred dollars by the time you're eighteen it's about two thousand dollars right so it's gone up about four x in the eighteen years but if you contribute fifty dollars a month it's twenty five thousand dollars by the time you're eighteen and the that twenty five dollars are said the fifty dollars a month that's like achievable for many many families and then if twenty five thousand dollars it like can pay for for you know state college tuition and and whatnot give you an education and so i kinda love this i thought this is a baller move to like build up your hometown and he's given it away five hundred million dollars just in maine across various programs i thought i thought was pretty remarkable the foundation has a billion in assets so they give away about five sorry six to eight percent a year of their total assets and i think his son is like a sender maine right i think like that's right the grandson so the family is i mean i guess they're legends in maine that's pretty baller this makes me wanna like get wealthy just for that reason you gonna go back to saint louis and do a little something or what i don't know i've been out for so long but did you you can make a big donation to a belmont your belmont finest alumni did you i'll put you in the spot did you donate anything to the haiti thing or the afghanistan or any other cause this year we did the a bunch of stuff for the wildfires which i don't know if that was this year or not or and then the other one was charity water we tried to support i don't know if we did it this year or not and then the last one sonya if she sees anything that's like for like animals or like it's like she's a vegan so she if she sees the animals are like distress somewhere she wants to give and so we'll give a little bit there but we're not big givers i'm mean actually we're talking about this in other day it's like we had this idea like my wife really wants to open up an orphanage in india this has been her dream since where we're dating she been talking about this like she wants to have like if you go to india you see these like tiny ten kids on the street banking it's like heartbreaking breaking so she wants to open up an orphanage where you know they can kinda have a place and not be on the street and and i told her was like you know like i feel like we made it and she she's like like well when we really make it and i was like you know that time will never come we should just start giving now proportionally whatever we can give now and then like when the time comes that we can open up a full orphanage great we'll already have been like doing the thing and taking some suffering away for some people and so we were literally just talking about this so i don't really get it either i we gave low digit thousands to the haiti and afghan stuff and that was like a big that was the biggest donation i've ever made right and maybe sorry it was it might have been two grand i think one thousand to each and i tipped that that's new we don't ever do that and i realize that's a huge mistake that is such a huge mistake and i think it's a huge mistake for for one major reason two major reasons one it makes you feel so good to do that even you know no one has to know but it i guess i'm breaking that rule i'm telling bunch people but the second thing it can like giving away money i think we'll make you earn more so john rockefeller was famous he he actually gave ten percent of his income every single year starting at age like twelve like the year he started making money he always gave it away we talk to we we joke about mormons they do this a ton a lot of christians they do tit i guess that's ten percent i don't know how different other i i don't know how other religions do i'm sure each religion has like their version of this we should totally give more and we don't and it's kinda messed up it it it's i think it's wrong i i like kinda convince to myself i'm like well if i i'll just tip a lot which is like kinda bullshit but it's not entirely bullshit but it's half bullshit we should totally give more we don't give nearly enough and so that's cool to read the story whenever i read these stories i'm like i wanna get wealthier just to do this there's a guy who what what was the guy's name in san francisco and there was this amazing article what it was called the billionaire who gave it all the way you know what i'm talking about his name was patrick patrick fee i think his name patrick fee let me look it up so anyway he his name chuck fe so he created the basically the stores that you i'm going off a memory i i read his a book a while ago he's ninety years old he currently lives in san francisco i i'm reading this the billionaire we did a billion of the week on him chuck fee remember you brought fee the billionaire who wanted to to die broke and is now and and did it the basically and he's now worth two million dollars at his height was he the one somebody wrote a book called die with zero or something that sounds that's a different that's a different topic but it also good but basically the idea is like a lot of people wait to give all their money away this guy did it when he was live his name was chuck fe he basically created when you're if you go to china and you're not china he he did japan if you're on your way back from japan you can go to the duty free shop he basically he basically invented that and now he's got a bunch of duty free shops they're they're quite famous i i can't remember what they are but his it was cash flowing like crazy and so at its height he had something like it was multiple digit billions i believe eight billion dollars and that's how much he's given it away so he's given all of it away except for two million dollars and he currently has an apartment in san francisco that cost him four or five thousand dollars a month and that two million is all he's got left crazy fascinating i remember reading about them and i was like i wanna get rich just to do that so pretty cool but like a lot of people when they start making money i'm like oh i don't know that that's you know yeah i don't know what what is the thought there is some thought that like kinda like blocks you but move what i can't even move my finger on it's not like i can say well i'm thinking about it this way but that's the wrong way it's like i don't i think i'm just not thinking about it or i'm i'm i'm thinking about it and then it kinda becomes a heavy topic because i think i should do more and then i feel guilty that i just move on with my life i just do i'd distract myself you know i don't wanna blow up his spot too much but the guest we just had on ram remit i've heard stories i've heard that he is a very good give oh yeah i i like hearing how people give i have a friend who as soon as you made a bunch of money gave a ton of laptops away and i thought that you know there's like a there there's something really cool about when you give somebody a knowledge engine or or or like a monetization engine it's like you know it's sort like a teach man to fish thing but you're not teaching anything anybody anything you're just giving them a tool that if used well can generate like kind of infinite number of returns and so i like that idea of like you know whether it's micro lending or it's or it's you know that what was that project where they dropped a tablet off do you remember this they dropped a tablet off in the middle of africa with no instructions and you you what i'm talking about no so they i might butcher some of the details they ran this experiment they left an android tablet which i think had like nothing like kinda like nothing on it i think it was like a white reset thing maybe it was just like the the boot sequence and they just left it in this like village in africa and and then they came back like a year later and like the whole village had learned how to use this company had to use the tablet they had like founded it booted up got an operating system on it and had apps it was like running and like they had like learned all put all these education games on it or whatever there was like yeah dan just linked to here i didn't remember the exact story so i guess ethiopia so a box a box of zoom tablets was dropped off in ethiopian village to kids who had never seen a computer before and by the time they came back they had not only taught of how to use it they were like modifying the android operating system on it to like work better for themselves it was kind of this like really inspiring story it was almost so inspiring that i'm like alright is this a little bit of bullshit or what i i i kinda don't really care but i like that i think that's that just shows how much power there is in in such a simple act yeah i i think it's great well we're we should have we should organize something for like our listeners like yeah we should do something via the pod let's give some let's give something fun via the pod well my what the the way that we gave to the afghanistan i think we only gave a thousand dollars so it wasn't like that big of a deal but the guy his name is sole s o dot s o l space and then or his last name he owns examine dot com he just tweeted out that he was gonna do this and he was like i'm gonna give away he's like i vetted this i know where the money's is gonna go to for this i know exactly what's happening you if you trust me then you'll then you can trust that this is gonna be good and he raised four hundred thousand dollars off a couple tweets and that was pretty amazing yeah and it sounds badass so we'll have to do something like that i think there's a lot of work to vetting in haiti sarah's you know haiti had this massive earthquake you know what was that yeah yeah and my mother law's is from haiti and she's got this brother so my my my mother law's brother yeah no my brother number yeah my uncle i guess he is a haitian immigrant and one and when the another earthquake happened what he did was he got all his friends that donate a little bit of money collectively added up to like a hundred thousand dollars so he had a hundred thousand dollars maybe a two hundred thousand dollar something like that a a lot but not enough that it's like too much and he took a hundred grand in cash and one dollar bills and five dollar bills and then he hired a private plane and they bought tons of toilet paper paper towels and peanut butter they flew into haiti they gave out the peanut butter and gave out the toilet paper and then he had all this cash and he's like dude they just need money to buy shit and like us currency was good i just started giving everyone five dollar bills anyone i could find i was just give them five dollar bills and then he goes and then we stayed there for a day we gave it all the and then we just came right back and i was like that's pretty baller that's pretty great and so i don't know something like that it's inspiring to here so we're gonna have to do something about that if somebody's listening this and they have a good idea of a way for us to give that i would say is what my hope is that it's kinda like in line with the values of the deposit like if you listen to this you kinda know what all about what we respect like i i respect that kinda like tablet giving tablets to people who never get computer before right i think that's kind of amazing and so if you can think of a good way for us to do this where you kind of you know where the money's is going you know it's legit you know that this is gonna like actually help people definitely hit us hit us up on twitter whenever give us ideas do can we go a little bit over can i can i there's one something you want i i have a lot of stuff on here you did you see i did a ton of research on a variety of different stuff and you totally overlap with a lot of my stuff scroll down look at all that stuff i'm not gonna get you at all it's like so much work that i put in we're gonna have to get to it next week but can can we wrap up with the theory of of the future of venture capital yeah because i'm curious what your opinion is is that i wanna saying this is that one of the things you research or you want me to spiel i want you to tell me your opinion so i was thinking about this so basically i was like alright venture capital i think is a great place to be because i think technology is driving a ton of progress so you you basically if you wanna bet on the future of humanity and where a lot of growth is gonna come from i'm investing in technology is the way to do it that's pretty clear alright so within that how do you perform well so i was thinking about you have venture capital venture capital is kinda changing and people like talk about this so here's my theory why thinking it's changing because like hey there's just new like the secret out that you should be investing in in technology so you have like soft bank coming over the top with the hundred million hundred billion dollar vision fund and you have tired global you do you know what's going on with tiger well i just know that i see tiger global everywhere i believe tire global it started by guy named chase coleman his wife was in like some actually documentary about being like filthy rich years ago and he it was a hedge fund at first it was just a hedge fund like a boring like maybe high speed trading hedge fund right yeah i have patrick what's trading you gotta read this sub i mean obviously not now we're on the pod but it's called playing different games it's by this guy everett randall phenomenal sub phenomenal blog post about what tiger's is doing and how they're playing a different game and it basically it what it talks about is like there's no beautiful headline by the way if you wanna learn about cut a package content into good stuff this is a beautiful headline it says playing different games the tiger phenomenon the beautiful use headline is up not it's not too quick maybe use it's like seven unbelievable things about tire no it's like it's it's a it's a this guy has a point of view or a thesis on what they're what they're doing because to everybody else that looks a little bit crazy because what what you were seeing was oh new funding round happens tigers in it tigers it tigers and say dude how much how many deals are these guys doing they can't possibly be vetting and seeing this many deals this is unbelievable pace and so what he talks about is that you're playing a different game so a normal fund says okay i raised this fund i'm gonna deploy it over the next three years and that's why i told my my investors i gonna do so over three years i'm gonna find the best deals i can i'll be super selective or i find the best deals and then i'm gonna maximize the sort of like the the sort of return the the return i'm gonna get the irr and he says what tiger's gonna do is like i'm gonna deploy as much capital as humanly possible at a eighteen percent irr so i'm not trying to maximize irr i'm trying to maximize the gross dollars that i could shove into a pipe that will give me eighteen percent so i don't wanna fall below eighteen percent but i don't wanna try to get to twenty eight percent if it means i'm gonna deploy half as much money so it's a very different game so so this happens in e commerce all the time you have two people in e commerce one one brand says we wanna maximize our roi or return on ad spend as some people say just call roi so they wanna put a dollar in and make three dollars out and they're and if they if they get two dollars out they feel bad if they get four dollars out they feel great and so they they spend as much as they can while they're getting us they spend like as long as they can maintain a certain like above three x roi and you have other people that say mel you know what like i'm happy as long as my roi is like yeah somewhere but somewhere above one point five if it's above one point five all i'm gonna do is just add more money into the top of this thing i'm gonna shove more money in because i'm taking a larger number and i'm multiplying it by a smaller multiple but my base the base i'm amount of money i'm shoving into the pipe is getting bigger so this that's my return so you have different strategies so what are you saying was tiger's doing this in vc they're basically trying to deploy way more money way faster so that they're and their returns look better because it's instead of deploying it over three years and being selective they're deploying it all in six months and so now if it comp if it starts to return it's gonna already have a faster rate of return because the money got deployed whereas the the vc might have held the money for three years being selective not how and so solving the hard problem of making sure that the companies are gonna collectively do eighteen percent irr well they're sort of saying book yeah if if the best guys who are selective are gonna hit thirty percent forty percent we can hit eighteen just by getting we we can hit eighteen by doing a lot of deals and sort of like a law of large numbers we should still get there because technology in aggregate the index is gonna do something close to eighteen and plus as we develop this reputation of being we are a trusted fast deal maker you want money come to tiger global we'll get you money in twenty four hours we'll get you a lot of money you don't have to do this whole dance with the other vcs and they're gonna debate or you nail repeating and they're like yeah cool what's your what valuation you want fifty make it sixty and it's like oh okay cool i'll take your money so they're getting into a lot of deals and a lot of good deals because they're not price sensitive they're fast and they're aggressive and they're building a tracker because when you do so many deals they're gonna have a bunch they can point to as like yeah tiger was the one behind this winner and they'll just sweep all their losers under the table and you don't have to worry about that so they'll build reputation fast too so i thought this is kind of interesting so i would say there's a whole bunch of reasons why vc changes this is actually not even what i was talking about my my thought was if you're creating a fund today you really the winning strategies are you you play a different game which is the tiger one so that's that's strategy one you play by a different set of rules than everybody else i love that strategy though another example of that is us win cha off moved up market to specs so cha off was doing early stage tech investing series a series b competing with sequoia and benchmark and everybody else and then he's like oh dude spa spa you know like spa weren't in v until he started to make the the mechanism had been around but they weren't popularized and not everybody was trying to do a spa and then he started this wave because he's like there's a bunch of companies that wanna go public i can take them public faster and get them a higher valuation and basically i can do late super late stage stuff and basically make ten x my money in one year and so he's and so he does once back he's like oh this is amazing it gets back a let trademark back b back c spec d all the way through spa z trademark twenty six of these he's like dude this is a money per drug ten x my money i'm gonna i'm gonna do this twenty six times if i can i but the verdict still out on that on that had i believe right sponsors the sponsors are making their money to do they make their money regardless it's the retail investor who joins in and says i'm gonna invest in in this back they are getting a questionable return but the sponsor cha off what he's doing so here's the model by way i learned this recently so i might be overs simplifying it i might have some details on this i was i was at a dinner with somebody who's doing this back and i was like y can you say who tough no i i was like i was tell me the numbers behind this i was i was like these guys get filthy rich i feel like they're making a lot of money doing this because just of how many they're trying to do this must be i'm wondering is like it's unbelievable so here's what here's what how their economics in this backward you let's say you're a tomorrow you have great reputation so for those who don't know what a spa is a spa is a special purpose acquisition corporation or something so it's basically a blank check holding company so you go to the public market and you you list your spa there and you say give me four hundred million dollars i'm gonna take that four hundred million dollars and i'm gonna go find a company to to invest in and so so he goes to the public market he says i don't know who i'm gonna invest in i'm gonna invest in somebody but his reputation was strong enough that he was able to raise four hundred five hundred a billion dollars bill act i think raised seven billion dollars or something crazy for their specs but they don't even know who they're gonna buy you have a deadline you have a two year i think clock eighteen months or two years or something like that you have a deadline and and and if you don't pay if you don't buy a company you have to buy it back plus a certain amount of interest yeah there's like a warrant basically so so so and that's what's happening now with specs a lot of spa investors but sitting around waiting for the company to make do a move they're just they're they're it's like a coupon like you can basically say give me my money back and they have to give you your money back and maybe plus i'm i'm not sure exactly happens so for us spa let's say it's a two hundred fifty million dollars back the sponsor who's you know a cha off for somebody in this case and he he's not the only one re hoffman doing spa a whole bunch of people are doing them they put down about three percent so let's say two hundred fifty million dollar spa i don't do public math but i think that's about eight million dollars that they put in in their of their own capital and then when they very froze we're back okay so you put you put three percent down when you find a deal you actually do the deal you're gonna get twenty percent of the action so you're putting three percent of the capital and you're gonna get twenty percent of the of the deal so that's your flip right there you put three percent in you're gonna own twenty percent by the end of it in addition to that there's things called pipes pipe is basically oh i raised four hundred million but i need turns out i found the company but i need six hundred million to do the deal so so before it goes public like somebody can come in and give you that that that difference that two hundred million dollar difference you're short and they get a sweet deal too because they're they know the target they put the money in and then very quickly it gets liquid for them like you know because it got the deal ends up you know in the public markets than announced so there's a lot of money to be made in specs right now there's also lot money to be lost if you're doing it wrong if you're there's a lot i think you're make made there's a lot of money to be made if you are a certain couple people a certain the way is why it's so funny when people like him off and i like him i think he's great but i think he's a virtuous signal like i think he he loves to say the things that make him sound like the people you know the people yeah robinson that up saving and everybody else is playing these bullshit games why don't we do real hard work and solve real problems and and cut out the bullshit he's all about that like those rhetoric he's very good at those speeches but if you look at what he did it's like dude you're you're playing the game just as hard as anybody else in my opinion you might believe you have better intentions about why you're playing the game but like let's be cleared and i a lot of it's you're an insider and you're an elite you're not the every man everyday man that you're you're try you tries to kinda champion for but i can't blame them like that's a good strategy instead of saying i'm rich billionaire like with insider or access you know that doesn't play over so long and i don't know if this is true today but i think it was true i believe that his spa cha spa are like the in aggregate of all across all of them like the most shorted stocks on the stock market may maybe they are now i i don't know i haven't i haven't looked at that but yeah definitely people have cooled off on on some of the because if you look eight what the thing is you look eighteen months later after they do their acquisition target you're like how how are they doing so like the typical spa curve was they list at ten dollars before they find a target they trade up to twelve thirteen fourteen fifty sixteen dollars right so you're getting this return before anything has happened right this is just like greed and then they find the target and then it either pops or it starts to shrink depending on how people feel about the target and then like eighteen months later where where is that stock is it at ten is it above or is it below i think people are doing some good analysis on this i'm not super up speed because i didn't know planning talking about specs today but do anyways i think they're an example is a open door have you look at open doors stock i i think that's one of his specs it's doing well no but i just look at it it's the exact arc so you guys didn't couldn't see this but right sean's what what's that arc called it's just like a like a like a standard issue cycle yeah like a bell it was like a standard deviation like a like chart and that's exactly what open door looks like it's like starts small gets huge it goes back list list of ten dollars runs up to thirty four dollars and it's currently trading at seventeen fifteen fifteen to seventeen and you know there if you were in the ten dollar yeah you got you gotta you you do have gains right now so say i'm not saying specs i guess what i'm saying is if you're my my mid my main theory here was you gotta do something different that's one way if you found a different game now people are gonna copy just like they've cha off credit figured out that this is a good model was the first one doing it and then this just had a flood of spa since then every and the mob who cans back wheels back right now and even startups who can't really raise well or don't don't aren't showing enough to go public they can go public via us spa and then all of a sudden hey we got liquid great so so there's definitely a lot of like lipstick on the pig going on wait so we we have to wrap up this segment which was vc you do the tiger thing you become like cha or do something different and those are one those are play a different game tiger and spa that's an example of playing a different game second one is you're the big brand so sequoia benchmark and entries and they're always gonna get the best deals or they're gonna get allocation if they want in the best deal because of their brand name and those funds are so big and you can't even invest in them if you wanna to if you're that seems like the hardest one to do well yeah because okay great it's like saying start off and check me you know like how do i do that how do i become that brand as obviously that takes time but they'll do well i'm just talking about who's gonna do well people playing a different game than big brands than the niche specialist so this is like i'm a vc fund focused on cannabis i'm a vc fund focused on automation and machine learning i'm a vc fund focused on let's call it saas software like david sacks craft ventures so there's like a whole bunch of these right vice ventures there's they they brand themselves a specialist in this one thing you could do a media on if you wanted to and basically what happens is if you picked a vertical that works like saas is a good vertical automation a great vertical right you're gonna see you you're gonna see a lot of you're gonna see more deals than anybody else in that vertical than a generalist because you say no to everything else that's not this so you're only spending your time here you build your brand theirs by creating a bunch of content your blog and your podcasting about why automations in the future self driving cars in the future blah blah blah so those founders will combine you and then also you they'll keep you in deal so even if sequoia or benchmark wants to do a deal the founder will add you for that credibility because you're a specialist in that niche and by you stamping them it's valuable at and they think you're you'll add value because you are more knowledgeable about this domain and anybody else i think the niche specialists can do well then there's celebrity angels that's like naval biology same sort of thing as the fur as the big brand and then the last one is called venture services what venture services are you familiar with tu tu ventures do you know what tu ventures is no there's a scott scott bradley tu he's got a book that you might have read he was i think he's like a ex washington policy guy i don't know what's still basically no brand he's like a policy guy what he got kind of known for was when uber was uber was in its early stages growing uber was having hell of trouble with cities and the the taxi cartel and like every every market they were fighting against taxis in the cities and then the people wanted them there and so they he was giving them a bunch of consulting and advice and that he got to invest and uber was like one of the best investments of the decade for an angel investor and he did that also with airbnb another group that had policy questions and so any startup that had a regulatory or policy challenge which actually many do i was like oh we should include tu and around that's what their value add is and so he had a services business that was his consulting business for for this that he built i think he owned a hundred percent of it i think it's a hundred million dollar business and then he created a venture arm just to invest equity equity all service just exactly this yeah exactly the the sort of policy legal regulatory provides that's all lawyer basically lawyer but specifically with like public policy think so like lawmakers more so than like drafting your shareholder agreements and so you know built this really successful services business but didn't leave it as service business added a venture arm to it and because that the own equity and things that ended up being very very valuable and a lot of ad agencies try doing this and they only do okay they only do okay i i think that if you did it with a different a different stick like what this guy tu was doing then it could be interesting a lot of ad agencies they'll do that i like even you never read ant and all those guys yeah i think they took of equity and you you had to give them like like there was a minimum of was like fifty grand plus some type of equity right well friend of the pod andrew wilkinson he was doing this with tiny right or sorry with med the design agency so design agency and so slack is paying them cash to design the first slack client could have took equity also or could have had an equity arm that says great let me also invest in your next round in this round with you at separately we'll take the cash on the balance sheet that we're making from consulting we will invest in into the projects that we believe in that are in in this portfolio would have done phenomenally well but didn't do that in his case he used it to go buy businesses separately did you hear do you know who david chose is no so david show and this will be last story david show is this kinda a degenerate gambler crazy guy he's he when he was eighteen he start traveling he had a a show when vice was popular of him hitch hiking across the country it was called like david c hitch hikes across the country and he's just kinda of just degenerate crazy person but he's an artist and he's like a wonderful artist graffiti artist he's so good at it and he's got some amazing work and right when facebook got started david c was kinda of like a cool guy like a lot of people knew who he was and they wanted this work but you know he was hard to get so eventually sean parker hires him to paint facebook's office they once this he want they wanna paint this like amazing graffiti and david c goes yeah you know be fifty grand and sean parker it goes well you want fifty grand in cash or fifty grand and facebook stock and he goes well i'm a gambler give me the stock he takes the stock and it's worth like three hundred million dollars a few years after facebook goes ipo and it was all from this facebook wall that he painted and i went to the facebook office and they ended up taking down the or they moved to a different office but they saved the wall so throughout the office you could still see the david show painting and ended i can't i at the time when i wrote the article like four years ago it was like two hundred million dollars that he made from the fifty thousand dollars worth of art now it's way more he's actually on joe rogan all the time he's a crazy guy this guy david c nice i like it yeah basically i think there's this model of venture services which is you know bobby good doing this with design bain did this back in the day so a bain c the consulting company and then bain capital was their venture on that they use so i think that investors you can't just say you know i'm good at this i'll give you advice it's like i think there's gonna be investors that say yeah use my like i have a company that does this as an agency as a serve as a services company and then we also invest and that combination i think it's gonna be pretty powerful i feel like i could rule where i know could be what i want to like never looking back