#29 - Powder Diets, Instagrammable Experiences & Distribution First

okay quick break to talk about our sponsor for today that's right a few weeks ago i did a fake ad read where i said this episode is brought to you by nobody and ever since sent people email reach out to advertise on the podcast which is great and this is a really cool company the sponsor for this week's podcast is super cast so you know if you wanna cash in on your podcast super cast can help you unlock predictable recurring revenue from your audience how was that but cutting out the middleman man and turning listeners into paying subscribers in fact podcast using a subscription model can make twice as much versus advertising alone i like that is super cast dot com slash hustle to learn and earn more alright i have to check that out after this i do love me some subscriptions so me and sam met actually we met in a really fucking random way so we we met because sam sam was hosting hu con and he was he i get an email from sam par that says hey sean heard great things about you heard things heard great things about your space monkey in inferno office is so dope hey you know what we i have hustle con coming up like in a week from now and i need a play i need a space to host my my speaker dinner it's gonna have badass speakers this guy this guy this guy this you know all these people are coming you know would you be down to to host it and i read it and i was like i know this guy there's nothing about you know like i was like this is he's full of shit like he hasn't heard anything about me but he probably saw our space because our space was really cool and for the record i had it wasn't was i i assumed it was but i was like still this is this is high class bullshit and so i was i was like yeah this sounds great and and he was bringing some value to the table he was like you can attend the dinner you'll meet all these people so i tried to negotiate back i was like cool as long as i could speak at hu khan i'll do it and he was like like no there's those spots left i was like alright fair play he could still do it and that that's that's actually how we met that night at the speaker dinner and i'm met a few my best friends there which is like testament to the idea of like just show up it's become like a motto of mine which is showing up like it's just eighty percent and like for you guys who you came here you could've done anything that you could could've stayed at home netflix gone on dates you know you could've done whatever you guys do you know you could have done tonight but you showed up and so good things can happen when you show up and and and so we use to do a weekly week weekly or monthly where it was sean and three of our friends that we would meet up every single week and then eventually every single month for years it felt like yeah was like seven pm when a week or once every two weeks we would get together and it was it's what we call junk now which is basically like a a meeting of the minds and sam was in it and you invited a couple friends that were really good and the idea was like hey you spend most of your time where you have to sell if you know if you're doing a business you gotta sell to investors you sell to your customers you sell to your teammates that hey things are going great but in reality things are usually not going great default by most most of the time things are not going great and so we wanted a group of people that you could talk to and it's like you know thirty percent therapy alright that's probably like seventy percent therapy thirty percent strategy but we like told ourselves it's all about the g which was that hey if i say i'm having trouble with this thing turns out sam's really good at marketing and he could be like dude why don't you just do this this and this go read this blog post it's awesome it'll help you out but then also we would have like insider knowledge because of because i host conferences you you're just very personal you know everyone and then we have an investor friends and like we had this network of we were like felt like one step away from anyone we ever wanna speak with and so we would also like hear rumors and we'd bring up those rumors like i heard person was doing this right and that's kinda what the podcast one this part of the podcast turned into yeah exactly so that's how we got to know each other and that's why i knew sam would be good to do these brainstorm storms with so i'm curious for people who are the anybody come from out of town you came from out of right you came from san diego san diego liver liver more malibu malibu love it sacramento sacramento who came to furthest this who thinks they came furthest this los angeles los angeles is okay very good san san he it goes to furthest alright round applause for the guy you came from say diego you go i'm like ten days notice i i i think yeah whenever i hear them i'm like why yeah we we don't say that part out loud what is the answer why i some questions i wanna ask you guys yeah okay should we start with that what's the question i i i feel like you came from san diego i i owe i owe it to you yeah i i and before we actually get a question i do what preface to saying i feel like because of the we've created that you created this podcast i created the hustle people think that like we have answers and that's definitely not the truth but what is the truth is though that i like because of the billions well i very opinionated because of the business that i've created in you as well i've met so many freaking people and seen so many patterns and i've heard of all these stories and so i would say if four questions that's the answer is coming from yeah what i will tell people is if you know there's a lot a lot of people out there are smarter and wiser than me but you probably don't know so i'm the best you got so so go ahead yeah so i wanted to ask you about your startup with laugh yeah i know that started in what twenty fourteen yeah and then and so i was reading your podcast or sorry your your media post about why it failed and how it failed and i know you mentioned that churn rate was one of the main issues but what other issues did you see coming and like what other reasons besides the churn you had that came to the failure of lab so okay so we we had built an app called lab jake's here jake was part of lab jason was a a a lab you joined right when we closed lab down i think somebody else said were a user of lab here basically bla was like a way you could push a button and start a talk show so basically what we're doing now but like online and so you could have two up to four people talking on screen and unlimited people watching and so now like periscope facebook live now a lot of things are out there that tried to do stuff like this we tried your question was why did it fail it fail for really two reasons one was when most people make content if you look at youtube podcast podcasts blogs ninety nine percent of content is really bad and not bad by my judgment but bad by the market's judgment it doesn't get any views it doesn't get a following and the problem with live is that you know you can get away with that if you're youtube or your a blog post because the good stuff sticks around it's still there so you know the one percent that's good you can could find it and enjoy it and that you can create a successful service with live you have this really hard problem where the good stuff is only good while it's on and then as soon as they go offline it's gone so it's like exponentially harder to have good entertainment on all the time and we've we felt that pain and so ultimately that's what i failed the other weird thing was do you do you guys know who martin sc is yeah so if you i'm glad with him on your show yeah so if you don't know i didn't know who this guy was but he came on i was like wow who's this guy martin he's the biggest user you have guys you got thousands of people watching them and we were this tiny service at the time and turns out googled them and it his like the first thing that comes up is march crowley most hated man in america and i was oh it's not a good thing and and basically he was the guy who had bought a he bought some drug and jacked up the price which is like pharma bro farmer bro and then he did all kinds other stuff he's in now in jail so that's like the that's where the story ends but he was on our service and he would b every night he was actually our star user he used it as like he used it perfectly we had other celebrities try to use it but he was like very ina this guy he would use it all the time and he would use it every single night and he was driving hundreds of thousands of people to us so we were growing but if you guys know about four chan or some of these other like internet like troll groups or hacking groups actually i shouldn't say anything don't attack me anymore i'm am i'm scarred but there was a a group called lizard squad at the time who did not like martin sc and they did not like that we were letting him broadcast on our platform and so they started ddos us basically like like you wouldn't believe every day for i don't jake how many months straight did we fight this on yeah as as long as martin was on they would do this and it was it was unbelievable so the other reason it failed was that we had one of the most prolific internet hacking groups attacking us with their full force which we were like this new startup and was not from me and ready for this there's maybe a third reason and as one of my best friends i saw like this whole thing is that his setup up as an entrepreneur was like way different than most people they basically too nice yeah they're the monkey inferno was so there's this billionaire named michael birch or he's close to a billionaire and most people when they get a little bit of money maybe they'll buy a nice car or a nice watch this billionaire had probably a five i don't know what your budget was but let's say five million dollar a year incubator where sean was the boss and got to spend this money on launching cool stuff and i think it created a little distraction because like you had the freedom to every three much we had a private chef every day and we have like you know a office in the ball sorry a bar in our office now these weren't in my opinion and i don't think they're the reason we failed but they do create a sense of security and comfort that like you know who's running a business that's like in your office is embarrassing like you are your daily conditions are like you you nobody raised their hand like he's yeah thank you like just be honest here what is like your back was against i used to take dates to my office to impress them i don't think it i don't think most entrepreneurs would take their dates to their garage just try to impress them like when a lot of people start companies are backs up gets wall like i i gotta make this work you never really had your backup at wall which i thought was awesome and maybe is awesome it could be awesome but yeah that might been a that might have been a factor for for sure but it's hard to say right when you when you fail it's hard to say why you why exactly you failed you try to pinpoint reasons but it's usually a multiple thing same thing with success if you ask successful people to do it usually they don't even remember the hard times they sort of blacked out and and and forgot about all those things they used to do when pre success and so i in general i try not to take put too much weight and you know why did you fail or why did you succeed because it's so nuanced and sorry that's not a great answer but yeah cool yeah what's up question great you so you've like run star we built great companies and now you're like an employee and running a start i'm yeah don't remind me i that balance like how do you make sure that you're a good employee would you have the startup i asked him that the other day so the question if you if you didn't hear on the podcast was your done startups now you're an employee at at at a company how do you what was it how do you bounce you're gonna how do you make sure you're a good employee well how about even first of all what is it what was the almost the difference of running versus yeah have me to major difference right so like so right now i have a baby a two and a half month old baby and like you gotta keep the baby alive that's like the only job the job is keep the baby alive and you gotta do stuff you can't the baby is not just gonna stay alive you gotta actively do things all times a day like my wife wakes up panic just every hour just to like i know what i'm supposed to be panicked about but i gotta keep his baby alive that's how a startup felt to me which was like by default we were failing every single week you know today bet twitch and we have a you know what you would consider like a high pressure job like i'm basically running international growth for them but twitch is not gonna fail tomorrow the next week you know pretty much regardless of what i do if i do something great it's gonna be additive but if i do okay or or mediocre job the company doesn't fail and so there's just a different level of pressure when literally the whole thing is gonna fail you're gonna owe people money who you raise money from your employees who took a bet on you and came to work for you they're gonna be out of job as it's a different level of pressure if if you can see i have like sort of gray hairs on the side here even though thirty one years old because i think that was the the pressure then so to me that's the difference i don't know if you've tasted the difference she wasn't know how you bounce but i i i would say that i our company is a good business i don't like running a company i really like starting a company and they're way different yeah and it takes do two different skills to do and you either have both or you don't the other thing which was how do you make sure you're a good employee i don't know i don't know if i'm necessarily a great employee to be honest with you in fact like when we got we got acquired to do one thing within the company and then within two months i'm like no we should do this other thing that's like really important and i pivoted which like i thought my days of pivoting were over when i left my startup but so i think in some ways i was a bad employee i didn't do the job i was meant to do but maybe there's a trade off which was you know the project we're working on now is a startup up type project more of a entrepreneurial type of project within a big company i think it's possible to balance that because that's how i started this was when i i had another business that we sold in and then started this this the things that are built between like six pm and one am are pretty amazing and to be to be honest now those hours are from my family they're for working out they're for the podcast they used to be for the business those same hours and so i don't give those hours to my job and that's that's why i said i'm not sure if i am a great employee and we can keep doing questions or go through some of the stuff we had here yeah do you guys wanna hear i guess show of hands who wants ideas and then we'll do who wants question more questions so you wanna hear brainstorm ideas hands up now okay and if you want q and a now few just you do you wanted to just ask a question i wondering what other questions people will oh okay the medic question alright we'll do some ideas and then and you guys can tell us because you know when we do these ideas we literally let like throughout the week take notes of interesting stuff i'm hearing the other people are doing or stuff trends i'm note is saying or stuff i read in the in the trends group i'm i'm curious also who here is the subscriber to trends that's pretty good yeah it's to trends yeah it's pretty good you wanna yeah who's going on house going i'm going alright okay we're just gonna do polls all night that's that's the whole thing well you know to talk to so yeah we we do these ideas and and i've actually found that there's this great practice so i actually encourage you even if you're not doing us about new ideas act like you are because now that i write down new ideas because i know oh shit we're gonna brainstorm on thursday or friday it's got my brain constantly looking and if i wasn't doing this podcast i wouldn't be writing these notes down my brain would kind of just start to ignore those interesting things they would just think oh that's for other people to do and i noticed this a lot in our company too if you know there's a lot of smart people and and i actually asked someone today i said so if you thought of any business ideas as well you've been working here and they like we're confused i even asked the question and it's because their brain wasn't thinking about that and and i encourage you to train your brain to look at the stuff forever i just love i just i do it all the time yeah you have a backlog okay so what do we got i got a couple of ideas i'm gonna tell you about one that i'm pretty bullish on so and may even heard of amazing grass it's okay so so i wanna eat healthy and eating healthy is basically it's actually really fucking simple you real food not processed food mostly vegetables and just like donate eat too much like that's the whole that's the diet book but eating vegetables is like pretty tough so i started taking this powder called amazing grass and basically it's the equivalent of like like i was too lazy to cook vegetables so i start doing green smoothies and now this is like hey you know what don't even do the smoothie just put this powder in water and chug and i'm like great let you know sign me up like if you could just inject it in my veins i'll take that too and so so i don't know what you think is but well i wanna know why you're you're bringing it up now i feel like this this is already a pretty popular thing right i it's new to me i've never so i've when i haven't tried when i tried to call it like a green juice or the greens so athletic greens is similar that's what i said do too so i think it's similar but it's a it's a green powder and and so i don't know if i greens is green powder i think it is it is but i i view this as to me that when i saw this i was like the same way that the protein powder industry has just sort of like gone up and up and up and it's really you know if you're trying to bulk up that's just becomes a part of your staple like routine i think that this is sort of the the vegan version of it right it's basically instead of trying to bulk up it's about hacking your way into health so it's about getting sort of everything you want from your greens faster and the the thing i like best about is that it tastes like shit so i believe that it actually works like if this thing tasted good i would be like oh no this is this is garbage this is a sugary something athletic greens i think i thought adam brought you something right now no it's really expensive is that stuff expensive so this little tub really your company they're and they are acquired no they got a private equity investment so these they work more than that yeah yeah private equity they're very profitable typically exactly so the idea that's here is not to invent something that's already invented but to do it in a new way so we have a lot of friends that do d companies of direct to consumer brands and this to me it was like screaming for direct to consumer right i bought it because i was in whole foods and i just saw it and i grabbed it but this is something that would be you know d if you were thinking about d products it's like a checklist in your head right so you wanna a price point that's high enough so you know you don't wanna sell a two dollar product because the facebook ads are too expensive you want something that's recurring and that basically people consume not something they buy once and they keep forever so this is consumable it's a high price point it appeals to the health and fitness market which is a very big market and and it's very like sort of shipping friendly and you could private label it pretty easily so the idea here is to go d with like a competitor to athletic greens through facebook and industry hate d why would you hate do this is like the a lot of these direct consumer companies which did see like but you know how well our friends are doing with this so how could you hate that i think that this whole d first of all like everything's d so we're just talking about like basically it's like in my mind it's white it's shitty products that are white labeled that are either pink turquoise or yellow use a lowercase font as a logo and they triple the or quadruple with the price of the normal but that's like saying a tech company you remove the vowels and you you know dot l y and you know like here dot io o right like it's similar i would never i stupid it to but i my take on the direct to consumer thing which like i said it's something like direct consumer is whatever this like category is all most like like a way travel i think their suitcases suck they don't like the products i think most of these products are horrible right because i have friends that own these companies and they print money yeah but they just like find something shitty in alibaba or whatever and they it's just all market it's a market it's i think it's a it's a solace marketing machine that will make you rich but once when facebook gets more expensive which it is pay four times more five times more than what we did two years ago yeah it's gonna close okay fine what ideas you got do you guys see eat honey got acquired yeah yeah so i've been bullish on chrome plugins ins for a while and i think i've been bullish on them is if i don't i've i've actually posted this in the group if anyone's seen it before this acquisition so i'm treating mount horn but i love chrome plug in because people dismiss them as silly dumb ideas so shopify apps or dismiss dumb ideas wordpress plugins ins are dismiss dumb ideas newsletters my companies dismiss small dumb ideas and chrome plugins as well and they think that it's like this small silly thing like it's a chrome plugin and it's like no it's not it's just like if your paypal are you an app are you a website it's like you're a service and then you just happen to deliver through a particular mechanism and so to me for own plugins are just services and they just so happens to use the chrome plugin and i'll tell you first firsthand we own a chrome and plugin and i was showing sean the stats before this the chrome plug is the stick delivery mechanism of a service or product that i've ever seen in my life we were looking at the stats and so you guys launched it like three years ago yeah and fifty or sixty percent of those users we we we literally launched launched it on day one and never touched it ever again and most of the users are still using every single day yeah and so this is a thing we launched called snippets so anyone actually have snippets oh you have it or you did someone did have cathy you have it okay it was just a silly widget there was like no thought in it and it's in it and it's neat but it doesn't like provide like a ton of value and it's still people don't the i think the reason people on on uninstall it is they got a new computer yeah but like on with twenty five hundred users will drive a hundred thousand pages views uses of that thing a day and it's a chrome plugin so another example is grammar you guys know no grammar so the founder spoke at hustle kinda and i was shooting the shit with them and this was two thousand sixteen so this was three years ago and i was like max like what this thing about he's like i'll tell you this we just raised a hundred million dollars in funding and i took in that money most to me and they only bought ten percent of the company i was holy shit and he's like tell me all the a little bit of the numbers and i was like it's a plug he's like yeah it's gonna be huge and i think they actually just raised more money recently had some huge value but yeah the stickiness of plugins ins are crazy so in my head i'm thinking what serve like with the hustle we're just a new service or an information service and we just picked the mechanism of email because it's incredibly sticky chrome plug way stickier than anything i've seen and in my head i'm constantly thinking of value that driven on it something that you need that each and every day because a chrome plug is perfect for that right and you gmail plug too yeah you you were saying for for snippets you you were saying that you guys promoted it just once and so like the graph basically look like launch day there's a spike of users and then no new users but the that no new users coming in but the active users is just like steady for three years right and that's is like a very interesting graph but i actually we what we could have done is it was an ad based thing and i don't really like advertising as a business but we very easily could have seen how much revenue we earned per per page view and actually paid to promote it we probably should have done it we would have made probably millions of dollars because it's gotten like a hundred or a hundred and fifty million page views already but if you look at honey i studied how they are growing they are going through to and brain those little art those little image something thumbnails at the bottom of like cnn n n dot com like because they calculated the lt t i we're just spend like crazy to acquire users i also think google lets you pay to like app installs yeah the you also i like i like how you think because you like to work backwards from distribution i distribution for so you'll just think of a distribution channel okay chrome extensions and then work backwards until a product makes sense like you do that basically with email for the for for the hustle yeah you know who told me that was the this guy the i guess her nerd wall it's like a two hundred million dollar year business they bootstrap it for a long time than they raised all when he taught me that and they how did they do they basically work backwards her from what because i have told one of the founders who is in we rate not raised any but we raised little angel money i told one of the founders i was like we have this conference and i think i i said i could build this huge email i learned how to do it and i know how to do that really well and he goes he's like dude raise this money and and go big and i was like i don't know what wanna sell and he goes you'll figure it out getting the audience is the hard part and i was like that sounds reckless i don't know what you're talking about he's he was right yeah and so i learned that once getting the audience and baking distribution into your cost to acquire customers so basically getting the audience being acquiring a customer acquiring a customers way harder because if you think about it think about how many shitty products are on the world that are huge businesses like go to that convenience store across a street and you'll see like really bad i mean that's subjective but you'll like candy or something that you're like man this is not that high quality but they're in every fucking storm in the world right for the record made like twenty pieces of candy right before this yeah it was an it was an incredible experience i sat there and he he just like a small child's halloween loot just downed it while we were talking and then he gets to like with two hands get all the rappers and throw it away i was like bob kid that was phenomenal but i i think a business is just distribution and then the product and there's loads of examples of amazing products that completely die and become horrible companies because you know no one wants to go and buy it but if an an inferior product has great distribution like what you see at the gas station you're like well fuck i just need this thing i'm gonna i don't care if it sucks right obviously if you have great distribution great product that's where magic comes applies yeah yeah i'm curious does anybody here have an idea for the brainstorm like have you are you all just ideal alright here we go what's your name karen karen great what's your idea karen e create do you wanna come up here and say it into the you wanna get on the podcast is good oh container no no don't know okay yeah yeah no decision are you pitching your own business or are you you're pitching your own actual business actual business okay is actually an ad it's still an idea you know the idea is that we need to live more connected with the nature have places to c and c live you know live an crazy you know mobile first lifestyle you know and that we can do that together by living shipping containers in poorly performing rb parks that we purchase and then move everyone in have a great c working space and we're out there in nature going for a walk breathing fresh air eating food dump it down it's it's yeah to without being disrespectful container share or container units container units that people live vacation and i think it's vacation vacation or live well it's for short medium term short to medium term okay yeah okay yeah thank you thank you care thank you for great me i was why too no that's okay and karen what do you think of that's how i would tell my friends yeah yeah have you heard of auto camp i sure have what do you think of auto camp actually i stayed there and it is absolutely gorgeous but it doesn't allow any of you guys to buy into it and we're giving the opportunity to c own something right so what comes a great way to spend a a lot of money on a gl in it right but they're all stacked next to each other so it's all about a re layout of the space so that there is actual nature involved how much does cost to buy one of your things hundred and ten thousand gets by the land no so it's like in rv it's like a trailer park but you rented it out you make money the whole time it's like a fancy trap yes that's okay i'm not be just disrespectful thank you got it but also we rented out we've get a company off sides and yoga treats can you put twenty thousand out like twenty percent down sure down alright looks looks like you got a sale we rented it out for you social should be out about how many square feet are they they're three hundred twenty fifty feet but plus the deck plus the deck with a garage store that opens out so this a small one bedroom apartment six fifty right or no studio is four fifty probably right mh okay k so it's a it's a studio apartment it's a studio point done it yeah in asia yeah i like i actually like the general idea first i like that you pitch picture your business that's hustling i like it and then i actually like this idea and the reason i ask about auto camp because i'm fascinated by say what auto campus is so auto camp is basically glam which is like a glamorous camping experience it's it's airbnb if you wanna like go out in nature but you're like me and you don't wanna do any of the work that's it's involved with going camping and that's how i think about it at i'm sure they would pitch it slightly more like with more flower words somebody raised money from private equity so they raised about a hundred and ten million dollars recently they only have about five locations which means these guys must be printing money and does anyone know that difference between pe and vc yeah okay so if you raised from pe you you're vc vc more asp for vc your business is gonna suck for ten years might become humongous pe is your business is awesome now and they'll train it that's the that's the short short short race from pe and i head them like yeah your shorthand for that means like they're already like they they already have have earnings is about eight years and they range around four hundred thirty a i to to two hundred so i remember you you can sit back down i don't want you to have to stand the whole time i remember reading do you have any me remember when sony's got sony got their emails hacked what's so i i read like all of them and i was like i was i was trying to figure out like what is there any good stuff in here because you know an email hack you would think there's some good stuff the one thing i remember that stuck out was there's some cool emails early on when snapchat was on the rise and i think the guy who was ceo of sony or whatever at the time he was like on the board of snapchat so he had some good like yeah i remember that raw thoughts you know he didn't know these were gonna public so he was telling the truth but what he thought about the business and the other thing that i thought was interesting was some guy wrote an email to the to the top guy at sony here and he was like a like a trend spotter type of guy i know if you know about this but like record labels and fashion brands they have people who are trans they go all around the world and just try to look for what the trends are and this guy was like he's like three things and he said ed is the rock and roll of this generation you need to know that two you that that is right that was right that i was was totally spot on and he's like related this generation loves festivals he's like in general turnkey yeah turnkey outdoor experiences so zero effort but i get to be out in nature away from my computer it's sort of a response to the fact that we're always sort of indoors at a desk connected at all times he's like those are those are big number three was bonus points if it's instagram and and i've actually seen this play out so like when we talked about the ice cream museum industry and and all all these ideas they all actually fit this same like ethos of how do you get turnkey experience with instagram moments we did a spartan race together and it's the same thing it's a you know turnkey you feel like you're tough or if you're me you feel like you're out of shape and then like you know instagram will experiences along the way there's one other idea that we were talking earlier about that's that sort like this which is studs so studs is a new startup that's based in new york i thought was pretty interesting what they're doing is they looked at what was working in malls so i don't know if you ever remember claire that are in inside eyed mall so place you go get your you go get your ear pierced there's not of men here i don't know i saw some nods they're either lying or they or they you know the was like cheap earrings yeah like where you go to get your ears pierced if you're like young if you're like you know a t and so so claire has like four thousand locations around the world they were doing like you know they sold it you know in two thousand seven for three billion dollars so they built a you know a sizable business they saw a billion and a half in sales last year yeah billing and a half in sales last year and so it's a big business but it's like kind of outdated like claire hot topic these were all like popular mall stores back in the nineties and so what studs is doing is just reimagine it so it's a cool looking place like every part of the stores is like instagram like you would you would wanna take a photo of yourself there and share it out and you're getting your ears pierced which is something that's like internet resistant like it's not like probably not gonna get like directing to consumer ear piercing so so you need to be you need a physical location to do this and when all of retail is dying there's a small segment of retail that's thriving and these are things that are that are essentially internet resistant businesses and so very interested in those and thinking through what what more those might so like we we should talk about things that we think won't work and i would put that in my category yeah why are you betting against i think it's too cute and i think that i think there's a problem with people particularly in san francisco in new york who build things only for san francisco new york or la people so one of my favorite companies is wish wish dot com has anyone not heard of wish some people not that many though okay last year it would have been or a few like a few years ago okay but wish dot com they have office is nearby they've been popular for five years now and not just popular like i think like ten billion users a month like one of the most popular websites on earth not ten billion users but something else yeah ten sorry not users sorry it's more than the sorry human population sorry i i meant ten like sessions like what what the sessions i have sorry yeah i have a tool that's guess web sessions yeah so that would potentially be a billion users right but it it was big enough that i'm friends with the founder on facebook i actually know but we became facebook friends somehow and he always shares like a screenshot he's like we're we're we were downloaded more than instagram this month right so that's how big it is anyway i love them because they made stuff that teenagers in middle america where i'm from wood buy would buy and what always anger me about these companies so you don't like the soul cycle type of like berry boot camp type of companies no i like them i just think that not everything works that way like your point of claire was that it was like shitty stuff that young people don't have any money on and they're that serves the purpose yeah but a lot of new companies don't make stuff for that demographic but my thing is and i and i think that like that's it doesn't make sense to me yeah this it's like a high end it's like at that millennial ping thing it's like right twos it's you you're like get off my lawn yeah i just i just i just think that there's a get i think that most people start too high end and too coastal with there's we could just crush like it's like you know what i i would i love way more than that it's fashion nova there's no fashion nova okay fashion explain the explain the this business nova who does know fashion nova wow okay okay it's the new wish fashion nova is awesome it a year i mean it's pretty it's pretty big now bootstrap by a middle eastern guy in immigrant which is just another reason why i like it and he's la his parents had a mall store like claire that sold really has anyone been to like new york and seeing these like stores that sell women jeans and women clothing that are all like knock offs and not really low quality that's what his parents ran and he's like should sell us online and so he went right to instagram and gave funny looking clothes to young women and they would wear it but it like became a joke almost like world star hip hop where it was like fat like they they were like you know how like young guys will well yeah whatever there's a fight they yell like world star well they advertise with all these instagram models that it became a joke that fashion nova was everything and it turned out that they're actually kinda cool and so fashion nova is i think it's one of the largest shopify stores out there and it's like a six hundred million dollar year fashion brand and they sell really cheap low quality clothes but they're kinda like funny and cool right it's like cardi be is now their spokesperson and the and they just went crazy on the influencer side so like if you go down the right instagram rabbit hole you will see fashion nova everywhere an example of people selling to relatively normal folks right it's affordable it's kinda funny they put themselves in the middle of culture i like that gym shark another cool and that i did same thing yeah yeah i i like those businesses too alright i wanna turn it over questions do you wanna do things that we don't think will work or okay let's do what do you got want to say so we we always talk about things that we think will work let's talk about things we think won't work hate mode and i try never do this because i always respect someone who try something even if it is stupid right you wanna start with yours well to be clear they have our respect yeah but we think it's stupid yet okay so the the the way you qualify for this is most people think this is a good business but we actually think it might be a bad business and i agree with you on most things that you've said i think you do me so we were doing this kind of in the back just shooting the shit turns out sam wrote them down and now we're doing it live okay so patreon so patreon is is not a cool business to hate on because it's like the nicest business say what is patreon basically lets any indie creator so you're a blogger a podcast or whatever you can say hey fan support me directly give me five bucks a month that'll help me do my art so i could do that with this show for example i think that's a really cool thing either patreon is gonna be a bad business even though that's a cool thing and think it's gonna be the worst customer the reason why is they went this you know bad is always relative right so it's high expectations they raised vc money a lot of vc money i think i don't know what they're i they raised fifty million dollars their last round so that means they're trying to track towards like a billion dollar plus exit and on the other side you have the business model which is to take essentially five percent of the patron donations and so if you just sort of calculate it out you're like alright to get to you know to be a billion dollar business you need to be about a hundred million in revenue as a as a business which means they're gonna need to make twenty times that it needs to be flowing through their system and i just don't think that's ever gonna happen and i don't think that i think that's like highly comm commodities like i work at twitch we have a built in way for you to give money to broadcasters do you how many can you say how many people so the reason i think it's bad is i've have seen media companies when they ask for donations it's a horrible business right like you can look like very few people ever the only reason why wikipedia does it because it's the most popular website to con or the world like or one of what i don't think that people donate money i like subs which is a newsletter subscription company because people give you get it's not plenty money it's i'll allow you to get my information if you give me money right yeah is difference paying for a product versus like tipping yeah i think so my question is so from twitch which i can tell you people definitely do tip well like a lot people definitely just voluntarily give money to things that they could also get the content for free the whole twitch business models off that based off that model wasn't the majority of revenue will come through yeah so a lot of people do this behavior but what i would say is that the bad part is when you're taking like a five percent cut of of that you have such a small you have such a small share and so like you know for twitch i think the default share is fifty fifty fifty percent is way more than the sort of five percent and i think patreon tried to up it to like seven percent once and everyone revolt and so that show they basically have no like headroom to to take a bigger their difference because they're like artists so like right if we're gonna start and then they probably don't have a lot of money in the first place and so any percentage more right and some guy went and scraped all the top patreon pages to see how who's making the most and like the top people are not very big and so it just to me it's like i don't know it doesn't add up doesn't pass us just do one more yep firefly so have you guys seen these uber with the oh you worked at uber so you maybe be know a little bit uber with the ad on the top it's like it's like making an uber look like a taxi we talked i talked to those we yeah yeah okay so we talked to these guys when they were first raising their seed round yeah and we saw the deck and good it was promising i don't think it's gonna work though you didn't think so at the time either yeah because you didn't invest on it yeah on it they have since raised money at hundreds of it looks like they're doing phenomenal and they might be i always just thought it was weird because like you used to work uber i was just thought this a huge platform risk because uber i would say get off yeah because if uber ever decides if it the bigger this gets uber might say hey that looks like a good midst stream we should own and the learning of this i think but i'm wrong still but i might be right is i think you it's impossible to build a it's very unsafe but it's doable z did it it's very unsafe build a business on top of one platform and they only have two platforms lyft uber right yeah yeah exactly i i love this don't love this business i a guy who had a a company that was about to sell for two hundred million dollars last january facebook changed their algorithm and it went out of business in march and i know the one you're talking about it's a media company right yep yep yeah we won't say it yeah but this is story i it was in the news probably and i think that's exactly what will happen to firefly and any company that builds on top of a platform i remember when you were restoring the hustle i was like you need to do facebook video snapchat get go to snapchat snapchat where it's at because all these things were hot and trendy and you were very adamant you're like i'm gonna do email because i'm not you know i'm not susceptible you know i own my community then right like these are people i have a direct relationship with i'm not dependent on facebook and it makes uber yeah stupid it makes look trash and and also i think it's five five planet there you go one point for sam well there's there's still up like a hundred like you know something don't wanted to fail right i just think that not even a little bit no i i don't want anyone who's taking a risk to fail but think it will and as sucks because the drivers make they prom i think they promise two hundred or three hundred dollars a monthly of drivers so of course i want all these guys to i wanna great i also think that in a when a recession happens in two or three years brand advertising which is what that is it won't it's gonna go away or it tracks go away it's gonna shrink and i think that the stock i think that more people gonna pay money on facebook and instagram whatever is gonna exist tiktok and that type of advertising is gonna go away the valuation that they eventually raised that i bet you was more revenue than all of the taxi app advertising did as a whole right yeah is there any way they can pivot it there's always a way you can pivot can you pivot successfully what would you do i i don't so you let's say you get they have some assets right let's say they're gonna have they have money in the bank they have a network of drivers let's call it ten thousand drivers that have their unit sold on top what does that allow them to do how do that how how can they leap frog from that to something else interesting is there anything that comes to mind they said they had loads of information on where the cars were going you you're trying to build the car company maybe there's something there you're still platform dependent but that's a way less obnoxious oh wait yeah you're not the city's not gonna the city oh they i think they you think they look good you like ads okay would you put that on your car for an extra three hundred dollars i could see that too yeah the reason it works is they're on the road and they install them for free so there's so there's two types of platforms i remember there's a story of facebook back in the day released their facebook platform which was like hey you could build games on facebook that's gonna be awesome and they were being hailed there's like the next great platform and the story i don't know if this is true at not but the story i've read was z goes and meets with bill gates and it's showing about facebook platform and really microsoft was the last the the previous like huge platform right microsoft operating system that had all these different apps you can you can use on on it and the bill gates was like this is horse shit like this is not this not a platform he's what do you mean like developers can build on this he's like that's not what a platform means a platform is where the the strategy is for the all for the sum of all the apps that get built on this to be worth more than the platform itself so like although microsoft was always a huge company if you added up the value of all the different programs that could run on microsoft the total enterprise value of those was greater than than the value of microsoft that was that was their strategy was like we will be able to sell more operating systems if we have more apps therefore we need to make sure the apps win on our platform otherwise we can't sell our operating system the second one it was very different the second is like more like what facebook did what twitter did which is like hey we got a whole bunch of users and we got people trying to build stuff because they're all enthusiastic we'll give them some access to try to build some things for the record huge companies have been built in the second time the idea though is you gotta get in while the getting is good and you gotta be really good at diversifying grade so for example movement watches one of our friends who spoke with health gardens bootstrap with the company for a hundred million dollars they built a brand and young people like that brand the blue apron and plated did what are those all whatever those also hustle speakers i was talking to him and he was like we couldn't build that thing now because the cost acquire customers way too expensive and we didn't get in early enough to build this brand equity so the idea is amazon's is a good example amazon totally got big because google adwords or to are the ads whatever the ads platform adsense adsense whatever it is they got big they they were the biggest customer of google but they built the brand yeah so it is possible i just don't think it's you wanted you wanna escape there's a great talk that this guy josh el he's a vc here who he he ran growth at like twitter linkedin and facebook he's had a good career and so he wrote he can gave a talk called like a building building a rocket ship on the back of a rocket ship or something like that and really when he's talking about is like hey it's great when these platforms are around you can go get some easy growth on top of them but you gotta make sure you're building escape velocity to get off them quickly because you will not survive living off them and so when just as much as you're thinking about all of all the advantages you're getting you better be thinking about you're gonna build your escape off of those platforms i was like z did mh we grew a lot from facebook and when we were doing that an adviser told me get paranoid and i was paranoid the whole time and we began diversifying and it hasn't it hurt us but it worked right like native who was on the podcast when he was talking you know he talks about how they use facebook and that's how they sell the majority of their product but they're constantly trying to grab customer email addresses and then they remark via email so they're not relying on the news feed they diversify through like now they're in stores so now that they're in stores they're less reliant on the facebook relationship so they're always trying to build those different assets and different relationships with customers i that you're not one channel had to start from scratch i think one of the platforms that's best right now is facebook groups alright is it is is everyone who's a trends that guys in our facebook group does our stuff show up at the top all the time every group up top yeah well that they they publicly announced they were like our strategy is to promote groups so that means right now like don't make a page like make a group group it's the algorithm is favoring it but also don't try to live there forever because the day that nature decided that this works not the i know this works because zuckerberg said an announcement last fed this was the same announcement like i said that killed off my friend's company they ever were prioritizing group content among other things but if you go down a bar at all the places in the commercials they're advertising groups and so whatever they're spending on their brand advertising that's the thing they want to succeed most so you have at least two years where that is still gonna be like the focal point and then who knows after that and so that's one of those you say work backwards from distribution it's like well if i knew this is gonna work great on facebook through groups which is not even pay you're not paying for ads you could just work backwards some that like what's a great group i could build and then based off that group what's a great you know sort of product or or sort of off platform commerce i could do like five or ten more minutes yes cool and one of the products that we were gonna come out with trends and they actually got shut down was we worked with a guy who had sold roughly five hundred companies as a broker and we looked at a ton of amazon companies and their valuations were horrible because that same reason quiet yeah and and so we we sold or he was is he was selling companies that were selling on amazon for like one or two times earning so if a company made like ten million dollars in revenue or let's say five million dollars in revenue one million dollars of profit they would sell like eight hundred thousand dollars eight if anyone and put that perspective our company more five x scott five so we spend five times more who acquire one customers as we did year ago that's crazy that's malibu what you got no i think that they're gonna continue innovating for another many decades scotch is instagram cheap so so when i started the company i don't wanna reveal too much but let's just say that like i'm gonna make that these numbers let's say one subscriber to us is worth twenty dollars we were able to acquire a customer for a dollar fifty now it's five or ten times ten and in my opinion that just means that the a company like mine cannot be be really expensive to starting to get now that said there's all these other ad products on facebook that are really good for example like i said groups groups are awesome you can acquire you can have advertising facebook can get up someone to join your group for really cheaply and so i think that there's other things i spent hours on on oc this weekend and i think that's gonna have so many ads in it so my opinion is that the normal facebook ad placements are definitely getting more expensive but it's not definitely there's still a lot of juice left in there particularly for you guys if the margins there so we'll do a couple more couple more questions political ads facebook no i don't care about that stuff my same what's up i quick quick question not that i don't care i just don't know anything about it about our friend had a company that ramon had a you know what took story what while ramon had our friend had a business built on top of that same demographic and he had four hundred thousand people with his groups and he started with one group and made it like sub interest now it was mostly soap opera yes so he basically drove him to a blog there he captured three email address and the blog he just did advertising because he had enough scale where he could do it that one of the major for the way that he did it was he got people to a blog head into a facebook group and then from a facebook group he would post articles in there and then collect emails and then back to the blog and then back to the group and it's very circular to the point where he sold it his traffic was like perfectly broken evenly so to me starting with a large facebook group is the same as starting with a large email list you can like segment it up pretty good into difference interest interest groups literally and meta like figuratively anyway yeah i don't have too many answers you gotta know the customers really well like why they're in the group in the first place what they're interested in that sort of thing but for i would say generally people air on the side of being too afraid to charge too afraid to ask they think it's gonna offend people and everyone's gonna run away and all the stuff and turns out if you're pretty honest about what you about the value you think you're providing and you say hey would you guys be interested in this that's a a very easy way to start and i think people over over complicated it and just do i would do that i would take your best idea i say hey we're thinking about doing this you know this is what it would cost would you guys be interested and that doesn't mean thing necessarily it's gonna work but you'll know the opposite if no one even says they're interested then then don't bother with numbers about a thousand mile radius best you could knock it out the park by having a premium one that's twenty dollars a month and you would do special stuff for them in the group what we learned about our trends thing which i thought was amazing is more people have been buying because of the group as opposed to the content i i didn't realize that jason what you got so guys like you're very bullshit and can i say one yeah and we're were just talking about this i think that there's a huge misconception about this like idea of like this person who starts something and then grows it to a huge publicly traded company i actually think that it's better for most people find professional managers and that is like not popular like is h they say that they want the founders to be the ceo i think that most founders would not wanna be ceo and would suck at it and there's been a lot of companies that have been completely running the ground because someone who starts the company maybe a visionary or creative and really bad at operating and i think that a lot of people don't acknowledge that i used to make a mistake which is i would listen to somebody and they would say one smart thing two smart things three smart things that's a smart person and then i would sort of auto accept all other statements that they make and i never did this explicitly but that's actually what was happening in my head i was just taking it all in and so now i have and then i went the other way and i was like i don't wanna listen to nobody i'm gonna figure it all out myself and and and i couldn't even last on that for six months because i was like well i wanna hear what people think i'm actually very curious and so now my mind says very different which is absorb everything i tried to take i tried to hear everybody's point of view but then i really like have like a a wall like a firewall which is like what do i actually believe which of these things resonate with me which of these things like do do i wanna actually incorporate into you know my own little personal bible and so i would say a lot of stuff that's sort of conventional wisdom which doesn't pass that test i think you said one which was like starting a business versus running and operating a business two two sort of different things and the way i would i would think about it a little bit differently is i think that there's some really underrated business opportunity so i think that buying a business buying an the existing business should be way more common than it is because i think the media investors all starting a new thing but there's so much value in buying a business and and actually just increasing the value a much faster path to business success now if you don't care about business you just wanna make some change happen in the world that's different the second one that i think is like like sort of criminal underrated is i've told you this before it's working working at a job i think is is is is a flawed way to get to financial freedom and i'm not like the first person to say this i think most people will sort of agree with this but the reality is that the majority more majority of people work as employees and if you work as an employee you sort of have the the deck stacked against you you might be a great employee agree with you okay let me let me let me tell you why think is bad so if you're a great employee you might be two three five times more productive or have higher output than the person next to you but you'll never really get paid two three four five x somebody who's in your peer group at your company company sort of have you ever met sales yeah yeah salespeople people but what what they do is they just raise the quote it's like okay fantastic you did it here's your new way to get that same bonus like i think companies go broke if they do performance if you are paid on performance then you can knock it out the far maybe i think most jobs are not from my experience sales jobs they also basically they just keep raising your quotas so that you you know you you can't continue to earn at the same rate say there's there's only a few ways to get rich it's you get lucky which includes marrying into it adherence or lottery the best way yeah the best way you start a business or you become a salesperson okay salesperson includes anything that is like put performance related that's typically sales in tech world that could be like growth as well right have you guys read the book rich dead poor ed i'm just curious so so so when i read that that was one of those like i'm gonna write that in my bible like that one resonated with me i was like this makes absolute sense and if you haven't the book crook i don't think he's crook yeah i don't i don't know if i i do this with a lot of people like elon musk a lot some people think he's like a hero super genius some people think he's a fraud then you go to jail he's he's not a in my point is this is like i don't really care about a person because from what i've encountered here in silicon at valley i've met my heroes and they're just their people have flaws people are weird people have strengths of weaknesses and i don't judge their philosophies or or wisdom based off of their totality as a person and so so this guy his philosophy around in rich it resonated with me and so that's one that i've led in that i don't think most people here and so silicon we can valley talk about dude him and then mike okay ideally yes the reality is a lot of people do the opposite too right so agree with you but i'm gonna add a second perspective you're you're working so this is i'm gonna i don't wanna call you or not how do you pronounce it anna none okay i have a friend who spelled the same way we call home not he's working on a self driving car that's that's i could go bigger to go home i think that that's awesome i think that you'd be out from missouri so i got a lot of people aren't in as smart as you but my friends are not as smart as zoo but there's people who are rich because they start a small business that makes five hundred thousand dollars to a million dollars a year in profit and that just goes straight to the pocket and i would argue though that i agree with you i think i i will if you would accept my money i will bet money on you and i think that you will win but i think that you can make just meet this guy yeah you just spend three minutes ago he's great you guys see these guys go with i would i think that a lot of people are surprised that so we have this database that we surveyed six hundred people and there's people who own restaurants that or make six hundred thousand dollars a year on a a two and a half billion dollar thing now who knows what type of life you want that's pretty cool for a lot of people that's great for most people but i do agree with you but that is probably why you're probably gonna be the best yeah yeah feel you i feel you you you won't get rich if you're aside from the lucky tier you won't get rich unless you're solving somebody's problem unless you're giving value to other people you're gonna capture some percentage of that value back now the the thing you said which was and if if you're listening to this probably didn't hear what he said which was don't go try to start start a business to make money go out there start a business to solve problems and money will come call you know that's the top of the pyramid and if you're living by that i think that is amazing i also know many people who start businesses because they enjoy the act of starting a business and they try to find different problems to solve and and they don't necessarily know which problem ahead of time they just decide that's who i am i'm a business person i'm gonna make it happen and i i think that while what you're saying is is amazing i think what it does is it isolate people out who don't feel that true calling of which problem to solve and it's okay to know that there's many different styles so i owned a company that's sold onions he was an onions salesman that's what my dad did and he knocked out the park because we poor he wanted to send me to private school i think that is possible that's my point though i think that your thinking is gonna make you a home run versus whatever is successful but not a home run oh leave everyone with one little exercise that i think is an amazing one to do yourself i'm gonna do it you so i wrote down we're gonna play the game real quick that's get my sorry mike one last question his hand up and hold on show your shirt so his shirts says southern sam wiener as big as a babies are my first company was a hot dog car called southern sam's wei this is how famous sam is that was solving a problem you you you made this sure i wasn't trying to get more get you get people that you had that those do it because i wanted to get paid i want to work outside wherever the attention is that's if you're trying to get people's attention that's where you gotta go and you gotta figure out how to play that game so now it's on tiktok fantastic now you gotta learn how to do music videos and get people's attention i think it's freaking awesome yeah it is so cool i think that the sixteen year olds of today are amazing i think that their bullshit detector is gonna be higher than any other generation bullshit detector and that i don't i think that the only way you're gonna be able to circumvent that is by not bullshit and so it's gonna be really hard i think for a walmart to advertise there unless they do something hip and cool which big brands are able to do that like a nike or something but i think that with face not so much instagram but with facebook it was really easy to scam people before i started a legitimate company i like most internet people i did scams facebook was easy to do that i mean everyone everyone right everyone because make in the internet they're gonna leave you hanging yeah like everyone has thought of i don't like real chaos but like you know you a hot bullshit anyway it was easy to do on google it was a little less but still easy to do on facebook kind hard on instagram i think with tiktok is gonna be very very very very hard so that's my opinion so i think tiktok is is amazingly fun to use i also feel like a per when i'm because it's also like a lot of like just sixteen year old girls no matter what i'm trying to watch like i like basketball but it's like no here's what you like i'm like oh god algorithm i don't know how i feel about this but but the other thing is i also don't know how long this this lasts because i know tiktok is pouring so much money into buying users and usually apps like tiktok don't have great retention so i'm curious in the long haul apps apps that don't typically i think right but the the sort of the wave and the critical mass users is really like eighteen months old and because they're buying so much you can't tell how much is leaking out is it popular in china spent over a billion dollars it's popular in china i knew it i knew it was a chinese company but i wasn't sure if it was a yeah dude i i'm bullish on usually products that like the facebook type products that feature your friends whatsapp instagram products that have people you know in them are like sticky forever products that are entertainment like a vine or you know they they have a harder time doing it and they can they can do it so i'm just saying it's not like a given that tiktok just gonna be the thing you know four or five years from now it's totally possible but it's not a given the last thing i say is just do what's native to the medium so like i know a lot of people a lot of music or artists are trying to use tiktok they're designing songs to be tiktok and so they're like because i'm tiktok a lot of the dancers are like little hand gestures so they're designing lyrics that are like pick up the phone say goodbye thumbs down see you later and like they're designing a song that can be tiktok really easily and so i think that's the type of thinking you have i'm almost inspired by like dane cook got really big because he gained lime wire back in the day he would people were searching for chris rock comedy so he'd like put like five minutes of chris rock comedy and forty five minutes of dane cook comedy right afterwards and that's how he got his followers because he knew how to like game that system because that's where the attention was at that time and so you know that's how i would think about it okay game okay the game the andrew real simple this is a game you could play with you can do to yourself you can play with other people it tells you a lot about people so i interview and hire a lot of people and i found that this three line test tells me a lot about the way somebody so gonna play with you so all you gotta do just answer first thing that comes to mind when not i'm gonna say a sentence i'm gonna fill a i'm gonna leave a blank that's where you say your thing okay people are friendly life is adventurous i am an nano very good okay so i've noticed that people have a a default reaction and it doesn't you don't have to be held to it but these are like the core beliefs that you carry around in the world so if you think people are stupid or if you think people are complicated i bet you're gonna have a lot of problems with people as you go around the world if that's kind of like what's what your top of mind thing is mine used to be life is great just something generally positive i updated it because i heard a better one and i like oh i like that i'm gonna take that which was just life is what you make of it and i was like oh that's a more empowering way to think about things like no matter what's going on my life it's gonna be about what i make of this situation and so i encourage ask yourself these three questions say what do i think people are life is i am and then ask yourself i happy with those answers and also try it on other people will tell you a lot about them so i wanted to leave you guys with that little framework cool thank you coming alright