#57 - Corona Business Ideas, Stock Buybacks & Recession Proof Businesses

special edition so we have this nice studio here we worked hard to set it up and we are no longer using it well we're using we're using the best we got and that's what we gotta do right now i'm a little out of breath because i just did a bunch of push ups to get myself ready for a podcast because normally i feed off that that in person energy of yours and i don't know if this remote podcast is gonna do it for me yeah we just it might we just had jordan harbinger on the show we're basically this guy had did a he's helped us a ton he's got this great podcast jordan harbinger show i'm still like in plug mode but we just recorded like eight or five different commercial where we're gonna be promoting him on our podcast he's really talented he was so much better than we were dude he flipped the switch it was like yeah we're just shooting the shit i was like okay it's all normal he's like okay so something like this and then he went into post mode yeah he's crushed it man oh you've been doing this for twelve and a half years that makes sense i understand now yeah he's he's talented so we're gonna be promoting him promoting him on our thing and he's kind enough to promote us on his show i'm excited yeah give it cool i think good idea so we corona corona corona how's your quarantine going i hate it i'm at the office so tell you where we are in san francisco mayor breed linen breed it's a a rule or i don't know what it is a ban a rule you can't be out walking around unless you have to be i thought i had to be here to record so i kinda got through but it's freaking crazy yeah i declared i think it's called shelter in place or something like that which basically you need to stay home regardless if if you have it or not except for grocery stores hospitals and one of pharmacy maybe something like that and i said this to our company and people could can take this the wrong way but basically where there's tragedy and where there's down like a downturn there's opportunity and i plan on bouncing on that so you know obviously first and foremost it's sad that everyone's getting fucked up and that's horrible and people are actually getting i mean it's literally life or death for some people but in terms of business there's a lot of people in our trends group that are screwed right now and i feel for them i also think that this can make some people hopefully them much stronger and they can come out on top yeah there's a difference between exploitation which is oh there's some problem i'm gonna go buy all the hand sanitizer and mark up five x right that's exploitation versus opportunity which is to say hey there's a whole set of new problems that exist now or existing problems that have been unmatched and if you're a business person you're in the business of you know finding solutions to problems because now there's a market of people who want them hard who need them and so i'm down with you if it's more about hey this is gonna build some resiliency this is gonna wash away some things that shouldn't have you know the what's the phrase where it's like you only find out who's swimming naked when the tide pulls in yeah yeah there's something like that that are going on but there's also just a whole bunch of opportunities that are created because now there's a whole bunch people experiencing a new set of problems yeah it's craziness just reminds me of nine eleven we'll see what happens but i think that what we're gonna do today is talk about a ton of corona related businesses and different opportunities you wanna kick it off or you want me to yeah i i guess so i send my one two three letter every sunday night and i wrote it and i wrote it sean i still don't get that i i sent it to you i sent this one to you this is the first one i sent to you so you'll have it now but i wrote at the top i said this email is either gonna be all about corona or there'll be zero corona i'm just gonna distract you from it i don't know which one it is let me just start writing and let's see what happens and it turned out to be more of an all corona because this is like nothing i've ever experienced i know there were some analog like you said nine eleven i saw this great tweet from this guy his name is yi sean do you don't know you know who he is he's he was a former ceo of reddit he was like a x facebook guy yeah ceo over reddit for a while really smart guy i love following him on twitter he doesn't have them any followers but he says a lot of smart shit that i just basically steal and then say myself later and he was saying he was like you know does coronavirus thing is so different from like the last thing that felt like this was nine eleven and he goes this is so much harder for americans he's like because when it was nine eleven the response was all bravery patriotism action revenge it was so it was all action things and there was a clear visible m and n enemy i was like okay you know this sort of the terrorist been laden in you got this picture in your brain that you could sort of pointed it to is like with this we have an invisible enemy here you can't see the virus you don't know who has it you don't know who doesn't so we all just have to hide and the best course of action is action and that's very strange for people and it reminds me of this quote by pascal which is it's like all of man's problems come down to put butchering the quote but it's like all of man's problems come down to the fact that he cannot sit alone in a room for thirty minutes yeah i heard that being unable to just sit in your house and chill and it's so difficult for people you know it's funny there's i was talking to a coworker i'm like there's two things that a lot of people want and then they get it and it freaks them out and this is a little taste of that which is people talk about retiring they want enough money they could retire and a lot of people wanna work from home and i've gotten a lot of shit on the work from home crowd because i'm because i keep saying i hate this i hate it i love coming into the office and feeling energy and i retired not retired i took i've taken eight months off at a time and it gets boring fast and what we're seeing now is that some people are you can kinda taste it a little bit and i personally hate it and so okay i got i got the quote because i butcher your it all of humanity's problems stem from man's inability to sit quietly in a room okay that's the i had to correct it because it's quote and that's what we're experiencing now people just don't it's always these the guy from reddit a alex o he started reddit and he's got like this new billboard company it's really cool which we should talk about sometime time we actually do didn't know that what is he doing yeah i did a big or one of our trends guys did a big report on this i don't have it in front of me but basically the idea here is that he is trying to recreate or not recreate but build a biz a billboard business and the the top two or three folks are like lamar advertising clear channel and i think outdoor advertising right and c and they do billions and billions and sales and it's a great business it's a great business because once you have a billboard like it's an annuity like they just it's almost subscription they don't go away and what he was doing was building billboard but it's really hard to buy one we i bought a billboard as a test and you have to go through all these salespeople people and it's a big process what he was trying to do was automated it right it quick i think that they're one of those that lets you do a sort of automated billboard board buy yeah i think that's his company i think that okay i that might be his and so anyway he bought bill it's in times square that said you are killing people by being here right or something like that you are killing people by not being at home right now and dude i wanna buy a billboard that's right that the billboard is probably better than buying like multi family real estate because there's less people trying to do it you know who who started as a billboard company my hero ted turner oh ted yeah my who i referenced all the time it was a bill it was on first it was it was a billboard company then he bought a radio station then he bought a local tv network and just par over thirty years to cnn by the way when you make it you need to blur all your businesses together so it's like they started as a hot stand and then then if it became this event and then they get a newsletter then it became a subscription company it doesn't happen nowadays that much but there's this guy named steve ross and steve ross started warner warner entertainment and it that business originally started as parking lots it was paid i think it was a a paid parking lot and then they branch out to morgue or not more where do you go like where where do you have like a funeral service like like a awake right wherever whatever that's called then he part that into entertainment holdings and it was all one company it all started as a parking lot and it's i love i love those stories you don't hear about people doing it as much nowadays but when businesses have lasted for fifty years it it definitely happens yeah inevitably so like berkshire hathaway same sort of i think textile factory was for the first one yeah it's really crazy so back back to corona for a second so people like you are out and about so you're at the office now well yes i drove my car here and i parked on the street and i we i'm with allan here you got out are you we he's he's six feet away and then we i had hand sanitizer or one are those cl bleach wipes that's what i used to type in the code yeah we ran right in nice okay so but have you seen you know what's your take on the reaction where you have you know you saw the sort of new york bar scene was popping off and a lot of people dis infuriating and infuriating it pisses me off i got a big fight on facebook i'm a troll facebook i got a fight on facebook with this lady who she oh my i gotta fucking pissed me off so much listen to this dude she said if you if you can cancel coming to my wedding shower you also better be canceling from work because if not you're an asshole and i was like i was like you're insane lady you're insane yeah you're like you are nuts okay like a difference we retreat if you have to go to work that's unfortunate that sucks because of what's going on but like cancel everything it it pisses me off yeah i think people should revealed how many of my friends and acquaintances i'm like wow this person's amazing like we have friends xavier is like putting together guides and really promoting the stuff and trying to help people and you know our friend mike brown put out this great facebook post about you know the the risk reward psychology around wide why he's over preparing even though he understands it's a little risk event it's like oh okay these are some of my friends who i believe are smart they're taking the actions that make a lot of sense to me and then i have some other people on my face feed i won't name names but man there's some other people that just don't get it and and they put themselves and they put everybody else in harm way for the stupidest reasons you know we had a a sort of a thirty minute debate with my sister all who wanted to have her her son's birthday party and like she loves her kids as you should to have this birthday party as you should wanna have birthday party but was like a hundred people going to chuck e cheese hundred kids going to chuck e cheese oh my god and like grandparents coming and like do their at risk and i was just like and she's like i don't want him to be disappointed tough tough sucks it sucks this is unfortunate you know this is what we had to do in world war two like you just can't buy certain stuff you can't do certain things exactly it was crazy to me that it was even a conversation but you know there's all kinds of little mini examples of this and especially the hardest one actually i don't know about you for your parents but it seems like people are risk they don't they're like what's the big deal well listen you know with oh i can't go to the grocery store and it's like yeah you literally can't was having to tell my parents that i'm like you guys cannot go out to eat tonight you just one hundred percent can't and they're like well we you know it'll just be quick and i'm like less of how it works but i go look i love you you're gonna get sick right this is this is one hundred percent your fault just so you know and you are hurting not only me as someone who loves you you're hurting yourself but you're also hurting all your peers right it's crazy and you know i i i trying not to get too political what's been pissing me off is all of my friends who are very like oh we have to help each other we have to vote for this person so everyone can be equal and then they're doing this other stuff i'm like right you don't give a fuck about anyone what are you saying you don't care about people it's insane i have a i just now you said pick a fight on facebook i never pick fights on facebook i i know you love to get in the mix and it's great it's great entertainment that's why you rank at the top of my news feed every day you're always at the top because i think you you to mix it up in the comments i do but just now right before where we went live i saw my old high school basketball coach you know and your coach is usually somebody you look up to there's kinda mentor they know everything your future your plant you know your dreams are in their hands type of thing more than a teacher i'd say and he was like he posted on facebook one of those passive aggressive things where he was like does anyone know anyone personally that's gotten corona like as if like this is a hoax basically and i commented on it i haven't talked to this guy in whatever fifteen years i it probably doesn't even know who i am from ninth grade basketball but i was like do you actually think this is a hoax do you are you literally promoting this right now on facebook page all of his comments were nope not me don't know nobody and he's like i four people i know four people it's crazy that people are like this i have i have four people too who have been tested and they it's it's they do in fact have it right and two who are incredibly sick not incredibly sick but they have a a flu or a flu like symptoms and they try to get tested and they said the doctor said it seems like you might have it but you know you you can just kinda you can get through it and we can't waste a test on you so and then there's all this so there's a people who don't give a fuck that are just they know but they go out to the you know they're like whatever school got canceled work i can't i'm going to the bar then there's like our parents were like you kids back in my day we have wars it's like yeah okay so they they just don't take it as as they should and then there's people in italy singing songs on the balcony so then there's like all these like great sort of human human moments and human ingenuity that's that's pretty great as well so that's been what i've been observing it's yeah it's nuts this is crazy i i i'm sleeping weight less i'm going to bed way later looking at the news and i'm waking up first thing and check the markets right that's freaking nutty alright boys and girls i wanna tell you about our sponsor for the week and you know i don't just take any sponsors i only work with sponsors that we believe in here products we use companies we love and heads spin is one of those so what's hud been so i initially met somebody who worked a head and this was a guy he had worked at spotify he had worked at tinder and he's like oh i found my next big unicorn and i was like what's that they said heads been i what's heads been i've heard a spotify i've heard of tinder what's head been and what he told me was you know when you make a mobile app and you need to be able to actually test how does the how does that app work in india on self service or in brazil on the local wifi f you know you have to be able to test your user experience across all different types of devices locations and networks and that's a pain it's very very hard to do it was a problem he probably ran into at spotify and tinder because those apps are global and they need to be able to perform no matter where they are what phone they are or what the what the conditions are so what hunts has is a global device cloud that's basically a bunch of devices all around the world that allow you to test monitor and analyze your user experience across real phones so these are phones with same enabled these are sim enabled devices they have real wifi f and carrier network works anywhere in the world and there's no sd sdk required so that's had been it's a dope company you should check it out and if you have a mobile app and you're not thinking about performance you're making a big mistake in my opinion is the number one needle mover for your metrics is performance and so if you wanna learn more heads spin dot io o is the website check them out heads spin dot io o i'm checking two things i'm checking my glucose monitor because we both started our weight loss challenge and now have a glucose monitor installed on our you go right or left arm which which arm did you put it on you want arm at left arm yeah me too and so i wake up all the time to compulsive check this thing which is awesome and then i checked the stock market and it's just all red although today little bounce back thank god well let's talk about that the glucose thing because it's an interesting business so the the background of this you wanna talk about this i do wanna talk about this i have one joke that i wanted to squeeze in there that i missed missed the opportunity but i saw this great joke on twitter that was like italian people are all singing songs on their balconies everyone in san francisco stands on their balcony and pitches their startup up which is hilarious so this the the glucose thing here's around folks just name's justin justin mayer have been friends with him since two thousand twelve a few years ago he started kettle and fire which is a bone broth company kinda you kinda of jumped on this keto trend it's it's like a sixty seventy million dollar company i bet i don't know firsthand but it's quite large she also c founded perfect keto which is a cool company as well and a few weeks ago he tweeted out that he was into this thing where we would all v mow him nine hundred dollars he keeps one hundred dollars for his fee and eight hundred dollars we can earn back over twenty eight days and the catches is that he gave us all glucose monitors which is like something a a lot of people who are diabetic they put in their arm and it monitors your blood sugar and if any of us goes above a hundred and ten i don't know what the measure measurement is will leader but i don't know what what like the unit is i don't know if the unit something something permanently the leader of blood yeah some measurement which basically means you have high blood sugar so if any of us go above this limit we don't earn our money that day and there's a group of twenty twenty of us beta testing it and i do a lot of weight loss thing so i have a like a nutritional coach that i pay two fifty four i do meal delivery which i pay two hundred a week for maybe i love all these things this so far has been the most effective by far the most effective dude so i was like okay you put money and measurement in you're speaking my language and so i you know i checked this thing i think you only have to scan it once every eight hours yeah i do once every eight minutes because i'm like oh how does podcasting affect my glucose let's check boom so right now i just scanned and i am at one zero four so one zero four the unit is mg per d and i've been hovering mine's really low all the time i i don't even know if i my installed properly because it's so low i've been hovering around seventy now one forty is the max if we break one forty we lose our money for the day and that's you know sort of you've been too carb heavy or two sugar heavy for the day and i made bet with i made other side bets with people in the group that says i am gonna have a one hundred percent yeah so that's so the other good thing is the social group so there's a there's a whatsapp group of all the pete weirdo in this challenge it's probably i don't thirty of us in there or something like that and sam came in hot i don't we don't know these people you don't know them right no but they said they listen to us actually oh okay that's cool so say some of them know who we are so i put in there i said what are you guys trying to do out of the twenty eight days you're trying to hit ninety percent eighty percent what what do you consider or a win for you and sam just came in and just laid down the gauntlet he's like what kind of question is this one hundred percent i am not losing my money i am winning this challenge regard like no matter what i have to like drain all the blood out of my body then i will drained all the blood out my body and then i bet a few other people twenty dollars that i'm gonna have a one hundred percent success rate i love this i love high stakes i think that's what you you have to be in terms of a business i think there might be some downsides if he tries to launch it but so far yeah the product is so let's pretend he that he makes us open to the public he says hey this is the best way to lose weight or whatever he's gonna claim something i ran this study you know out of my thirty participants all thirty lost twenty pounds and maintained their thing they stuck to their diets because money and measurement is a great motivator so everybody in the world v me a thousand bucks and join this challenge join these little batches i can see that being very big why do you think that there's some challenges okay so these aren't reasons why it it can't work but why it would be a challenge the first thing is that in order to get these freestyle libre it's produced by a large pharmaceutical or hardware company called abbott right you have to get a doctor's diagnosis i have no idea how we got our hands on it yeah maybe i don't know how we got it but but a lot of doctors will give it to you because it can't hurt i don't think it can hurt i think you can also just buy them out of pocket not covered and they're way more expensive i think they're like whatever four hundred dollars a month so he said he's losing money on the monitors i don't actually believe that i think he got him in bulk and got a deal or he got the other company levels to like cover it for him but but i think you can buy them out of pocket without the doctor's know but yeah that that makes the economics hard for sure so so that makes it hard the second thing that makes it hard is could it be dangerous i don't know i i i'm an idiot about this i have no idea i don't know anything about blood sugar i i bet he does but i certainly don't so does liability component for sure we're it's a big liability component now there are other services they're stick s t i k k i think it's called and what that service does is you sign up with a coach and you put money on the line and you have to hit it and if you don't you lose your money but it's like a coach so for example one time mine was i'm gonna dunk a basketball by this date and if i didn't film if i didn't have a video of me doing it that person would donate like five hundred dollars to like a charity that i hated right can you dunk have you deduct yeah yeah what yeah oh well i mean i mean i could i could i'm not good at basketball but i could put a ball in my hand and and up really high duck yeah i'm pretty you just moved up three notches in my book that was an excellent okay so stick that's interesting so but that's an old school company they've been around at least a decade and so it's not quite effective because you can cheat this is the only service i've done that you can't cheat now this is the upside which is it's super effective now with my nutritional coach i take a pictures of my my meals and they look at my reports i lie sometimes like when i go like when i go to costco and i'll like sample something i'm like oh that's like a that's not even worth doing it yeah but i could easily have chips right it's like that but i could easily eat five hundred calories of chips and dip walking around whole foods right why do you think i'm here right or so groceries and so this is like the thing where this is i love it i love this service it's it's been it's definitely the most effective but as a business so as a business i think there's demand and it's effective there might be logistical issues i think they're liability and logistic squish and the other thing i would say is i'm not a hundred percent sure this glucose monitoring is actually like legit so i don't know if this device is effective for example i hadn't been able to like not even getting close to one forty i was eating right so i was like let me see what i could do i ate a plate full of french fries i ate like five girls scout cookies and i stayed under one twenty and i was like oh well then this is like that ruined me so don't know if i installed mine not exactly right or something like that here's what happened with you and it's what i experienced so i actually got three of these devices i i got my first order and i told them that one was broken and because i thought it was broken because i did what you did but after twenty four hours or forty eight hours it started getting it all incredibly accurate it was it it was very accurate after about twenty four or forty eight hours so in the first twenty four hours of doing my thing i started eating horribly and i called abbott it and i like hey you guys isn't working and they sent me another one and i just kept it on anyway and then it started working oh that's so you got extra fourteen days now yeah okay that's great yeah so this engine so we're gonna keep reporting in so we're only two days of the challenge we're gonna report in if this is a good sort of method for us as well as the weight loss that ultimately results from this so we'll we'll check on that again a couple other things i wanna talk about so back to corona for a second because you know when while we're quarantined here it's really all that's on my minds all that we're reading i'm sure that's the same for many many people who are listening to this one really interesting thing that's happening is what does this mean for various businesses what does this mean for the overall economy i'm not gonna pretend to be an expert i don't know what's gonna happen probably nobody does but there's definitely better people than me at predicting so let me just put out put that out there from the beginning but i will say some of the interesting things that i've been reading i'll share that with you guys and then if you know more great keep going beyond that so the first is the prospect of bailout so there's all these different industries cruise lines airlines hotels because seen those movie theaters sports leagues that are not gonna survive this thing or they're gonna have a lot of trouble because we're not like two weeks away from this ending the i think the new york governor came out today and predicted that they said that the curve looks like in forty five days this is gonna peak so a month and a half the patient curve peaks and that's just the peak it still has to sort of decline all the way back to normal from there so a month and a half from now that's when they're projecting is so all these businesses are having trouble and a lot of people believe that we're gonna have to do a bailout of the airline industry hotel industry casino industry what do you think about that well i'll i have two points the first is bailout i'm conflicted i'm i'm really typically i don't know i'm not hardcore but i'm right of center in terms of capitalism where i'm like let the week go down and let the strong get stronger it's really hard i i don't know i haven't made my opinion because i was very much against a lot of socialist stuff and then when i see our our our our rich comp country hurting and there are people that can help us i'm like man what do we do here so right i i i'm i'm i'm i'm having to reflect on my beliefs and this is changing them and so there's there's two interesting things going on so the first is what i call the blue collar bailout so i i i i tweeted this two days ago i said i think we're gonna need a blue collar bailout which is a lot of people who go to jobs retail jobs they work in these casinos they work on these cruise ships they work in the stadiums whatever they're not gonna be able to withstand being out out of work for a month or two months or whatever and that's what we're gonna really hurt the economy because it's a huge percentage of you know citizens in the country i said we've seen bailout when it comes to big car companies and energy companies but we've never seen a blue collar or bailout banks you know the government rushes to help the sort of institutions that are deeply tied in with them but will they help the constituents and today for the first time they discuss you know a a potential s end that they'll will give out i think a thousand dollar sort of andrew yang style trump trump and his crew talked today about doing that so i think that's very interesting it's eight hundred and fifty billion i think that's what it would cost i think well it was he's they're discussing eight hundred and fifty billion dollar stimulus package for regular people yeah and so i think they're gonna have to do something like this otherwise too many people are gonna dip into the poverty cycle and once you sort of once you get on that track it's just very hard to get out it's like being on the wrong end of a game a t ball and the other person is just hitting it just out of your reach and it's just getting tighter and tighter so i think they're gonna need to do that that's one thing and then the bailout on the other side i was looking at these companies and i saw a bunch of people saying hey why are we gonna bail out the airline companies when they're doing all these stock buy backs yeah come my boys said that and so i was yeah mo ali was saying that and i said up with these stock buy back and so i went pretty deep on understanding you know what what are these buy backs because i i only do at a surface level pretty interesting to me so let me talk a little bit about what's going on here so stock buy back started basically the great depression so nineteen twenty eight the depression happened stock prices start crashing for a bunch of the companies and the companies realize hey normally when we want our stock price to go up we gotta generate more revenue more customers more profits but with the great depression happening those are going down so our stock is dropping and then the way that our stock is measured revenue profits etcetera is gonna get worse and it's just gonna cause a a cycle where we're it's just gonna keep keep keep crashing so somebody very smart decided oh i know what i can do if i want the demand for my stock to go up i should just limit the supply how do i do that well what if i just use the cash we have and rather than investing it in our business to you know grow or do more marketing or whatever i going to just buy back shares so they started buying back shares and they bought back shares and then all of a sudden the there's less shares available in the market and the price started to buffer and price started to go up and so this became like immediately the the sort of silver bullet solution that companies were using to sort of survive in the great depression now this is actually a a technique that joseph kennedy did with there used to be a cap company called hertz mh which is now the car company and this is exactly what he did the founder of hertz said joe i need you to lock he was young and he goes he was one to break the rules he goes i need you to lock yourself in this hotel room up in new york and i need you to do a lot of these buy back so it appears as though we are a lot bigger than we are and then once people start buying them back sell them our stuff and you're gonna save us right exactly and you they just need to reverse the momentum and the appearance that hey this company is doing well in spite of everything else and so when there's a you know when the economy is crashing people fly towards safety so there's a flight to to safe safe havens and so if your stock is going up people will view that as a safe haven and so anyways this happens for a few years happens for six and then they put a stop to it so the government comes out and says hey wait this is sort of an artificial way to pump your stock price and we don't like it we don't think it's a good thing you're just buying they're basically buying the management stock itself so the management would sell the stock using the company's own money so the the executive management would get rich and the stock price would go up and so the executive management keeps their jobs so it was a double win so nineteen thirty four this stops and it stops for about i don't know fifty years fifty years there's basically no stock buy backs in the stock market now nineteen eighty two comes around you have reagan as the president and there's this guy john chad and i i don't know exactly what his deal was but but they decided that hey you know what we should they changed they wrote they wrote a new law which allowed stock buy backs back back into play company should be able to do this and the theory was hey here's what will happen when the company buys back its shares they can use you know they can use some of that or let me step back the company could use cash to do three things at any given time they can give it to the employees and raise their wages they can invest in growth hire new employees or invest in machines and whatnot or they can issue a dividend to investors and that's the sort of buy back route and so what ended up happening was reagan writes law in the past so nineteen eighty two buy backs are back after fifty years and the second change that happened was that ceo started getting compensated not on salary but also based off of bonuses for the share price so now the ceo is also incentivized to buffer the the sale the stock price and so you go from in nineteen eighty two half a percent of profits were spent on buy backs before this law two thousand eight seventy seven percent of profits are used for stock buy backs even now it's sixty five percent so sixty five percent of profits not going to employee wages not going into investing for growth just announcing stock buy backs and you could see that the ceo compensation is sort of skyrocket as well so it went from the ceo used to make fifteen times more than the average employee at their company now it's two hundred twenty times more because they're compensated on the stock price and the stock buy back is the easiest way to buffer the stock price and so this has been getting worse and worse and worse two thousand eight was sort of the peak worse time because when the financial crash happened in two thousand eight companies they pulled their favorite lever to keep their stock price high or from plummeting further and so recently trump cut the corporate tax from thirty seven percent to twenty one percent and the idea again was like alright great if we don't tax the companies they'll use that money to give higher wages to reinvest in the business and they did a study and they saw that it's been a year and a half since that tax cut and wages have gone up one point two percent only but there's been one trillion dollars of stock buy backs announced since then and so clearly the the reason the company asked for the tax cut is not why they did this and so what what do you think is gonna happen so i think what's gonna happen is now there's a there's a problem right so these companies like the airline industry right so i have this graph that we can show on the screen for people who watches us on instagram or on the youtube channel for the hustle which by the way for some reason nobody watches on youtube even though it's much better we cut the clips of just the good parts and you see the video you see the graphs so i don't know why nobody's watching but they should the podcast gets way more listens than that but anyways there's this graph that shows okay if you look at like international companies outside the us where you know like volkswagen or whatever they'll have like zero percent stock buy backs if you look at in the us some of the corporations like united eighty percent of profits went to to stock buy backs southwest sixty six percent delta fifty percent of profits being used on this so now these companies they don't have cash anymore because they bought back their own worthless shares so they they ran out of cash because they were buying back their shares to pump their price and now they can't do it because the whole economy's is crashing so now they can't get their way out of that and they don't have the cash to withstand this so they're gonna go to the government and say hey we're all out of cash don't let us fail but real should we reward that because you used all your cash to buy back stock to make yourself rich for the last five years which by the way we know how this is gonna end yeah you're gonna get bail out and they're gonna do the same thing sadly it's it's yeah this is it i didn't know i didn't know about a lot of that so there's our clip yeah it's crazy and you know bernie and elizabeth warren they've been trying to say like hey we just stop this but like i think you know it took me five minutes to explain this and that just means it's like too complicated of an issue to like be mainstream therefore it's gonna get swept under the rug well let's talk about let me bring up two things that are interesting first of all have you looked at casper oh my god have you looked at casper market cap so that reaction makes me wanna know it's sad i mean it sucks i don't want it like i said i don't wanna see people lose a hundred and seventy five million dollars to their market cap and so what was it you know so their market cap can times higher no the share price right now is is four fifty before it was thirteen fifty so that's way less money than they raised right that's crazy and then let's talk about one more and i'm gonna this into like an opportunity here which is right okay group on for years i said that i think group on could actually be great why is that the the market be because i think that i think there's still ways to make a i don't know i just a couple years ago when i was looking into this i was like man i think rip can can be a little bit better if they change x y and z and i did a few years ago so i'd have to go back and look at my arguments but i was wrong because their valuation up until recently was like two or three billion dollars as of today three hundred fifty eight billion three hundred fifty eight million wow yeah and so they crashed and i mean they they're their share price sixty five cents the other way just school our money together and buy it out right now yeah but i think it's actually i think what i would do is i would wanna buy hotels right now which i'll talk about in a second but i will i'm very interested in this local deals and here's why i've had maybe five people come to me and talk about monthly boxes with local goods and i think that if you executed on this appropriately it would actually be incredibly incredibly successful because the moment that we're at now it's not really like people don't have money it's just that there's this this virus that's scaring people and so people have jobs or hopefully still do and i think that well i've had some people interesting reach out to me and a lot of people and just people have ideas and this kinda worthless i had one guy who mocked it up and he goes i have this company of about his name's sam actually he goes i had twenty i have twenty employees for this events business i'm gonna fire them or i gotta make this work and he reached out to me and i showed me his mock ups and everything and i go yeah i'm into it and so what he's doing is he's starting in seattle and i go then then you gotta like put like a box where people can sign up for a san francisco one and if you get enough demand you could do it and then have a chicago one and then la one and then s saint louis new york and you spend a certain amount of money and they'll send you goods from that local service so for example a restaurant that has good barbecue sauce or you know whatever coffee beans from a local place and i think it's awesome if this existed like in a reasonable way for san francisco i for sure would spend a couple hundred bucks to buy from my place i mean i don't wanna i'm kinda i'm kinda humble bragging here but the coffee placed down the down down underneath me i love these guys are the app these afghan immigrants who are great i went and bought coffee from them yesterday and i gave a hundred dollar bill and i was like i'm i not gonna be buying from you guys for the next couple weeks right but act like i am and and but i and i and i think a ton of people are doing shit like that but i would totally put my money into this something similar yeah i think i think that's that's happening there's there's also i think an opportunity right now for sort of some kind of local gift card or some kind of buffer so one problem that that's happening is you know a gym a local gym my my brother he does ji ji and did get a gym post on facebook they're like look if everybody freezes or cancels their membership for two months like we can't survive we're gonna try to do video glasses and other things but and so people started commenting like hey how can we help you and he's they said look if you could just buy you know a gift card for for ten classes that you can use in the future that will help our cash crunch today and we'll be able to stay open now let me bring that up i'm gonna tell you two things first i'm gonna well first i'm gonna humble bat brag again i'm bragging a lot ben as one of my favorite fighters the guy who got knocked out five seconds on he reached out to me it was awesome he messaged me on twitter i'm meet up with them online like a video call on thursday because he has wrestling gyms and he wants to do that work he goes you he goes we gotta go digital i go yeah let me help and so anyway that's badass like my hero one of my heroes the second thing is okay there's this i'm gonna come back on thursday with more insight into this but entertainment dot com entertainment dot com what it what it was was like a local coupon thing remember those coupon books were you my parents love this yeah i think that there's a huge opportunity to bring that back and so the business model for these coupon books was actually pretty sound so entertainment dot com went out of business in two thousand thirteen when they went out of business they had thirteen million in assets and fifty million in liability so they didn't run it well it's now been acquired by a private equity firm originally before the private equity firm bought them a ais i a c the folks who own tinder and match those guys owned it and when when those private equity firm bought it they bought it for a hundred and thirty five dollars in cash and the company had like five hundred employees so at one point the economics were sound i actually think that someone can re tool these coupon books and build something super interesting the way that i would angle it that i would say i don't i would have to work through this model i think it's i think it's doable but i would have to work through the unit unit economics i think what you could do is do some type of deal where you as the middle man get your fee but you can kind of forward your money to the vendors right away right i would have to i i i have to think about this but i think that something like that is incredibly interesting so this company now they still make tens of millions of dollars a year in revenue but in two thousand and twelve two thirteen fourteen they were making about a hundred million in revenue so right these businesses can work well i think i think it's you know like honey or those chrome extensions those are the modern day coupon books because you know they their coupon books for the internet which is great they can operate at internet scale and and honey doing you know ludicrous chris numbers but but i i do think you're onto something with this local this hyper local thing you know what that's why fascinated by gru hunt right exactly the group on thing i think is more interesting than the coupon book because you know at hu con this year that guy eric ryan talked about the cofounder of method soap and ollie and well lead all these great d brands or or sort of d actually just new consumer brands that they sell through target and whatnot you know he he said a line that stuck with me there's the number one most important thing from hal khan this year in my opinion he goes you have to identify the culture shift first and you know the culture shift happens first and then the products and services that that meet those cultural values come second so let's say for methods soap he was saying you know consumers now they turn they're everything they buy they turn to the back and they read the the ingredients and so they care about what they're putting in their body they care about what they're putting in their homes they care about what they're putting in their babies etcetera etcetera and so you see honest company take off because people care about what they're putting on their baby you see native deodorant takeoff off because people care about putting natural ingredients and not aluminum and para you know in their arm pits and method so took off because they said hey you shouldn't have to clean your house with toxic chemicals but he identified the culture shift first now know how much of this is just retro retrospect because entrepreneurs do do that where they just make up a story later about how they did it and the real reason was just some total numerical thing where they were like yeah just we know that we know firsthand was true with boys with native deodorant at he did this yeah and he actually tweeted today is some more info which i thought was good he said he identified that natural deodorant was one of the top selling he's at number one i know if it's actually number one but it was one of the top selling products on etsy period yeah but everybody was buying it out of a jar and you have to like do this weird thing stick your hand on the jar than rubbing it in your arm pit and he's like look people want people want natural deodorant but they want the convenience of the stick if i could figure out how to put natural deodorant in a stick i think i can make a business that work and you know eighteen months later sells it for a hundred million dollars so i think there's something to identify the culture shift and if the culture shift is hey we gotta like hun down a little bit or hey we gotta like support our local businesses like small businesses that's where something like a group on or a group on two point o is very very interesting to me very hard to pull off extremely hard to pull off because local is super super hard it's slow to scale and you're dealing with lot of mom and pop style businesses group but group on was not slow to group on got to a billion dollars in sales i i think faster than any other company ever now it didn't true that's true it didn't it didn't operate well it was now there it didn't stop i i don't wanna talk out my ass i think it did stick i mean look up until group upon hey look how much does group upon doing revenue they still if it did stick from a merchant perspective what happened is they onboard all these merchants the merchants win on and they would get a bunch of empty traffic and then those empty sort of calories eventually they pulled off and they said why am i offering these deals people come they they take the sale they don't come back and that part didn't work so they lost on the merchant side for a while and then they got all all these clones came out that were doing the exact same thing so customers sort of got inundated with daily deals products so that was a bit of the problem there but you're right actually they did scale very fast what what's yeah yeah the revenue of two point eight four billion in total seventeen yeah so that's sick we have a echo from can you hit mute or something alright we're good two point four billion dollars in sales it definitely stuck yeah but you you can see the share price right like you you could see see that it's not well because operationally it's it it's not it it didn't work operationally you know they have way too many salespeople there's a lot of reasons why that model didn't work but whenever i look at a bit this i i ask myself where's demand and where where do i get demand and distribution in this case distribution is kinda built in because the the demand i mean the proposition is quite simple you're gonna get stuff at a discount now i really think that something's here i'm talking a little bit on my ass that's kinda what the podcast is though something has to be done and so i'm gonna look or not something has to be i don't know if i'm gonna do it but somebody there is opportunity here of like i you could pull on people's hearts string it's pretty easily because i found myself giving this coffee guy more money i've paid my clean lady already even though she won't be coming and i have a feeling a lot of americans are doing that you know everyone's buying gift cards at the moment yeah and i also think that there's a just a pay it forward component so if somebody made a really simple viral site that's just about giving it's like hey this is for giving for people in need that are gonna be affected by this i think you could do i think you get a lot of attention from this because i think there is i think people understand that people are suffering and nobody likes when the people around them are suffering and there's enough good people in the world will even if it's the minority of people there's enough good people that will do something about it next week sean what i wanna talk about is founders card and some some membership deals and the reason why is i think that you know my prediction is well i don't know if it's a prediction or if it's a hope is that because this wasn't like a financial crisis it was more so a scare or whatever we wanna call what's going on i hope a full blown recession is it gonna come and i actually think that it it might be okay but if it's gonna be really bad i'm i think we'll see a really big rise of discount memberships right like for example buying clubs which i have done a lot of research sean and so next week i'm gonna come with a bunch of by buyer's club improve information that i super into that i've heard from our buddy c about group buying group purchasing companies and i was fascinated so i i i do want i wanna hear what you have to say about that for sure i actually have the opposite view i think this is gonna be very very bad i had been hearing for first i'll give three reasons so my my general view is that the coronavirus isn't gonna cause so i'm gonna cause in economic recession but i believe i i think corona is the needle that pops the bubble it didn't create the bubble the bubble was due to several other factors like corporate debt or the fact that we've just had a ten year bull run which is like as long as it goes and these things always go in cycles and so at some point the cycle had to reverse where you have super low interest rates so money's is easy to come by you have a bull market for ten years that that's gonna go you know the other direction and i view this as the the pin that popped the bubble the bubble was things like the stock buy backs that we talked about the corporate debt problem i'm not as much of an expert in but if you wanna see like how f up this is just google corporate debt crisis and that's basically the equivalent of more mortgage backed securities this time that's my that's my understanding of it at least and another video i'd recommend have you seen this it's ray dal has this youtube video called how the economic machine works i think about it constantly one of the best videos i've seen out there it's just super well made it's twenty minutes which is long i understand but watch it it's amazing and drives how economy works this is what sticks out yeah which is these many cycles many cycles but hopefully auto grand scale up into the right right so it's it looks if you zoom out it looks like a linear linear diagonal line but when you zoom in there's loads of blip and if you're are in the thick of it which we are the little blip down feels like the end of the world right yeah it's crazy also i thought some other interesting things are happening there's other opportunities that are happening here so some companies are doing really well like i know at twitch for example usage is higher than it's ever been but but are the advertisers the advertisers are gonna suffer right so you're gonna get usage to go up and then you're gonna get some of the advertise advertisement to go down dollars will go down but if you're a company like a social media company like a facebook or a youtube you'll take a temporary dip in advertisers because they'll always come back when the economy but the usage is super important because you have very few times to build a habit amongst consumers and so we see this all the time we do analysis of of of the business and i can't say too much but i'll say what's a safe way to say this so a safe way to say this is there are times of the year where people have more time availability maybe they get new hardware or new software and they build a habit during that period of time and that sticks throughout the whole year and so we as a business decided okay we need to invest in those times because this is the formative period where people build their habit that lasts the rest of the year all the stuff we do in mid midway through the year is nothing in comparison to anything we can do during this special zone or the special time windows and so like twitch is interesting then to you so twitch twitch has that that's where i've sort of learned that but e commerce obviously has this seasonality like christmas black friday time you know sales all peak but that's also where people sort of are willing to go buy a bunch of stuff try a bunch of brands and form opinions and that carries through the rest of the year and so i think some companies are gonna do really well and so you know i'm looking with my personal portfolio at i don't know when and when is a very important question because you don't know how long the economy will get rocked but companies like amazon facebook google i think they are on sale i think they're they're a discount it's like you know get these blue chip companies fifteen percent off twenty percent off it by get up to thirty forty percent off and those are opportunities for because i asked a bunch of people i said hey you know you saw the dot com boom and bust you saw two thousand eight you know what two thousand eight i was a sophomore in i was paying attention to this shit and so i asked them you know what do you what do you remember from those experiences and what would you guide now and they basically said hey during these downtime times two things happen a lot of great startups ups get started because jobs aren't available and people have a lot of downtime and the second thing is stocks are fifty percent off real estate for thirty percent off whatever and and it's sometimes the best time to buy now you just you don't know when it's gonna hit that that bottom and so you have to have if you have dry powder in a good position i brian checked my wife works at facebook brian c gave a big talk the other baby because what did i say facebook oh she used to work at facebook she works at airbnb now brian c gave a talk because it's not good obviously yeah and they big space they're in the it's not good at all because they're gonna go public and our family was expecting a nice little right you know it it would have been whatever anyway yeah as shareholders i'm very upset but it i think it will bounce back and brian gave a talk to the other day he goes just everyone think about this we started this company in two thousand and eight okay we have been through this right we have we have planned for this we expect we already know what's gonna happen he goes just spent an hour on the phone with obama and we talked and he like was he was like kinda of in a cool way and he goes he was like i we we plan for this not this but we planned for we know what happens to travel industry when bad things happen and he goes we thrived in o eight and o nine you know we're just getting started but we started on paper the hardest time he goes we will get through this it can work and let's just work together and execute and we'll come out the other side fucking fingers crossed man yeah that's that's great you know if it's actually it's good for all businesses if you know the more businesses that survive and thrive the better because the the whole economy gets impacted by it so yeah rooting for that to happen do you wanna keep going or you wanna save some for next time i think we save for next time i have a a call for investment i gotta make an in two minutes so i gotta i gotta talk to this guys in y comb i actually wanna do this i wanna go through the y comb company so they canceled demo day which is usually an in person sort of meet market of investors and and founders and they went all remote and so what i wanna do with you it is to go through the list of companies and react to them and talk to them we might do like so of a three part special just going through the yc batch i don't know if people are interested in that because it's like yc is very silicon valley but did you beat this guy how'd did you meet this guy which one the founder yeah actually i've met i saw him on twitter doing something interesting it's the same way i'm at fe actually i saw the anytime i see an engineer who's on twitter talking about either growth tactics that they're trying or talking to customers i'm like oh this is special this guy builds the product but he doesn't just sit there he's like changing this button and and trying to figure to get conversion rate to go up or he's talking to customers and being like yeah don't worry i got i'm gonna fix that and then tweeting again hey i fixed it and those people one man wrecking cruise and so i saw this guy i started dm and i said hey i gotta talk to you and then i fucked up and i didn't he was like yeah great i love to talk and then he kept being like like i it's said something like very mysterious in the first combo that was like hey i got something to ask you and and so he then i like dropped off the map and he's like dude what kind of the thing was at i need to know come on talk to me and so i i messed up there and i came back again like two months later i was like hey sorry about that and so his company just been growing in value and so now he's raising at a fifteen million dollar valuation and i probably could have got a two million dollar valuation if i had just responded to the dm i started way back in the in the day so well next week or on thursday you'll have to update us next week i'll cover a little bit more about coupon stuff and some buyer club stuff okay and i'm i don't know if i wanna do the yc thing partially because they might hate it because you're not supposed to do this but i'm willing to do it anyways if people actually really want it if you're a lukewarm on it just be like i'm lukewarm on it and then i won't risk my neck putting these companies out there but if you're like no i wanna i wanna hear this i wanna get access then let me know and we'll do it and i did a a rant last time sean on i did this on thursday i showed up here by myself and recorded it was scary it was weird rick doing that and i think people liked it and they said they want you to do one too okay yeah i'll do one i'll do a corona rant as well from quarantine and quarantine rant alright thank you listeners me and sean read every single review i i i'm this is i'm not exaggerating literally every night i go and look at the new review so go ahead and leave us one and let us know what you think and will you will talk to you soon see yeah