#74 - The $72B Chinese startup you’ve never heard of, a mysterious billionaire and the guide to post-corona opportunities

this episode is brought to you by super side they're an always on design company that delivers great design at scale fast afford and within twenty four hours go to super side dot com slash m f m m m as in my first million so super side dot com slash m m to check them out what's how are you man i'm great i upgraded my internet hopefully it looks better called comcast now paid sixty bucks a month and just called them and with a click of a button i paid them more money and my internet was supposed to improve we'll see if it happens like magic great great business to be in i'm excited to i feel like it's been a little while i got a bunch of random topics to talk about i don't know how how about you do have anything that was top of mind for you i yeah well i know about all the stuff that you or a lot of the stuff that you have in here right or like i know it to the point of i wasn't sure if i wrote it or you wrote it that's the best okay great okay so i'm gonna start with let's pick one that's that's interesting okay so how about how about we start this one so somebody was somebody tweeted this and i saw it and i was like this is pretty smart so a lot of people right now talking about coronavirus how does the world gonna change and lots of speculation i think everybody sort of agrees okay handshakes you know mike about the window for a bit live sports you know looks gonna be a little tough so there's there's some things that we know we're gonna change and there's some things that you can't really predict their sort of second order effects and so somebody reached out and they had put together this they had like a group of people had put together this thing called the second order effects of covid and i thought it was great i'm gonna find the pdf and i'm gonna link it in the description here i know one of the creators was this guy that i've met one time super super supermarket guy he created are you a harry potter fam no but i know i mean i'm not not a fan but i don't buy the stuff seen the move so he he created this site back in the day called mug which was oh yeah i know that guy he also created a oh my god pop what was it he's a viral concierge about what's not at own g pop but he's yeah yeah yeah i i know all about him tell me his name i'm trying to find it i can't believe i forgot it every is wife sports so they started sports media yeah i'm yeah yeah i know i know about him well i think his business background is the one you're thinking about that's right so he started a chain of viral websites and they got really popular but like everything in that era i i bet it just crap right and but if i met this guy once and i was like my god if i just bet on this guys like lifetime earnings i would bet right away like this case this guy's is really really sharp yeah he's he's kinda like a almost a little genius yeah i like when you say genius because it means like kinda hard to talk to is that yeah like he's a little g but and when i read about like dude why you doing these viral sites like you do anything yeah and i bet will i bet he's gonna be one of those people that transitions from like yeah i first created these you know the harry potter fan site that became number one then i created this viral twitter account and the viral meme websites oh and then i like solve climate change like that's what this guy's career should look like it all goes well he's cool so he anyway what about many a group of people who created this thing that was like second order effects they were basically like okay you know for example what's the second order so everyone knows a first order effect is coronavirus they you know is is wild first order effect you shelter in place okay but the second order effect of that is like are people gonna have more babies our divorce is gonna go up because you're at home is grocery delivery gonna take off because of that and then there's like a third order effect okay if grocery delivery takes off they need to you know in starts hiring hundreds of thousands of delivery people okay what happens when all those people go to that job now they need health care system for a a gig worker becomes more important so there's like these these knock effects and so for a business person you wanna think about okay oftentimes the biggest impact to the biggest opportunities are in the second and third order effects because you can start doing work now and then as this plays out those thing those markets are growing rapidly but you can kinda predict them so a classic example of this was you probably know better than i do there's some story like the highway system was built for for something like it was built for i don't know i forget forgot what it was military purposes or something like that but the second order effect was that like walmart basically it was like oh people are gonna exit and wanna get you know buy stuff get little you know get food get drinks blah so the whole cars got faster yeah cars get faster the retail system takes off because now there's a highway interconnect system blah blah blah so there's a second order effects so one of them that i just thought was kinda interesting was this idea of drive through and drive in so now that you know movie theaters are like short of going bankrupt because all their chairs are so close to each other that people like people aren't gonna go back to the movies movies were already kinda struggling and this might be the knockout blow and so people are talking about drive in theaters is that gonna be a thing i could see it i could see you know rising on top of that you have drive through so how do you use sort of minimize contact well drive through caffeine so there's some coffee shops that are like the photos i saw twitter you know the line is out the door i've never seen a line this long except for chick f a and so like what's this for and it's basically just drive through caffeine and so i'm pretty bullish on this if somebody was you know right now they had like nine franchises but they were doing well and they were a drive through coffee concept i would you know be very very bullish on this thing expanding and going from nine to two hundred locations over the next two years because i think the need for this is gonna go up what do you think about that okay so what do i think do or first of all are people gonna change your behavior forever let's let's talk about that right like our is shaking hands gotta go away certainly now like i i don't wanna do a lot of that stuff but is that gonna change your behavior forever i don't know what's the what's in now like what what can we compare this to like world war two i mean september eleventh like when i see when i hear low planes i get scared so like no no tsa clearance right so like you used to be able to just walk into an airport take a ticket that didn't even have your name on it and board any plane and it took you five minutes to get from the you know check desk to to the gate and now it's like yes you know security buffer in an hour you have to have your id it's gotta have your name on it if your name sounds a little sketch out you're gonna come to the special room and get checked that the world change forever from that sure but we're also talking so the sometime september eleventh was definitely like a lot of like force change like tsa but then what we're discussing is like force change like when you and i see each other are we gonna hug are we gonna high five are we gonna are we gonna allow like you know what i mean it's like yeah like how far away are we gonna say so i i would imagine that some of these consumer behaviors are a little bit more analogous analogous right to that i don't know man will we change i i think so i think that at least for three years something is gonna change the question is what's gonna change and to how long is it gonna change or is it gonna be sort of a temporary precaution that goes away well so look you how long did do you live in china for two years maybe not long enough to maybe maybe long enough to when when they went through they've had not i don't know if they've had pandemics but they've had a a variety of outbreaks of things this has is there a behavior difference yeah like the masks is a great example so like mask quite common in asia to be you know something you just generally wear out and nobody even bats eye or seasonally like when it's flu season yeah everyone mask up i'm not trying to get flu and you know you don't see that here but will you maybe you will like i i would i would expect did they go to crowded movie theaters they do yeah there's something just crowd in china you like can't avoid a crowd but you you know yeah like a billion people in a small city so so it's it's very you know there's crowds everywhere in china but people do behave quite differently than they do hear gloves you know gloves are very sort of common there that that people here don't wear gloves just on their day to life right so yes i do agree i think things gonna change i think specifically big cities are gonna i mean i i'm i'm biased because it's directly impacts me i think cities are gonna our cities are different right i do think that work is gonna be different we we're getting rid of our office in san francisco exactly so you know there's all these sort of second order third order effects example of a second order effect of the tsa so first order effect is tsa second order effect is people selling toothpaste in three ounce bottles because that's what you need now to get through right that became a market where before who wants this tiny little bottle and so you know from a i'm just trying to keep it from a business perspective because you know from a medical scientific and cultural perspective you know don't listen to me listen to other people but from a business perspective i think that there are it is worth you know taking a pen going into a whiteboard in starting to map out okay if this then that and then if that then what and the what is where your business opportunity lies and if you're looking for that it's also just a good way to guess and check even if you're not gonna go do those things the only way to get your gut to be good is to predict a bunch of times and be wrong or right and we'll go revisit those and so i often do this while predicting things also so let's talk about some talk about some of these here i i pulled it so some of these predictions here are so gyms are gonna go away or significantly go away and which means innovation and home exercise obviously that's like you're at the dock that's when you to a quick that's like just yeah that's i mean that's not even a question right i don't think gyms are gonna go away necessarily but yeah people are going to whatever the home exercise market was versus gyms it's gonna eat them more share are you exercising at home yeah but it's you know i actually exercise at home as much as i do at the gym which is like week on both fronts second have you how that's interesting funerals i don't know cities will become less popular that's one of his predictions suburbs and rural become more popular like bill girly came out today and was like you know camping and rv is gonna go on the rise because people still wanna travel but they're not gonna wanna travel you know i in dense areas staying in you know hope maybe maybe staying in hotels or un clean air airbnb beads yeah i just rented an rv so i'm gonna do a three week cross country trip for my birthday in june so i yeah i'm i love that i completely agree i've never understood that in the first place anyway it americans are kind of interesting whenever they like wanna do a gap year like travel for honeymoon or river they always wanna go outside my country and i'm like dogs like let's you should explore here it's way easier and we have every i mean that's what it's interesting about america so we have every time i think we're the only country that has every geography or every climate so anyway another thing that he talked about is virtual tours and virtual museums so on trends we had talked about a company that was crushing it with virtual museums and we also talked about a company that was doing what was it called the b r thing i don't remember the name of it but i know what you're talking about sand vr or is that was it sandbox and i yeah so i i think it's great struggling go with this right because sandbox vr are you have to go to a physical place where headset that somebody else wore an hour before and you know do this in person and and they placed their locations in malls and they're supposed to be foot traffic from the malls so foot traffic is dead nobody wants to wear a device that somebody else just wore and you know in general this is like sort of a fringe behavior anyways and so i talked to you i i heard from them that you know they had to be really conscious about how they're gonna do i think they did some layoffs and whatnot but they you know they have to figure out how are we gonna survive and what does the new world look like and so unfortunately some great ideas and great businesses you know some markets got punt back a year or two four years or whatever it is and some markets got pulled forward like it as my friend chris from first base and they do remote work setup up so you you know everybody now at home but this wasn't the case when i started advising and when i started advising and i was like hey i think companies are gonna be going remote more and if you ever a remote employee they need a desk and a chair and they need a webcam and they need a microphones so they can work effectively remotely maybe companies will pay to give them a home desk and i was like i don't know maybe they'll pay maybe they won't and then boom this thing happened and like his wait list has exploded thousands of companies signing up and he can't handle demand and now every company has to have a person like you know at the head of hr or whatever that is planning how are we gonna have so many employees remote and also hey this is actually this remote thing actually kinda works why aren't we paying so much for our our office let's just do this this is way cheaper and so you know the the world has changed for him his market got accelerated by four years yeah i that's incredibly fascinating i what i think we should do is we should just link to this this document is dance there's is no way that we can yeah fuck afford us but i think it's cool i i think it's cool that somebody this this and that they just published us as a google doc that anybody can access us i think that's there's like a cool way of going about things and also one that i like on here one more that i like is church so like you know church is one of the super spreader type of places where everybody congregate people often hug or shake hands or touch and it can spread throughout a community rapidly if you if you have churches open and so how are people gonna do this right is church gonna go away no are people gonna go in six feet to sit six feet apart maybe i don't know and so i'm of the opinion that church like live streaming for churches is gonna be a very big deal i've been in the live training days for a while so maybe it's one of those situations where you know to a hammer everything a nail and for me everything can be live streamed but no i i i live definitely right church is one of those things that's every sunday so people can build a habit and you know the experience of a live sermon is pretty much just as good as being there it's not that much worse in fact in many ways it's more convenient and you have all the sort of community features like chat or donations i mean that's like what the twitch product is for example and i researched and there's a a platform called church online now or something like that church online platform some some horrible name like that i just it looks like a pastor who learn programming in his spare time and like you know sat in the pews and and coded this thing up like it is it is so you know un branded it it backwards in way but he said they have seven million members or something crazy and you know i guarantee that's not the best thing that's out there so for me you know digital faith is a big thing whether that's sort of like a next door for churches i don't know what that means but it sounds provocative i like it is it is it twitch for churches is it you know what is it and so i would be if i was if that meant something to me if religion meant something to me i'd be like now is my time i need to combine technology with community building and and religion and i need to bring these these real world institutions online i i'm very excited to see what happens with all that stuff speaking of this corona stuff you have on our sheet that you wanna talk about outdoors z i would love to talk about that as well you talk about about it i don't really know shit about it i just put it on there because i'm like oh interesting and i didn't do any research so you tell me about it okay let me the good thing about us doing this remotely is my computer right in front of us okay so outdoors it's a it's a peer to peer market but this is the exact description peer to peer marketplace to disrupt the thirty two billion dollar recreational vehicle industry okay so they've raised seventy five million dollars they've raised a lot of money is this what you used to rent your rv clearly you said you just rented darby no because i i think i'm gonna drive from san francisco to new york and then maybe fly back i i have to i have to figure it out i i technically haven't rented it i have a lot of outgoing quote so i've got people who are gonna be sending me back quote so i think for outdoors it's kinda like airbnb where you submit it sometimes you gotta get approved and so anyway outdoors is interesting if you wanna learn about this industry there's actually what's that guy saying who's on that tv show called profit marcus something mark isn't soon the same yep mark is something yeah mark the profit i've watched like date episodes leon yeah yeah that's right or no lima something like that well anyway a lot of people don't know this but marcus is actually i don't know if he's the founder i think he like aggregate a bunch or brought a bunch of companies together so he's the ceo and chairman of camping world good sam enterprises gander outdoors and the house board shop basically all of this are is around rv and camping and you can actually go and read about this company and a lot of their information is public so you can kinda see huge business many hundreds millions of dollars in revenue maybe even hundreds of millions of dollars in income and so what outdoors he's doing is basically is basically kinda screwing up that model and i love it i don't know right but do you know what their revenue is i don't know outdoors use revenue right i think it's quite high i remember correctly it's over a hundred million let me just do a quick check let's see yeah look i least three hundred twenty five million in twenty nineteen jesus christ okay but meant there's a difference between revenue and is that the revenue or the gross bookings that might be their gm let's assume for a second it's their gm because marketplaces love to do that so let's say you know do you take ten percent of that exactly thirty two million is their cake maybe yeah so they're just exploding right now yeah this i mean this is a great business you know we we talked about before hey marketplaces are great what are the fringe or niche marketplaces and this is one of them right renting rv you know and now now is the time and so they you know so i think they're gonna ride a wave of interest as people sort of crave being outdoors crave travel but need to be away from others how about hip camp are you familiar with hip camp yeah they're like to same idea right they're like a turnkey glam is that right camping camping experiences the camping in the way that i do it where i'm like alright do i wanna learn out a camp and let go get a rei membership and buy like hundreds of dollars of stuff and then be like wet all night like now i'm not interested that but this is like hey you know sleep this instagram worthy tense is what i remember of it yeah it it can be as easy as that or it can be as difficult or you can make it as difficult soft or hard as you want right yeah so you could just like go and rent like a cabin which isn't probably camping but or you could just like get a plot out like an area and like land and apparently they're booming as well so they've raised about fifty million dollars and what's interesting is if you told me about hip hip camp about two years ago i'd be like this is not interesting but it is kind of interesting and there's a i don't know if this is a company but okay so like i am like i'm like a your habit i keep referring to this type of stuff but i what i always like to do is i'd like to look at comparable and i like to look at public information so do you know what ko oa is never heard okay so k i don't know what it stands for actually but what it is is it's a it's a it's a non nonprofit and they have campground grounds throughout the country and if you go to like colorado they're all over the place you'll be on the highway and you'll see in the same place you see signs for food you'll see a k a sign and what that means is if you're a member you can i think it's like twenty dollars a year super cheap you can camp there either for free or for five bucks a night right it's really cheap and i used to use it all the time when i was traveling and so according to some analysts or i i think they're privately owned they're non nonprofit they do about forty million dollars a year in sales and they charge like five bucks right it's like dirt cheap and so if you wanna learn about that business look up k away that's probably the best cup comparable the it's a you yeah i can't believe you've sean you've never heard a k away never like look again now that looks great seems like an obvious idea fantastic but the what's interesting to me what i love doing is i love looking at these older things like k like boy scouts and it's like tell me the demand and that kinda gives me an idea and then if you just like add add ons and operate it in a in a way where you prioritize revenue and profit then things get super interesting and so k is a really cool one to look at it's yeah it's it's it's it's an interesting group and i also think that in terms of rv i would look at a marcus leon leon companies right and you can a lot of that information is out there i love it i love hearing about businesses that i've never heard of that are successful i feel like there's a like my brain i feel like it's organized like there's a set of hangers and every hanger i can just hang another like business or business model onto and then that that's just mapped in my brand and then when i see something new i'm like oh is this a new hanger or do i just attach this to one that already exists and i start to see a a pattern of like oh yeah there's five things that are just like this and so that's what i see when i love hearing about new things because it's just another thing to hang into my brain have you updated your home at all while you've been at your house i had built a home office right or covid because i was planning to work remotely anyways for the month of month of march which has happened to be like covid so that's been like the only home upgrade and then shit started breaking my dishwasher broke my dryer broke so i'm like that's not an upgrade yeah that's it i started going to the park every single day and i bought these little like tiny loop fold out park chairs and i've actually seen several friends buying the same products called click the cli q it's a it's like you know whatever a park chair like you go to a soccer game you wanna watch and you you just wanna unfold but the key is how small and discreet can you make the the fold in versus like oh fuck i'm carrying a chair all the way to the park and i don't know it's gonna arrive soon but i've seen like actually three different people i know mentioned this thing and i bought it myself too before that i have began spending so i've i think up saving like matt i haven't i actually ever since the the stock market crash i have refused to log in to my accounts you everything's just like that right yeah i i sold though have a i was like hey dude good news just go log in so like my philosophy was i was like man there's gonna be like dead bodies in the streets of new york and that's gonna scare wall street and that someone's gonna take a picture of like a body in in the like a in in the like an open van with bodies and it's gonna flip people out and they're gonna like say sell sell cell and that happened there was like a videos of like these like ice trucks with like bodies in there and nothing happened and that the day i saw out a picture was like i'm out right and it took off a week after and so i'm still sitting on a lot of cash and i've lost a lot of money and i hope well i don't hope this proven right it goes down and i yeah if it goes down then i get back in i so i anyway i haven't logged in i usually use i use personal capital and i log in all the time to check my finances so i've not logged in so i i don't entirely know what's going on but i the other day i went and bought like eight or maybe a thousand dollars worth of artwork because i'm like i haven't bought anything in forever i'm just gonna buy exactly what i want because i'm no pretty cheap and i just haven't been buying shit but have you been buying buying like crazy dude because i shop online and now i lost track of like time and space so i'm just buying things and then there's stuff arriving and it's like if you can't go anywhere the next most interesting thing is like someone comes at your door and leaves a mystery box at the at the front you're like oh shit what did i ordered nine days ago i don't know i'm excited to go see what it is it's like this moment of fun so i keep giving myself that gift but yeah buying a lot of stuff also all the delivery stuff is like super expensive so i'm like post meeting and insta and it's like you know four hundred dollars for groceries or something crazy so i know if that's just an s thing or i don't know what's going on can we alright i wanna talk about this mark leonard guy who you have but before we get to that i a good segue which is i i'm gonna get rid of these map i have okay so little people listening i have a background and i've got maps and which apparently is like a was super basic thing to do i didn't know that but i have saint louis yeah it's like the most it's like basic with the capital b saint louis nashville or no s saint louis new york san francisco me and my wife are from those areas and i'm gonna switch it up so i have a a wall of people who i inspired by so yeah so let me tell you who i i've have steve pre font you know who that who's that there's a movie bottom that's really great you don't want to be a runner to like it but he was he was a runner at oregon he was the first person wear nike so bill bower was the coach of oregon tracker field his pupil his his athlete was phil knight together they partnered and made shoes together steve p team was probably the first person at war he was or one of and he was definitely the first sponsored athlete and he was kind of a badass ass runner where he was like he was like kinda like a full clip so he would say shit like to give anything less than your best as to sacrifice your gift he said all this inspirational stuff but he died when he was twenty twenty six and he was just kinda a rebel out of cause then i have hold on time supposed to be he was drinking and driving and flipped over and crashes his car and suffocated cases crazy okay so pretty try very very tragic but he lived fast died young and he it was real tragic because he got fourth at the olympics when he was a favorite even though he was only twenty three anyway it was a big deal he's also like really good looking so he's like easy to like admire him props to you for admitting that that's part of the appeal alright great yeah he's like he's like you know romantic kinda that type of thing like you kinda look good then i have easy eat in doctor dr k they're interesting to me because when easy e was only twenty three twenty four or twenty five something like that he created ruthless of records which went on to become a huge business like hundreds of millions of dollars a year in sales and he was just like a kid from compton who knew nothing didn't deserve to be there or you know like on paper like what are you doing here anyway they achieved it doctor dr fucking change culture in in a in a variety of ways then i have felix dennis and ted turner ted turner started cnn i like him felix dennis he started a a media company buddy and he's like richard branson but more vulgar google him and then i have i've got three more i've got mike tyson i love mike tyson he screwed up so many times in his life but he's done a good job of being ferocious and kinda coming back and then i've got two puck and then i'm i think that's it that's amazing great oh diaz nate alright so you have like i love ideas you have like the in road dude like i i'd say like the majority of your people fight for a living or like should fight for living not intimidating wrote but i'm incredibly fascinated with people who are at both people who on paper should have done nothing and they did a they were are really good at having bold ideas but then also we're having fun along the way right so that's what i like like ted turner i think he had a he was a sudden stuck out and but he had a bold idea and he laughed along the way so i'm i'm always fascinated by that i went to sol house our our friend silly and he had this on his walls was like i was like who are these peep but why do you these pictures that's not your family and i was because if the first one always i was hillary clinton i was like why didn't picture really clinton on your wall he's like oh these are people i admire and he had seven photos and i only knew like three of the people told me the other the other four in a story and it was like hillary i don't know i was like whoever you know malcolm x or martin luther king or something like that really cool idea i was like you know i guess that's cool like you know you walk out of your bedroom every day and you know go to your office or wherever you're going what does he admire about hillary clinton hillary clinton and su don't see he like hillary clinton and i have no idea why he just thinks she's awesome upset i i'm like what okay i guess so i mean not even gonna say like that she's not awesome but i didn't think that she was wonderful enough that's exactly what i'm indian entrepreneur it's safe francisco so much to have i was like i don't wanna sit here and hate on hillary i don't hate hillary but i am so surprised she made it to your wall like that doesn't make getting sense i definitely disagree with that one yeah so yeah it's just like a mediocre maybe alright this episode is brought to you by super side alright so here's the deal i'm incredibly impatient like horribly horribly impatient and if i get an idea at midnight by eight am the next day i want it done you know but that's really hard because if something needs to be designed where am i gonna find designer at midnight to try to make this thing brand to life so you know i don't think i'm alone other startups ups even huge companies need design help fast and they just don't have the internal resources or expertise to get it done so how do you get reliable design done without dealing with expensive agencies and lots of freelancers you use super side that's our sponsor for this week just go to super side dot com slash m f m and tell them what you want they have a team of designers that can get it done fast you know they are twenty times faster than hiring you know hiring designer and fifty percent more affordable than a traditional agency so if you need high quality design done fast try super side lots of fast growing teams that are stretched are using them already check them out super side dot com slash m m i've used them before i love them check it out so let's talk about this guy cancellation so i know a bit about them sean put this on here as billy of the week is mark leonard you wanna contact take in the background we sometimes do this billionaire of the week so the billy of the week is mark leonard constellation software i'd heard about this from a few people because they do something that you know we had andrew wilkinson on here and he buys internet businesses and sorta of has this conglomerate of of small internet business that he's collected that are now you know let's call it a hundred million dollars worth or maybe a little more a little less and that's a fantastic success so this guy mark leonard did that like he's andrew's daddy you know like he his companies were thirty one billion dollars what they do is they buy software companies and they roll them up sort of and they're they try to be a perpetual owner so they're not like not private equity where they're doing a leverage buyout and trying to flip you know cut it skin it and flip it or whatever they tried to just own the thing for a long period of time and have the cash flows and so what i like about this guy what thought that was cool was this guy's like a satoshi na moto of boring businesses so he nobody knows shit about this guy you can't find a photo of them really wait what's that reference pointed at the bitcoin guy yeah you just don't know a lot about i guess so so this guy you can't find photos of them he doesn't do public appearances he doesn't really talk he writes his annual letter and you know but so i was reading like kind of the definitive thing about him because i wanted to learn and it's like all we know is this guy's born in nineteen fifty six maybe in south africa maybe in england and i was like what the fuck we don't even know where where this guy's from and you know he's wrote on his bio he's like he was a vc but before that he's he said i was a banker evaluator a mason a grave digger a dog handler a bounce her a sap and i i went the energy researcher i particularly enjoyed the bouncing but an early retirement was necessary so i love it that i don't know anything about this guy but we'll be gaining me i love and i think half of those are like a joe but here's their business so they buy in the early on they buy they bought businesses that were you know two to four million dollar acquisition targets so very small acquisitions which is which is on paper you would say that's asked i by on earth you ever do jump change you know okay you know small ball but small ball turned into sort of big league returns and so you know this data is out of date now because when the article i was reading was like hey this guy has you know done really well they did last year they had one point two billion in sales twenty percent margins they're doing ten to twenty acquisitions a year and at that time the market cap was five billion i looked at it while i was reading the article it's now thirty one billion and so if you just invested all way guys pay they they have a thirty one billion dollar valuation on only one point two and instead that was the old one when they were at five billion market cap now they're at thirty one billion of mark out so you know look if the ratio sort of held held the same it'd be whatever six seven billion in sales which is we can see what it is now but i love that this guy's is mysterious i love to it it's only it's only three it's three billion their sales were only three billion dollars a lot of money but that's interesting i got a good little i wonder i wonder why it's been on such of the run up because you can see the stock chart is like you know it's going up like crazy and then they can use that money for for acquisitions and this guy he writes these annual letters that are actually pretty interesting so like if you're like me you i like to read bezos as annual letter i like to read warren buffett annual letters this guy is a new one i'm adding to the sort of arsenal of annual letters and he has a lots of really interesting sort of views on business and none of which are like totally groundbreaking but he does something that i think most people fail to do which is the same thing warren buffett does which is take a very simple principle that everybody would nod their head and agree with and then like actually stick to it and do it for like forty years and and that's like a winning formula most people you know nod their head and then go do some other shit and they they get they're on the lack of discipline and lack of focus and so i also like you know trying to read a little bit more about the company and you know they have sort of a a a focus on what they call vertical software so they'll go for like within one vertical or sorry they looked at it they said hey some companies are horizontal like a slack every company can use slack as a messaging service and slack will be a multi billion dollar company but what about all these vertical things that are like better software are specifically tailored software for you know what if you're a golf club you need to manage bookings t times memberships and whatever else every golf club you will pretty much use whatever the best software is and they'll pay for it in every every month reliably and they'll never churn so they'll buy like that club house software they'll buy health software public transit software loss software and that's been their focus i don't know if that's changed over time but when when i was reading about them they try to consolidate vertical market software which thought was a pretty interesting approach what do you think of this guy so i love it i'm reading about what you have here so i i i love doing these things and i love the what what he's doing and i actually i'm gonna bring up a different point and i don't wanna dress it yeah but i wanna ask your opinion of it in a second but more so what i'm interested in is and i i don't wanna refer to like things i tweeted that's sounds super lame but i was tweeting earlier about how i hired an operator so basically adam ryan works the company and he kinda handles a lot of the operational stuff and i work sometimes down on the weeds sometimes high up revisions up and it's hard finding someone who's competent to run a business and so if this if this guy if he might have i just say how many companies he has it could be like two hundred right so i don't know if their model one was they keep the existing management or if they replace them i'm not i'm not hundred percent sure what they do i'm sure there's some some mix and blend there one thing i saw that was interesting was so they like berkshire hathaway the execs of the companies do not get share options as their compensation which basically you know incentivize as you just boost the share price as as you as much as you can which is often somewhat short term so instead they take you know seventy five percent of their after tax bonus and they could buy shares on the open market and then those shares are held in an escrow for four years so if the shares if the stock is over valued because they are sort of temporarily pumping you know enthusiasm and energy or drink buy backs or whatever they're buying over value stock and so i don't know if this is perfect because maybe the other thing happens where they actually you know when they're about to buy they sort of you know bad news dips the share price temporarily they could buy it on the so i'm i'm sure if any incentive system is perfect but i thought it was interesting that they've thought through how should we compensate everybody and and not sort of follow the traditional playbook so i wanna dig in more i've only just scratched the surface of this guy i think there's a lot to learn here but i wanted to bring it up because i it's very interesting and i like that he's sort of mysterious character i think that adds to it so here's an interesting takeaway and and this what what i'm about to say actually kinda changed my business game and i'm gonna name drop here but when tim ferris invested in us he told me he goes one thing that i've learned from i don't know who he learned it from but he goes there's a thing that i like to use call them did he i think he called the inverse incentives or but basically the idea is if you when you incentivize employees to do something you need to actually have an opposite incentive that make sure it's balanced so for example if you're gonna tell your sales team you have a quota of this number and it's huge you also have to have an incentive it's kind of like revenue collection which means you only go after quality people who can pay bills or ram retention which is you only get paid if you sell people and your are you treat them well and they wanna back organically and so yeah counter incentives i think that's what they call it and that actually changed the game for me a lot because what i've noticed is with people if you give driven people incentives the right type of person will be able to get that done and you want those you you want those people but you actually really need like that second incentive in order to make sure that it's quality and quantity and so i love this incentive but what i wanna know is how in earth do they recruit all these people who are talented enough to run a business i've hired ceos for a handful of small businesses that i've had most all except for one or two have been horrible yeah and which maybe i'm bad at hiring but i think it was also it's really hard to find these types of people and so in my mind this company cancellation they're more like a recruiting company than innovative software company yeah you know i think the that is sort of the maker or break we i think you also invested in in our friends who are doing enduring ventures and so these guys are basically starting a a a modern day version of constellation or what andrew andrew's is doing or whatever where they're buying companies to hold forever that have strong cash flows and they wanna own great businesses and you know they've already closed they bought the first business they bought was a business called up council ironically i believe this was sort of outside the model which is you know to my point earlier of say a simple thing nod your head and agree and then go fucking do it i think that they did not do that with up counsel because up council was not a great business it was a it's a potentially great business but it was currently sort of in a in rocky waters but they got that at it's such a great deal and do they structured the deal in such a smart way that i think they'll still end up making a lot of money from it but anyways you know they're doing the same same sort of thing and their biggest challenge is is how do you find operators so when they bought up counsel you know the ceo that they placed was you know you know somebody xavier had worked with and new knew very very well anyway they brought in a team of operators but you know they're pulling from their personal networks that's what andrew said he did as well which was he pulled from people he knew or you have worked with before in the past but i think that is the the the largest challenge with this business model is being able to maintain a but keep a great business a great business by having good operators in place when you buy out the owner sometimes you may lose that great operations and if this interests you i think that there's a few giants that you can look up and one of them is ulta vista or not alta visa that's a not that visa equity it's owned by this guy named robert moore i believe he's the richest black man in america that's he's is the guy who's famous for i'm the richest wait what my wish he's well he he's the guy who's famous for paying the tuition of everyone at more house when he gave a an address he said by the way all your guys is debt paid off so he's he's cool but that's what he does he does the same thing as does trilogy software so look up joe lam who we've talked about alright do you wanna talk about oh here's what i gonna talk about okay so there's these companies like tesla and basically a lot of stuff that elon does which is like this like super sexy stuff i mean i'm not interested in in it but it is quite sexy to say you're gonna send a a you're gonna go to mars or you're creating these cars that are are neat and fun and that whenever i think about these companies there they're like the coolest companies where you create a hype video at the end of the year and you see everything they've done and you're like oh my god that's so sick like when they created like a video of elon celebrating the one of his rockets is taking off house i was like sauce and so anyway congratulations on that he doesn't do a video him like looking at his golf club software right and it's pretty boring but it's still fascinating because like a fun puzzle how do you sean about like where are your aspirations like do you say like i wanna do something that's full of excitement or do you find excitement in the boring so i used to be pretty hardcore about this where i was like dude the only thing worth doing like if i'm gonna spend my time and i used to be really like dismissive of people who were wasting their time doing things that were not sort of the the peak of the peak so i was like okay if i'm gonna do why would i do a job when i can own my own business i was like why would i own a small business when i can own a big business they both kinda take up all my energy my time and it's i'm gonna do a big business why what i do a boring thing might as well do an exciting thing and that that train of logic made sense to me and i did that so at monkey fern it was we are here to try to create the next hit consumer thing right like we don't give a shit that that's low odds of success we wanna create you know michael had created be and which was like sort of like almost facebook he had like come within sort of inches of of creating a a facebook but instead ended up in the myspace pile and you know did well financially but he didn't change culture and so we were like dude we can do this we could change culture and so we tried every you know messaging apps live streaming we tried all these different consumer things and failed like crazy at you know even things that like kinda worked they ultimately were not successful because they was they were so home run driven they were grand slam drift so i'm backed off that and i backed off that maybe because i'm just burnt it i just wanna get wins like i don't need to change culture like i didn't need to change my bank account and my lifestyle like so i don't know to what extent i'm it's it's like i can frame it either way am i more mature because i'm like look so i don't have i'm not as as attracted to the sex of it i just wanna build you know great things great businesses or am i just fearful and burnt out from failure it's hard to say for me right but my my view definitely has changed now i'm like oh that you on path i don't know that sounds like a lot effort why don't i just do the simple thing that's gonna like work yeah and part of me is like okay i i agree and i i agree and i'm the same and then the other part is like yeah dude but you're just kinda being like a plus like what were the twelve year old in you like think is awesome and every once in a while you gotta listen to that and so i don't know how i feel like because the other day i was thinking about making a purchase and i i sound like a like a kinda entitled rich dude right now which i'm not implying i am either of those things but i was gonna buy like a car like a cool car and it wasn't expensive it was like a ten thousand dollar car and it was not practical and i was like weighing the like pros and cons of it and then i was like yeah but here's this pro which is like this is fun and cool and i want it right right and i'm like when did i could become such an old man like where i'm not just doing shit just because it's exciting and i do think that like you we have to give her those urges a little bit more you know like he elon recently about this i think on i don't know if joe i don't know where it was but he was i was talking about it he was like yeah like warren buffett like he's was like i'm not a huge fan of the guy not the biggest fan but he didn't say he did like but he was like you know what he does he's a capital all like he spends his time trying to figure out do i buy pepsi and coke he so boring to me he's like yeah he's like he's figuring out put ten billion dollars into pepsi or coke he's like like just boring to me like i wanna change the world and you know i'm gonna make cars electrics so we don't have to depend on false fuels and i'm gonna get us to mars so we're inter inflammatory species and i'm gonna do neural link so that our brain can control you know you know or bring and download information and upload information like we're a computer in the brain and i'm gonna do boring company because i fucking hate traffic and i wanna get you know from place to place in you know fifteen minutes rather than two hours and i'm like okay you know respect like when you hear that you're like yeah that does seem like the maximum of winning but you know i guess my view is my my views brought but i'm like you were at when i hear myself saying it i'm like don't be a pushy dude just like come on like go for it i don't do what you would do at the beginning you know like don't don't lose that sort of dream just because of practicality so i'm a fan of sports and motorcycles and i i like i'm like some of these adrenaline stuff i i like whole porsche and all these exciting things and i see these guys on youtube like ken block and he's got this like compound or i'll see like travis and he's got this compound it's just like grown up playground and i'm like oh one day that would be cool and then i'm like no no no now like why why can't i just do that shit now and i so i constantly have to battle that in my head and so it sounds like you name it is about i have what's prudent like prudent versus like exciting yes and the balance between the two okay i let's let's leave with one or two little ideas real quick alright so i have one idea so are you familiar with pin duo duo okay so this is one of the largest companies in china i think like a thirty billion dollar company that grew in the last i don't know four years or so all those numbers could be wrong but you get the idea big ass chinese company so what the hell can do a do pin do do is like group on but it's with your friends so what happens is you go on pin duo and there's like an item the number one selling item tissue boxes number two selling item is like a vacuum or some shit but it it'll be like tissue boxes here's these tissue boxes you can get them for let's say you know twenty dollars you can get these tissue boxes but if you buy with your friends you can all get them for eight and it's like create a team to buy and so you see the item you want you create a team the way you create a team is it it just gives you link and you share that link through wechat or whatever you're messaging apps are and if your friends are like yeah cool i'll join the group i'll buy at eight like i'll i'll pitch i will contribute to the call as helping you get a lower price and i get a lower price too and so there's these team buys basic so this thing has become really really popular in china and i don't think it's become popular really anywhere else i know there's a couple of companies trying to do this in india as well and like you know god knows indians have a good discount so i do think this will work in india as well but i was thinking about this so i was like okay you know if i was an entrepreneur you know just sitting on my you know at my desk and there was nothing on my desk i would just write the word pin duo four x and i would just figure out what the hell x is i it's spent a day on that brainstorm and so i love it can i can i give i'll let me sure you don't want me to to talk with the so i no i like listening to it while you're talking i'm like in my my brain wasn't so you know tilt dot com tilt guy tilt fault it was called fault tilt tilt it was called crowds crop tilt so james tried to launch this he raised a lot of money it crash and burned but doing different and then was another crowd tilt was crowds tilt was not a discount it was just hey we need five hundred dollars for a c everybody pitching your ten bucks if you're gonna come to the party so it was a way to collect money but it wasn't discounting you're right so let's get rid of them drop do you know drop formerly known as master drop they do this right so i have yeah kinda it's similar you know you know i think to make this work it's all about the packaging and the positioning like so mass drop and this other company can offer the same technology and do the same thing but you really gotta it's it's really if you gotta get that angle exactly right i think and mass shop has is trying this and from my friends who have inside information which i don't have they claim that mass shop is booming master shop has raised close to fifty million bucks and everyone i talked to who is knows about the space says that it's a sleeper and it's doing wonderful and they do a little bit similar stuff so i think that that's cool another bit of information is something like masterclass class so master class actually allows you to share passwords on or two people and someone someone in our trends group posted about it and said like hey does they wanna split masterclass with me and it was our most engaged post ever right and so i completely see the validation here this is incredible so yeah and back in the day i think root was like this and there were some others where it's like hey this tv is you know cheap and the it wasn't exactly like it wasn't exactly same i think the magic of this is that it's your tool friend group that you use to do this so with the problem with group on and all these others is you get these deal hunters so there's just this population of deal hunters and they're getting everything at a discount and they're not necessarily like the best customers long term they're not retaining long term all that stuff what's cool about this is you know one of the challenges for any business is you have to acquire customers so here's how i would do this today i think you can create pin duo for shopify what is that so there's all these shopify stores i don't know let's call it a hundred thousand shopify stores every single one of these shopify stores wants more customers they'll try to get those customers through either google seo or facebook ads two primary ways and then word math let's say that's beyond that so you know they go and they go facebook and they'll pay fifteen dollars for a customer to come purchase from them and if they want another customer they gotta go pay another fifteen dollars and that's unfortunate right they'll offer discounts and they'll they'll try to do a referral program or whatever but what i think they should do is one of the largest sort of booms in shopify is this thing called after pay or a firm which basically says hey when you're checking out instead of paying eighty five dollars for this you can do monthly payments for nine dollars and that increase the checkout rate because people can pallet at nine dollars a month better than you they can do ninety dollars today upfront and so adding an after pay button increase sales so i think if you added a buy together save together button you would increase sales of way it works is you're about to check out and it says great you can either have this item for eight eighty dollars but if you get five friends buy you all get it for sixty year you all get it for fifty or whatever it is some discount there and you basically are saying rather than paying fifteen dollars per customer in facebook ads i will pay you know fifteen l pay ten dollars right now to discount this item for you because you're gonna go acquire five customers for me so like if i reduced it and i'm you know i'm i'm basically reducing my my cost by or my my revenue by twenty up twenty bucks per customer i'm unable to sort of acquire customers to a new channel besides facebook ads which is sort of steadily price rising over time and also the way that if you get introduced to a product through a friend i think you sort of have a better relationship with the product and better experience better retention than if you are only being advertised through by the company so i would try think i think this is i think this is the best it's very hard very hard because you have to you're building something from scratch here and it's all about like this is that this is definitely a all or nothing type of thing in my mind where you have to get the positioning really really right and but i think if you do you're on to something right can i also think you know it's it's kinda it's kinda like a live streaming thing it's like live streaming isn't like hard to make i mean there's so many of them but you really gotta find that angle that gets people this is a more big business than small certain success big business most likely to fail the other thing that i think is interesting here i think nothing thinking about shopify and i was like okay what other buttons would i put at checkout that i could basically offer that's a great that's a that's a great framework so like for example in mobile games they do this all the time you run out of lives and it's like hey you could buy another life you can share this with a friend and get another life or you can watch this thirty second ad and get another life so mobile games are like you know it's like a little you know wizard sitting inside a slot machine and just trying to figure out how to take your money your time or attention and they've optimized the shit out of this and so what can you learn from that so maybe if you're at shopify or you have a shopify store maybe there's a plug in that you could add to your checkout which says hey if you wanna extra you know dollar off or two dollars off just click this button and like us on instagram and boom now my instagram is growing with every customer that joins or whatever yeah there's a bunch there's definitely a bunch of tools that allow you to do that but i enter the most popular one email like give us your email and you get a you get a fifteen percent off or whatever and i think that's cool that's like level level one but like this idea of team buying of sharing to your instagram liking us on instagram i think there's just more things that you could do at the checkout page that would say how do i get your time money or attention in in some way that you're not currently giving me and so i don't know if there's there's a lot there because shopify is so big now that if you build something that works on shopify you can build a you know ten million twenty million dollar business pretty quickly because every store will just adopt these like best practices fairly quickly i think that first thing you're talking out group buying is incredibly interesting i've always thought that group on i love group on i think that their valuation is shit and i'm like that there's gotta be a better way to make that happen and i love group on i love gru on it i'm also familiar with apps cmo which does group discounting for software and then social stack i think it's called great companies what where else could you do group buying is there any other like sort of space like absolutely was a great example where they're like okay cool sort of software are there like i don't know could you could do this yeah i mean like could you do this you well so a lot of this stuff has been tried and it doesn't always work but you definitely could do it i mean this is what kickstarter right you do with a brand of brand they're like you have to tilt we have to cross this threshold and i don't know what it could work for i i'd have to really think about it i i just i feel so ignorant on what it should work for way of think about it is it works better when the thing cost the make or nothing than when the when it cost the make or something right so software is great because every incremental sale of a piece of software cost the maker zero versus like if it's a physical item and was like well now every tv if the more people that buy this the more people more tvs have to sell that a loss and so i think digital works better than physical that's one like premise i would make i would i would hold when when it comes to this and i'm the other one is like where maybe i don't know if it works better for low price probably higher priced items because a the discount matters and b maybe there's just more margin you know to be captured even after discount versus the low price items so maybe you would be looking for sort of high priced digital digital services software yeah i mean i think that you could definitely what about using it what i would wanna use it for what business buy so like for example i wanna buy a pitch book but it's twenty grand a year and i'm not gonna use it that much but i would love to split it with someone so i think that's incredibly interesting one weird idea is i think that i would wanna figure out a way to use it for lawyers so instead of having a legal firm be my lawyer i split a lawyer with you and five of the people and that by the same great name split it or split would be a great name for a company that was trying to do this i was like hey you could do this but or do you want you wanna split it with four others and hey you all save you have to have a ton of volume to make this work but the only way you could make that is if you make it to that cool let's say the price is a hundred bucks and if i'm gonna split it with five people i think what ends up happening is that everybody gives it for less than a hundred but the total adds up to more than a hundred right like like the total like i i end up making more than i would have off of a single customer paying full price by by lending you create split it first for seventy and now i get one forty and you get a hundred right it's like how personal trainer does group training they're like if you want one on one it's a hundred dollars an hour if there's two of you guys you each pay seventy bucks an hour and it's like i'm i now make well per hour it's a great idea that's a great idea i love split it i've never gonna create this because that it seems way too hard but i understand the need and the problem and i would love to be involved in as a customer some capacity great alright split your brains we just call brain we'll be back in a couple days with another brainstorm people said you can't keep up this pace how can you keep coming up with new ideas every week twice a week are you crazy but they don't understand they don't know how this brain works that if you spend enough time doing it which we definitely don't always do but a lot of times we do it is not if you lower the bar on what you call an interesting or good idea so you have to simultaneous you lower the expectations and practice that that is the that is a criteria it's that easy leave us for review tell us what you think tweet out us or whenever we'll talk to you also soon yeah