#96 - The Entrepreneur Betting Billions On American Passenger Trains

what's up how are you i'm okay i just i'm packing up all my stuff and i had all my trash and which include garbage as well as furniture packed outside my house really nicely for the garbage people to come and i just got into a big argument with these cra that were like digging through and thrown it all over the place and i was like can you guys not do that please and they're like this is what we do we just destroyed trash and we throw it all over the place i was like oh don't do that it it i got it put in a horrible mood so where would you where'd did you net out did you just walk away or did they stop oh i we got do a little pushing match eventually pushing match what oh my god that's amazing you pushed the guy it yeah it got into a fight flight mode bad it pissed me off you are you so easily triggered it's amazing to me i'm on edge i think that with corona and and the economy like i said i'm in fight flight mode and like i think something changed this will i imagine this happened to too already but like something changed when i got married i was like i'm in like i got dude i'm at the exact opposite i thought that i would kick i had a kid i thought i'd kick it it didn't i'll tell you on my first date with my what my wife now sonya it first date we go out we get sushi it's great we go back to her place and we're we're hanging out and the doorbell rings and i'm like it's straight late at night eleven or twelve who's who's at the door so she just kind of like ignores it for a second she's like that was weird and did the doorbell rings she's like okay wait they're actually she's somebody there so she's like just wait here i don't know where that was i'm like okay whatever i wait there she goes downstairs she opens up the door i hear like a brief conversation for a second door closes she comes like upstairs she's like sorry about that and i was like what what happened who was it and she's like oh it's nothing and like it's like a you know like a doorbell ditch and i was like odd okay kids doing prank no problem we sit we're sit we sit down for a minute doorbell rings again she doesn't move i'm like are you gonna get that and then she's like no and then the doorbell starts ringing like just non nonstop she's like ding ding ding and i was like okay you gotta go get that and so she's like okay hold on stay here and so she goes downstairs upstairs anyways i hear a voice i hear a guy's voice at he's like he's like who's here and i hear this guy coming up the stairs and it's a it's an ex boyfriend who has shown up on our first date you know what he had done he was out he was he'd had come by the house to try like pitch ticket get back with her and he saw through the window that we were watching a tv show nip tuck and he's like we've already seen that show you wouldn't you wouldn't be watching that show alone he's like somebody must be here and so he was like somebody's here i know it and so he comes up the stairs and i don't know who this guy is i'm also not that invested in her at this point so i'm just like like i've got trying to i was like i'm not trying to you know get any drama here this is this is already kinda messy so he comes to the stairs and he doesn't know what he's supposed to do he's like he's here now and standing there facing me and so i just taken on my hand to shake his hand i was like hey s what's up because i don't fully know what's going on i definitely know that something's up no so he shakes my hand and then i see he gets angry himself for shaking my hand and she's just like oh horrified she's like oh my god you need to leave why are you here and she's like oh my god i knew this would happen oh my this is the worst and then i start laughing because i'm like this this is a comic situation first day ex boyfriend shows up angry little indian guy and i was just like okay i start laughing and then this tilt him like crazy so who she's in between me and him he swings punches me in the face but he punches me with his left hand so it was like kind of like you know like a dude kinda of punch it didn't really do anything and so and i again i start laughing so no fight flight i'm literally in a fight and there's no fight flight so i start laughing again he gets really bad so then he's embarrassed and he starts to come towards me and sonya just like body slams and while he's walking towards me she just grabs her and throws it down now he's really embarrassed at this whole situation because he kinda got tripped up by a girl and and i just saw i just like i grabbed him by the shirt and i was like you need to leave and and then he like whatever came to he's was like what the hell i doing and so he like got anger and he left and and then so for five minutes we're both sitting there go back to watching nip tuck like nothing happened and then i was like yeah i'm gonna go i'm like go now like i'm done and she was like i can't even speak i'm so sorry i don't know what the hell has happened wait i would've have thought that like you'd like just totally get it on and like out of it it was i was like oh your adrenaline was was going i i was this girl shady she probably is just trying to get with that guy at me at the same time forget all this and i was like i'm not trying to be involved in of this i'm i'm i'm gonna go home now anyway and now she's the mother of your children yeah exactly so so we we ended making but long story short i don't even have the fight flight even when i'm in a fight so you know there's something wrong with me that's a great story yeah so i don't think if most people even know that story but now you know hundreds of thousands of listeners no know that one my family doesn't know that's a that that is a good story mama bear took care of it sounds like yeah she you know snapped into gear in a way that i did not so we both kind of don't talk too much about that but we both know if a situation goes down she's much more likely to react than me i'm just sort of like easy going like oh this is interesting that going out here okay well at least you know your strength yeah oh this is okay so let's talk it let's talk about some things it's been a little while since we we hopped on without a guest what's been interesting you let me bring this up and this is incredibly half baked we have a lot of topics here that seem like they have a lot more research but i met this guy named ryan bi man i think his name is do you know who that is no never i'm i met him in the trends group so ryan started biz media biz media was a it was basically what we do i mean we are what they are they were first for real estate and it was a newsletter business he sold it for like fifty million dollars and then he went or in con like concurrently he started summit series which is dude to everybody fucking started a summit series i've met nine creators of summit series how many of these guys are there well they all worked at biz now and so i think him and elliott i believe we're the guys this guy ryan was the ceo of it gotcha so i believe he was the guy elliot it's last name is biz now as in biz media i believe though i think they were the two guys and everyone else was also a guy but not be a guy and so he starts summit series for those of you who don't know it's like i don't know what it's kinda like a sour southwest it's kind of thing and they'll rent like a cruise ship and people go it kinda turns into like an org it sounds like we're just people party you pay a three grand it's not that good of a business but i think it's okay like i think it just it affords a lifestyle but created a sweet life for them they bought they bought the mountain that they did the summit series on and now they own here's they they bought a mountain so they raised money from and people and investors and you rich people who ten basically yeah yeah would put in a million dollars and you bought a plot of land on this mountain and they're trying to build the city this town it's called powder mountain i met him in our trends group and so i'm i'm gonna go and stay with him for a week on thursday and to you got this big yeah in utah he's got this big house that he's gonna let me crash at really interesting guy and i'll do a podcast with him and we could do a threes sum do it altogether or we could do it i can do it just with him but really interesting guy and i also talked to joe lo did i tell you about him i know about him loosely i've ever heard his name before he's was with eight vc so what well we was your conversation with him about i met him on twitter and then we did a phone call he's the guy he was like a inch he was like employee number twelve or something or i some early thing at paypal as an intern then eventually partnered with peter t and started pal here which is gonna go public for like fifty billion dollars some crazy stuff and anyway what i'm getting at what we are all discussing and i talked to joe about new cities right this is something that we've discussed a little bit and it's something i'm very fascinated about and what i'm noticing is and i can't tell it's because i've got a lot of like affluent friends who make a lot of money but all many of them are saying that they wanna spend six months and one part of the the country in six months in another part of the country and i can't decide if this is like one of those things where you learn where you like what's it called like the yellow taxi thing where like where you know that taxis are yellow and then you start seeing them out all over the place or this is like actual like trending and so anyway it's something that i'm fascinated about is like these new planned cities and it's so interesting to me so was this the one because i just saw one recently i'm mean we might be talking about the same thing the five minute city is this that so five minute city so somebody's creating a little city in the the core premise might might be in be a whole city it might just be like kind of a living community like like a smaller version of town bigger than a neighborhood smaller than a town but the idea is that everything is a five minute walk so everything you need groceries the gym whatever all the kind of basic things that people go do with regular will be a five minute walk from where you live and they wanna create a walking lifestyle city based around that one constraint and they're gonna build it out that way and they're gonna try to find people who wanna live in that that manner and i like i like all these experiments around new cities there some that are trying to do it around self driving cars so they're basically saying hey self driving cars the tech can actually work but the tech is risky when you have a whole bunch of human powered cars also on the road and so if you could just start with a blank slate and have roads that are designed a certain way that don't have you know best traffic and don't have human drivers on it you could actually have autonomous vehicles zip up and down these roads and transporting people back and forth it could be awesome and so some people are trying to start cities around that some people are buying old ghost towns like in the you know in nebraska and wyoming where infrastructure all got built it got abandoned for one reason or another and they picked up on the cheap and they're trying to revitalize it so i think these are awesome projects like really really awesome projects yeah i agree and i think it's really cool so a lot of times they call it a charter city and a charter city is a is a city that's granted i'm just reading the definition a city that's granted special jurisdiction to create a new governance system and this isn't like a new thing i i think that even san francisco is considered a charter city where you can like make your own rules a little bit within some type of constraints i know and then there's like planned communities one of those is du and ohio it was started by two brothers in nineteen twenties where they just bought a large plot of land and they started planning it out and they were very meticulous about what happened to what and people started buying homes there silicon valley actually was a little bit like this the mark since father law actually owned is a bill mark teresa the famous investor his father law's is a billionaire real estate guy and in the forties fifties and sixties silicon valley was farmland and they like said let's make this a town and so anyway it's kind of an interesting concept and i've been reading a lot of history about it so like the reason i like reading about titans and van and all this stuff is you can see how they did stuff and like a lot of towns in staten island and places like that were created because van belt was like let's create a ferry to go there and whole towns are built around it so it's not like a new concept but it's incredibly interesting right now because i can't tell if people are truly fed up with cities or if it's just something i'm fed up with and i noticed others are too so yeah this is sort of like you know if you think about what are the coolest sort of what are the sounds cool ideas so a few years ago or many years ago the sort of the sounds cool idea was i'm gonna create a new school system i'm a create a new university so you had like old school and you have man school you have mid school you have all these other schools and that was sort of like wait that's that's a startup up but that's not a startup right like that's different and there's a whole bunch now that are in the like rockets space so there's a whole bunch of rocket and satellite startups that are like yeah we don't we don't just make apps we like you know launch shit into the into fucking orbit and yeah that's what we do and i feel like the sounds cool ideas of today a lot of them are around city starting a new a new and that's either gonna be different on policy or like the kinda of urban planning and design and that doesn't mean it's not actually cool but you do have to be careful because some people are gonna go into it just because it sounds like a cool project to be working on but i wanna meet some of the people who are behind this i know why comb had a had a project called new cities that they were working on i don't know haven't heard anything about it so i'm like i don't know what's what's actually i don't know if it it it failed or or what this was a years ago and we have a friend of a friend who who i know has bought one of these so i i'd love to have him on and come talk about this but it reminds me of a different thing i wanted to talk to you about and wouldn't can come back to the city's thing if you if you want but you do you know who west eden is no so west eden is a billionaire so this wes would be the bill of the week because he's doing something cool so he owns the milwaukee bucks but that's not obviously how he made his money that's how he spend his money and then he has i think his investment firm is called like fortress capital i think he's a private i think he's a private equity guy i'd have to go confirm that but yeah i'm looking up fortress is like a really big name hedge fund i i think soft bank owns it actually right right right yeah she sold he's sold a stake of it to something so he's just a big billionaire we made money finance world right yeah so i saw this article a few weeks ago and you know somebody's gonna know a lot more about this because i'm like when you're just reading the forbes article you you're you're not really getting much info but i i the premise i i understand the premise so what this guy's doing is he's trying to revitalize the passenger train system of america so you have something like amtrak amtrak has been like a money pit like i don't know like fifty billion dollars of government money has gone into amtrak amtrak has never turned to profit the closest they ever got was twenty nineteen i think they're like thirty million operating loss that was the closest they ever got to a profit and also the user experience is not very great right like amtrak is kinda cool and kind of this nostalgic kind of interesting way but it's not like great it's not amazing and so what this guy realized was he was like hey it's a shame we don't have like your awesome passenger train system here in the us to get to get from place to place you goes beep amtrak is actually profitable on certain legs it's just that they operate all these other legs because they're non for prop they're not profit and so it's their other legs that are causing them to be unprofitable but if you just look at their their best route and like he's like you know look at this one route from new york down to washington or whatever it's actually extremely profitable because a lot of people wanna go on that corridor and so he's identified all so he started this thing called bright line and so he he's he's got this transit system something that goes from you know south florida to central florida he wants to do from la to vegas in eighty five minutes and and so you know the these are these are high traffic routes and he wants to build build a four profit train company so recently richard branson took a minority stakes so they just rebranded to virgin trans usa but i love this idea for two reasons one i love the quote that he had in the article which was the biggest ideas solve obvious problems and and i think that's that in many ways that's true there's obviously tons of counter examples but i think it's one way to brainstorm ideas is to say what are the ideas that are so obvious so in our face so baked into the way we live that we kinda just accept them at face value we're not even trying to change that anymore guys i wanna take a second to answer one of the most common questions i get which is hey i got this great idea or hey my company is doing really well and i just need a developer i need somebody who knows out a code so that i can either bring this idea of a life or i can grow faster you know i've been there before i've dabble in the no code tools trying to make it work sometimes that works most of the time is not good enough tried to learn programming myself that was a waste of time and you know i've looked at to overseas platforms to say hey can i find an affordable developer you know i can't afford to somebody here in the states and california and japan some silicon valley prices but maybe i can afford a developer in the philippines or in eastern europe and the big challenge has always been finding somebody who's actually like good like they're vetted like i never know if somebody's gonna just take my money and run if they're actually a good developer a bad developer and how do i know if i knew how a code i could judge their stuff but i don't have a code so what what i really like about this week's sponsor lemon dot io is that they have a vetted marketplace of remote developers from eastern europe so i know the founder pretty well his named alex and what they do is they filter and they test and they basically have a reputation system of any developer that they have on their roster so you know if you go to lemon io you're getting a developer who is actually good it's good quality is gonna get the job done and so what the way it works is you go you type what you need hey i wanna build this app or i need to add an extra fund and developer to my team and i i don't wanna hire within twenty four hours they'll match you with the right developer if it's not the right developer you just tell them and they'll switch it you know basically for free it's a replacement guarantee and they're actually cheaper than the other outsourcing platform so you know you get one big savings when you just go outside the us or outside of europe and you you get somebody in kind of in either eastern europe or in philippine and southeast asia you know you know you save money there but lemon dot i is actually half the price of the other platforms that try to do this and so it's stupidly effective i would just kinda take advantage of this as long as they they can offer these rates it's pretty amazing and alex basically told me that for any my first million listener they will offer a fifteen percent discount on the first six weeks of work that you have done so if you want that done if you want a developer who is vetted who can build your projects go to lemon dot io o slash m f m again that's lemon dot io o slash m f m like my first million alright enjoy back to this week's episode cities is an example of this it's like oh this is how city works these are the rules is how cities laid out well it's like well what if you changed that what if people were sick and tired of that and you could start a new one elon i i think did this great with obviously with tesla right like elect cars or the boring company which is like hey two traffic sucks like why don't we just have underground high speed tunnels and so i think there's a set of ideas like this that are big big problems that are so obvious that actually people have stopped tackling them or the rate of innovation is very low compared to how big the size of the prizes and that's how i think about this train system what do you think about this i am you're getting me all hot and bothered i love this i'm i'm i'm looking up so i'm familiar with trains i'm looking them up if you go to companies house dot gov dot u uk you can actually look at and see they've been operating in the uk for a long time because branson did this you know base brands was like okay the government runs trans that that probably mean means that they suck we can take over and we can run it here so this is virgin trains usa which is now the like usa version of that that he's that he's trying to do but he's just invested into west project as a minority investor i think this is awesome so i've actually considered doing this there's a train i think it's amtrak do they call it the z route i think they call it like got a route that you can take where you take an amtrak from california i think to new york and it takes a long time like five or ten days like takes a while but it it's like two hundred dollars it's really cheap chicago the bay area and it goes via omaha denver for salt lake city and reno that's yeah so it sounds awesome it's pretty cheap and affordable amtrak wow amtrak is something that i remember as a kid we used to take it every once in a while like and it was like something like like poor people would take like i would take it when like what you do you don't have any money it's like a it was almost almost like a greyhound right and it's so cool i i i'm really into this i in another places like europe i know in india i've done this whole bunch you go on trains there it's awesome it's like a hotel on wheels you know what i mean like it's so fun to go on you get your cool little cabin and the food truck trolley these come by and you're looking out the window and it's like a a nice ride and you can go to sleep you could sleep overnight on it and i know in europe it's the same way and i just don't i never hear anyone doing that in the us s i'm sure people are doing it but i i i i don't think it's a big part of the travel culture here and how cool would it be if they made it happen so how's is it going with guy i'm just looking him up as you talk like he's making a lot of press because this is a really romantic i romantic idea exactly and he's doing a good job because he needs the press because so the the the catch with this is like oh you need five billion dollars to build out this track and it's like okay well we're the hell i get five billion dollars and so the the reality is that a lot of this money comes from public financing it's a combination of public and private and so one of the reasons to get so much press is because it really helps you raise the money raise money and get access to capital that is in the public domain that's sort of like like he has his tax free bond that he released you know for florida so they put he floats out this tax bond bond he raises a billion dollars or one point five billion dollars on it and you know this is like free money and so it's in the same way that sort of you know elon will go and announce a car and everybody puts down a hundred bucks and it gets like a you know five billion dollar loan to you know interest free loan from customers essentially and so there's an art to the the the trick of this business is really the financing being good about the financing and there's the jury out whether they'll be able to pull this off or if they'll just get buried under debt so it looks like in two thousand seven eighteen they said in the first half of the year they had about ten million dollars in sales and they had four hundred thousand riders virgin trains projected by two thousand nineteen it's riders ship in south florida with top two point three million riders a year and revenue would eclipse one hundred twelve million dollars in revenue and wow so there's demand there wow this is crazy so over a million wow this is pretty crazy and so this this is cool the cool thing about this is i think the most ambitious projects the projects that are sort of frightening ambitious are awesome for talent yeah you can be you could book up a talent magnet if you're el elon and saying hey look we're gonna build hype hyper speed tunnels under under la to kill traffic you can attract capital because people wanna get involved with being audacious ideas that sound fun and sexy you can get free capital because like right now one one of the big reasons people hate on tesla because a lot of their you know they were subsidized heavily by the government now somewhat are you hey dude the that it's good that the government subsidize this it's the you know d digitization of planet earth through electrification and blah blah there's an argument for that that says they should get access to this and other people are saying hey you know why is why is the government footing the bill for this private company but it my point is these big audacious ideas attract the best capital the best talent and and sort of the the best press because they make for the best stories and so in some ways these sound like they're harder than other ideas but in other ways they're they're actually less hard because there's less competition and you get all these rewards for being so ambitious and audacious i'm i'm so into this this is incredibly attractive to me what's interesting what i've learned is i've gotten older and seeing people succeed is there some there's these ideas that appears as the one thing but it takes an entirely different expertise to do so for example this guy wes is that name wes eden he is from fortress which their expertise is all about raising money from rich people and rich organizations like governments or families or whatever and then his job is allocating that money he's just he like to to kinda be disrespectful to him he's a a a spreadsheet monkey right or right where he's like well if i change this by a little bit and that's totally simplifying what this person does and i understand that but you think like well when you i of a train i think of like a richard brave type or he's gotta create this like amazing like your experience with the purple lights and size like nope doesn't matter it's it's all about how are you gonna financially engineer the funding of this of this infrastructure yeah and when you think about a business do you think i have to know something that other people don't know and or i have to be good i have a skill set that the other people don't have and what's interesting and a little bit discouraging to me personally is when i see these things i'm like man this isn't about having a good vision for a train this is about being able to creatively finance something which means coming up with interesting schemes and documents and strategies not building a brand i mean it is also building a brand that people love but it's the hard part is the admin stuff and the strategy around it but that's kinda neat too which is different yeah yeah and i think it's really important to know what it what business are you really in so for example peter hill talks about this with universities universities are not in the education business they you can't be harvard by offering a better curriculum go try right like nobody would even care if you had even if even if it was proven even if every expert on earth said this is a better curriculum than harvard curriculum you would not touch harvard status and any any student would pick harvard why because what business are they really in they're in the credentialing business they're in the insurance business hey this insurance policy for your kid if you get a degree you're gonna have job they're in the sort of like you know social you know either babysitting or social the social development business of like helping you grow up and you know become an adult and so you gotta know what business you're really in and i made this mistake a lot i remember starting a dating we were building a dating app during the ideal lab phase and we thought we had this great idea for a dating app and it was all about dating and we were like look this is the problem with dating app as a way better user your experience and we might have even been right but what i realized six months in was oh dating apps are really in the business of local customer acquisition you have to in a small geography within a twenty mile radius you need to acquire a whole bunch of males and a whole bunch of females and success is not about what your dating app experience is like and the features of your app it's about how well you can get enough males and females within a twenty mile radius over and over and over again do you or do you have the acquisition shops to do that same with gaming people are like i love video game i love frank games it's like well cool but just so you know like you are and that you you have to during the advertising business though and in a beautifully designed product or a really novel product helps right because tinder was was really novel and fun and so they acquired more customers because it was fun to talk about it was buzz worthy it was controversial in some ways to just swipe on people's faces oh oh how how shallow is this generation or whatever so the product design definitely helps and also if it's sticky if it's actually a really great product or a really great game cool that gives you more budget to acquire customers for because you know you keep them around for longer and you're gonna make more money off them but like you gotta know what business you're in and you gotta know what the table stakes of success are if for a game the table stakes of success or customer acquisition same with dating for this train thing it's about finance you know the the financing of massive infrastructure and that's the business you're and not the cool seats and entertainment system and the head rest you know have you seen the movie founder by it's bob mcdonald's i have yeah he goes i don't think you know so basically there's a scene where this business guy i don't know who he is some sales guy comes in and talks to ray k the founder mcdonald's and he goes tell me how your business operation works well while i do this i flipped the burgers and we hire we release re we lease the restaurant to the person yada and the guy goes wait a minute i don't think you understand what business you're in and ray cro goes what are you talking about i i sell cheeseburgers he goes no no you're not in the hamburger business you're in the real estate business and then he like his mind switches and then he goes oh my god you're right the hamburgers simply get people to come to real estate and i own all the real estate that's the move and so it's like that one packaging switch changed right everything and by the way sometimes you hear the opposite it this happens a lot on the start world it's like you roll your eyes somebody's they're they're they're in some shitty business and then they try to not be in under there like we're actually a tech company like no you're not you're a media company you just happen to use technology or open it right like people love to say that they're not in a shitty business and that they're in this great business and it just with as much or more frequency than people who happen to be in a great business and don't even realize it yet and so yeah you gotta be wary for you that that's i said you gotta know what business are really in and so you can't just make up that you're in the real estate business when you're fucking not you're in this other business and you just have to like you have to see the truth for what it is because lying to yourself doesn't really doesn't really work sometimes it does i mean sometimes there where it does well like we work out of way with it for a little while like you could say like well it kinda it fell flat but they it could have gone either way maybe yeah if it fell flat i i i would count that as eventually the truth catches up you you're right like or like this new company lemonade that went public it's a they're like a wanna get valued as a tech company but it's like well your insurance you're you're still just like an insurance business like like people are like or like i i i know that there was criticisms around flex port so flex port is this huge company in silicon valley that everyone says the greatest thing ever and and the guy who runs it is awesome and it totally might be the greatest thing ever and what they do is you order like a whole bunch of stuff from china and you've gotta ship that to america they help you track your shipment if you're a so you like can trap your track your shipping container and help with licensing or customs and all this whatever anyway they're like we're this revolution revolutionary anything and i've read a bunch of comments in the trades in like the shipping trades and they're like just so you guys know we've been doing this forever right like we we have all this technology already like these guys are just what they're doing is just no different than what we're doing but flex has been like we're doing it new and i don't know the the i don't know the truth but i do know that i i know the through now i've used other freight forward and now i've used flex sport flex fucking awesome and so much better than the others it is so much better than the others well there there is a limit bit of the answer personally as a customer that from a customer it's better but these are the things that all the other people are saying they're like in the comment section so i only know what the comment comment are saying they're like we've been doing this just so you know like it's true they didn't invent the industry but yeah it's so annoying they're like hey like for for example somebody's gonna be like oh charter cities trains you know these other guys have been doing this or you know people have tried this for a long time like yeah i know right i said something about specs on twitter i was like hey i wanna talk to somebody who really is super knowledgeable about specs which are these special purpose acquisition companies and i said i feel like there's a growing trend towards this i wanna know you know why would i invest in one why wouldn't i invest in one and you know how game changing is this trend and some you know ninety percent of comments are great and helpful and inform me and ten percent are like dudes back nothing new been around for a long time nothing new happening in here it's like people are so excited to be like nothing new here that they missed that there's actually new things i'm not saying the whole fucking thing is new i'm saying maybe it's just more common now maybe what's the spa i hear i see people talking about it and i don't entirely understand it is example so cha poly created a spa what it is it's a blank check acquisition company he raises like let's say five billion dollars two billion dollars something like that i think he raised one or two from private institutions or public from from institutional investors that pump that company is is a public company so it's a publicly listed entity that does nothing except for acquire companies but he a but he gets the money from private people i believe initially he gets different from private and then it's publicly listed and then there's public shareholders as well so you can buy into his back okay then it searches for a great private company that wants to fast track to ipo so instead of doing a road show and all that the spa says look i can just acquire a minority stake or a majority stake depends but i let's say i can acquire forty percent of this company and you'll be public tomorrow and spa will be renamed as what you are and then you'll be liquid and i'll take a a fee you know sort of like an alternative to the ipo process it is an all extra the ipo process so company acquired virgin galactic and that it took virgin galactic public and so they rebranded the spa as whatever i forgot what it's the ticker is what it's like space or something like that and so now now we're any revenue the spa is no revenue no it's just a holding company waiting to go buy a company so galactic the like galactic has revenue because they have bookings for like pre bought pre bought bookings for stuff and i i don't know if they do other kinda like industrial work to take satellites up or what but so so the other one is bill ac so bill act the guy who runs per square you know famous kind of investor you know up and down history but very well known he does great on tv so so people love him he's the one who had that giant kinda like it wasn't exactly a short but he had basically the equivalent of a short bet right before coronavirus hit and he made two point six billion dollars in a month off that bet so it was like one of the greatest sort of investments of all time and so bill ackerman has created the largest spec so he's created a five billion dollars back and what he says is he goes it's like a unicorn mating dance he goes we're a unicorn because we raised five billion dollars we we have that money in their bank and we're just looking for a unicorn mate with a private company who is really special really def def has awesome revenues long term about everything you would want in a company right long term rapid growth is the winner of its category and it's a private company and we will try to buy thirty percent of that company so like for example they could go and try to buy five billion dollars worth of airbnb for example and take every and b public and in doing so one of the values is it's kinda like a sequoia investing in your company they would be signaling to the market that this is the we could we analyze something that he said there's a hundred twenty seven eligible companies we believe this year that we could mate with that are these private companies have satisfy these criteria and we're gonna find one and we're gonna go hard on it and when we find that one it's a huge signal to the market that this is the the company to to to buy when i hear this i think to myself this is stupid this is a scam and then i'm like no it's not a scam is awesome they're winning i mean maybe some people think it's a scam but it's like pretty cool and i'm like down on myself that i'm not smart enough to entirely understand it well i didn't it fully either and i'm sure my description here has some holes but i this is why i tweeted about it and why i'm gonna bring a friend on to to talk about facts because he knows a lot about it but my brain immediately goes to like a how on earth are these people smart enough to come up with these plans b how are they so bold to think that this is actually gonna work and then people think of you that way they're like we're not i hear sam talk about these bring bring some of these ideas or talk about media or talk about whatever growth and you know how easy it is to make money people are like how is sam so smart i only understand you know thirty percent of the gibberish saying how is he so bold that he just you know creates the hustle you know buys his conference it creates this media brand and creates trends and then investments in friends companies blah well like people think you're very bold too and it's just the same exact thing but in a different field so it's not even at a different level i don't think personally i just think it's a different field and it's like a new language like when you don't know the language you feel kinda dumb because you're not understanding yeah i feel dumb all the terms but like that's okay you've now known about it for one hour versus like you know the shit you know you've figured out over ten years and these guys have just done their ten years on this so i i'm gonna bring this back to history because i'm a history fan i'm on a kick and i that everyone likes to but i'll make it quick so i'm reading about jay gould do you know what who jay gould is nope so he's he was one of the if you look at like who are the richest people ever he's like in the top ten or thirty he was alive in the eighteen fifties all the way he maybe be died in eighteen ninety he was like he ran around with van bill and all these guys and what he did was he found some loop loophole where this idea of watering down stock and so what he did was he bought in to the erie railroad and he somehow bought into the point where he didn't put up any money then what he did was he went down on like a monday to the government in dc like to some officials and he convinced them to change this law over three days that allowed him to issue new stock or on a publicly traded company but he didn't have to tell anyone somehow we got away with this and so he issued all this new stock and cornelius van built bought five million dollars worth of the stock which back then five million dollars times twenty that's about what's it's equivalent to now and he took all the profits and then sold that like anyway he just like made profits from thin air and it's kinda it's definitely shady and s but he got really rich doing it and what you're describing is like what i just read about last night with jay gould i'm like these guys who find these weird loopholes part of me hates them because they're just like not creating true value for the world part of me is like well i gotta i got you gotta like appreciate the hustle and you gotta respect the the player who's just playing in the game right and it's just i'm so fascinated by all these people like find what's his name cha cha yeah cha and bill ac who are bold enough to come up with these like ludicrous ideas that a simple like me is like i don't understand so what widget are you selling and right how are you making a profit it's just so fascinating to people who are bold like this it is exciting and it is bold i don't think i wouldn't say they invented it because again it's been happening but who are hoo rather different to total different scale yeah it's different to do like most people in their industry like responses from the tech world right like no no venture capitalist was doing this he did it's sort of like i i really respect chris saga because what he did when he was like you know rode an angel investment check of twenty five k into twitter and was not like super wealthy like he needed that twenty five k to like come give the full stories so chris sa is now this billionaire guy who who's relatively young and his forty seen him on shark tank you know he's whatever like a western shirt he's probably worth two or three or meant more billions right and he worked at google for a long time and he didn't have that much money probably had like one or two hundred thousand dollars to his name which is a last his story is crazy so he before he goes to google he and you know i'm telling this story a second i wish just get him on he he he's a cool guy so he starts he goes to law school doesn't attend class starts day trading in the stock market during the stock the dot com do you know this total story although otherwise yeah i'll tell that's all the short version of it alright starts day trading runs up like a small amount of money like let's call it twenty thousand dollars into to basically look like a million bucks and he's oh you know so he's making these he's doing day trading he took some money from family and friends to to kinda lever up even more and so stock market crashes and he swings from you know up a million or two million bucks to down four million dollars he owes four million dollars and he's a law school student who's like got zero to his name and comes from kind of a slow to middle class family and he's like oh shit like what the fuck and you know conventional wisdom is like declare bankruptcy it's working away and i'm not entirely clear why he didn't just do that i don't know if it was pride or if it's it wouldn't have actually worked i don't know the details but but he the way he tells sort of like you know no i i pulled up my boot bootstrap and i i i decided to solve this problem so he does two things first he negotiate a total amount down to two million dollars of what he and then he sets about for the next few years to pay this off and he starts off by doing he he's in silicon valley he starts off by just doing like legal work on the side on craigslist like hey i'm a i'm i'm a lawyer like i can do your you know startup up documents and shit like like small deals like hundreds of dollars get hundred of dollars a he's just hustling at night then he's going to meet and he's like so he he he to get he he to famously sort of get some credibility he creates this name this business card called like the carly group or something like that yeah legit zach sa and brothers or something it was was the something group is like the the the clyde group or some carla or something like that so he starts and people would be like oh yeah heard about you guys you guys do good work and so he starts you know like consulting under that banner and making thousands of dollars but like you know two million dollar hill climb so then he gets a job at google pre ipo kinda like hustle his way around google ends up working on some cool projects at google like when they were buying all these data centers around the country under secret shell corporate shell company names because they didn't want microsoft to realize how fast that google was actually growing but they needed the data centers and so he gets to the point where google ipo he makes you know million or two bucks he ends up paying off his his loans that he owed he gets back to net worth zero and he's like you know no better feeling in the world i went had net worth zero and so then he takes a little bit of money that he has left over from his job at google and decides to angel invest an ex google employee friend at williams who's starting this thing called audio or twitter or whatever so anyways he ends up as an angel investor in twitter he i think he gave him i think he in a i read he's like i had like seventy five thousand dollars but twenty five and i gave twitter twenty five thousand right and so you know he he and i love this because he's like most angel investors they're already made it and so their money doesn't doesn't matter to he's like i needed this money to to work so he starts working for the company in in a way too so he's like hustling making introductions trying to get celebrities to use twitter he's you know helping them with their fundraising deck he's trying to get his twenty five k to grow into something and so and and in some ways was two hands on the company sort of was kicking them out of the office so like dude you don't work here and this happened to him with many companies with twitter with uber where sort of overs stepped a little bit but along the way he realizes that the the the world has mis priced twitter they don't get it he believes in it he thinks twitter is gonna be a huge thing people are writing twitter off as this goofy little hundred and forty characters sms toy where you talk about what you're eating for lunch so he's like trying to convince people able to to invest in twitter and is having a little bit of a hard time so he's like effort i'm gonna raise my own fund and just invest in twitter and so he starts creating these sp special purpose vehicles which really just means it's a fund just for one deal it's not like an ongoing investment fund where we trust you chris socket to invest in twenty five companies it's like hey i have access to this twitter deal let's buy twitter stock i need to raise money to buy twitter stock and he was just buying secondary he's buying i you know employee wants to leave they wanna pay for their wedding cool chris taco will buy your stock and so he accumulated by the time the ipo happens he accumulated i think the second largest or the first largest ownership stake in twitter i think he only like eight to ten percent or something of of twitter stock by the time at ipo and that became like a billion dollar plus stake in twitter and along the way he did you know also invested in uber instagram if i forgot whatever else he is i was like is the greatest early stage fund ever created because he had he had kickstarter in there he had like mongodb db or something like that he he had a whole bunch of of of winners of a billion dollar winners out of this tiny little seed stage fund so to the point where like it can't be replicated again even he couldn't do whatever ever again but you know really hard it it it it can be replicated again so i'll tell you i've know this guy named well i'm a friends of a friends with this guy and they have this thing called giga fund if you go to giga fund dot com you can see it what i'm gonna say is all public so not like revealing anything but from the looks of it they only invest they have this fun and they only invest in elon musk so they basically put they're one of the early monies into spacex and i believe they're raising money just to invest into spacex and and it looks like on their portfolio it says spacex and then it says the boring company right and so that's like all they're doing is like those it looks like those two companies and that's the horse they're picking they're like we think that spacex is gonna be like the greatest thing ever and we're just gonna raise money and so like luke luke is x fund well he also luke is one of the c cofounder of paypal so these aren't just like no yeah they're they're a big deal but and this actually says it on tech according to the ax axiom story giga fund will initially only focus on raising capital for spacex so they just found a company they like and somehow they got in with elon well they got in with them because they work with them and all the money is for spacex and that's kind of fun that's kind of a funny thing yeah incredible okay so by the way so so lowercase capital so here's what they invested in uber docker optimize style seat instagram twitter let's see what else i mean those are all massive so so it looks like it's so a good vc fund like a a great like return would be like a five x return of the fund so you five if you invested in their fund they five extra money over the like sort of seven to ten years sequoia like kinda top funds might be like nine to ten x so this one returned over two hundred twenty five x so like you know you put in a hundred k you got twenty two million dollars out i like that it's kind of incredible so lance i'm armstrong we had him at on the podcast and i think before or after the podcast he he was an investor in chris sack fun and he said that he gave him a hundred thousand dollars and that saved his family from all he's like when i went to all my lawsuits i like it was almost going broke and that saved he's like that that blows me through okay business ideas so it's i saw josh constantine the kinda ex tech guy i saw him to tweet this out i thought there's a good prompt for startups this is what he said specifically there's fifty million creators across like youtube twitch instagram whatever people whose job is to be a content creator fifty million creators now this is the fastest and largest growing small business what do they need and i think this is a great prompt for startup ideas so you i wanted to quickly brainstorm what what comes to mind here so so i'll i'll start with one while you while you should have the and i have the threat up while you think about you know for example commerce has been on the rise and one problem for any e commerce startup was like okay you need capital for inventory or to run ads you don't really wanna raise from traditional investors because a your commerce thing might not be like might not fit event fit a venture scale return might not be a billion dollar company but it could be a awesome e commerce company doing thirty million a year and the second thing is you don't wanna give up equity just for this just to buy facebook ads and buy inventory with that you really want some kind of debt and so clear bank stepped up and basically created a bank for e commerce because traditional banks like the wells fargo and chases of the world they didn't really understand how to assess credit for an e commerce company whereas clear bank was like look you connect your shopify and i'm gonna look at your last six months of sales data and i know if this is i know i i know how how likely you are to pay back your loan and the traditional banks didn't know what the fuck you know that would even mean i could i could print them out my facebook ad history and my shopify history and they would never know what's to do with it and so clear bank came in and was a bank for e commerce and so similarly i think you could have sort of a clear bank for creators so and there's a a yc company that's doing this what what else comes to mind what would you do to serve this the segment this is this is a definitely a hard question the boring one is that for surely some smart people have figured this out is i mean health what do these people do for health care i wonder that's where my brain goes to like what are all the boring but super lucrative businesses like health care insurance lending and trying to build up those for are you are you are you a freelancer at you're a company are you full time freelancer i used to be full time what do you do for health care right now i technically don't even have health so i left like six months ago i i just took a bet like hey hopefully i'm gonna done the next few months so i start doing something else so that works when you're twenty six or twenty seven or whatever but i wonder that's what i that's right immediately where i went i'm like do you what yeah health care is immediately where i go you're not you're so you're not on your parents anymore after twenty six so yeah that's like a big thing for people starting companies as well you can't leak so you don't have health insurance yeah so that's immediately sean where i go i don't know what else i mean it's a good question it's a it is a pretty crazy stat what i wanna know is all these people so like subs stack is filling this void they're giving something for creators yep it's my opinion that a lot of these people on subs stack are gonna fizz out in about a year and when they're realizing fuck i gotta do this shit like every fucking sure most of them i'm not saying there's fifty million successful creators i'm saying this fifty million people are trying to live the dream of become the next whatever on youtube on twitch on subs on podcast podcasts i think whatever you know i know i love think have the tools that they need to actually get the job done two of my favorite ones one's they're both obvious fig i like when i see that i'm like oh my god someone totally should have thought about this like right i've shocked that that's so late and then another like one that's actually crazy simple is can do you know can yeah yeah i love can i use that all the time and i'm like i can't believe about this didn't exist beforehand this is such a like blatantly obvious need right and it's like not like a comp i doesn't appear to be complicated yeah the the other the version of that that i think needs to exist is in the video editing space so youtube doesn't have like the tool of youtube to let you edit your videos so people use you know something between imovie movie to like kind final cut pro or if you're on windows there's like forgot like name of that awful software there's like sony vega there's like all kind of shit like that and that's still the best today and those were built pre youtube even existing as a thing and so like even if you just took that as the premise like hey i'm gonna build the video editing software that's best for video for for youtubers and i'm gonna build it with youtube in mind youtube has got put and i'm gonna build in all the things that everyone has to do for youtube anyways i think that's a service you could charge for in a fig style fig style tool because there's enough people and the existing tools you know i think you pay for final cut i think you pay for for some of these things of the existing tools i think you pay for so it's not a fun project to build because it's so like technical but i think there's a there's a fig type product there as well but i i would go for financial services or health care or something like that for the creator for the for the set of creators when these peep when you were starting your business you have a a a thing that you're tinkering with a project how did you file your llc strike atlas was that good it's a bit slow and i think it's a bit more expensive than it should be but it's really easy so yeah i did i've done it i've done three stripe atlas companies because it's just the most convenient way to do it i'm not sure this is a great question that you actually need to like i need to like think about but right it is incredibly interesting i don't know i feel i kinda feel like a little bit of a bump because i can't think of anything but it is a great question one thing i've learned from you is asking interesting questions actually changes how you think yeah yeah forget the answer i'd take a great question over a great answer any day because a great question can yield many many interesting answers to to explore okay here's here's another topic that i think is interesting cool company the cool company i just saw today daybreak health so it's a company that launched today and what these guys are doing is pretty simple it's a mental mental health and therapy app four teens so you know anxiety depression and other sort of i don't even know how you would describe it i don't have to call mental health conditions or what but i know for sure anxiety and depression are sort of the two big ones that they're trying to tackle extremely prevalent amongst teens i think like reported is like twenty percent or thirty percent of teens experience it that's reported so like you know let's say forty fifty percent is the real number eighty percent never get any help for it and there's a stigma around it and there's like all these like complications and so these guys have kind of a telemedicine solution so anyways i think it's a good idea yeah i mean put this on the list of things that is the the it's it's obviously gonna be it's obviously gonna be successful how successful i don't know right the thing that i think will happen the thing of the trend that i think i think will happen is i've now seen that companies are willing to pay as a benefit for meditation apps so com has a bunch of partnership corporate enterprise partnerships that are like crushing it there's another one called ginger that's for mental health that companies are paying for especially during covid i know a lot of companies adopted it but i think mental health is just this huge surging trend and topic that eventually companies will need to provide solutions for their employees for this and it it will become a total faux pas to not have this as part of what you offer your your employees and i think the same thing will happen with schools i think because of suit suicides and team sort of mental health issues school districts and schools will offer this as a free counselor essentially a digital counselor for states so i'm i think it'll get subsidized by either the federal government by the states or in some other way i i am i am fairly confident that over time this will become part of what's offered just what's offered as a health solution for for schools it's three hundred and sixty five dollars a month which comes out to be about forty six hundred dollars a year it's quite expensive but that's how much a shit costs do go to therapy i don't i have for a long time i'm not right now but it like normally it's where i go and i don't think it's like a yu place i think it's just like par for the course it's two hundred and fifty dollar or no one hundred and fifty either one hundred and fifty or two and fifty dollars a session yeah yeah you gotta have money for it and you know there right now these guys charge about half of what it what a in person counselor would be and they said that you know they're able to do that because the person doesn't need to have an office the therapist doesn't need to have an office and secondly there's like a geographic arbitrage the therapist live in low cost areas and then they serve clients in in sort of all over own around the world so you get this like you know if you're in new york city you have to pay new york city prices but right now with this digital thing with this telemedicine thing you know your person might be in arizona serving you in in new york or whatever so this isn't like a new thing like there's talks space has been there and they claim talks spaces is they're according to the articles they're preparing for an ipo right it's just online therapy they say they have five thousand therapists on its platform and one million users i didn't realize it perm for ipo i i know talks space there's seven cups of tea or some shit like that this one i know just targets teams i don't know if the other guys like specifically brand themselves that way but that's sort of you know who talks spaces is spokesperson right i think it's is it them or is that better help as mike phelps michael phelps oh right right right hey yeah that's right because he and you kinda went through a dark period too it's better help i think is mike phelps his thing so these are big things i would wonder what the churn is for a customer i think on the surface i'm like oh they never churn but then i'm like i bet you they do actually a lot yeah sort like a dating app where in some ways the churn is a good thing like if you churn off a dating app maybe because you found somebody in your not a dating app anymore it could be that if you turn off of a a therapy app you've you feel like you don't need the therapy anymore because you've sort of turned the corner although i'm not sure if that's how works maybe it's an it's it's a ongoing practice never ends this is fascinating better help claims to have like seventy or eighty million dollars in revenue yeah so so i'm not saying these are guys are gonna be the leader i just like that they're focused on teams and i think that my i i also you know the the the unproven part is will will this become baked in as a perk for as a service available to students that's funded by somebody else have you studied gen z at all like i went to i sound like an old man i went to conferences and they had discussions on gen z and like the stats were that there to me it was shockingly depressed right shockingly and good for this business they're super open minded so like like when i was a kid you said you went to therapy like i mean to be crude home be like are you gay like like you know what i mean like you got therapy like what are you really like fucking gay like that's what people would say right when you're twelve years old like like twenty years ago now i don't think that that's even close to a thing i don't even think anyone would it like you know i don't think they would say that shit to you yeah now it's like a status symbol silicon valley if you're not go to therapy like it's like not you don't go to the gym interesting well like when we are kid like that's what we say you like dude don't be gay like that's what they say and i i was talking to some nephews and i was like do you guys ever like call each other gay they're like well if they're if someone's gay i'm like yeah like you make fun of someone and call someone gay they're like you mean because they like are i'm like yeah they're like why would what we ever do that and i was like nice you guys are different i remember the first time because yeah when when i was ten twelve that was like just part of the slang i remember the first time i set it and somebody was like that's not that's not cool it was a it was it was i was i don't know if ever told you when i was in middle school i was in a movie i was in two movies actually and they're like the small like kinda like indian american movies they're like in english but they're like all indian cast they're about indian indian stories or whatever so the guy cal penn who ended up being you know harold and kumar he's kumar so he was my older brother in the movies and so no way and so we were hanging out and i was like oh my god that's so gay and again i'm twelve year old kid and he was like he's like you know that that's not cool to say that like you shouldn't you shouldn't say that here's why but voice you start tell me and i just remember being like what is this guy talking about like everybody says this and he was like you know from la i'm living in texas at the time so like it took like a decade for the message to get from new york and la where people probably realized early on like this is hey this kinda messed up to like get to texas where i was at because i remember literally it was ten i remember that was one isolated incident and then like eight more years i said it and finally i was like oh oh yeah okay alright yeah my bad sorry about that i didn't realize what i was doing it yeah i that's what i have the i had that feeling when i when i was talking to like our nephews i was like so you guys don't ever say that i'm like that's crazy you're so open minded and like help like kinda kinda healthy and it and and more mature so i definitely learned them like wait you don't so like you won't make fun of him for like why would you ever like what's wrong with being gay i'm like yeah you're right yeah but that's just now how we that's just we would say that word right it's it's actually funny because it's not only that saying calling something gay when what you're really trying to say is that's weird that's stupid that's lame or something whatever it's not only that that phrase is like revealed to be really dumb and hurtful and all that stuff but all the activities that you were talking about as gay also became totally normal mainstream healthy good day it's like oh yeah like joke yoga like big vegetarian vegan is like like what are you a gay mom right like like sharing your feelings like have a good yeah you have a game game mark that's awesome i guess we'll end there yeah podcast this cool