Just found out my neighbor’s business sold for $450M

talking to my barber he tells me this story that's pretty crazy about muscle milk i feel like i could rule the world i know i could be what i want to put my all in in like a days off on a road let's try got my hair kicking back and he knows i have the podcast every time i go in for a haircut he just gives me research and it's great did my handyman man knows knows i have the podcast and he always asked me what stocks he should buy and i'm like that's not the point bro he thinks for jim kramer yeah he's like this what stocks what stocks should i buy i'm like i i don't know i don't know don't ask me that just change life all please if he asked you like you know what's the best way to increase my testosterone right now using a illicit truck i feel like that is what he should be asking you well like clearly he's got a listener what can i buy from a forum they'll make my attendance stronger like do sam has answers to those that i'm like june wanna know some really cool subreddit or an illegal place to download books i got you brett alright go i talking to my barber he's like dude you know whose hair was cutting he goes he's your neighbor my neighbor and he goes yeah the guy lives just down the street from you it's the family that started muscle milk so they started back in nineteen ninety eight and it actually started because he bought a sub brand called cy max from his employer it's not ended it's not what ended up working but i think it's a hilarious starting point yeah it's sort like how spacex started because he wanted to send like a a small plants to mars and now who he's like you know build like a trillion dollar company doing this you know what's the i get so many ads on on colossus good stuff do that i don't is it like from a animal or a human it's from a cow yeah damn so i'm like depriving some newborn cow from you know like her fresh milk well that's how all have you ever seen how milk is made it's pretty insane no no is messed up is it just tons devices that hook on to you like an alien alright this is this is my wife's vegan she's for to like go down this road to like acknowledge what what goes on here's how a lot of milk is made i can't say all but i think this is like the mainstream way they imp up cow artificially literally a dude sticks his hand and and like artificially ins intimidate a cow gets the cow pregnant cow has a baby baby is then ripped away from the cow but placed nearby so that can hear the crying and we'll produce more milk and then they take the milk yeah i mean that's that's sad fucked up i yeah what kind of podcast is this yeah dude i literally tried sad ass vegan podcast is this i drink a glass of whole milk just last night and now i regret it back to muscle milk yeah okay so muscle milk not actual milk it's a supplement and it starts out as powder you put in a drink and he's like cool i think body builders are into this they're willing to drink this kinda chuck and nasty drink and he buys in and basically it's a family business so it's greg picket and his it's his kids are involved with it and what's cool about this business is years later muscle milk becomes a household brand they end up selling the thing for four hundred and fifty million dollars and this so i'll make almost half a billion dollars off this muscle milk thing the guy lives a down the street they basically started this as a c sac company meaning he lives in one house the sun lives in another house the sister his daughter lives in another house and they all just live in one c to sac something and like the kids play together and then they just built this behemoth that way like isn't this insane that is that is badass that was like inspiring to me it's just like a family like you've heard of a family business but dude just imagine the cold des sac business i'm kind of inspired by this very much in the vein of thinking of find the people you love and do life with them like so how how did it win really quick have you seen the land man the oil show hell yeah need land man i might wore cowboy hat yesterday just feeling a little billy bob thornton myself i haven't seen it but this clip i just saw makes me wanna watch it but basically jones jerry jones comes on and jerry jones like gives this like amazing acting performance where he talks about the importance of working with his family and how he's proud of his wealth and his real estate he's proud of his the the cowboys but you know what he's proud of most is that i got to spend time with my kids and we work together right and that's why they're here at my death because they love me and we got to spend a whole bunch of time together and i heard that speech and i was all in for one i was all in and two jerry jones who were a thought he like had to he was a size i'd not think he could act like somebody was saying they're like i don't think i think this is such a good performance because he's not acting think all of this is just true for him and he just said the truth which which is great by the way land man fantastic show yeah it was such a good scene alright so tell me about milk and muscles luca muscles alright so they start the business pretty humble plan they bought this like kinda supplement and it's powder you mix into drinks and they were like look if muscle body building enthusiasts drink this this would be great we think we can make this more mainstream but we don't really know how we just kind of our believers in the general idea and they were like look if this thing ever got to like eighteen million in sales that would be like imagine that that would be crazy and they that was like the dinner table talk by the time they sell this thing is doing over two hundred million in revenue and about sixty million a year in profit before they they sold so they they had built like a really sick really successful company how did they do it they eventually and and what i love about these stories is you hear about the story and you're like nod your head like that yeah that makes sense how that happened but then you look at the timeline and sometimes i'll force myself to literally draw out the timeline so it'd be like alright nine ten ninety eight they start the company and then i'll draw ninety nine two thousand two thousand one two thousand two two thousand three two thousand four it's like two thousand four is when they actually made the product that hit which is the ready to drink like we've all seen you know the muscle milk carton and so you when you hear that you're like okay cool two thousand four then it really took off and you just sort of read the numbers and the revenue ramp but it looks good but then do you think you zoom in and you you force yourself to look at that like five or six year time period and you're like there's not they don't even talk about what they were doing during that time because it's just like the forgotten the forgotten grinding out years of trying to make shit happen and staying in the game long enough to get lucky and what were they doing they were just selling they were just trying to sell and they were selling to like the really small niches but ever expanding out of that niche and eventually he has an insight the dad has an insight and the inside is basically like hey you know what flavor matters and he's like if more people are gonna drink this it's gonna be because i i can't i get this to taste like dessert and he realized that the initial market they were looking at which is body builders they took pride in drinking nasty shit and so anytime you try to make like a fruity better tasting thing sweeter thing they almost kind of rejected it because it felt less hardcore and they were super hardcore and that's where there's a lot of people who like take testosterone or steroids or oz and a lot of doctors will offer you a pill a cream or a syringe and i've asked the doctors that they go they all want the syringe because it feels more like this works better it's going through my veins like feel it right so exactly and i think that's true for the early markets the hardcore markets you ben is like ben is an early adopter of every product as soon as a product gets popular his interest like completely drops in it right because of the fun part was doing the hard thing getting the edge being ahead and so same thing for body builder so what the the genius of the business is that they saw that hey okay the market we see today the people were buying it today actually is different if we wanna reach this other market we gotta to like ignore all the signals we're seeing today so he goes in the lab and he starts doing small batch production and everybody else was so big that they could only test flavors in basically bigger batches and so that meant slower cycles it meant kind of like getting less like tight feedback loops so what he did was he goes to la and he starts testing flavors in like fifteen gallon increments and he pours it and he gives us people and they're like too chalk and he gives them another one like too sweet he gives another one and he finally makes this vanilla flavor that they're like this tastes like dessert i love this and so he brings those flavors into the ready to drink beverage and it just takes off it goes nuts and eventually like walmart starts knocking and walmart like hey we wanna carry this he's like dude we can't even fulfill walmart but he's like all the specialty stores the g c's it's flying off the shelves and for like the first year they're like so inventory constrained because he nailed the flavors so what my barber was telling me which is fascinating what caught my attention about this he goes so let's dude down the street they created muscle milk sold it for like five hundred million dollars but the cool part is he goes he didn't sell the flavors like what do you mean he goes he had there's some story he goes it's not out there but the guy always cut my hey i've cut together he's telling me the story is barber on blast i not insider trading he's just telling me it's a really cool story but he's like you know when you go in research it's not this part's not as reported so maybe he got some of the details wrong that's my my caveat but here's what what it what he explained which was basically the when they did the sale they sell the brand muscle milk they sell the operating business is all the distribution and then the buyer was like cool and the flavors and they're like actually we have our own separate company that does flavors and we're not gonna sell you that company and they're like well we need the flavors like yeah we'll do a licensing deal like we could provide flavors but we won't sell the flavor company and again this is where the details are not reported so either that's what happened or right after they sold they started a new flavor company because now this is what the family does they have this flavor house that they created and they were like we're not gonna do any brands anymore but we will do flavoring as like that's ours that's what made muscle most successful and that's what we're gonna do now as a service and now they've got a bunch of customers for this flavor brand that are this flavor house that they've created and if you look at their facility it's like this insane like you know huge facility with like a fucking vacuum sealed room and they're like oh we do this technology like spray flavoring where you can add flavor to things that doesn't add any calories and it basically it's all about flavor tech and i've just called by flavor houses and flavor technology it's called flavor insights it looks awesome and i see like the they have a video with the father and his son and on the about pages it's the whole family this is my dream by the way this is how show you why this is even more dream while he's building muscle milk he's got a hobby and i know that you love a man with a real hobby and this his hobby is racing cars and he has his own racing team that he created and then he himself races and i i don't know shit about racing but is it lemon man lemon mans lemon yeah it's like it's like a a famous i guess got lulu lam track but it's like a the famous thing is like it's a twenty four hour race and so like ford vs ferrari and all these things i thinking like won the race sorry perform really well how impressive is that is this like just rich guys doing it or is he competing it's like real racers i'm not a real race ent so it could be wrong but yeah it's like dude like the story ford versus ferrari it was about the time that ford beat ferrari at lam like it's like a big deal yeah it's like a movie worthy deal you know like rudy style movie off a underdog winning lam lamar right so it's d h the guy the jason fried c he competes it out did he i don't think he won did he he won yeah he won i think he i think he won the race and he said he's competed in it eleven times yeah it's sort of like and oftentimes like the company that wins they win for some innovative reason and then like ten years down the line that car part that helped them win becomes like the norm gotcha gotcha yeah so that's like a big deal isn't this a it's a total like life goals story build a killer brand you stuck with the thing you built it with your family you do it in the cold to sac i just think it's it's amazing sell the thing for hundred busy dollars none of us kids are yolk right like these guys they don't look very yolk looking at the family doll well as their public defender here's what i have to say about that one of the things they talked about with muscle milk is they go we wanted to build a product that everybody would look at it and see a different thing so they go women see it as a weight loss product men see it as a muscle building product some people see it as a snack some people see it as a meal replacement our goal was to build a product that you that would basically you know solve multiple problems for different people at once i'm just saying that i wanna see some bigger buys and tries on this family photo they looked great they look very healthy more importantly they look happy the founder teeth are beautiful like he's got a really nice smile i just think that we is see a little thicker neck can tell you one other thing so this company that bought them pepsi yeah pepsi owns it now but before that they it was bought by something called h foods it's one of these companies that you'd never heard of this company does twelve billion dollars in revenue they do like a billion and a half dollars a profit a year and if you go to their website the the like the the headline like tagline for them is like we sell more pepperoni than anyone on earth and they're like like food holding company they own skip peanut butter they own planter they don't own bam they own spam and then they sell just shit out pepperoni dude they just sell pepperoni worth why they own apple gay they own justin's they own planter skip y chi cheese i don't know cheat she's is is that black label bacon they own a lot of shit i mean literally spam is like on their homepage as like they're like they're they're pride and joy like the way my parents pinned like pictures of me up on the fridge that's what this company does with with spam which is like it's pretty pretty good horrible for you but oh dude to h yeah h pepperoni i know them that's one of my snacks one of my snacks is like eight pepperoni with a little bit of mozzarella cheese on it microwave it's a pizza without the the pizza yeah i just caught it like ready to hold the dough just just red and mustard redneck fitness food oh this should be your brand a line of of not that bad for you redneck snacks it's like it'll it'll make you farm strong yeah or do you know like pb dip you know your i called dip but you know pee powder the powder yeah yeah you get a spoon of that and just trace and yep chalk it up on your the top of your root your mouth and you suck on that thing for sixty minutes i caught it like fitness dip so like instead of like having like a fat lip in you just have a pb dip you're just and your tongue just rub it against that the the dehydrated nut oh boy oh boy you wanna have a good time put a little pb dip on the roof of your mouth alright we got our we got our cold open for the episodes by the way let let me show you one thing you sent something that i do religiously i have just sent ari a document that i i just sent her one of the tabs i have dozens of tabs on this alright can you share your screen so whenever i read a book i have this google doc that i've used since the year like two thousand and ten alright so check this out whenever i read a book i do a few things one i make whenever there's like a year and a money term or some type of milestone i write it down in a sheet and the reason why i write it in a sheet is because a lot of times when you're building a company or doing anything that's like really challenging you you'll read about someone else you're like that was easy and so i like to do timelines and you'll see like okay like they went four years with nothing happened so for those listening i have got a timeline of coke industries which is like a the largest privately held company in america over the biography of their family and i like did a timeline where every everything major happened in their life and then i converted the dollar amount in two two thousand nineteen dollars which is when i made this particular one and it's really fun to do because you could see that things took like in this case like thirty years right and so if you like if you scroll all the way to the left i did this with a kirk ke cor and another one of the a guy who i love and i've i every biography i read i i create one of these just another man you love can i just point out a couple things about this what we're share here that are are just just fantastic is it's just a a peek into the mind first of all it's a google sheet that's just called sheet which is just a great title okay scroll over ari here are some of the milestones that sam wrote down alright so he starts for for coke industries nineteen nineteen hundred fred coke born nineteen twenty four so twenty four year gap big break finds mentor okay so then it goes nineteen twenty seven just a quick update still broke then it goes twenty nineteen twenty nine see success nineteen thirty one big success with two g's it's a big double g success right here amazing and then nineteen forty he buys a company and that company he buys it for four million dollars you also should just have pictures on here where it's them and the calves and it's just your calves just for reference and you're just comparing calves because i feel like tell me that's not part of your research process is they're looking at photos and judging their looks yeah particularly the koch brothers because they're like these tall wasp me guys and i definitely am sizing myself up to them yeah the the the the total picture of success includes a picture for sure it's like tennis sweaters it's like oh they're into tennis sweaters therefore i will wear tennis sweaters but yeah yeah definitely like two guys that are both six two from the midwest with blonde hair blue eyes like we there's definitely like a there can only be one of us in this room dude there's this girl who keeps going viral on twitter and it's the same tweet she does every time and she just goes my dad goes to a bar with his friends every friday and he makes a list of topics to discuss yes and then is she she put she has a photo of him holding a printed out agenda and i'll just read you one of them ted perry fun capital story shown on fox news six next one what's going on with the bucks question mark nfl overtime rules take ball first or second question mark breeze how close is too close to an alligator do you think people that throw garbage out of their car window are the same people that don't pick up their dog poop and walking through my subdivision that it read at the bottom goes sleeping on time as you could see we have another week of a packed agenda and it goes super viral every everybody i like a hundred thousand likes and i think sees this he's like yeah that's part of the winning life i'd like to go to the bar with my friends every thursday and have like an agenda that we print out and we talk about while wearing our new balances do you know who does this and he's not joking i already know because you're talking about a legend a social legend and i know it has to be nick gray tell me i'm i'm wrong is it not nick gray the second time i hung out with nick gray we went to a bar called lazarus sarah and i came and he goes hey guys i would love to hang out there's second time hanging i thought it it'd be nice to have an agenda so we could say on track and there was a thirteen point agenda list where it was like as sarah about her job figure out how that's going on explain my dating life and get opinions from it like it was a and we stuck to that agenda and he took notes and is it thrilling because i think i'm gonna absolutely was doing this it was thrilling you know how like you know how was it the agenda that was great or the fact that he had an agenda that was great which which of the two second here's why so look in a world everyone wants to be a tough guy it feels good to be a leader but you wanna know something everyone likes getting led and like we'd like the assertive person i'm just a leader who loves being led yeah that's me like that's on my linkedin i i like leading some stuff but then there's other times where it's like just tell me what to do and right small talk is one of those things that no one just like tells you what to do and when there's an assigned leader who has something outline for small talk i'm just like yes sir i'll do whatever you like me to do and thank you may i have another sir like it's like the best way to go about doing stuff and that's what nick does okay and by the way that's how we do this podcast actually we both bring some agenda items and then we discuss it will point form yeah i think it's good i and he's done that for years and it's awesome alright we're gonna normalize having conversational agenda hangouts with an agenda i have a business that's pretty cool can i tell you about it here's my here's my opening for this business sam i found the business that you should have started instead of wasting your goddamn time with the hustle okay i like that so you built the hustle and if you recall one time you came to me hat in hand absolutely begging for an investment you needed the money and you paid ed said please sir invest in my company and i looked at it i i flipped through the business plan like it was a flip book and i just said no thanks no said you said look sam you're coming to a knife fight with a knife i don't even want you to come to this knife fight with the gun i want you to come to this knife fight with a magic fucking wand and it that clearly turned away on my heel with the dramatic spin and i left through and then you tried to pull the door to open but it was really a push door totally you blew it at the end atlantic like you clearly had just read that on a whatever the equivalent was of twitter and you're like that is now my line yeah exactly back when i was like i had it written out the inside of my palm and as like peter till says this magic wand somebody totally owns them no matter what they're doing so but you know the reality was i looked at the business and you were like here's what i'm doing i am creating a immediate company so every day we're gonna write the news so every every day you had to recreate your product yeah sucks oh that sucks it's didn't get any it's already benefit for all the work you did in the last three months it's like not really we gotta recreate it again i'm gotta bake that cake every point okay sounds good and then you said and then i was cool so then people pay you certainly for the service that you're doing not free oh okay you're like but then the advert then we have to do a separate business basically to a separate customer selling advertisers i was like okay but certainly they're on retainer and it's gonna be recurring revenue that's gonna stack up you're like not at no they're just gonna if they feel like advertising they will if they don't they don't every month we're gonna start back at zero yep and a thought damn this is a tough business to win and that's when i hit you with the knife and the knife five and bubba blah blunt which it is tough ish tote to do well yeah and by the way the the best one of the whole thing is five years later after you successfully sold the business and got rich doing it i then copied your business model it did the same thing for crypto and and was like came back to you basically being like what how do you what was the business plan to how do this so so that's the the end of that store now here's a better business that somebody created five years ago that has the following profile they don't recreate the product every day people pay them for the product on a subscription it's in a hobby that you love doing and it's a thing you were doing anyways for free so i think you would have been great at it and also it uses your gift which is making things simple summarizing things making them easier to understand saving somebody time doing it and this person has bootstrap this business to two hundred million in revenue with thirty percent profit margins i have no idea what is this it's called headway app and it is a book summary app so this guy in the ukraine created this company where he takes popular books and he summarizes them and the promise is basically instead of reading the book i already read it i summarized i could tell you main point one i could tell you main point two i could tell you the main point three and in under fifteen minutes you can get the gist of what's in this book you'll get you know the the big ideas and you'll get them explained to you could either read it or we have ai that turns it into audio and you can list listen to like a fifteen minute summary of this book and we've done it for fifteen hundred of those popular books and people pay a simple twelve thirteen bucks a month for this and this has become an absolute juggernaut so i did not think that these book summary apps could get this big but damn if that's impressive two hundred million in arr thirty percent profit built this thing out of the ukraine they just raised funding out a two point three billion dollar valuation right right holy crap so like you could've have done that instead and i think you would have been great at this by the way you you know here's why i said that this this like you could've have done this because when i went and looked at their ads right the bay the way this business grows they run ads on tiktok on facebook whatever and the book of their ads tell me if the sounds familiar my boss thinks i'm a genius but and thinks i read a hundred fifty books a year but actually i just use headway that's their ad it's not at word for word i just wanted to really bait you with that one but it's basically the it's basically the gist of their ads it's the same mentioned ad i invented that ad i stole it from someone else and i invented that ad that's my ad that's the ad that's my ad that i took yes i stole that from the sim and i invented that ad their ad is a little bit more like it'll be the average ceo reads fifty two books a year how many do you read right so they're basically making you feel like a shitty ceo or it'll say everyone thinks i went to harvard with the amount of books that i know but actually i just use headway or it'll be meet the app to all the intellectual you're using stuff like that and so those are the sort of hooks that they use to get people to do this with they're not saying here's a book summary they're basically saying be a smarter person and be seen as a smart person because you seem so well read and here's your hack to seeming so well read so what's interesting is thrive throughout it we should consider the podcast it's like my boss thinks i'm kind of retarded but know a lot about business the secret is i just listen to my first million but i still sound a little retarded but must so impressed that i know all these numbers did wonders with that fact checks me my boss just wondering why i have pepperoni in my mouth this is ridiculous these guys so they raise money from thrive which thrive is a big vc investor in chat are they're not worried that chat gb just does all this well they are themselves using ai for a bunch of stuff like if you go look at a bunch of their ads they're all like ai generated ads i think you know businesses like this that are like super laser focused on one thing you know even if you can use chap g to generate a summary that's not the same thing and i think you know to they're not even old they started in two thousand nineteen i don't know right super impressive they also have done this other app so there's this one ad that was like so frustrating good it made me piss that i didn't think of this it's this simple looking puzzle tell me if you've seen this i don't know i don't how much you use these like it's like in a lot a lot of games this ad pops up or tiktok it's this like it's like a maze imagine a maze and it's like you're you start on this dot you have to get across without picking up your pen and it just shows somebody's trying to do it and they're messing up yeah yeah yeah and it's like see if you can solve this only five percent of people you know can solve this but fifty percent of fifth graders can do it or whatever and you're like i gotta see if i could do this he you download the app by the way that puzzle is actually impossible if you there's there is no solution to they just put it in and they put a thing that looks simple but you can't figure it out you can't figure it out because it is actually an optical solution it's actually impossible but it that they use it through the name to dump yeah they have this other other app called impulse that's done like seventy million downloads and it's a brain training app and the the framing of that is basically keep your brain sharp with these little like many mini mind games to and like you know my mom likes a lot of these things because she feels like getting older i should i should have these little things on my phone that you know keep me sharp so she plays su and cross and she she downloads apps like this so they're still set they're just like crazy good inter marketers internet marketers and really good like creating apps that retain apps that first and foremost gets you to convert and become a subscriber and then yeah obviously you know the retention helps and you know this guy talks about it that he frames it as micro learning he's like micro learning is this how do you get somebody to spend five to fifteen minutes a day getting smarter what if you use your phones to get smarter instead of just to waste your time and so he makes it sound like this grand noble mission and at the same time on the back end it's just this ruthless funnel that is like run by now by now the download convert convert convert convert convert and like that's the game that's what you gotta be we talked about them was it remember the period app or flow were they flow were they ukrainian as well yeah so would these guys all have like a a like these eastern european app makers where they have these family of apps and you go look at their website and they're like no raise no funding and then they'll have like three hundred employees and then their apps will do like you know a hundred million downloads a year and it's like based out of kiev or whatever right like this just seems to be a pattern i think there's like just a very high density of talent that knows how to build this specific type of company yeah they're just like all homie and they all have this like i don't know this idea of like it feels fun to get one over on someone but then they're like alright if we're gonna have that attitude we should also like provide value so we stick around for a long time which is like when every internet marketer ever has they're like i'm gonna do something shady and they win and they're like oh but it'd be a lot cooler if the customers came back to us or if we didn't have to refund people constantly so let's just like do a shady stuff do it for something like if i could tell my mom what i do yeah shame which is like when every internet marketer ever has done but this is badass how'd do you find this how did i find this actually that's another good story have you seen this twitter account arthur rock or arthur arthur i know that arthur rock was no it's a it's like a parody account it's arthur rock is this account have mean you not seen this this distinctly amazing alright so spell bro just you try to spell arthur and naturally and just see what happens you'll land exactly at the right thing it's a r f u r arthur rock arthur okay so it's this guy who's this like anonymous he's like this anonymous vc and what he did is he just created this twitter account where he just tweets out numbers from companies that are raising money or trying to sell and he's just like leaks information and so he's this just this giant leak and so he tweeted out the numbers for headway app but if you just look at his feed his feed is like pure signal because it'll literally just be like it'll be like post hog thirteen million in arr growing two x year over year they're currently crazy it'll be like or like somebody will be like you know the the founder will be like we're we're pleased to announce that we raised our series c from sell it's a huge milestone and we feel so validated and then he'll just tweet out he'll re a quote twilio just go fifty million arr as of november up one point eight x year to day congrats or there's like another one that like they raised that four hundred million dollar post they did six million dollars in two thousand and twenty four congrats yeah exactly exactly like how amazing is this this is like the best twitter account right this is really good and you know what's funny and we've seen this again and again and again these meme people anonymous meme joker are like right a lot you know what i mean it's sort of like how esquire or what was it called american what what was the tabloid that like is in the grocery store inquire national enquirer yeah the national carter like they say a lot of bullshit but they also like predicted that the bill clinton scam or bill clinton stuff before everyone or like the john edwards affair and so like i do love filing these non accounts this guy's is great yeah dude he says hollow a catholic per app doing sixty million arr growing three point five x a year yeah like he did and he'll also supposed to update so in may he'll be like sun the ai music app just closed around fifteen million arr in the first year like to be invested at five hundred million post congrats and then he'll then you know that was may and then in october right so like you know five months later he just wrote at forty million arr now alright this guy's just providing i don't know you you're not you're not as big of like a basketball fan but like in basketball there's these two guys who were like famous on twitter for just like just has sources everywhere so it'd be like sham and it'd be w and they would just always have intel and this all their entire twitter feed is literally just inside info it'd be like you know sources say jimmy butler wants trade his list of teams that he wants to go to are these four or it'd be like like during the nba draft like you know forty five seconds before every pick they just say they're taking this guy and it would just spoil the draft if i'm one of these ukrainian guys like i don't have the skill set to do this i'm not technical but i wonder if you like you ever wonder why aren't there more people just copying fast growing companies like we'll just there are that happens a lot it doesn't but i think you're i think my is actually pretty good which is why aren't there more so actually i think i answered your question wrong i was like no some people do do that and i think your question is actually correct which is why more people doing this it's like i i don't wanna do this because i kinda have a reputation and i don't really want to do it but if i was a little bit younger and if i had the skill set which i don't like if i see a company that's going at like four hundred x a year which this guy does he's like here's some app i was only doing five million in revenue but they're set to grow four x i'm like yeah just go to their website and copy that yeah i mean it's not so easy right like you could copy a product that doesn't get you to the customers and so you have to not only copy the product you have to figure out how they grow and be at as good at growth that you can figure that out you can use all the technology like here's what their ads say i'm just gonna do that exact same ad you can but you know most people who have that ability if you're if you're were that good you're also able to create new things from scratch and i think also what ends up happening is that a lot of things look similar but they're you know they're eighty percent the same and they're twenty percent different but that twenty percent difference is actually huge difference right it's like if you've ever looked it we were talking about flavors earlier it's like the difference between two flavors is like a point one percent change in a certain you know certain chemical but it'll change you know from vanilla that time that's the difference between you know vanilla and you know orange soda or whatever right it's like there's it's not that big of a difference on the on the whole right you're doing eighty percent the same but it's twenty percent that's different and so you know i actually advise this and and talk a lot about this which is if you see something that's working not a company maybe but like let's say a trend or a business model like you know let's say e commerce or whatever try to figure out what's working better or worse in a category and then you know if you're gonna go into that category you're probably gonna end up even if you're trying to be super original you're probably gonna end up with eighty percent of the things the same because that's how businesses is you're not a hundred percent different but the key is to figure out what is your twenty percent difference gonna be and how how well could you execute on that twenty percent innovation and i think that's a more humble honest way of going about things versus i think most people believe they're doing everything a hundred percent original and unique and that's just not true right like even this is also for content or wisdom right like how many truly original wise thing you know i love neville but how many of neville things are a hundred percent homegrown not inspired by anything not not not similar to anything else that was out there they're very rare right like that's not how anybody does things tony robbins talks about this he's like yeah i i learned under jim ro and jim learned learned under zig zig or whatever and like it's the same school of thought but like me putting my twist on it is the is what makes all the difference then you have people like rocket internet which are literally like pixel for pixel clones but even they operate in different markets so they'll be like cool we're building amazon and amazon for for brazil thailand or whatever and turns out once you try to do that you're gonna like time i'm an a lot of things are gonna end up different alright let me tell you a story really quick about some investment thing that i heard about that i would never do you would do but it's a thrilling story okay let me guess it's obscure overly complicated doesn't really make a whole lot of sense too much risk and we'll end up netting less than the s and p five hundred in the long run no this one he came out on top actually so story is this first of all like i was just listening to scott gallo podcast while i was driving somewhere i think it was like over chris's break and something happened at the very end of the podcast that i was with sarah and i literally pulled over to the side of the highway and i was like are you listening to this it just like shut up no but i was like alright but this is actually amazing can we get an instant replay on youtube of your wheel diagram you just did how big is your wheel did you're like literally driving a school bus what was that it's like a ship our ship we outlines it's like a tractor that you're driving is a ship i pulled the ship over and i literally had it sit down because she also me wanna use my phone and i had like type this out so i had this note i remembered it but scott gallo had michael lewis on so scott gallo is as an investor in podcast michael lewis as a an amazing author wrote about f downfall and he was with sam beck freed when this all happened and so he he you know he has a unique perspective in the forty five minute part of this like fifty or fifty five minute episode scott gallo just mentioned something where he's like yeah i bought some of the the the bankruptcy claims against f t x and michael lewis started talking about something else and then michael lewis goes wait wait what you made a good investment where you bought the f t x claims what was that about and scott like just casually throws this out there but the story is actually pretty amazing so the background is this so in two thousand and twenty two f t goes bankrupt because or sorry f t goes bankrupt because s b sam bank freed he's over leveraged and he spent all the money and whatever it it didn't work out because of a bunch of different reasons and because of that ten billion dollars in customer funds are lost or you know they're just gone and people are distraught they're freaking out but when a bankruptcy happens one major thing happens which is the person who had the money in f t x so let's say i stored one million dollars in f t x i now am a am i'm gonna have a claim against that company for one million dollars so it's gonna go to court and we're gonna figure out how do i get my money back somehow and in a lot of cases you get no money back and so what happens is these kind of vulture i mean i don't know what you wanna call but they come along and they go hey f t owes you a million dollars you're probably not gonna get that back you might get that back but i'll tell you what you have a million dollar claim i will buy that claim from you for a hundred grand so you get the grand today whereas the other outcomes are potentially you eventually get nothing or maybe you'll get a little bit more like a hundred grand or two hundred grand three hundred but it's gonna be four or five years and you don't even know for sure so just let me buy your claim and so sure you could do that so it creates a market when that happens but scott gallo he's kind of a he's kind of a strange guy and he had this quote on this podcast where he's like when i see fire i run towards it because when because i have known enough seeing a lot of bankruptcies that when there's when a bankruptcy happens there's opportunity and so scott gallo he reads the paperwork about the claim or about the bankruptcy and what he notices is that sam beck freed unlike a lot of different po schemes a lot of time with po schemes that are spending this money on coke hooker planes like party shit spf maybe did a little bit of that but you wanna know what he was a real degenerate about venture investing he left investing in companies and one of the companies he invested on a few and i think a lot of them didn't work but one of the big ones that he invested in what's he invested in ant philanthropic which is like the number two or the number three best ai company and scott looks at the numbers and they don't actually say what the valuation was of what s of what the they didn't they don't say the valuation of ant philanthropic when sam beck to invest in them but what they say is that he invested five hundred million dollars and scott does a little math and he's like i think the valuation was around five billion dollars meaning spf owns ten percent of this company and this was happening two years ago he's like i think ant is going to raise money at a ten billion dollar valuation and then eventually one day at a sixty billion dollar valuation which by the way as of today there are rumors that that's happening and because of that i think i can buy a claim for twenty percent so a million dollar claim for two hundred thousand dollars and if you do all the math i think i could actually triple or quadruple my money based just off this venture return let alone if we ever are going to claw back any of the crypto that was lost well turns out a few things happened one bitcoin exploded and because of that well not because of that but that they were able to recap or claw a lot of the money and bitcoin exploded and so a lot of these people are going to be getting back a lot more money than they actually had in there because the money you know the bitcoin was just sitting there growing and also sam beck freight investments one of them killed it knocked it out the park and so i think now the people who lost money they're getting something like a hundred and twenty five percent of their money back which is not bad for a po z scheme that you are victim up scott said the numbers he goes i bought two hundred and fifty thousand dollars worth and i sold i bought to fifty a million dollar claim for two fifty and i sold it for ninety percent of the million so he like tripled his money and scott like goes through the story and he explains like his reasoning on this podcast and it was amazing to be honest like how on earth you could find value in this way yeah that's that's super impressive i actually happened to hear this segment too and had the same yeah i wasn't driving a bus but i had the same sort of like next snap reaction where i was like what what's funny is you said a couple of things but i don't think so a couple of things i think we have to correct a couple of things one it wasn't a po scheme no i more like a lot he stole customer funds i i guess i mean that this was a po scheme but it's in the category of like schemes where you know a lot of people are like how do i get my money back scammed you lost your money yeah exactly the other thing is that he was saying you i valued fx takes a stake in ant dropping at four billion but that's not really what happened so they sold their stake for eight hundred million so he put in four hundred or five hundred million and they sold it for eight hundred nine hundred in the liquidation and so it wasn't the ant philanthropic investment that really paid off he was using the ant philanthropic investment as a downside protection where he was like doing the math where he was like alright that gets me that gets my investment up just a little bit to like a safe zone but then what else can there be yeah exactly so i but i i think his math was wrong so he said in the thing he goes i valued the ant philanthropic based base based on the ant stake i thought it was worth four billion the total claims were nine billion so i thought ant philanthropic was giving me forty four cents on the dollar for every dollar of claims that i would buy claims were selling for twenty two cents on the dollar so he says to me there's was the easiest rate ever made but the reality is that the ant philanthropic stake ended up being worth less than one billion right so it would've in ten cents so even he got it right even though his logic was wrong and we had shi on the other day and he basically said his two best investments kinda worked out the same way he's like i bought nvidia in twenty seventeen because i thought that crypto mining was gonna take off and nvidia took off but not because of crypto mining at all it turned out it was ai and i you know kind of like i was wrong but i was i got massively right he same thing with bitcoin he's like bought bitcoin early leon on because i thought it was gonna be this fast peer to peer transfer thing turns out that was all wrong but bitcoin went up anyways because of this other store value gold you know digital gold use case and so i think what ended up happening is that he made a great investment but i think his underwriting was wrong i think that's one of the hard things about doing this like what you know the smart money investing is that when you're right you feel like such a goddamn genius and when you're wrong you chalk it up to you know whatever you use you sort of either mentally block it out you either say you're wrong or or you think maybe one of your assumptions got got a little off but this there's also this weird state where you can end up right even though your underwriting was wrong and you can inflate kind of like luck and skill and i guess the question is i guess i that's one of my my observations i've had in this process of of like as i do my own investing and to get something right get something wrong i talk to other people it's very humbling to realize how much of this even your wins aren't your are yours they're not your wins because you got so much of it wrong well and there's another learning that i had which is finding value and crap like this story like this was the worst the the like this was the worst asset the worst company like you don't wanna touch this because a it's like a scam so like the there's a no go there and b it's like a reputation ruin like who wants to be involved in this guy and then it's like i have so much better things to do why would i waste my time with this pile of shit and what was interesting was seeing scott walked through his reasoning on how he can still capture value from a horrible situation and i thought that that was really intriguing because that is not how i tend to do things like what did they say try to trying to catch a falling knife like yeah when something's bad is just going to get worse and just stay away but that's not always the case dude what i went to mon house and we recorded that podcast together we did the podcast and then at the end he's kinda just like touring me around and i go to his desk where he works i like seeing like literally where you sit when you work that i think the environment kinda tells a lot and he has this pla on his desk like the way you would have a like if you walk to a bank or whatever it would be like the name tag of the of the bank manager or something like that but but instead of a name on it it just said trouble is opportunity and literally he was reminding h he wanted this on his desk because in those moments where there's panic where there's trouble he wanted the reminder that trouble is opportunity and not all trouble his opportunity right like one of his ism that he took from charlie mu and buffett is he puts things in what he calls the two hard pile so he's like yeah you know i look at a hundred opportunities i could probably tell you the three obviously good ones and i could tell you the ten obviously terrible ones but then the other whatever seventy seven i'm i just put in the two hard pile and i'm sure some of them are really good but i just throw things in the two hard pile when they're too hard and so for example you i was asking like what's your thoughts on crypto and he was like well i think there's a case for i think there's a case again he's like but i just don't do anything because i put it in the two hard pile so i i i don't need to win in that it's too hard for me to figure out so i'm not gonna bother and i think this the concept of the two hard pile is so valuable because i used to be very black and white about everything like either it's good or it's bad and if it if i thought it could be good i would smash my head against the wall trying to like make it work and if it was bad he had to like stand out as bad for me to like to to throw it away the so you said a hundred ideas the story is the story is this he's at the he's at a lunch with warren buffett and he goes warren you i think one of your great gifts is you're a great judge of people hey he was talking about like you know warren buffett and hired that guy i who like runs their insurance business he's like i just think you're a great reader of reader of people judge a people how do you do what's your secret and he goes i don't think i'm a great reader of people and he he's like but i'm not trying to be humble he goes i just approach it differently it goes it pays to be a harsh greater when it comes to people meaning the cost of being optimistic about somebody who turns out to not be great to let them into your circle of friends or to do business with somebody who turns out to not be great is so costly that i just rule a bunch of people he goes if you put me in a cocktail party and you have five minutes with a hundred people in that five minutes i could probably tell you the five people who are really outstanding i could tell you the five people who are really lousy and i just don't want anything to do with them they just obviously came off super bad like in in a five minute interaction but then there's ninety people that i just can't make a judgment on in five minutes and i he goes so i just put them all in the bad pile they're all in the too hard to know pile and so i just rule them out because it's not worth the brand brain damage to try to figure it out on a case by case basis just so you don't miss a good one because the cost of a bad thing is worth way cost me much more than missing out on a good thing because there are more good things that i could just filter for and i'll find those good things like over time that'll be obviously good i'll just focus on the obviously good things and he does this with investing he does this with people and it's just a very useful heuristic because i think most of us try to be if there's a hundred we try to be accurate at the hundred level it's like i wanna have an accurate grade on all hundred and i'll spend all my time on the hard to judge things and i'll get a lot of them wrong but i'm trying to get them right and therefore i'm taking a too much risk whereas this take is don't take too much risk take the obviously good and act on it obviously bad throw them away and everybody else put them in the two hard pile and ignore it can i dumb this down let me explain why i'm a genius when i go to a restaurant there's like two columns of entree i start at the top and i skim down and the first one that i see that's a seven out of ten i go that's it bed over i don't look at the menu for the rest of the meal i don't second guess it i just say the first one that's a seven that's that that's done and i'm able to do that right away is this this is applied to everything is marriage advice is this what what i let other thinks this is applied to where does this not apply i mean yeah i think like it could apply the marriage like the idea of like settling is like good like you settle for something that's pretty good and you can like make it great i don't know like is there any like data on like indian couples who have been yeah like a arranged marriages have like the same six quote unquote success rate as like american marriages which are like involve dating and selection and courtship and then eventually you know engagement and the marriage versus like the way that indian couples do it is very much the menu that you you scan the the the listing that'll do engineer good family full set of teeth seven out of ten let's go yeah i will see you at the altar for the first time yeah yeah you have five no i i i just think that that's how i order like i've done that for years it's just i just don't want i i want less choice and i think what warren buffett is actually saying similar which is like i know for certain that these three are fine enough therefore i don't care about the rest yeah you you know that book the mark manson books settle are of not giving enough like i think that book it got so popular that it sort of got written off you know what i mean like do you ever hear a smart person being like man i learned so much from this book the subtle alarm rocket it like it's not like it's not like a cool intellectual thing to reference because it's pop it's like pop so pop shame it's like if i'm like oh i really like just bieber music so yeah okay what that that's like a low status thing to to sort of say but there you know he brings up one good point in the book the book is basically around one point which is life is not about caring about everything or not caring about everything it's about choose you know assume you have a limited set of f you know f's to give in your pocket like you got five to give choose wisely choose the things you're gonna care about so like you know the menu you you just don't have to care to get that right and that's kinda like the warren buffett like you can just throw a bunch of things that there's too hard pile and ignore them and then like there may be a few decisions we're actually getting it right really really matters and then you have enough bandwidth to actually care about those things because you're not caring about everything yeah i think there's good shit what do you wanna do now i wanna give you one other story have you heard this bill act story of his running into the fire when everybody else is running out story the his his four hour investment decision do you know this man i thought it was like literally a fire well kind it was the o eight crisis which i think to people on wall street felt like you know the the giant fire oh bill act the famous twitter influencer he invest wait he he's a builder joking okay i hope you're still coming on later alright so he tells the story of it's o eight the financial crisis is happening banks are failing like bayer stern fails and then this other bay bank is gonna fail people don't know what's gonna happen widespread panic and the bank w was on the brink and basically what he did was he did a four he's like i had four hours i i spent four hours just looking at this business of w and came to a decision in four hours that the panic was overblown and that w would be saved and that wells fargo which ended up buying w was you know far healthier than the market believed in that moment of panic and so he made a huge investment and it was like you know one of his most lucrative investments ever it was a four hour decision and it was made at a time of extreme panic when trouble was opportunity and when everybody else was just running out you know screaming he was calm and basically looked at the situation and assess the risk return differently it which is sort of like what you're talking about the scott gallo when when f t x just feels taboo in every way and it feels like you know the worst possible situation and he's like cool it's the worst possible situation at a price and there's a price for everything and the price you know for him to buy those claims at twenty two cents on the dollar turned out to be the right price dude bill ac also like six four i think yeah which is pretty cool we should create an index for ceos above six two and i bet it'd be you i better do alright alright so he bought let's see a hundred seventy eight million shares at three dollars and fifteen cents a share so he spent five hundred sixty million dollars after four hours of thinking and his estimate was that it was gonna be worth more than double that and the next week w bought it at about seven dollars a share so he basically doubled five hundred million in a week that's insane alright well that's cool bill heck great alright great story great sorry alright i think that's a pretty good podcast what do you say i think that was alright you alright that's it that's the pod i feel like i could rule world i know i could be what i want to from at all in it like a days off on a less travel never looking back